- Exports are a main driver of Taiwan’s economy, recording 480 billion USD in 2022 and accounting for 62 percent of its aggregate GDP.
- Looking back at the period from 2012 to 2022, the average growth rate of Taiwan’s exports to Mainland China and Hong Kong (+4.4 percent) is slower than for the export to the US (+8.6 percent) or to Japan (+5.6 percent).
- However, in absolute terms, Taiwan’s annual exports to Mainland China and Hong Kong increased by 53.7 percent from 121 billion US dollars to 186 billion US dollars.
- Despite active diversification efforts by Taiwan’s authorities to reduce reliance on exports to Mainland China, the mainland is still the largest export destination for Taiwan, accounting for 38.7 percent of total exports in 2022.
- Among the major export items, electronics, especially semiconductor products, constitute the largest export category and keep growing. In 2012, electronics made up 32.9% of Taiwan’s export to Mainland China and HK. The ratio increased to 62.4% in 2022. This demonstrates Mainland China’s significant demand for semiconductors from Taiwan, but also the importance of Mainland China as a market for Taiwan’s electronics industry.
- Assuming the continuance of high economic interdependence, a potential escalation of tensions across the Taiwan-Strait will not only damage Mainland China’s technology sectors due to disruptions of the semiconductor supply chain, but also severely hurt Taiwan’s economy by disturbing export to Mainland China and other destinations.
Sinolytics is a European research-based consultancy entirely focused on China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.