TaiwanChapters
Economic outlook
Taiwan holds an important position in the global economy. It is a top player in the world’s information and communications technology industry as well as a major supplier of goods across the industrial spectrum.
According to the World Trade Organization, Taiwan was the 17th largest exporter and importer of merchandise in 2022. It was also one of the largest holders of foreign exchange reserves as of December 2022. According to the International Monetary Fund, Taiwan’s gross domestic product per capita reached US$32,756 in 2022. In terms of nominal GDP, Taiwan ranks close to Poland and Switzerland, while its GDP per capita expressed as purchasing power parity is similar to that of the Bahamas and South Korea.
As of 2021, the three highest-paid sectors in Taiwan include telecommunication service, financial services, and information services. The economy of Taiwan ranked the highest in Asia in the 2015 Global Entrepreneurship Index (GEI). With the technocracy-centred economic planning until 1987, real growth in GDP has averaged about 8% during the past three decades. Exports have grown since World War II, with inflation and unemployment staying low and foreign reserves being the world's fourth largest. Directorate-General of Budget, Accounting and Statistics and Ministry of Economic Affairs release major economic indicators of the economy of Taiwan.
Key indicators
- Area
- 35,980 km2
- Population
- 23,572,052 (July 2021 est.)
- Government type
- semi-presidential republic
- Languages
- Mandarin Chinese (official), Taiwanese (Min Nan), Hakka dialects, approximately 16 indigenous languages
- GDP
- PIB $1.4 trillion (2021 est.)
- Growth rate
- 5.46% (2021 est.)
- HDI
- N/A
- Capital
- Taipei
Macroeconomic indicators
Foreign trade
Foreign trade has been the engine of Taiwan's rapid growth during the past 40 years. Taiwan's economy remains export-oriented; thus, it depends on an open world trade regime and remains vulnerable to downturns in the world economy. Export composition changed from predominantly agricultural commodities to industrial goods (now 98%). The electronics sector is Taiwan's most important industrial export sector and is the largest recipient of United States investment.
Taiwan has one of the world's lowest fertility rate and high housing prices. Labor shortages, falling domestic demand, and declining tax revenues are concerns as Taiwan's population decline is faster than other advanced economies.
As an island economy with a lack of natural resources and comparatively lower domestic aggregate demand, Taiwan's highly educated human resources would contribute greatly to Value added Innovation management for expanding Taiwan's international trade.
Taiwan is the world's largest supplier of contract computer chip manufacturing (foundry services) and is a leading LCD panel manufacturer, DRAM computer memory, networking equipment, and consumer electronics designer and manufacturer. Major hardware companies include Acer, Asus, HTC, Foxconn, TSMC and Pegatron. Textiles are another major industrial export sector, though of declining importance due to labor shortages, increasing overhead costs, land prices, and environmental protection.
Imports are dominated by raw materials and capital goods, which account for more than 90% of the total. Taiwan imports most of its energy needs. Mainland China has recently become Taiwan's largest import and export partner. In 2021, Taiwan's exports to the People's Republic of China (including Hong Kong) totaled about US$270 billion per year, which is equivalent to more than 40% of Taiwan's total GDP. Imports from mainland China consist mostly of agricultural and industrial raw materials.
The United States is Taiwan's third largest trading partner, taking 11.4% of Taiwanese exports and supplying 10.0% of its imports. Exports to the United States are mainly electronics and consumer goods. As the Taiwanese per capita income level has risen, demand for imported, high-quality consumer goods has increased.
Taiwan is a member of the Asian Development Bank (ADB), the World Trade Organization (WTO), and the Asia-Pacific Economic Cooperation (APEC). Taiwan is also an observer at the Organisation for Economic Co-operation and Development (OECD) and International Energy Agency (IEA) as Memberhttps://en.wikipedia.org/wiki/Economy_of_Taiwan under the acronym of Chinese Taipei, and a member of International Chamber of Commerce as Chinese Taipei. Taiwan signed Economic Cooperation Framework Agreement with People's Republic of China on 29 June 2010. Taiwan has also signed free trade pacts with Singapore and New Zealand.https://en.wikipedia.org/wiki/Economy_of_Taiwan Taiwan applied for the membership in the Asian Infrastructure Investment Bank in 2015.
Taiwan is a member of numerous trade agreements, with China, Japan, USA, the European Union, and Hong Kong as top 5 trade partners.
-
xports - partners
-
China 22%, US 15%, Hong Kong 12%, Singapore 7%, Japan 6% (2022)
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Exports - commodities
-
integrated circuits, machine parts, computers, refined petroleum, plastics (2022)
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Imports - partners
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China 19%, Japan 12%, US 10%, South Korea 7%, Australia 6% (2022)
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Imports - commodities
-
integrated circuits, crude petroleum, machinery, natural gas, coal (2022)
Computex Taipei, the second-largest technology trade show in the world, is a global IT exhibition which attracts many foreign investors.
IMF Statistics:
| Subject descriptor | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
|
Gross domestic product, constant prices Percent change (Units) |
6.620 |
2.588 |
1.396 |
3.072 |
2.730 |
|
Gross domestic product, current prices Percent change (Billions) |
773.038 |
760.907 |
756.592 |
802.958 |
854.677 |
|
Gross domestic product per capita, current prices Percent change (Units) |
33,070.701 |
32,609.595 |
32,443.705 |
34,431.965 |
36,649.723 |
|
Inflation, average consumer prices Percent change (Units) |
1.971 |
2.947 |
2.492 |
1.881 |
1.555 |
|
Volume of imports of goods and services Percent change (Units) |
17.375 |
1.513 |
-6.511 |
4.630 |
2.850 |
|
Volume of exports of goods and services Percent change (Units) |
18.437 |
-0.880 |
-2.743 |
4.050 |
3.100 |
|
Unemployment rate Percent change (Units) |
3.950 |
3.670 |
3.670 |
3.670 |
3.670 |
|
Current account balance Percent change (Billions) |
117.976 |
100.829 |
98.926 |
111.590 |
118.442 |
|
Current account balance Percent change (Units) |
15.261 |
13.251 |
13.075 |
13.897 |
13.858 |
Estimates
Source: IMF Statistics
Relationships with Luxembourg
Existing conventions and agreements
Non double taxation agreement
In order to promote international economic and financial relations in the interest of the Grand Duchy of Luxembourg, the Luxembourg government negotiates bilateral agreements for the avoidance of double taxation and prevent fiscal evasion with respect to Taxes on Income and on fortune with third countries.
- Convention from 19.12.2011 (Memorial 2014, A No.123, p.1770)
-
Effective as of 01.01.2015 (Memorial 2014, A No.123, p.1770)
Cooperation between Taiwan and Luxembourg continues to develop in depth and across scopes. In recent years, the two countries have signed agreements and MOUs on the avoidance of double taxation and prevention of fiscal evasion, financial supervision and management, education, air transportation, and youth working holidays. They also take turns to hold meetings of the Taiwan-Luxembourg Joint Business Council, which has expanded bilateral industrial dialogue to cover such emerging areas as green energy, ICT, and the digital economy.
Source: Administration des contributions directes
Further information
Foreign Trade
The Statec Foreign Trade statistics provide information on the trade of goods - by product and by country. This information is collected respectively through the INTRASTAT declaration and on the basis of customs documents.
You can see the statistics on the website of the Statec.
Contact points in Taiwan
Luxembourg Trade and Investment Office Taipei
Mr Lex Kaufhold
Executive Director
Suite 1812, 18 F
No. 333, Sec. 1 Keelung Road
Taipei 11012
Taiwan
Tel.: (+886) 2 2757 6007
E-Mail: ltio.taipei@mae.etat.lu
Website: www.investinluxembourg.tw
Source: Ministry of Foreign Affairs of Luxembourg
Country risk as defined by Office du Ducroire for Taiwan
Ducroire is the only credit insurer covering open account deals in over 200 countries. A rating on a scale from 1 to 7 shows the intensity of the political risk. Category 1 comprises countries with the lowest political risk and category 7 countries with the highest. Macroeconomics experts also assess the repayment climate for all buyers in a country.
Link: Ducroire Office - Country Risk for Taiwan
Other useful links2