Abstract
Since the 1990s, Taiwan has promoted the upgrading of industrial structure, and the financial crisis has brought about major economic shocks. After Taiwan became a WTO member in 2002, the total trade volume increased significantly under the trade liberalization economic system. The trade sector has become the main source of Taiwan's economic growth. As energy consumption expands with economic growth, the instability of international energy prices has become an important factor hindering Taiwan's future economic development. Taiwan’s energy demand is over 99% dependent on imports, making Taiwan’s economic growth and energy consumption really closely related. This study has found that the source of growth has transformed from domestic final demand effect and exports effect to technical coefficients effect and self-sufficiency Coefficients effect. The financial crisis has increased the “self-sufficiency” coefficient effect and the technical coefficient effect, and all other industries except the “agricultural sector” have shown significant growth. On the other hand, the source of energy consumption has changed after the financial crisis. This also confirms that Taiwan's economic growth is closely related to energy consumption, indicating that energy shortage has indeed had an important impact on Taiwan's economic development.
Highlights
Taiwan has experienced rapid economic growth since the 1960s
This study has found that the source of growth has transformed from DF effect and E effect to TC effect and SS effect
This transformation suggests that the future economic growth in Taiwan ought to rely on technological innovation in production to receive higher growth performance
Summary
Taiwan has experienced rapid economic growth since the 1960s. It suffered from the impact of two world oil crises, it still maintained a high level of economic growth. In 1985, the Gross domestic product (GDP) per capita reached $3,314, and in 1995 it increased to $12,906. In the process of economic development that Taiwan has experienced many challenges came from international economic environment. Taiwan has overcome the “middle income trap,” yet the transformation of the industrial structure remained to be a major challenge. After entering the 21st century, Taiwan’s economic growth has gradually slowed down. In 2005, the GDP per capita was US$19,278. Taiwan’s GDP per capita increased to US$24,318 in 2017, it faces rising costs due to high international energy prices and uncertainty about electricity supply
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