Taiwan’s economy boomed in reaction, as the island logged ahead of the pack with roughly 8% economic growth for two quarters in a row. Projections have Taiwan’s GDP growth peaking at 7.4% by 2025, even overtaking growth in neighboring China. Further stoking this surge is the unprecedented global demand for artificial intelligence (AI). Export growth in Taiwan reached a year-on-year record of 49.7% in October. Despite these impressive numbers, most residents are not enjoying the fruits of the region’s economic prosperity. Stagnant wages combined with increasing costs of living remain a heavy weight on their everyday lives.
Especially important to this economic tableau is TSMC, Taiwan’s semiconductor powerhouse and the world’s largest contract chipmaker. The company has raised its full-year revenue outlook into the mid-30% range. This increase is driven by a just as explosive increase in public interest for AI. Though tech companies are enjoying record returns, people are still worried about their economic security.
Economic Growth and Projections
Taiwan’s remarkable economic success has long earned it a place as one of the highest-performing economies in the world. Jason Tuvey, an economist, stated, “Taiwan’s economy has clearly been one of the best performing economies in the world, particularly over recent quarters.” When adjusted for purchasing power parity, this year the country’s GDP per capita is expected to exceed $38,000. This wonderful increase places the country in the lead of not only South Korea, but Japan.
The semiconductor industry has become an indispensable pillar of Taiwan’s prosperity. Chips and electronics now comprise almost three-quarters of the nation’s exports. Electronics manufacturing powers more than 15% of Taiwan’s GDP. It only uses 6.5% of the workforce, making clear the stark disparity that exists between who generates the wealth and who gets to enjoy it.
Of all these positive signs, growth might not necessarily continue at such an impressive rate, experts warn. Wang Jiann-Chyuan remarked, “Taiwan’s export growth will definitely come down next year.” As international markets shift, Taiwan will find it increasingly difficult to protect its current upward trajectory.
Stagnant Wages and Economic Disparity
And while Taiwan’s economy has recently boomed, average Taiwanese people’s wages haven’t caught up with the increased living expenses. Average salaries are over 30% less than in South Korea and Japan. This inequity is making the chasm between corporate prosperity and personal prosperity wider and deeper. Wu Jieh-min expressed his concerns about this disconnect: “That’s why I’ve come to the conclusion that the country is strong, but the people aren’t necessarily wealthy.”
The housing market adds to this problem, with Taipei’s HPI almost tripling in the last 20 years. The high cost of living is taking an enormous toll on more working and middle-class families. Chen, a healthcare professional, noted the impact of stagnant wages across various sectors: “That’s why you hear doctors complaining about being underpaid, and why so many nurses are leaving the country or the industry altogether.”
What’s evident in Taiwan are the broken dreams of the residents lamenting the disparity between Taiwan’s soaring economic prosperity and their own struggling finances. Chen further commented, “People in Taiwan keep hyping themselves up, saying things like ‘We have TSMC,’ or boasting about how high the stock market is. For many living here, their monthly pay stayed much the same.”
A Cautious Mindset Among Citizens
Against this economic backdrop, a Taiwan is a cautious people by nature. Wu highlighted this sentiment: “I think the cautious, on-edge mindset you see across Taiwanese society is very obvious, and I actually see it as something positive.” This new perspective embodies a realization that we must steward future threats prudently.
Despite the prevailing optimism surrounding technological advancements and economic statistics, many individuals remain acutely aware of their daily struggles. The contradictory story between thriving corporations and struggling people paints a jarring picture that complicates the notion of widespread success.