|Taipei 101 as seen from near Taipei International Airport|
As economists predicted late last year, 2012 has been a tough year for Asian exporters, and Taiwan, its economy increasingly dependent on the Chinese engine, has been no exception to the downturn.
From forecasts in mid-2011 of 4.51 percent GDP growth for 2012, government indicators in August predicted annual growth would settle at just 1.66 percent (the Taiwan Institute of Economic Research has since cut its forecast to a mere 1.16 percent). It was the lowest in a long series of downward revisions through the year — primarily the result of a slowing Chinese economy and the struggles of Eurozone economies. Taiwan’s economy shrank 0.18 percent year-on-year in the three months to June, the first quarterly contraction since the third quarter of 2009 — mostly the result of poor exports performance.
Despite the difficulties, the Ma administration’s plan to revive the economy does not seem to imagine anything beyond further expansion of economic ties with China.
My article, published in the October/November 2012 issue of Asia Today International, can be accessed here (subscription required).