Taiwan’s Social and Economic Challenges

Neszmélyi György Iván (2022) Taiwan’s Social and Economic Challenges. In: Changing Trade and Investment Relations of the Taiwanese Economy. Budapesti Gazdasági Egyetem, Budapest, Magyarország, pp. 15-39. ISBN 978-615-6342-39-3

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Hivatalos webcím (URL): https://doi.org/10.29180/9786156342393_1

Abstract

When we read or talk about Taiwan, we attribute a number of ideas and thoughts about a distant island from Europe which was one of the well-known East Asian economic miracles, the so-called Asian new industrialized economies (ANIEs), together with Hong Kong, Singapore, and the Republic of Korea (ROK). The rich bibliography describing and analyzing the background of the spectacular economic development of these economies also mentioned these famous fours as tigers, dragons and ANICs (Asian newly industrialized countries). No need to say, the latter is not punctual, as Hong Kong—contrary to Singapore and the ROK—is not a country, but since 1997, a special administrative region (SAR) of the People’s Republic of China. Moreover, with the exception of a few countries, Taiwan is also not recognized as an independent state, but as a part of China. Members of the European Union and all other significant powers in the world consider Taiwan as an important entity in terms of its economic performance, and in fact, with its own currency and financial and corporate system, Taiwan has its own economy, but in the international political arena, Taiwan is not considered as an independent entity. It is radically different, than it was before the early 1970s, when Taiwan, the so-called Republic of China, represented China in the United Nations’ Security Council. So, for several decades now, Taiwan has to act in international isolation in terms of political relations, but in terms of trade, business, sports, culture, education, and many other fields, it developed a wide range of cooperation with most countries of the world.The relations between Taiwan and the “Mainland”, the People’s Republic of China (PRC) have also undergone important changes. Even though Beijing considers Taiwan as a renegade province, the trade and investment relations between the two sides of the Taiwan Strait became intensive. The PRC needs semiconductors and other state of art technologies while Taiwan needs growing export market opportunities. Nowadays, PRC is far the biggest trade partner of Taiwan, by and large 30-40 percent of the Taiwanese export is purchased by the PRC.The economic ties became really strong, therefore, contrary to militant rhetoric of politicians, PRC has no interest to get the control back over Taiwan by military force, unless the government in Taipei declares its independence.