Country Study:

1

• Country Study
• Taiwan

2
An Overview

• An export-driven economy
• A gradual decrease in state intervention with
  privatization of public sector
• Agriculture constituted 35 of GDP in 1952. At
  present agriculture account for only 2 of GDP.
  Services constitute 71 of GDP
• Population of Taiwan is estimated at 23 million

3
An Overview

• GDP per capita 32,000 (PPP) growth rate 4-5
• GDP (PPP) is 738.8 billion
• Population growth rate is 0.23
• Infant morality rate 5.35 / 1000 live births
• Population below poverty line 0.95
• Inflation rate 3.7

4
Development Model

• Outward-looking industrialization
• Labor-intensive growth and industrialization
• Small business sector emphasized in five year
  plans
• Government plays an important role. With
  privatization, role of government is decreasing
• Aid from U.S. (1950) used for primary and
  secondary education
• Land reforms
• Less dependence on debt
• In recent years, more skill-intensive growth
  fueled
• by biotech and computer industry

5
Development Model

• Taiwans labor-intensive industries (shoes,
  textile) moved offshore as they were hurt by
  appreciation of New Taiwan Dollar and rising
  labor costs
• After a sustained growth over a decade (7) in
  2001-2002, Taiwan experienced negative growth
  rate (-2.2). Bad debt from the banking system,
  poor government policies and global downturn were
  among the major causes

6
External Relations

• In 1971, the U.S. changed its policy of
  recognizing Taiwan officially
• Mainland Chinas threat-affects internal parties
  and elections
• Recently, there are more economic ties with China
  tourism, air lines
• KMT is a major political party

7
Current Problems

• Global recession
• Large defense expenditures (3 of GDP) to protect
  Taiwan against P.R.C.
• Current leader Mas administration has called for
  diplomatic truce