Economists have high hopes for Taiwan's economy, largely driven by booming demand for artificial intelligence technology. But is Taiwan in danger of relying too heavily on the high-tech sector? TaiwanPlus speaks to Nick Marro, lead global trade analyst at the Economist Intelligence Unit.
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00:00How significant is this new monthly high in Taiwanese exports going to the U.S. and also
00:06its relation to the rate of shipments going to China?
00:09Yeah, well, the latest trade figures really validate the bullish expectations that we
00:14have for the Taiwanese economy.
00:16We're expecting real GDP growth to exceed 4% this year, and a lot of that reflects what's
00:21happening in the trade picture.
00:23And really, Taiwan's incredibly competitive positioning and global value chains when it
00:27comes to chip making.
00:29We've been seeing trade patterns in Northeast Asia start to shift over the past couple of
00:33quarters and shipments to China and Hong Kong, those shipments are still an incredibly important
00:38part of the export basket for Taiwan.
00:40But when we look at the U.S., the U.S. is really a growing source of demand here, and
00:44it's changing how the world thinks about Taiwan in terms of its relationship with the rest
00:48of the world.
00:49In your view, is Taiwan in danger of relying too much on the high tech sector, especially
00:55chips, for its economy?
00:57That's one of the big risks that we would kind of attach as a caveat for this very positive
01:02story for growth.
01:03It's never a great thing to just be beholden to one industry.
01:07And as bright as the optics look like for technology, I mean, any time there's going
01:11to be disruptions to that or demand's not going to perform as well as people anticipated,
01:15there'll be consequences.
01:17Looking into 2025, that's the big risk for kind of the immediate future for Taiwan.
01:22I mean, depending on who wins the U.S. election, we could see U.S. policy turn a bit more protectionist,
01:28and Taiwan is very much in the crosshairs there.
01:31As a trade-dependent economy, the policies coming out of the White House could have a
01:35disproportionate effect.
01:36So keeping a close eye on what happens in November is going to be important for Taiwan
01:40as well.