Taiwan’s economy grew faster than China’s for the first time in three decades last year, as strong demand for the island nation’s tech exports boosted growth in the fourth quarter.
Gross domestic product rose 4.9% in the last three months of 2020 compared to the same period a year earlier, bringing Taiwan’s expansion during 2020 to 3%, the agency said on Friday. of statistics of the cabinet. It was a faster pace than the Growth of 2.3% in full year reported by China.
Wu Pei-hsuan, an official with Taiwan’s statistics agency, said it was the first time the country had overtaken China in a full year since 1990.
It is also Taiwan’s fastest quarterly growth since the first three months of 2011 and well above a market consensus estimate of 3.6 percent.
Exports of electronic components, which account for the lion’s share of Taiwanese exports, jumped 21.2% in the last three months of the year.
Unlike most developed countries, the Taiwanese economy has also been boosted by healthy domestic demand due to its successful containment of the coronavirus pandemic; Taiwan has only recorded 899 Covid-19 infections and seven deaths. Consumption by residents of the country rose 4.3% year on year in the fourth quarter.
“The positive growth, despite the disruptions from Covid-19, reflects strong external demand for tech products and well-contained local infection,” wrote Helen Hu, economist at Goldman Sachs, in a research note.
Taiwan has long suffered from sluggish growth due to the exodus of its manufacturing industries to China, where cheaper labor and land costs and looser regulations have long given them a cost advantage. for export production.
Taiwanese exporters, many of whom are contract manufacturers of American, European and Japanese suppliers of electronics, have been one of the biggest investors in China for the past 30 years. But rising production costs in China, eroding incentives offered by Beijing in the past, and the Chinese government’s support for domestic companies have instead caused Taiwanese companies to divert their investments home and elsewhere recently.
In the past, many Taiwanese were drawn to the economic opportunities offered by China’s dynamic growth. But Beijing is more and more hostile attitude towards his little neighbor cooled this interest.
China claims Taiwan as its territory and threatens to attack it if Taipei refuses unification indefinitely.
Since China locked down entire regions to contain the spread of Covid-19 early last year, Taiwanese have returned home and stayed there in large numbers, a trend that has also bolstered the national economy.