Editing Economy of Taiwan (section)

==Foreign trade==
{{More citations needed|section|date=July 2021}}  
{{See also|Taishang|New Southbound Policy}}
[[File:2008Computex Day5 TWTC Hall 1.jpg|thumb|right|[[Computex Taipei]], the second-largest technology [[trade fair|trade show]] in the world,<ref>{{cite news|url=https://www.pcworld.com/article/216340/tablets_internetlinked_smart_sensors_to_star_at_computex.html|title=Tablets, Internet-linked Smart Sensors to Star at Computex|author=Ralph Jennings|work=PC World|date=10 January 2011|access-date=19 January 2011}}</ref> is a global [[information technology|IT]] exhibition which attracts many foreign investors.<ref>{{cite news|url=http://www.zdnetasia.com/computex-show-draws-over-23-300-foreign-buyers-21212378.htm|archive-url=https://archive.today/20120418225740/http://www.zdnetasia.com/computex-show-draws-over-23-300-foreign-buyers-21212378.htm|url-status=dead|archive-date=18 April 2012|title=Computex show draws over 23,300 foreign buyers|work=ZDNet|date=11 June 2001|access-date=19 January 2011}}</ref>]]

Foreign trade has been the engine of Taiwan's rapid growth during the past 40 years. Taiwan's economy remains export-oriented; thus, it depends on an open world trade regime and remains vulnerable to downturns in the world economy. The total value of trade increased over fivefold in the 1960s, nearly tenfold in the 1970s, and doubled again in the 1980s.<ref>{{cite web|url=http://www.taiwanembassy.org/ca/ct.asp?xItem=92320&CtNode=181&mp=77&xp1=|title=Services of Economic Division|publisher=Taipei Economic and Cultural Office, Canada|access-date=23 December 2010|url-status=dead|archive-url=https://web.archive.org/web/20111003053239/http://www.taiwanembassy.org/ca/ct.asp?xItem=92320&CtNode=181&mp=77&xp1=|archive-date=3 October 2011}}</ref> The 1990s saw a more modest, slightly less than twofold, growth. Export composition changed from predominantly agricultural commodities to industrial goods (now 98%). The electronics sector is Taiwan's most important industrial export sector and is the largest recipient of United States investment.

Taiwan is a member of numerous trade agreements, with [[Economy of China|China]], [[Economy of Japan|Japan]], [[Economy of the United States|USA]], the [[Economy of the European Union|European Union]], and [[Economy of Hong Kong|Hong Kong]] as top 5 trade partners in 2010.<ref name="imports">{{cite web|date=December 2010|title=Import by Key Trading Partners|url=http://2k3dmz2.moea.gov.tw/gnweb/Indicator/wHandIndicator_File.ashx?type=pdf&report_code=FB03|url-status=dead|archive-url=https://web.archive.org/web/20131005133546/http://2k3dmz2.moea.gov.tw/gnweb/htmNotFoundPage.htm?aspxerrorpath=%2Fgnweb%2FIndicator%2FwHandIndicator_File.ashx|archive-date=5 October 2013|access-date=23 December 2010|publisher=Ministry of Economic Affairs}}</ref><ref name="exports">{{cite web|date=December 2010|title=Export by Key Trading Partners|url=http://2k3dmz2.moea.gov.tw/gnweb/Indicator/wHandIndicator_File.ashx?type=pdf&report_code=FB02|url-status=dead|archive-url=https://web.archive.org/web/20131005133546/http://2k3dmz2.moea.gov.tw/gnweb/htmNotFoundPage.htm?aspxerrorpath=%2Fgnweb%2FIndicator%2FwHandIndicator_File.ashx|archive-date=5 October 2013|access-date=23 December 2010|publisher=Ministry of Economic Affairs}}</ref> Taiwan has one of the world's lowest [[fertility rate]] and high [[housing prices]]. Labor shortages, falling domestic demand, and declining [[Taxation in Taiwan|tax revenues]] are concerns as Taiwan's population decline is faster than other [[advanced economies]].<ref name="CIA">{{cite web|date=2020-02-07|title=East Asia/Southeast Asia :: Taiwan - The World Factbook|url=https://www.cia.gov/the-world-factbook/countries/taiwan/|access-date=2020-02-29|website=Central Intelligence Agency|quote=Taiwan's diplomatic isolation, low birth rate, rapidly aging population, and increasing competition from China and other Asia Pacific markets are other major long-term challenges. Taiwan's total fertility rate of just over one child per woman is among the lowest in the world, raising the prospect of future labor shortages, falling domestic demand, and declining tax revenues. Moreover, Taiwan's population is aging quickly, with the number of people over 65 expected to account for nearly 20% of the island's total population by 2025. President TSAI's administration has made little progress on the domestic economic issues that loomed large when she was elected, including concerns about stagnant wages, high housing prices, youth unemployment, job security, and financial security in retirement.}}</ref><ref name="Asian Development Bank 2020">{{cite book|date=2020-04-03|title=Asian Development Outlook (ADO) 2020: What Drives Innovation in Asia?|url=https://www.adb.org/publications/asian-development-outlook-2020-innovation-asia|archive-url=https://web.archive.org/web/20200407050409/https://www.adb.org/sites/default/files/publication/575626/ado2020.pdf|archive-date=2020-04-07|access-date=2020-04-07|pages=207–208|issn=1996-725X|issue=2020|publisher=Asian Development Bank |doi=10.22617/FLS200119-3 |isbn=9789292621568 |s2cid=241124033 }}</ref><ref>{{Cite web |title=THE WORLD FACTBOOK - Birth rate |url=https://www.cia.gov/the-world-factbook/field/birth-rate/country-comparison |access-date=24 August 2022 |publisher=CIA: Central Intelligence Agency}}</ref>

As an island economy with a lack of [[natural resources]] and comparatively lower domestic [[aggregate demand]], Taiwan's highly educated human resources<ref>{{cite web|title=Background paper |url=https://www.un.org/esa/sustdev/publications/industrial_development/3_1.pdf|website=Un.org|access-date=28 June 2017|url-status=live|archive-date=12 July 2017|archive-url=https://web.archive.org/web/20170712102828/http://www.un.org/esa/sustdev/publications/industrial_development/3_1.pdf}}</ref> would contribute greatly to [[Value added]] [[Innovation management]]<ref>{{cite web |title=Data|url=http://unctad.org/en/PublicationsLibrary/ecidc2013misc1_bp8.pdf|website=unctad.org|access-date=27 February 2018|archive-date=29 August 2017|archive-url=https://web.archive.org/web/20170829075848/http://unctad.org/en/PublicationsLibrary/ecidc2013misc1_bp8.pdf|url-status=live}}</ref><ref>{{cite web|last=Karimaa|first=Alexandra|date=February 2013|title=Value-Aware Approach to Management of Innovative Software Products and Services|url=http://www.joebm.com/papers/16-E00039.pdf|website=www.joebm.com|access-date=27 September 2015|archive-date=27 September 2015|archive-url=https://web.archive.org/web/20150927184208/http://www.joebm.com/papers/16-E00039.pdf|url-status=live}}</ref><ref>{{cite web |url=http://iic.wiki.fgv.br/file/view/Developing+Innovation+Capability+in+Organizations+a+Dynamic+Capabilities+Approach.pdf |title=Developing Innovation Capability In Organizations |website=iic.wiki.fgv.br |access-date=17 January 2022 |archive-url=https://web.archive.org/web/20120813045719/http://iic.wiki.fgv.br/file/view/Developing+Innovation+Capability+in+Organizations+a+Dynamic+Capabilities+Approach.pdf |archive-date=13 August 2012 |url-status=dead}}</ref><ref>{{cite web|title=Bloomberg Pursuits - Bloomberg|url=https://www.bloomberg.com/slideshow/2014-01-22/30-most-innovative-countries.html#slide22|access-date=27 July 2018|website=Bloomberg.com|archive-date=1 July 2016|archive-url=https://web.archive.org/web/20160701043449/http://www.bloomberg.com/slideshow/2014-01-22/30-most-innovative-countries.html#slide22|url-status=live}}</ref> for expanding<ref>{{cite web |title=Chinese Taipei |website=Innovationpolicyplatform.org |url=https://www.innovationpolicyplatform.org/content/chinese-taipei|access-date=27 July 2018|archive-url=https://web.archive.org/web/20180714164617/https://www.innovationpolicyplatform.org/content/chinese-taipei|archive-date=14 July 2018|url-status=dead}}</ref> Taiwan's international trade.

Taiwan, as an independent economy, became a member of the [[World Trade Organization]] (WTO) as [[Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu]] (often shortened to "Chinese Taipei" - both names resulting from PRC interference in the WTO) in January 2002. In a 2011 report by Business Environment Risk Intelligence (BERI), Taiwan ranked third-best globally for its investment environment.<ref>{{cite news|url=http://focustaiwan.tw/ShowNews/WebNews_Detail.aspx?Type=aECO&ID=201109010034|title=Taiwan world's third-best for investment: research firm|publisher=Focus Taiwan News Channel|date=1 September 2011|access-date=1 September 2011|archive-date=19 January 2012|archive-url=https://web.archive.org/web/20120119215500/http://focustaiwan.tw/ShowNews/WebNews_Detail.aspx?Type=aECO&ID=201109010034|url-status=live}}</ref>

Taiwan is the world's largest supplier of contract computer chip manufacturing ([[Semiconductor fabrication plant|foundry services]]) and is a leading [[liquid crystal display|LCD panel]] manufacturer,<ref>{{cite news|url=http://www.taiwantoday.tw/ct.asp?xItem=138976&ctNode=445|title=Taiwan's ICT industry gears up for prosperous 2011|newspaper=Taiwan Today|date=23 December 2010|access-date=23 December 2010|archive-url=https://web.archive.org/web/20110718012053/http://www.taiwantoday.tw/ct.asp?xItem=138976&ctNode=445|archive-date=18 July 2011|url-status=dead}}</ref> DRAM computer memory, networking equipment, and consumer electronics designer and manufacturer.<ref name="supercycle" /> Major hardware companies include [[Acer Inc.|Acer]], [[Asus]], [[HTC]], [[Foxconn]], [[TSMC]] and [[Pegatron]]. Textiles are another major industrial export sector, though of declining importance due to [[labor shortage]]s, increasing overhead costs, land prices, and [[environmental protection]].<ref name="majorind">{{cite web|url=http://www.taiwan.com.au/Polieco/Industry/Major/report01.html|title=Major Industries in Taiwan|website=Taiwan.com.au|access-date=23 December 2010|url-status=dead|archive-url=https://web.archive.org/web/20100222091017/http://www.taiwan.com.au/Polieco/Industry/Major/report01.html|archive-date=22 February 2010}}</ref>

Imports are dominated by raw materials and capital goods, which account for more than 90% of the total. Taiwan imports most of its energy needs. The United States is Taiwan's third largest trading partner, taking 11.4% of Taiwanese exports and supplying 10.0% of its imports.<ref name="imports" /><ref name="exports" /> Mainland China has recently become Taiwan's largest import and export partner. In 2010, the mainland accounted for 28.0% of Taiwan's exports and 13.2% of imports.<ref name="imports" /><ref name="exports" /> This figure is growing rapidly as both economies become ever more interdependent. Imports from mainland China consist mostly of agricultural and industrial raw materials. Exports to the United States are mainly electronics and consumer goods. As the Taiwanese per capita income level has risen, demand for imported, high-quality consumer goods has increased. Taiwan's 2002 trade surplus with the United States was $8.70 billion.

The lack of formal [[foreign relations of Taiwan|diplomatic relations]] between the Republic of China (Taiwan) with Taiwan's trading partners appears not to have seriously hindered Taiwan's rapidly expanding commerce. The Republic of China maintains [[Taipei Economic and Cultural Representative Office|cultural and trade offices]] in more than 60 countries with which it does not have official relations to represent Taiwanese interests. In addition to the WTO, Taiwan is a member of the [[Asian Development Bank]] as "Taipei, China" (a name resulting from PRC influence on the bank) and the [[Asia-Pacific Economic Cooperation]] (APEC) forum as "[[Chinese Taipei]]" (for the same reason as above). These developments reflect Taiwan's economic importance and its desire to become further integrated into the global economy.

Taiwan is a member of the [[Asian Development Bank]] (ADB), the [[World Trade Organization]] (WTO), and the [[Asia-Pacific Economic Cooperation]] (APEC). Taiwan is also an observer<ref>{{cite web|title=Research from TASC|url=http://www.aseancenter.org.tw/en/CenStudyDetail.aspx?studyid=6&natstudyid=1 |website=Aseancenter.org.tw|access-date=7 October 2012|archive-date=29 July 2013|archive-url=https://web.archive.org/web/20130729172832/http://www.aseancenter.org.tw/en/CenStudyDetail.aspx?studyid=6&natstudyid=1|url-status=live}}</ref> at the [[Organisation for Economic Co-operation and Development]] (OECD) and [[International Energy Agency]]&nbsp;(IEA) as Member<ref>{{cite web |url=https://www.iea.org/countries/chinese-taipei |title=Chinese Taipei |website=[[International Energy Agency]]&nbsp;(IEA)}}</ref> under the acronym of [[Chinese Taipei]],<ref>{{cite journal|year=2011 |title=Chinese Taipei - Organisation for Economic Co-operation and Development |url=http://www.oecd.org/countries/chinesetaipei/|series=OECD Trade and Environment Working Papers |doi=10.1787/5kgcf71l188x-en|website=Oecd.org|access-date=13 October 2012|archive-date=7 June 2013|archive-url=https://web.archive.org/web/20130607030144/http://www.oecd.org/countries/chinesetaipei/|url-status=live}}</ref> and a member of [[International Chamber of Commerce]] as Chinese Taipei.<ref>{{cite web|title=Chinese Taipei Business Council of ICC details &#124; ICC - International Chamber of Commerce|url=http://www.iccwbo.org/Worldwide-Membership/National-Committees/Chinese-Taipei-Business-Council-of-ICC/|website=Iccwbo.org|access-date=13 October 2012|archive-date=23 August 2013|archive-url=https://web.archive.org/web/20130823195747/http://iccwbo.org/worldwide-membership/national-committees/chinese-taipei-business-council-of-icc/|url-status=live}}</ref> Taiwan signed [[Economic Cooperation Framework Agreement]] with People's Republic of China on 29 June 2010. Taiwan has also signed free trade pacts with Singapore and New Zealand.<ref>{{cite web|author=Jenny W. Hsu |author2=Aries Poon|date=7 November 2013|title=Taiwan, Singapore Sign Free-Trade Pact|url=https://www.wsj.com/articles/SB10001424052702303309504579182900090244112|access-date=4 March 2015|work=WSJ|archive-date=2 April 2015|archive-url=https://web.archive.org/web/20150402125620/http://www.wsj.com/articles/SB10001424052702303309504579182900090244112|url-status=live}}</ref><ref>{{cite web|author=Lucy Craymer |author2=Fanny Liu|date=11 July 2013|title=Taiwan and New Zealand Sign Free-Trade Agreement|url=https://www.wsj.com/articles/SB10001424127887324425204578597022344060966|access-date=4 March 2015|work=WSJ|archive-date=31 March 2015|archive-url=https://web.archive.org/web/20150331171027/http://www.wsj.com/articles/SB10001424127887324425204578597022344060966|url-status=live}}</ref> Taiwan applied for the membership in the [[Asian Infrastructure Investment Bank]] in 2015.<ref>{{cite web|title=Hong Kong, Taiwan seek to join AIIB|url=http://www.chinadaily.com.cn/china/2015-04/02/content_19978113.htm|access-date=27 July 2018|website=Chinadaily.com.cn|archive-date=27 July 2018|archive-url=https://web.archive.org/web/20180727151403/http://www.chinadaily.com.cn/china/2015-04/02/content_19978113.htm|url-status=live}}</ref>

The [[Economic Cooperation Framework Agreement]] (ECFA) with the People's Republic of China was signed on 29 June 2010, in [[Chongqing]].<ref name="xinhuanet1">{{cite web |url=http://news.xinhuanet.com/english2010/china/2010-06/29/c_13375203.htm |title=Chinese, Taiwan sign landmark economic pact |agency=Xinhua News Agency |date=24 June 2010 |access-date=29 June 2010 |archive-url=https://web.archive.org/web/20100703011457/http://news.xinhuanet.com/english2010/china/2010-06/29/c_13375203.htm |archive-date=3 July 2010 |url-status=dead}}</ref><ref>Taiwan News, [http://www.etaiwannews.com/etn/news_content.php?id=1299089&lang=eng_news&cate_img=83.jpg&cate_rss=news_Politics_TAIWAN ECFA signing scheduled for June 29] {{Webarchive|url=https://web.archive.org/web/20131021233451/http://www.etaiwannews.com/etn/news_content.php?id=1299089&lang=eng_news&cate_img=83.jpg&cate_rss=news_Politics_TAIWAN |date=21 October 2013 }} 25 June 2010</ref> It could potentially widen the market for Taiwan's exports. However, the true benefits and impacts brought by ECFA to Taiwan's overall economy are still in dispute.<ref>{{cite web |author=John Pike |url=http://www.globalsecurity.org/military/library/news/2009/07/mil-090716-voa06.htm |title=Taiwan Sees Gains in Closer Ties With China |website=Globalsecurity.org |date=16 July 2009 |access-date=17 July 2009 |archive-date=5 September 2009 |archive-url=https://web.archive.org/web/20090905161506/http://www.globalsecurity.org/military/library/news/2009/07/mil-090716-voa06.htm |url-status=live }}</ref> The newly signed agreement will allow for more than 500 products made in Taiwan to enter mainland China at low or no [[tariff]]s.<ref>{{cite news|url=http://www.chinapost.com.tw/business/asia/b-taiwan/2011/01/02/286001/Taiwan-ranks.htm|title=Taiwan ranks fifth in major importers to China in 2010|work=China Post|date=2 January 2011|access-date=1 January 2010|agency=CNA|archive-date=25 September 2012|archive-url=https://web.archive.org/web/20120925020348/http://www.chinapost.com.tw/business/asia/b-taiwan/2011/01/02/286001/Taiwan-ranks.htm|url-status=live}}</ref> As of 2021, Taiwan's exports to the People's Republic of China (including Hong Kong) totaled about US$270 billion per year, which is equivalent to more than 40% of Taiwan's total GDP.<ref>{{cite web | url=https://asiatimes.com/2022/04/chinas-trade-boom-defies-new-cold-war/ | title=China's trade boom defies new Cold War | date=14 April 2022 }}</ref> The government is also looking to establish trade agreements with Singapore<ref>{{cite news|url=http://focustaiwan.tw/ShowNews/WebNews_Detail.aspx?ID=201012150035&Type=aECO|title=Taiwan, Singapore prepare to forge economic partnership (update)|publisher=Focus Taiwan News Channel|date=15 December 2010|access-date=23 December 2010|archive-date=19 January 2012|archive-url=https://web.archive.org/web/20120119000234/http://focustaiwan.tw/ShowNews/WebNews_Detail.aspx?ID=201012150035&Type=aECO|url-status=live}}</ref> and the United States.<ref>{{cite news|url=http://www.chinapost.com.tw/taiwan/foreign-affairs/2010/12/23/284795/Taiwan-US-TIFA.htm|title=Taiwan-US TIFA talks to resume next month|work=China Post|date=23 December 2010|access-date=23 December 2010|archive-date=9 January 2011|archive-url=https://web.archive.org/web/20110109081857/http://www.chinapost.com.tw/taiwan/foreign-affairs/2010/12/23/284795/Taiwan-US-TIFA.htm|url-status=live}}</ref>