Foreign trade has been the engine of Taiwan's rapid growth during the past 40 years. Taiwan's economy remains export-oriented, so it depends on an open world trade regime and remains vulnerable to downturns in the world economy. The total value of trade increased more than five-fold in the 1960s, nearly 10-fold in the 1970s, and doubled again in the 1980s. The 1990s saw a more modest, slightly less than two-fold, growth. Export composition changed from predominantly agricultural commodities to industrial goods (now 98%). The electronics sector is Taiwan's most important industrial export sector and is the largest recipient of U.S. investment. Taiwan became a member of the World Trade Organization (WTO) as a special customs territory in January 2002.

Taiwan is the world's largest supplier of computer monitors and is a leading PC manufacturer. Textile production, though of declining importance as Taiwan loses its competitive advantage in labor-intensive markets, is another major industrial export sector. Imports are dominated by raw materials and capital goods, which account for more than 90% of the total. Taiwan imports most of its energy needs. The United States is Taiwan's second largest trading partner, taking 20% of Taiwan's exports and supplying 16% of its imports. Taiwan is the United States' eighth-largest trading partner; Taiwan's two-way trade with the United States amounted to about $45 billion in 2002. Imports from the United States consist mostly of agricultural and industrial raw materials. Exports to the United States are mainly electronics and consumer goods. The United States, Hong Kong (including indirect trade with mainland China), and Japan account for nearly 56% of Taiwan's exports, and the United States and Japan provide over 40% of Taiwan's imports. As Taiwan's per capita income level has risen, demand for imported, high-quality consumer goods has increased. Taiwan's 2002 trade surplus with the United States was $8.7 billion.

The lack of formal diplomatic relations with all but 26 of its trading partners appears not to have seriously hindered Taiwan's rapidly expanding commerce. Taiwan maintains trade offices in more than 60 countries with which it does not have official relations. In addition to the WTO, Taiwan is a member of the Asian Development Bank as "Taipei, China" and the Asia-Pacific Economic Cooperation (APEC) forum as "Chinese Taipei". These developments reflect Taiwan's economic importance and its desire to become further integrated into the global economy.

Agriculture

Although only about one-quarter of Taiwan's land area is arable, virtually all farmland is intensely cultivated, with some areas suitable for two and even three crops a year. However, increases in agricultural production have been much slower than industrial growth. Agriculture only comprises about 269% of Taiwan's GDP. Taiwan's main crops are rice, sugar cane, fruit, and vegatables.

Although self-sufficient in rice production, Taiwan imports large amounts of wheat, mostly from the United States. Meat production and consumption are rising sharply, reflecting a rising standard of living. Taiwan has exported large amounts of frozen pork, although this was affected by an outbreak of hoof and mouth disease in 1997. Other agricultural exports include fish, aquaculture and sea products, canned and frozen vegetables, and grain products. Imports of agriculture products are expected to increase due to the WTO accession, which is opening previously protected agricultural markets.

Economic Outlook

Taiwan now faces many of the same economic issues as other developed economies. With the prospect of continued relocation of labor-intensive industries to countries with cheaper work forces, Taiwan's future development will have to rely on further transformation to a high technology and service-oriented economy. In recent years, Taiwan has successfully diversified its trade markets, cutting its share of exports to the United States from 49% in 1984 to 20% in 2002. Taiwan's dependence on the U.S. market should continue to decrease as its exports to Southeast Asia and mainldn China grow and its efforts to develop European markets produce results. Taiwan's accession to the WTO and its desire to become an Asia-Pacific "regional operations center" are spurring further economic liberalization.

GDP: purchasing power parity - $357 billion (1999 est.)

GDP - real growth rate: 5.5% (1999 est.)

GDP - per capita: purchasing power parity - $18,100 (1999 est.)

GDP - composition by sector:
agriculture: 3%
industry: 33%
services: 64% (1999 est.)

Population below poverty line: 1% (1999 est.)

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices): 0.4% (1999 est.)

Labor force: 9.7 million (1999 est.)

Labor force - by occupation: services 55%, industry 37%, agriculture 8% (1999 est.)

Unemployment rate: 2.9% (1999 est.)

Budget:
revenues: $36.82 billion
expenditures: $40.53 billion, including capital expenditures of $NA (1999 est.)

Industries: electronics, petroleum refining, chemicals, textiles, iron and steel, machinery, cement, food processing

Industrial production growth rate: 7.5% (1999 est.)

Electricity - production: 133.586 billion kWh (1998)

Electricity - production by source:
fossil fuel: 65.91%
hydro: 7.84%
nuclear: 26.25%
other: 0% (1998)

Electricity - consumption: 124.235 billion kWh (1998)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 0 kWh (1998)

Agriculture - products: rice, corn, vegetables, fruit, tea; pigs, poultry, beef, milk; fish

Exports: $121.6 billion (f.o.b., 1999)

Exports - commodities: electronics, electric and machinery equipment 52%, metals, textiles, plastics, chemicals

Exports - partners: US 26%, Hong Kong 21%, Europe 18%, Japan 10%, Singapore 3% (1999)

Imports: $101.7 billion (c.i.f., 1999)

Imports - commodities: electronics, electric and machinery equipment 45%, minerals, precision instruments

Imports - partners: Japan 27%, US 18%, Europe 16%, South Korea 6%, Malaysia 4% (1999)

Debt - external: $35 billion (September 1999)

Economic aid - recipient: $NA

Currency: 1 New Taiwan dollar (NT$) = 100 cents

Exchange rates: New Taiwan dollars per US$1 - 31.395 (yearend 1999), 32.216 (1998), 32.052 (1997), 27.5 (1996), 27.5 (1995)

Fiscal year: 1 July - 30 June (up to FY98/99); 1 July 1999 - 31 December 2000 for FY00; calendar year (after FY00)