Taiwan‘s economy grew at nearly 3 percent last year, making it one of the best performing economies in the world during the pandemic.
Taiwan’s economy will grow at 2.98 percent in 2020, significantly higher than the 2.54 percent forecast last November, the Office of the Chief Justice of the Executive Yuan reported Friday (Jan. 29).
This growth rate surpassed mainland China’s 2.3 percent for the first Time in nearly 30 years.
In the fourth quarter of last year, Taiwan’s economy grew by 4.94 percent, the best economic performance in more than a decade, the main record office said.
The latest figures confirm Taiwan’s great success in Epidemic prevention and control. Taiwan quickly blocked passenger traffic with the outside world after the outbreak. So far, Taiwan has less than 900 cases of the virus and only seven deaths.
Officials from the Executive Yuan’s Main Records Office said that due to the success of the outbreak prevention and control, Taiwan’s manufacturing activity and private consumption continue to grow, driving economic expansion.
Ma Tieh Ying, an economist at Singapore’s DBS Group, noted that last year, Taiwan’s economy not only performed better than China’s, but also surpassed Vietnam and performed best among 11 major Asian economies. Vietnam’s economic growth rate was 2.9%, slightly lower than Taiwan’s.
DBS Group is bullish on Taiwan’s future economic prospects. The largest commercial bank in Singapore explained that this optimistic view is based on the good momentum of Taiwan’s electronics industry, which will help further boost exports and private investment this year. Global digitization and the use of new technologies such as artificial intelligence, the Internet of Things, 5G and autonomous driving will continue to drive demand for Taiwan’s semiconductor sector.
China was the first country to have an outbreak, but also the first to have it largely under control. Last year, China was the only major economy in the world to achieve positive economic growth, but its economic growth slowed to a 40-year low.
Fishy economic growth data for mainland China
Taiwan’s English-language news noted that Taiwan’s outperformance last year was due in large part to the shift of some supply chains from China to Taiwan, expanding demand for Taiwan’s electronics and communications products. Both Chinese official media and Western media have attributed the “rapid recovery” of China’s economy to a rapid recovery in industrial production and consumer spending as the country effectively contained the spread of the epidemic through city closures.
However, Taiwan’s English-language news says this view is not true. The main reason for China’s 2.3% economic growth is that China’s statistics department quietly revised downward the economic data for 2019 last year, thus lowering the reference base for the 2020 economic data. For example, the 2019 fixed investment figure was revised down by 4.7 trillion yuan ($729 billion); the 2019 total retail sales figure was also revised downward.
Had these figures not been revised downward, China’s fixed-asset investment would actually have not only failed to grow but contracted by 5.9 percent, and the total retail sales data would not have shown strong month-on-month growth since last August, Taiwan English News said.
Based on the unrevised data, China’s total retail sales actually contracted by 4.8%, or about 2 trillion yuan.
Related surveys show that all important economic indicators contracted in almost all regions and all industries in China over the four quarters of last year.