Taiwan' s Trade Soars to Record Heights in 2005

The value of Taiwan' s external trade rose 8.6% in 2005 to reach a record high of US$371 billion. Exports increased 8.8% to US$189.39 billion, also a record, according to statistics released by the Ministry of Economic Affairs. Imports for the year amounted to US$181.61 billion, an increase of 8.2%.

The island' s trade surplus for the year amounted to US$7.79 billion, a sharp 27.3% improvement over 2004, allowing officials who had been worried about 2005' s trade performance to breathe a sigh of relief.

Economic growth also performed well in 2005, with the rate of expansion rising from 2.49% in the first quarter to 4.38% in the third and an estimated 5.32% in the fourth. The lively economic activity helped push the jobless rate downward; the figure for the whole year was 4.15%, and for November alone it was 3.94%--the lowest level in five years.

In the World Economic Forum' s global competitiveness report for 2004-2005 Taiwan moved up one notch to 5th place worldwide and 1st in Asia, boding well for the island' s medium- and long-term growth. The top-10 countries in terms of competitiveness were, in order, Finland, the United States, Sweden, Denmark, Taiwan, Norway, Singapore, Switzerland, Japan, and Iceland.

The main reason for Taiwan' s improved ranking, observers commented, was the outstanding performance of its high-tech industries, whose competitiveness ranked second in the world after only the U.S.

For other Asian economies, competitiveness performance as reported by the WEF was mixed. Singapore dropped one notch to 7th place, South Korea tumbled from 18th to 29th, and mainland China slipped from 44th to 46th. (China' s slide down the ranking despite its spectacular economic growth in recent years, observers said, was probably due to the deteriorating quality of its public systems and its technology.) In addition to Taiwan' s advance, Hong Kong climbed three notches to 21st place.

Taiwan also did well in the 2005 World Competitiveness Yearbook published by the International Institute for Management Development (IMD) of Switzerland. This annual survey ranks 60 countries in four major categories. In last year' s report Taiwan moved up from 33rd to 24th place in economic performance and advanced from 20th to 18th in government efficiency. The island also climbed from 11th to 7th in business efficiency and from 23rd to 20th in infrastructure.

The IMD report placed Taiwan high on the competitiveness list in terms of patent productivity and credit cards issued, No. 2 in export ratio of goods produced, and No. 3 in Internet cost and secondary education.

Recent efforts to improve Taiwan' s economic climate seem to be paying off. The employed population reached a record high of 10.02 million in November 2005, and the unemployment rate dropped to 3.94% that month. (In 2002, the jobless figure was 5.17%.) Taiwan' s unemployment rate for November was higher than that of South Korea, Singapore, and the United Kingdom (at 3.5%, 3.4%, and 2.6%, respectively) but much lower than that of Germany (at 10.1%), France (9.9%), Canada (7.3%), Hong Kong (6.7%), the U.S. (5.4%), and Japan (4.7%).