Taiwan’s economy currently faces a slight slow-down in economic growth. GDP grew at 2.7% in 2018, and is expected to be around 2.2% in 2019.
Taiwan’s exports, which account for around 77% of its GDP, have this year been hit by a fall in demand for electronic components such as computer chips amid weaker device sales and slower global economic growth. The Taiwanese government is forecasting a decline of 1.17% for exports in 2019, following 5.9% growth in 2018.
Electronics make up more than 40% of Taiwan’s exports, and as growth in the global smartphone sector is weighed-down by market saturation, the effect will flow- on to Taiwan’s economy. Demand from the mainland China market is also slowing, particularly in the fields of automotive and telecommunications equipment. Tzer-Ming Chu, Taiwan’s Minister of the Directorate General of Budget, Accounting and Statistics, is reported to have stated that the slowing of exports is due to decreasing global trade and a slowing global economy, not because of the trade war.
On the other hand, there are some underlying positives for the Taiwan economy, as the share prices of tech companies continue to rise. Google, Microsoft and other major global tech companies are growing their presence in Taiwan, training local staff, which will result in a long-term benefit.
FOXCONN DRIVING BUSINESS
The past couple of years have seen Foxconn very active on the international front, with Taiwanese company’s subsidiary, Foxconn Interconnect Technology (FIT) buying the US tech player Belkin – the mother company of Linksys and Wemo, for a reported US$866m in March last year. In an official statement, Sidney Lu, CEO of FIT said, “Integrating Belkin’s best-in-class capabilities and solutions into FIT, we expect to enrich our portfolio of premium consumer products and accelerate our penetration into the smart home.”
Interesting to note also, with the arrival last year at IFA of the Shift Automotive conference, is that in 2016, Foxconn, together with Tencent and luxury-car dealer Harmony New Energy Auto, founded Future Mobility, a car start-up that aims to sell all-electric fully autonomous premium cars by the end of this year, under the “Byton” brand name. The vehicle has been described as a “driveable electric concept car”.
- 2.2% forecast economic growth in 2019
- 77% of Taiwan’s GDP comes from exports
- 40% the part of Taiwan’s exports taken up by electronics goods
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