After Tsai Ing-wen came to power, Taiwan's economic development has been relatively stable and has performed better than expected. In 2019, when the global economy and many economies were lowering their economic growth rates, Taiwan's economic accounting department raised the eco

Wang Jianmin Data map

Author Wang Jianmin

After the outbreak of the new crown epidemic, the impact and impact on Taiwan's economy has become one of the focuses of attention from the outside world. Among them, whether the Taiwan authorities' originally optimistic economic growth expectations can be realized has attracted more attention.

After Tsai Ing-wen came to power, Taiwan's economic development has been relatively stable and has performed better than expected. In 2019, when the global economy and many economies lowered their economic growth rates, Taiwan's economic accounting department raised the economic growth rate twice. , Taiwan's economy grew by 2.73% throughout the year, returning to the top of Asia's "Four Little Dragons", demonstrating the strong endurance and competitiveness of Taiwan's economy.

In 2020, the COVID-19 epidemic broke out and began to spread since early March. The economies of many countries or regions were affected. The global economy was in danger of entering a recession, and the impact and influence on Taiwan's economy was gradually expanding. Bloomberg quoted Australian scholars as estimating that the economic losses caused by COVID-19 may be four times that of SARS, which will be the highest in the history of human epidemics. Oxford Economics predicts that the epidemic will drag down global economic growth by about 1.3 percentage points and cause losses of US$1.1 trillion, more than 25 times higher than SARS. Some international institutions predict that global economic growth will shrink by 50% to 1.5%. This is the forecast for February and early March. The spread and development of the epidemic after March has had an expanding impact on the global economy. Many experts predict that a global economic recession is a foregone conclusion, and the impact and losses may be more serious than expected.

Before the beginning of 2020, Taiwan’s economic forecasts from various institutions both inside and outside the island continued to show a medium-to-low-speed and stable growth trend. Few forecasts exceeded a growth rate of more than 3% or less than 1%, and most forecasted a growth rate of about 2.5%. Among them, relevant Taiwanese authorities are relatively optimistic about Taiwan's economic performance. The accounting department predicts economic growth of 2.72%, higher than in 2019.

However, after the outbreak of the epidemic, Taiwan’s economic growth has declined and been downgraded. In February 2020, Taiwan's accounting department revised the economic growth rate down from 2.72% to 2.37%, a decrease of 0.35 percentage points. The first quarter forecast was only 1.8%, a new low in the past 15 quarters. Taiwan's accounting department estimates that the epidemic will continue for the first quarter and economic growth will be reduced by 0.35-0.5%. Even on March 8, Taiwan’s accounting department still firmly believed that Taiwan’s economy could maintain a growth rate of 2.37%. It believed that there were four main supporting factors: semiconductor manufacturers continued to invest in advanced processes, Taiwanese businessmen continued to return to Taiwan, and foreign companies actively invested in Taiwan. The accelerated investment in green energy such as offshore wind power is expected to drive a steady expansion of corporate investment. Taiwan's "National Development Council" stated in early March that if the epidemic lasts for three months, Taiwan's GDP will decrease by 0.35-0.5 percentage points. It was not until late March that Taiwan's accounting department became pessimistic about Taiwan's economic growth, believing that it would be difficult to "guarantee 2".

ANZ Bank predicted in February that Taiwan's GDP growth would decrease by 0.47 percentage points. S&P Global Ratings lowered Taiwan's economic growth rate from 2.4% to 1.9% in early March, and further downgraded it to 1.6% in late March. Yang Jinlong, president of Taiwan's "Central Bank", said during an inquiry at the "Legislative Yuan" on March 12 that the economic growth rate will be reduced due to the impact of the epidemic. It will not be clear until the end of June whether the economic growth rate can be "guaranteed to 2" this year; if the epidemic continues to In the third quarter, it will be difficult to "guarantee 2". However, after Taiwan's stock market fell below 9,000 points on March 19, Taiwan's "Central Bank" took the lead in lowering the annual economic growth rate to 1.92%, indicating that "guaranteing 2" is no longer achievable. Judging from the current situation, there is a high probability that the epidemic will last until June. U.S. President Trump has even stated that it may last until July-August, and some experts predict that it will last even longer. Obviously, the duration of the epidemic development will not be long. The accuracy is very high, and the impact and influence on the global economy will further expand. Taiwan's economy still has great downward pressure, and may face the challenge of "maintaining one" in the future.

Among them, under the background of the epidemic, the economic performance of mainland China and the United States has a particularly important impact on Taiwan's economic growth. In 2019, mainland China's total GDP accounted for 16.3% of the world's total, four times that of SARS in 2003, and contributed 38% to global economic growth, which was 1.7 times that of 2003. Overseas tourism expenditure of US$257.7 billion was 15 times that of 2003. The economies across the Taiwan Strait are very close. The annual cross-Strait trade volume exceeds 200 billion US dollars, and the proportion of Taiwan's exports to the mainland (including Hong Kong) exceeds 40%. Therefore, the mainland's economic situation has a significant impact on the world and Taiwan's economy.In addition, the economic relationship between Taiwan and the United States is both special and close. Especially in the past two years, Taiwan-U.S. trade has seen a significant rebound. In 2019, Taiwan’s exports to the United States increased by about 17%, and the proportion of exports to the United States was close to 14%. Therefore, the U.S. economic performance is very important. has a significant impact on Taiwan's economy. Former president of Hon Hai Group Terry Gou said in early March that the United States accounts for 40% of the global consumer market and is the locomotive driving the global economy. Among them, nearly 350 million people in the United States are high-spending groups. If affected by the epidemic, Americans Not going out and not consuming are the key factors affecting the U.S. market and the global economy. The epidemic in the United States only began to expand rapidly in mid-March and became the global "epicenter." By March 30, the number of people infected exceeded 160,000. The impact on the U.S. and global economies has expanded, and the impact and impact on Taiwan's economy will further expand. It is more difficult for Taiwan's economic growth to "maintain 1".

observed the three major factors of investment, consumption, and export that support economic growth. Taiwan's exports and consumption will be significantly affected by the impact of the epidemic, while investment will be relatively less affected, which has also become a support for Taiwan's economy under the epidemic crisis. An important factor in maintaining rapid growth without recession. Usually, the status and role of investment in Taiwan's economic growth are not significant, but 2019 was a year of great growth in Taiwan's internal investment, reversing years of sluggish investment and becoming an important source of support for Taiwan's economic growth. Among them, government investment reached 567.5 billion yuan (NT$, the same below), with an annual growth of 11.5%; total public investment was 230.2 billion yuan, with an annual growth of 6.4%; private investment was 3.5898 billion yuan, with an annual growth of 9.9%; the total investment reached 4,400 billion, a significant increase over the years. Among them, fixed capital formation reached 4,387.5 billion yuan, with construction projects and machinery and equipment accounting for more than 60%. In particular, the Tsai administration vigorously promoted the so-called "three major plans for investing in Taiwan" in 2019 (reshoring Taiwanese businessmen, staying in Taiwan, and small and medium-sized enterprises), and achieved remarkable results in promoting investment. According to statistics from Taiwan's economic authorities, by the end of 2019, the total investment of enterprises that had reviewed the "three major investment plans in Taiwan" reached 824.2 billion yuan, of which the vast majority were so-called "Taiwanese businessmen returning to Taiwan to invest", accounting for about 90%. Private investment increased significantly in 2019. Taiwan's accounting department raised the annual private investment growth rate from the original estimate of 5.01% to 7.61%, a new high since 2014. Driven by the growth of private investment, the contribution of domestic demand to economic growth rose to 1.93 percentage points. After the outbreak of the epidemic in 2020, will Taiwan's investment, especially private investment, be affected? At present, it seems that the epidemic has little impact on investment on the island. This is closely related to the Sino-US economic and trade war, the adjustment of the overall industrial chain of the international economy, and Taiwan's internal industrial economic policies. Taiwan's economic authorities announced that as of March 19, a total of 399 entrepreneurs had been approved for investment in Taiwan's three major plans (reshoring Taiwanese businessmen, staying in Taiwan, and small and medium-sized enterprises), with a total investment of 918.7 billion yuan, a continued increase from the end of last year. Nearly 100 billion yuan, and will increase in the future. This is also the key reason why Taiwan’s accounting department is still cautiously optimistic about Taiwan’s economic growth after the epidemic broke out and continued to spread, and it is still possible to “maintain 1”. (Author Wang Jianmin, researcher at the Taiwan Institute of Chinese Academy of Social Sciences)