With more than $50 billion in trade with the United States, Taiwan is both America’s seventh-largest trading partner and seventh-largest foreign market. The small island nation buys half as much from the United States as all of Latin America, less Mexico. Its annual U.S. purchases are twice as much as all of Africa, five to seven times those of Russia or India, almost double China’s, and more than France, Korea, or Italy.

From 1996 to 1997, Taiwan’s gross domestic product (GDP) grew 6.8%, and 4.6% in 1998. It is projected to increase 5.3% in 1999, and forecast to grow 5.6% in 2000. The island’s 21 million people have an average income of $12,500.

Asian Flu Had Little Effect

U.S. exports to Taiwan – and via Taiwan to China and Southeast Asia – are growing. Taiwan is among the largest investors in China and most countries in Southeast Asia. The Asian financial crisis little affected the country’s economy, and Taiwan is now assisting other countries in that region to recover.

Taiwan’s Imports Are Vast

With few natural resources, Taiwan imports nearly all of its energy needs and agricultural goods (it is the fifth-largest importer of U.S. agricultural products), and most of its raw materials used by its industrial and manufacturing sectors. Its government is pro-business and strongly encourages foreign investment and technology. The country’s workforce is well educated, and the island’s proximity to mainland China offers unusual opportunity.

The top U.S. exports to Taiwan include machinery, transportation equipment, chemicals and related products, food and live animals, and crude materials, except fuels. Through September 1999, Taiwan had imported U.S. goods and services worth $13.7 billion and had exports to the U.S. of $25.8 billion.

Daley Asks Taiwan to Increase U.S. Imports

U. S. Commerce Secretary William M. Daley spoke before the 23rd Republic of China (Taiwan) and U.S. annual Joint Business Conference in San Antonio, Texas, in November. He said that trade relations with Taiwan haven taken off, and “we are looking forward to Taiwan’s entry into the World Trade Organization.

“We take in about one-fourth of all the goods Taiwan exports,” Daley added, “and we need Taiwan to take in more of our goods. That includes high-tech areas, such as biotech, and services, like banking and finance. I know many American companies also have their eye on the $150 billion in infrastructure projects anticipated over the next decade.”

Commenting on the earthquake that struck Taiwan in September, he congratulated the business community on how quickly its semi-conductor factories were back on line.

According to Taiwanese government figures, losses caused by the earthquake reached $4.1 billion. Stated earlier, authorities predict the island’s 1999 GDP growth to reach 5.3%. This is below their stronger forecasts of 5.7% and 5.5% announced in August and September, respectively, after a more accurate assessment of the earthquake damage had been concluded.

Competition Is Fierce, but Rewards Are High

The competition in the Taiwanese market is fierce. Japanese firms are well entrenched and European companies are moving rapidly to capture market share. Nonetheless, Taiwanese consumers typically have strong feelings of goodwill toward the U.S. and tend to favor American goods and services. As a result, U.S. firms with quality products and services at competitive prices have found and will continue to find Taiwan a rewarding market.

This article appeared in October 1999. (CB)

John Manzella
About The Author John Manzella [Full Bio]
John Manzella, founder of the ManzellaReport.com, is a world-recognized speaker, author and an international columnist on global business, trade policy, labor, and economic trends. His latest book is Global America: Understanding Global and Economic Trends and How To Ensure Competitiveness.

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