Taiwan economic growth at 23-year high in 2010
By Amber Wang (AFP) – 14 hours ago
TAIPEI — Taiwan's economy grew a blistering 10.47 percent in 2010, its fastest rate in 23 years, according to a government estimate, with analysts saying trade with former rival China was a key driver of the surge.
Improving ties between China and Taiwan has provided a massive shot in the arms for the island's exporters but economists warn that a pact between the two last year could also the end up restricting the Taipei's economic independence.
The Directorate General of Budget, Accounting and Statistics said the growth was the best since 1987 but warned that the figure for next 12 months would be almost half of that due to the slow recovery in developed economies.
"China was a major contributing factor to Taiwan's trade growth last year, and the two economies are closely linked," said Cheng Cheng-mount, an economist at Citibank Taiwan.
The finance ministry said exports jumped 34.8 percent to $274.64 billion last year, with those to China and Kong Kong hitting a record high $114.75 billion, or 41.8 percent of the overall figure.
Economic growth of 10.3 percent in the Chinese economy, now the world's second-largest, helped make the mainland a market hungry for Taiwanese-made products.
Taiwan, which signed a sweeping trade deal with China in June, is tying its economic fortunes ever more to the mainland, while seeking to keep a political distance with Beijing, which considers the island part of its territory.
However, the economic dependency means Taiwan may see a reduction in its freedom to steer a course regardless of China's wishes, according to Kenneth Lin, an economics professor at National Taiwan University.
"As Taiwan's economy relies more and more on China, local companies have to adopt a more pro-China stance in order to keep their business interests on the mainland, and they in turn will influence government policies," he said.
Another concern is that close economic cooperation with China may benefit just a few Taiwanese businesspeople with investments on the mainland, leaving the rest of the island's 23 million with few gains.
Despite double-digit growth in the economy, average salaries by the end of November were only 1.6 percent higher than a year earlier, according to the Council of Labour Affairs.
"The economic growth in 2010 was enjoyed more by business than the general public as many office workers didn't get pay raises last year and the income distribution is getting uneven," said Lin.
For 2011, the directorate general predicted growth of 5.03 percent, stating that uncertain factors in the year ahead included a still weak jobs picture in developed countries, which are key to driving the island's export sector.
The economy expanded 6.48 percent in the fourth quarter of 2010, the directorate general said.
Although Taiwan is highly dependent on overseas markets, domestic demand accounted for a bigger share of growth than exports in the fourth quarter, it said, citing a rebound in consumer confidence.
In 2009, as world trade was hammered by the financial crisis, the island's economy shrank 1.93 percent.
The government said Monday's data an advance estimate, with the official growth figure for 2010 due to be announced at a press conference later this month.
Taiwan's economy was the world's 20th largest in 2010, according to US government data based on purchasing power parity, which takes into account the cost of living in different countries.
By Amber Wang (AFP) – 14 hours ago
TAIPEI — Taiwan's economy grew a blistering 10.47 percent in 2010, its fastest rate in 23 years, according to a government estimate, with analysts saying trade with former rival China was a key driver of the surge.
Improving ties between China and Taiwan has provided a massive shot in the arms for the island's exporters but economists warn that a pact between the two last year could also the end up restricting the Taipei's economic independence.
The Directorate General of Budget, Accounting and Statistics said the growth was the best since 1987 but warned that the figure for next 12 months would be almost half of that due to the slow recovery in developed economies.
"China was a major contributing factor to Taiwan's trade growth last year, and the two economies are closely linked," said Cheng Cheng-mount, an economist at Citibank Taiwan.
The finance ministry said exports jumped 34.8 percent to $274.64 billion last year, with those to China and Kong Kong hitting a record high $114.75 billion, or 41.8 percent of the overall figure.
Economic growth of 10.3 percent in the Chinese economy, now the world's second-largest, helped make the mainland a market hungry for Taiwanese-made products.
Taiwan, which signed a sweeping trade deal with China in June, is tying its economic fortunes ever more to the mainland, while seeking to keep a political distance with Beijing, which considers the island part of its territory.
However, the economic dependency means Taiwan may see a reduction in its freedom to steer a course regardless of China's wishes, according to Kenneth Lin, an economics professor at National Taiwan University.
"As Taiwan's economy relies more and more on China, local companies have to adopt a more pro-China stance in order to keep their business interests on the mainland, and they in turn will influence government policies," he said.
Another concern is that close economic cooperation with China may benefit just a few Taiwanese businesspeople with investments on the mainland, leaving the rest of the island's 23 million with few gains.
Despite double-digit growth in the economy, average salaries by the end of November were only 1.6 percent higher than a year earlier, according to the Council of Labour Affairs.
"The economic growth in 2010 was enjoyed more by business than the general public as many office workers didn't get pay raises last year and the income distribution is getting uneven," said Lin.
For 2011, the directorate general predicted growth of 5.03 percent, stating that uncertain factors in the year ahead included a still weak jobs picture in developed countries, which are key to driving the island's export sector.
The economy expanded 6.48 percent in the fourth quarter of 2010, the directorate general said.
Although Taiwan is highly dependent on overseas markets, domestic demand accounted for a bigger share of growth than exports in the fourth quarter, it said, citing a rebound in consumer confidence.
In 2009, as world trade was hammered by the financial crisis, the island's economy shrank 1.93 percent.
The government said Monday's data an advance estimate, with the official growth figure for 2010 due to be announced at a press conference later this month.
Taiwan's economy was the world's 20th largest in 2010, according to US government data based on purchasing power parity, which takes into account the cost of living in different countries.
