Taiwan Economy

Taiwan is a small island bordering the East China Sea, Philippine Sea, Taiwan Strait and the South China Sea. With a population of 22,858,872 (from July, 2007) Taiwan is about the size of Maryland and Delaware combined. Eighty four percent of Taiwan’s people are of Taiwanese and Hakka decent. Fourteen percent of the people are made up of main land Chinese and two percent of the people are aborigine. Taiwan’s government is a multi party democratic regime headed by a popular elected president. Those are the simple facts of this small island, but whats more important is how much GDP has grown and produced , inflation and unemployment rates, major goods and services, fiscal and monetary policies. Taiwan has a dynamic capitalist economy with gradually decreasing guidance of investment and foreign trade by government authorities. In keeping with this trend, some large, government-owned banks and industrial firms are being privatized. Exports have provided the primary impetus for industrialization. The island runs a trade surplus, and foreign reserves are the world's third largest. Despite restrictions on cross-strait links, China has overtaken the US to become Taiwan's largest export market and, in 2006, its second-largest source of imports after Japan. China is also the island's number one destination for foreign direct investment. Strong trade performance in 2006 pushed Taiwan's GDP growth rate above 4%, and unemployment is below 4%. Consumer spending recovered following a slowdown early in 2006, when banks tightened lending to address a sharp increase in delinquent consumer debt(1). From 2006 Taiwan's GDP purchasing power was at $681.8 billion, and official exchange rate at $346.7 billion. Its real growth in 2007 is 4.7% which increase .7% from 2006 but decrease 1.3% from 2005. Foreign trade is the top producer for Taiwan and also the engine that drives its economy. Taiwan's economy remains export-oriented, so it depends on an open world trade regime and