Taiwan

V

Economy of Taiwan

After retreating from the mainland in 1949, the leaders of the government on Taiwan instituted land reforms that increased agricultural productivity. In the 1960s Taiwan adopted export-oriented policies, establishing export processing zones with incentives to attract direct foreign investment. Meanwhile, the government also pursued industrialization. A strong manufacturing sector developed, with most products consisting of labor-intensive goods. During the 1980s the focus of manufacturing shifted to capital- and technology-intensive commodities, such as personal computers and machinery. In an effort to join the World Trade Organization (WTO), an international body that promotes and enforces the provisions of trade laws and regulations, Taiwan’s government began liberalizing the economy in the 1990s by deregulating banking, finance, the stock market, investment, and trade. These policies contributed to rapid economic growth, and by the 1990s Taiwan could boast one of the world’s highest standards of living. Taiwan became known as one of Asia’s “Four Tigers,” along with Hong Kong, Singapore, and South Korea. Taiwan’s membership in the WTO was approved in late 2001.

A

Services

Services account for about 60 percent of the gross domestic product (GDP). The most important services are finance, insurance, and business services. Next in importance are wholesale and retail trade, restaurants, and hotels, followed by government services. Tourism is significant, with 3.5 million tourists visiting Taiwan in 2006. The majority of tourists are Japanese, although many Southeast Asians, North Americans, and Europeans also visit Taiwan. Among the major tourist attractions are the National Palace Museum, Yangmingshan National Park, Sun Moon Lake, Mount Ali, Cheng Ching Lake, Kenting National Park, and Taipei 101, which ranked as the world’s tallest building when it was completed in 2004.

B

Manufacturing

Manufacturing accounts for about 35 percent of the GDP. Chief manufactured products include chemicals, petrochemicals, electrical and electronic machinery, basic metals, paper products, and nonmetallic mineral products. The importance of labor-intensive products, such as garments, leather, fur, and bamboo and wood products, is declining.

C

Agriculture, Forestry, and Fishing

Agriculture, forestry, and fishing account for less than 5 percent of the GDP. Taiwan’s chief agricultural areas are located on the island’s fertile western plains and basins. Rice is the principal food crop. Other major crops include sweet potatoes, citrus fruits, sugarcane, watermelons, pineapples, bananas, peanuts, mushrooms, tea, asparagus, and soybeans. Pigs, chickens, ducks, cattle, and goats are among the livestock raised.

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About half of the land is forested, but timber production is insufficient to meet domestic demand. The main timbers are oak, cedar, hemlock, bamboo, and rattan. Onshore and deep-sea fishing yield about 80 percent of the total catch; the remainder comes from along the coast and from cultivated ponds. Mackerel and various types of tuna are the leading marine species caught.

D

Energy

Thermal power plants burning fossil fuels provide 73 percent (2003) of Taiwan’s energy supply. Other sources of energy include nuclear power, supplied by 6 (2001) nuclear reactors, and hydroelectric facilities tapping the island’s major rivers, including the Choshui, Shimen, and Tahan (see Waterpower). See also World Energy Supply.

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