Taiwan is a real surprise package. For a small tropical island of just 23 million people it has become the centre of the world’s semiconductor industry.
And with a population smaller than Australia, Taiwan is full of energy and innovation. It has invented items as diverse as the DVD, Connect 6 laptop projectors and bubble tea, and in terms of GDP at nearly US$760 billion ($AUS 1210 billion) is approaching the top 20 economies in the world.
Taiwan is an open democracy with presidential and legislative elections every four years. Taiwan is culturally a mix with both Taiwanese indigenous and Chinese people, and past influences from Japan, Spain, the Netherlands and Portugal, where it was once known as Formosa.
According to the Deputy Minister for Foreign Affairs, Ambassador Francois Wu, (who recently served in Paris) Taiwan’s strength as a liberal democracy is that it can draw upon many influences from Europe (Dutch, Portugal, Spain) as well as Asia (Japan, China, South East Asia) as well as Indigenous Taiwanese influences.
“…We are very successful with our European origin also because in the past we have so many Taiwanese that study in Europe and came back and share the experience also try to bring the good part of Europe and mixed to the good parts of Asian, as an Asian country” he observed.
But as well as its cultural influences Taiwan is an economy very much based on international trade, particularly due to its comparative advantage in semiconductors, increasingly on renewable energy.
Great transformation
According to Chaney Ho a distinguished Taiwanese business leader, and chair of Avant tech, the great transformation of Taiwan to one of the world’s most advanced economies is quite the story.
“Taiwan produces 92 per cent of the world’s semi-conductors as well as being a leader in AI and IT, and renewable energy. It all started in the 1970s when Japan and the USA invested in Taiwan in the 1970s and other foreign investors followed. It all started with the education system, with the emphasis on skills. Yes, the foreign investors came here, developed Taiwan, but the Taiwanese had already, provided the education system. And we had to rely on foreign investment due to Taiwan’s small domestic market. We need to go out, we need to export, we need to work with the global company. So in the beginning we make the product for them and then we designed the product for them. And now we have become their very vital supply chain partner,” He explained
Ambassador Wu agrees that trade is central to everything Taiwan does.
“It’s important for Taiwan to be a member of the TPP for the other countries so we can grow trade. If we were a normal recognised state, Taiwan would be a member of G20 in terms of GDP per capita and trade. The GDP of Taiwan’s GDP is more than 1/4 of the French, we trade more than Russia, we trade more than Brazil, the world needs Taiwan to have a better trade system.”
Indeed, Taiwan is already a Taiwan is a member of the World Trade Organisation (WTO), APEC, and has applied to be a member of the Comprehensive and Progressive Agreement for Trans Pacific Partnership, CPTPP, or just TPP for short. Taiwan is a miracle economy with international trade and global connectivity at its core.
Big opportunity
So what are the opportunities for Australia? According to Austrade’s Christopher Lim:
“Taiwan is a terrific place to do business. I think many Australians may think of, you know, Taiwan as a tourist destination, but just so many wonderful business opportunities.
Of course for the regular sectors like Agri food and education in tourism, it’s a fantastic market, but there’s fantastic new areas such as renewable energy and hydrogen and the like, which is actually so important to Taiwan and Australia. When I first came to Taiwan, I noticed that clean energy was very important, the clean environment, the clean air that Taiwan has compared to other neighbours,” he said.
Indeed the airport economist has been visiting Taiwan for over 20 years and have noticed the country’s commitment to the environment and the green economic opportunities for Australia in Taiwan. It’s great that a green tropical island helping Australia put the greenback in the green and gold in a sense.
Should Australia and Taiwan should have a free trade agreement (FTA)? It’s the case that Taiwan is now the only one of our top ten trading partners for which we don’t have a FTA. Taiwan is in the top 6 in terms of exports of goods and services and top 5 in terms of import sources. An Australia TaiwanFTA would help grow the trade and investment between the 2 economies.
But regardless the FTA, Australia and Taiwan can do more together in terms of trade, investment, education and tourism and of course technology and innovation. And once again, the Australia state of Queensland is leading the way.
Taiwan’s strengths
According to Juna Ferrett, Queensland’s Commissioner to Taiwan (Queensland has a long-standing presence in Taiwan) about some leading Queensland companies: “Queensland has strengths in biotech, quantum computing, data centres and renewable energy that match well with Taiwan’s strengths. We have some great Queensland companies in Taiwan including Audeara in the health care space who works with their Taiwanese partner Clinico, and Green Harvest who work in green hydrogen.” She said.
Juna herself is of Paiwanese heritage and talked to me a lot of about indigenous entrepreneurship in Taiwan.
“A lot of people don’t know this, but the indigenous Taiwanese is actually a part of the larger Austronesian family. So it’s very likely that a lot of the indigenous tribes from across the Pacific and Southeast Asia originated from Taiwan. And we are growing the indigenous business partnerships between Taiwan and the rest of the Pacific. And overall, Taiwan is a very open place. It’s a very welcoming place. It’s a place that has a lot of emphasis on relationships, so it’s a very relationship driven business. A lot of the Taiwanese people, they’re very genuinely caring they’re very they’re very warm and friendly and they’ll go out of their way to help you,” she explained.
In conclusion, Taiwan is a great place to do business and to visit, Taiwanese are the friendliest people to foreigners and I would describe the Taiwanesestyle as ‘friendly efficiency’
Liberal democracy
What also strikes me is that Taiwan is a liberal democracy with a culturally diverse people and influences, both Indigenous and Chinese with influences from Europe, Asia and the rest of the world.
Also on the world stage Taiwan a good global citizen: Taiwan would be an excellent member of CPTPP as it has been a model member of APEC and WTO. And given Taiwan’s excellent record in dealing with SARS and COVID with its advanced healthcare sector, the world needs Taiwan in the WHO, especially if the world faces another pandemic. And finally, this little green tropical island’s commitment to the global environment and renewable energy has shown the world that it is easy being green.
Professor Tim Harcourt is Industry Professor and Chief Economist, IPPG, at the University of Technology Sydney (UTS) and host of The Airport Economist. www.theairporteconomist.com
The Airport Economist Taiwan episode will air soon on Ticker News and The Airport Economist channel: https://tickernews.co/shows/airporteconomist/
