TAIPEI (Taiwan News) — An economist has warned that even though Taiwan’s preliminary projection for its GDP growth rate last year was 2.98 percent — among the best in the world — a crisis may still be brewing for the country, as it relies too heavily on the tech industry, Liberty Times reported on Tuesday (Feb. 2).
CNBC reported that Taiwan became the fastest growing economy in Asia last year due to demand for its tech products, especially from China. Therefore, tech exports have been described by Iris Pang (彭藹嬈), chief economist for Greater China at ING Bank NV, as Taiwan’s sole economic growth engine. Taiwan has relied too heavily on the tech sphere, she said, to provide not only economic growth but also jobs and investments.
The economist maintained that it’s only a matter of time before Chinese tech companies catch up with those in Taiwan. When that happens, China will have realized technological independence and become Taiwan’s major competitor in the global market.
However, until then, the outlook for Taiwan’s tech industry will remain bright, and the sector will continue to drive economic growth, she added.
TS Lombard economists estimated that Taiwan and South Korea together produce 83 percent of the world’s single-chip microprocessors and 70 percent of memory chips, making the two countries strategically important to the U.S. and China, especially since China has limited access to U.S. technology.
The report said that under such circumstances, China will strive to achieve technological independence. However, some experts believe that at present China has fallen far behind, per Liberty Times.