In his October National Day address, President Lai Ching-te (賴清德) emphasized that Taiwan’s economic growth rate has surpassed China.
However, Taiwan's economic situation reveals a stark contrast between its surface appearance and its underlying reality. On the surface, we see impressive GDP growth that outpaces our competitors, but there is also the profound hardship felt by the general public due to inflation and stagnant real wages.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) projects an annual economic growth rate of 4.59%, a significant increase from 1.31% in 2023. In comparison, while China has set an official growth target of 5%, its economy faces structural challenges, including a real estate crisis and insufficient consumer momentum.
Within the cross-strait context, this figure is more than just an economic indicator. It has been imbued with the political significance of declaring the superiority of Taiwan's democratic model over China’s authoritarianism.
But why do these macroeconomic GDP figures fail to translate into a sense of well-being for the public? The answer points directly to inflation.
Economic sentiment
Taiwan‘s annual Consumer Price Index growth rate has surpassed the 2% inflation alert threshold for three consecutive years, with an average increase of 2.18% for the full year of 2024. What the public feels most acutely is that these price hikes are concentrated in daily necessities, such as food and dining out, with rent increases hitting a multi-year high.
Ultimately, the public‘s economic sentiment comes down to the most fundamental question: Is my salary really increasing?
The data reveals a harsh truth. Although nominal wages have grown, after factoring in price increases, the growth of real regular earnings has been extremely slow, even stagnating or declining in recent years.
According to DGBAS data, even though real total wages finally returned to positive growth in 2024 with a 2.16% annual increase, the public generally feels no difference. This meager increase is but a drop in the bucket for purchasing power that has long been eroded by inflation.
This proves that the fruits of economic growth have not been fairly and effectively distributed to the broad salaried class.
The Lai administration has attempted to frame outperforming China economically as proof of democratic superiority. However, the former is caught in a dilemma between defending security and safeguarding freedom, while the latter is severely disconnected from the public's actual economic experience.
MVP of democratic world
These two issues collectively point to the core challenge facing the current administration: how to bridge the vast gap between grand narratives and the lived experiences of ordinary people.
In his inaugural address, Lai expressed his hope for Taiwan to become the “MVP of the democratic world.” However, a true MVP not only scores points in the international arena but must also lead the team to win the heartfelt cheers of the entire nation.
The challenge of this governance test lies not only in leading Taiwan to resist the erosion of external authoritarianism but also in how to make the fruits of democracy manifest in the daily lives of the people — a society where one need not worry about excessive speech regulation and can actually share in the dividends of economic growth.
Ultimately, a true democratic achievement is the establishment of a resilient society characterized by internal fairness and distributive justice, where people can live and work in peace and contentment.
How to move from abstract numbers and slogans to tangible improvements in people's livelihoods will be the most critical, mandatory question on this unfinished test.
