Five ways to boost Taiwan’s economy in the face of China’s overtures and threats

Sonny Lo says Taiwan’s drop in global competitiveness rankings should inspire the island nation to adopt innovative policy measures and cease political bickering

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A woman practises tai chi in front of the National Theatre in Taipei in March. Taiwan must take steps to maintain its competitive edge in the face of rising China. Photo: EPA-EFE

Published: 1:15pm, 7 Jun 2018Updated: 8:22pm, 7 Jun 2018

While Taiwan was viewed as one of the four East Asian tigers which produced an “economic miracle” in the 1980s, its global competitiveness is now in decline – its rank is down from 14 in 2017 to 17 in 2018, according to the Swiss-based International Institute for Management Development (IMD) in May.

Although some question the methodology of the competitiveness ranking, Taiwan’s decline is alarming. Taiwan now lags behind the People’s Republic of China, whose rank rose from 18 last year to 13 and whose rise poses a serious economic threat to the island republic.

With China’s implementation of 31 measures to lure more Taiwanese students and businesspeople to study, work and live on the mainland, the danger of a “hollowing out” of Taiwan’s talent is real.

Furthermore, Taiwan’s universities have dropped drastically in the global rankings, compared to the universities in mainland China and Hong Kong.

Not all indicators are negative for Taiwan: its digital competitiveness rank has risen from 16 in 2016 to 12 in 2017, while China’s has risen from 35 to 31. Overall, Taiwan still has a competitive edge over China in terms of technological know-how and development. Judging from the strong semiconductor industry in Taiwan and its ongoing development of artificial intelligence, such as the efforts made by the Southern Taiwan Science Park, the island is doing well in technological advancement.