Economic and social factors in Taiwan’s competitiveness with special focus on the Taiwan-EU trade relations

Abstract

The main question of this study is the present and future challenges that influence Taiwan’s development and competitiveness. From among these traits the issue of the high exposition (especially in terms of FDI) and growing dependence on mainland China (the People’s Republic of China), the need for a shift in terms of the main drivers of the future economic development and to mitigate the risks of brain drain and social unrest. Taiwan needs to give up insisting to the principle of low labour costs, and this may give impetus to the two-decades long salary stagnation and to the domestic consumption. Taiwan can be competitive by increasing its focus to the domestic R&D and innovation in the new industries and also puts more emphasis on sustainability. It may give Taiwanese economy a chance to remain competitive and successful. The study gives a brief overview on the main characteristics and figures of the Taiwan-EU economic and trade relationship from which it can well be seen that while in a 10 years period (2004-2015) the European exports to Taiwan grew by around 50 % in value, Taiwanese exports to the EU countries more or less remains stagnant during the same period. It illustrates and emphasizes the fact that Taiwanese economy needs stimulus to regain its competitiveness. Within the frames of the Taiwan-EU economic relations the paper gives a brief insight into the Hungaro-Taiwanese trade issues too.