Taiwan's economy is growing at a great pace. It has the potential to become one of the top economies in the world in the coming years. The recent economic model adopted by the Taiwanese is quite unique. Although other countries have tried to adopt the same policy, they have not been successful so far.
Taiwan's economic growth has depended on heavy dependence on exports. The single currency unit can only be used for purchases and payments by foreign nationals. Hence, there is a huge necessity for foreigners to open businesses in Taiwan. That is one of the reasons why the Taiwanese government has allowed direct investment in several industries.
Direct investment is the most important aspect of Taiwan's economic growth. That has made Taiwan a high-income economy. But the main reason why the Taiwanese enjoy such high-income is because they have access to cheap labor force. Taiwan's economy still lacks basic infrastructure but it has modern hospitals, technical schools and universities. The people are extremely friendly and warm.
Taiwan's economy is also based on technology. The main industry is electronics because it is one of the easiest to produce, Taiwan's low cost of labor has led to the rise in demand for electronic appliances. The most important economic growth indicator is tourism, which is made up of visiting all major tourist destinations like Taipei, New Taipei, Kaikoura and Hickory Hills.
There are two types of taxes in Taiwan, the sales tax and the value-added tax (VAT). The first type of tax is quite fair and predictable, while the second one attracts a lot of businesses to expand their operations here. Tourism contributes over half of Taiwan's total economic activity. Tourists from all over the world travel here to experience the beautiful scenery and the business opportunities available here.
Taiwan's central government does not interfere with private economic activities but protects them from direct government regulation. They are also encouraged to set their own economic policies. The economy is dependent upon foreign trade, which mainly comes from the USA, Japan, China and Europe. The shipments consist mainly of machinery and automobiles. This dependence of the economy on outside sources leads to high inflation and unemployment in Taiwan.
Taiwan's government encourages the local economy to develop so that they can become more self-reliant. It has been trying for the past 15 years to have its own currency, the New Taiwan dollar, to facilitate trade. Although the attempt was not successful, the government has remained involved in the process of introducing the new currency. The main aim is for the economy to become more self-sufficient. The plan is to reduce the trade surplus and turn the economy into a zero sum game.
Taiwan has, however, successfully dealt with the external financial crisis and has kept the inflation to a minimum. The only setback has been the slowing down of the economy. In an effort to counter the problem, the central bank has adopted accommodative monetary policy. Inflation is still below the desired level of around 3 percent. The future economic growth in Taiwan is therefore secured thanks to the efforts of the Taiwanese government and private sector.
There are signs that the Taiwan economy is on the upswing. The consumer price . . . . . . index (CPI) has been increasing for the last few months, pointing to a rebound from the global economic recession. Retail sales have picked up as well, especially in metropolitan areas. Taiwan has one of the lowest unemployment rates in the world. Taiwan's recovery is supported by the United States and other countries, both through trade and American investment in the country. The direction of Taiwan's economic growth is therefore encouraging.
As mentioned earlier, the main thrust of the Taiwanese economic policy is to promote private sector growth. There is a balance of payments system to encourage private spending. The government also provides monetary support to the public through low interest rates and other monetary instruments. These moves are meant to improve Taiwan's economic performance and create space for the private sector to step up. A strong Taiwan economic performance can only be beneficial for the United States.
In addition to promoting growth in the private sector, the Taiwan government has taken measures to improve Taiwan's economic performance relative to other countries. For example, the Taiwanese government has implemented a massive economic stimulus package. The main aim of this economic stimulus package was to pump up demand in the Taiwanese economy, to increase exports and to allow the Taiwanese to reduce dependence on imports. This effort has had some positive effects, with more Taiwanese companies entering or remaining in China, the country's largest trading partner.
Taiwan's economic performance is on the upswing. Now is the time to take advantage of this progress. If you are thinking of investing in Taiwan real estate, you should be ready to take risks. There are no guarantees that the real estate market will recover soon. However, with so much risk involved, the possibility of seeing substantial Taiwan economic growth within the next five years is good. Now is the best time to get in on the action.