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Economic Daily News: Coping with changes in global trade

Economic Daily News: Coping with changes in global trade

Taiwan's trade growth averaged just 5.2 percent during the period 2008-2013, much lower than the average 10.6 percent recorded between 1987 and 2007. As a result, Taiwan's economic growth dropped accordingly from 6.4 percent to 3 percent. In 2014, Taiwan's trade momentum remained weak despite continued expansion. The situation is due partly to slow demand and investment over the past several years in the wake of the global financial crisis. But what deserves more attention are structural factors such as the reversal of globalization and changes in the international division of labor model. Taiwan's export orders from the United States, for example, fell from 7.9 percent during the period 1987-2007 to 5.1 percent 2008-2013. This is attributed to a series of policies imposed by the U.S. government to boost domestic industry and bring back manufacturing to America. China, meanwhile, is no longer satisfied with being just a contract manufacturer of low-end products. It is developing its own brands and industries that require a higher technological threshold. The vertical industrial integration in China is changing the cross-strait division of labor model and has reduced China's dependence on Taiwan imports. Even more worrying, China has become one of Taiwan's main competitors in the global market. To find a way out, Taiwan has to enhance the quality of its products, improve its production technology, increase the added-value of its products, adjust the operating model of its industries and develop its own brands. Also, the government needs to provide good education and do more to nurture talent. (Editorial abstract -- Jan. 16, 2015) (By Y.F. Low)


Updated : 2021-09-20 13:34 GMT+08:00