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TAIWAN’S ECONOMIC SITUATION AND OUTLOOK

September 2011

Council for Economic Planning and Development Executive Yuan

CONTENTS
I. CURRENT DOMESTIC SITUATION
         

Economic Growth Foreign Trade Domestic Consumption Domestic Investment Industrial Production Employment

Prices
Money and Interest Rates Stock Price Business Indicators

II.
III.

PROSPECTS FOR 2011/2012
CONCLUSION

APPENDIX: POLICY INITIATIVES STATISTICAL ANNEX TABLES
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I. CURRENT DOMESTIC SITUATION
Economic Growth In the second half of 2011, the external sector is expected to lose some of its vigor while domestic demand is also expected to cool slightly. Despite the deceleration of both growth drivers, real GDP growth for 2011 is forecast at a solid 4.81%. In Q2 2011, the external sector remained quite buoyant, with real exports of goods and services up by 4.39% yoy. With domestic consumption up by 2.61% yoy, real GDP is preliminarily estimated to have increased by 5.02% from the same quarter of the previous year. Expressed as a seasonally adjusted annual rate (SAAR), real GDP increased 0.91% in Q2, considerably better than the contraction of 4.80% forecast in May.
30

%

Real GDP Growth forecast
12.86 10.69
3.67

YoY (%)

SAAR (%)

20

17.78 14.57

10

13.59

7.13
1.18

2.36

5.02 6.16
0.91

3.48

6.41

8.91

3.77 4.01
1.18

5.20
4.56

6.94

0

4.71
-0.62
Q3 Q4

5.25

-10
Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 2010 (10.88%) 2011 (4.81%) 2012 (4.58%)

Source: Directorate-General of Budget, Accounting, and Statistics (DGBAS), August 2011

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I. CURRENT DOMESTIC SITUATION
ppt.
15 10

Contributions to GDP Growth (in percentage points)
forecast

yoy, %
15.00 10.00

5
0 -5 -10 -15

5.00
0.00 -5.00 -10.00 -15.00

Net foreign demand Inventories Domestic demand (excl. inventories) GDP growth, yoy % (right scale)

-20

-20.00

Q1-

Q2-

Q3-

Q4-

Q1-

Q2-

Q3-

Q4-

Q1-

Q2-

Q3-

Q4-

2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012
Source: Directorate-General of Budget, Accounting, and Statistics (DGBAS), August 2011.

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Total exports include “exports” and “re-exports.12 24.  In July 2011.” Source: Ministry of Finance.0% year on year in July 2011.” and total imports include “imports” and “re-imports. CURRENT DOMESTIC SITUATION Foreign Trade  Exports and imports rose by 17.6% and 14. due mainly to the revival of the global economy.6 40 14. 5 . 50 40 30 20 US$ billion Gross value of exports (left scale) Gross value of imports (left scale) Export growth (right scale) Import growth (right scale) % 120 80 17.0 0 28.77 -40 -80 -120 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 2008 2009 2010 2011 10 0 Note: Trade data are adjusted according to the United Nations IMTS Compilers Manual (2004). the foreign trade balance amounted to US$3.3 billion in Taiwan’s favor. growing for the 21st consecutive month.I.

0 9.8 12. Singapore.8 6.5 30.8 10. Changes in Two-Way Trade with Major Trading Partners (yoy %) Exports USA Japan Europe 2002 2003 2004 2005 2006 2007 2008 2009 -2.9 10.7 16.9 47.9 10.7 *ASEAN 6 refers to Indonesia.0 10.0 -0.8 -15.4 47.I.7 39. Middle China (incl.2 9.2 16.5 -0.8 12.1 30.5 9.7 34.1 15.9 13.3 6.5 43.8 -0.6 11.2 0.2 39.1 26.1 11.2 -4.5 19.0 13.4 14.1 2010 2011 Jan-July 33.6 24.3 11.6 5.7 8.0 -22.1 24.8 10.3 5.2 8.2 -22. CURRENT DOMESTIC SITUATION Major trade partners China (including Hong Kong) and ASEAN have become increasingly important trade partners to Taiwan since 2000. ASEAN 6* USA Japan ASEAN 6* Hong Kong) East Hong Kong) 29. Meanwhile.1 45.7 -0.6 -0.9 -2.8 13.7 2002 Share 20.3 -21.9 10.7 7.2 15.1 17.1 20.8 13.9 28.2 -23. the Philippines.6 -24.8 16. Thailand and Vietnam.7 14.7 4.5 19.2 16.5 -17.8 7.3 1.2 14.0 -22.8 -6.6 28.7 3.1 9.8 1.6 23.1 -5. 6 .1 41.2 -5.5 33.7 39.1 Imports China (incl.4 7.0 32.4 32.3 6.8 37.4 12.7 -3.3 0.0 8.7 5.2 20.6 33.2 30.8 10.4 11. Japan has remained Taiwan's largest supplier of imports.6 36.4 1.5 19.2 3.4 -31.9 -42.1 11.1 43.6 2010 Share 11.9 -0.6 5.6 25.1 10.5 11. despite a narrowing share.7 14.2 -2.5 10.9 7. the higher cost of crude oil has increased the share of imports from the Middle East. Malaysia. Source: Ministry of Finance.8 37.4 24.

respectively.79% increase in food services.I. . sales of retail trade and food services posted an annual increase of 4. % 30 20 10 0 4.15%.  Owing to the ongoing revival of the domestic economy. CURRENT DOMESTIC SITUATION Domestic consumption  With consumer confidence improving significantly due to rising employment and booming financial markets. Retail trade and wholesale trade increased 5.61% for July 2011.15 -10 -20 Wholesale Trade Retail Trade Food Services 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 30 8.47 20 10 0 -10 -20 -30 2008 -30 2011 7 2009 2010 Source: Ministry of Economic Affairs. private consumption grew by 3. contributed largely by an 8.47% and 4.4%. yoy. while government consumption increased by 0.79 5.12% from a year earlier in Q2 2011.

public enterprise investment decreased 17. 8 .60% in Q2 2011. Government investment diminished by 6.  Private investment is forecast to increase by 3. gross fixed capital formation increased 1.  As a result. yoy.66% in Q2 2011. due to production process improvement and capacity expansion to meet strong export demand. CURRENT DOMESTIC SITUATION Domestic Investment  With high-tech firms increasing capital expenditure to improve production processes and expand capacity.09%. August 2011.43% in 2012. private investment soared by 5.80% in the same quarter. % 45 45 25 forecast 25 5 5 -15 -15 -35 Private investment Government investment Q1-2010 Q2-2010 Q3-2010 Q4-2010 Q1-2011 Q2-2011 Q3-2011 Public enterprise investment Gross fixed capital formation Q4-2011 Q1-2012 Q2-2012 Q3-2012 Q4-2012 -35 -55 -55 Source: DGBAS. Because of the decrease of capital expenditure by Taiwan Power Company and Taiwan CPC Corporation.I. growing for the seventh consecutive quarter.

2010 2011 9 .93% in July 2011.36%. while mining & quarrying decreased 4. and water supply decreased 3. electricity & gas supply decreased 0. Growth of Industrial Production Index 80 Machinery & equipment yoy % 80 60 40 20 0 -20 -40 -60 Computer. while chemical materials made a negative contribution owing to the surging international price of fuel. panel. Building construction output soared 36. electronic & optical products Electronic parts & components Basic metals Chemical materials Industry 60 40 20 0 -20 -40 -60 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 2009 Source: Ministry of Economic Affairs.85%. machinery and basic metal industries were still the main contributors to the industrial production index. The semiconductor.73%.24% and manufacturing output rose 3.00%.I. CURRENT DOMESTIC SITUATION Industrial Production The industrial production index showed a year-on-year increase of 3.

5 55.5 56.29 of a percentage point from the previous month to 58. the unemployment rate increased to 4. August 2011 10 .0 12 Labor force participation rate (left scale) Unemployment rate (right scale) 58.I. The labor force participation rate decreased by 0.5 4.11 of a percentage point from a year earlier.0 54. Accounting and Statistics.5 58. down 0.06 of a percentage point from the previous month.5 11 10 9 Unemployment rate % 57.79 percentage points lower than a year earlier.0 57.41%. 59. and 0.4%.0 56.40 Labor force participation rate % 58.0 8 7 6 55. CURRENT DOMESTIC SITUATION Unemployment Rate and Labor Force Participation Rate In July 2011.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2 Source: Directorate-General of Budget.41 5 4 3 54. up 0.37%. The seasonally adjusted unemployment rate dipped to 4.

34% from the same month last year. due mainly to the surging prices of crude petroleum & natural gas. The WPI in August rose by 3..26%. and food. yoy % 15 10 5 0 1.I.Taiwan’s CPI increased by 1. Core prices (excluding fresh food and energy prices) increased 1. The most significant changes in CPI components were increases in the prices of clothing. chemical materials. Accounting and Statistics. September 2011 11 .34 15 CPI WPI 10 3. CURRENT DOMESTIC SITUATION Prices In August 2011.85% year on year. fuels & lubricants. These price rises were partially offset by declining prices of electronic parts and components.85 5 0 -5 -10 -15 -20 -5 -10 -15 -20 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Directorate-General of Budget. and basic metals.

12 .60 6.60%. respectively. caused by an increase in net foreign assets of banks in July.18 Source: Central Bank of China (Taiwan). 35 25 15 5 -5 -15 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Daily average. The annual growth rate of M2 rose to 6.61%. CURRENT DOMESTIC SITUATION Money Supply  Due mainly to the transfer of demand deposits to time and savings deposits. the annual growth rates of M1B in July 2011 declined to 7.50% and 0.18%.I.  The monthly growth rates of M1B and M2 were 0. yoy % 35 25 15 5 -5 -15 M2 M1B 7.

Since inflation risks to the global economy remain elevated and market interest rates have also moved up in recent months.73% and 0. 31-90 days) 4 4 Interbank call loan rate (overnight) 2 2 0 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Central Bank of China (Taiwan). 13 . CURRENT DOMESTIC SITUATION Short-term Interest Rates  With the economic outlook improving conspicuously.375%. 8 % 8 6 6 Commercial paper rate (secondary market. the commercial paper and interbank rates in July 2011 rose to 0.I. which was the fifth policy rate increase since last June. the CBC raised interest rates again on June 30. respectively.

000 4.000 July-11 8681. European debt crisis fears. 14 .I. CURRENT DOMESTIC SITUATION Stock Price In the first half of 2011.24 7.45 1.000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Jan-09 4475.14 1. down 0.19 10.78% from June. plus the debt-ceiling crisis and the weak recovery of employment and real estate in the US had a dampening effect on investor confidence.000 Oct-01 3782. tightening monetary policy in mainland China. Feb-00 10.000 9891.000 2009 2010 2011 Source: Taiwan Stock Exchange.21 7. causing the average closing level of Taiwan’s stock exchange index to slip to 8681.24.000 Taiwan Stock Exchange Index Oct-07 9605. the interplay of the global economic recovery. In July 2011.000 4. and Japan’s earthquake had a fluctuating effect on Taiwan’s stock exchange index. the sovereign debt crises in euro countries.

2% to 99.1 0 100 99.1. the annualized six-month rate of change of the leading index was 2. Source: CEPD 15 .I.4 of a percentage point from June.1%.1 90 -20 composite leading index (annualized 6-month rate of change) (left scale) 80 composite coincident index (trend adjusted) (right scale) -40 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 70 Note: The shaded areas represent recessions. 40 130 120 20 110 2. and the trend-adjusted coincident index also decreased by 1. down by 0. CURRENT DOMESTIC SITUATION Taiwan Business Indicators In July 2011. affected by the slowdown in global economic activity.

the monitoring indicators posted a total score of 24 in July 2011. 16 .I. CURRENT DOMESTIC SITUATION Monitoring Indicators Due to the steady growth of Taiwan’s economy. continuing to flash “green” as the overall light signal. Source: Council for Economic Planning and Development (CEPD).

I. CURRENT DOMESTIC SITUATION Monitoring Indicators and Economic Growth Note: The shaded areas represent recessions. Source: CEPD 17 .

Taiwan’s real GDP grew by 10.58%.2 of a percentage point from July’s forecast of 5. - Per capita GNP is projected to rise to US$21. - In the first half of 2011. 2012 GDP growth is projected at 4.88% in 2010.58%. down 0. the highest GDP growth rate since 1987. 18 .280 in 2011 and US$22. higher than Singapore and South Korea but lower than Hong Kong.81%. due to the increasingly uncertain outlook for the global economy in the second half of this year.01%. Taiwan posted a year-on-year real GDP growth rate of 5. PROSPECTS FOR 2011/2012 Taiwan's economy shifting to moderate growth - In line with the strength of recovery in emerging economies.II.176 in 2012. the 2011 GDP growth forecast has been revised to 4. - In the latest estimation of the DGBAS.

Private consumption showing significant growth -Consumer confidence and spending have been boosted by the improving employment situation and rising incomes generated by the economic recovery. as well as the increasing flow of new consumer electronic products coming onto the market.18% and 6. - In the first half of 2011. The growth rate of Taiwan’s private consumption was 3.18% in 2012.09% respectively.75% in the first half of 2011. imports are projected to grow by 1. In 2011 and 2012.24% and 4. - Private consumption is projected to rise by 3. the boost from the signing of the cross-strait Economic Cooperation Framework Agreement (ECFA). exports are projected to increase by 6. plus soaring prices of raw materials. PROSPECTS FOR 2011/2012 Export growth expected to continue - The launch of innovative ICT products.64% respectively.02% due to rising demand induced by export and investment. Over the whole of 2011 and 2012.II. contributed to a 7. 19 . and rising demand for electronic and mechanical products due to the increasing labor costs in mainland China.55% in 2011 and 3. which was the highest rise for the period since 2005. goods and services imports grew 4.60% expansion of Taiwan’s goods and services exports in the first half of 2011.

high-investment industries (such as semiconductors and optoelectronics) decelerating production capacity expansion in line with the recent decline of capacity utilization.49% in the first half of 2011 as high-tech firms increased capital expenditure in order to meet rising export demand. But in the second half of 2011. private investment is forecast to decline by 8.II. In 2012. government investment is forecast to decline by 11. Over the whole of 2011 and 2012.43% due to the increasing uncertainty of the global economic outlook.72% due to the high-base effect. government investment in 2011 is expected to reach NT$496 billion. but will still show a decline of 1. private investment is projected to decrease by 0.55% as special budgets for economic revitalization public construction and reservoir management reach termination.52% and increase by 3.43%. - Because of the ongoing expansion of spending on public infrastructure. respectively. 20 . PROSPECTS FOR 2011/2012 Domestic investment likely to contract - Private investment grew 8. and the high-base effect.

the CPI is forecast to rise by just 1. lower than the previous forecast of 1. and some raw material prices gradually decline. the CPI is forecast to rise by 1.89%.II.21%. PROSPECTS FOR 2011/2012 Inflation rising moderately - Wholesale price inflation is expected to recede as flagging global economic growth puts downward pressure on international oil prices. In 2012. The WPI is forecast to rise by 3.36% in 2012 due to the high-base effect. 21 . as well as by stable climatic conditions (with minimal typhoon damage suffered this summer). and to rise by 1. and active government price stabilization measures taking effect.59% in the whole of 2011.76% for the whole of 2011. - Since inflationary pressure on domestic prices has been eased by falling international energy and raw material prices.

7) CIER (2011. 22 .81 [5.01] 5.29] 5.7 [4. Polaris: Polaris Research Institute.02 [4.6) Global Insight (2011.7] 2.4] 5.7] 4.58 - 2012f 1.75] - 2.7) 4.2 [5.70 [5.9] 2.Forecasts for Taiwan’s Economy Real GDP (yoy.1] 1.7 [1. [ ] indicates the value of previous forecasts.47] 2. Taipei. IEAS: Institute of Economics. %) 2011f DGBAS (2011.78] - 4.9 [2.8 [2.89] 2. TIER: Taiwan Institute of Economic Research.21 - TIER (2011.72] 5.59 [1.6] 1. ROC (Taiwan).4 [4. Academia Sinica DGBAS: Directorate-General of Budget.0 [1.4 [4.2 5.05] 1.9 EIU (2011.70 [1.8) 5.4] 1. %) 2011f 1.0 2.9] 4.78] 4.0] 5.08) IMF (2011.05 [2.8 [1.88] 2012f 4.60 [1.20 [4. Taipei.5] 2.4] 4.07) CIER: Chung-hua Institution for Economic Research.16 [1.8 [4.41 [2.04) ADB (2011.71] Consumer Prices (yoy. Accounting and Statistics.8) IEAS (2011.8 [1.93 [4.0 1.5 [4.48] 1.52 [4.5] 5.7) Polaris (2011.

Taiwan’s real GDP is projected to grow by 4. Industries for Homes” plan.81% in 2011. the government should speed up the elimination of investment barriers and promote the expansion of exports to Asia and emerging markets. These initiatives. Conclusion • In the first half of 2011.58% based on moderate growth of exports induced by sustained economic interaction with mainland China and positive growth of private consumption and investment. In 2012. Taiwan’s real GDP grew 5. With the increasingly uncertain outlook for the global economy in the second half of the year.III. push forward implementation of the i-Taiwan 12 Projects. 23 . to achieve the most advantageous reshaping of Taiwan’s industrial structure.58% yoy. real GDP is forecast to grow by 4. the government will continue to carry out the “Invest in Taiwan” initiative. step up efforts to promote the development of six major rising industries. balanced by continuing strong demand from emerging economies and improving domestic consumption. should ensure that sound progress is kept up toward endowing Taiwan with a vigorous and sustainable new economy. and carry out the “Homes for Industries. • At the same time. mainly on the back of substantial growth in exports and private consumption. backed by an array of employment-promotion measures. and four main emerging intelligent industries. ten key service industries. • In order to ease the impact of economic weakness in Europe and the US on Taiwan’s exports.

Helping government agencies conduct investor solicitation. executing. Ministry of the Interior MOTC Council for Cultural Affairs Department of Health ... Council of Agriculture Setting up investment promotion offices Drawing up investment promotion programs Supporting solution of investment promotion obstacles and amending related laws and regulations Drafting investment promotion documents Conducting investment promotion work Signing contracts. Helping simplify administrative procedures. to give comprehensive assistance to investors in removing investment obstacles. and inviting discussion with other agencies re attracting investors and removing investment obstacles Executive Yuan Invest in Taiwan Service Center (Director: MOEA Minister) Setting up a one-stop office. and completing projects 24 .APPENDIX I Executive Yuan Invest in Taiwan Task Force (Convener: Premier) (Deputy convener: Vice Premier) Organizational Structure of Invest in Taiwan Executive Yuan Invest in Taiwan Planning and Promotion Committee (Convener: CEPD Minister) Planning overall investment promotion strategy. and establishing the main themes and plans of investment promotion.

08.Timeframe of Invest in Taiwan (July~December) Mapping out work of Invest in Taiwan plan Drawing up survey forms and operational procedures 2010. Singapore. southern and eastern Taiwan. India. 2010.05 Invest in Taiwan (Taiwan Roadshow) Japan. 25 .07.31 Jointly choosing core spheres and projects for investment promotion Domestic Holding five explanatory meetings in northern.20 2010.07.07.01 Convening communication and coordination meetings Communicating and coordinating directions of implementation Planning and filling out survey forms Preliminary work Implementing Invest in Taiwan 25 2010.10~2011. America.07 2010.23~9. etc. Hong Kong. 30 Submitting first wave of Invest in Taiwan projects Overseas 2010.07.05 Executive Yuan sets up Invest in Taiwan Task Force Mapping yearly policy directions and supervising implementation CEPD sets up Invest in Taiwan Planning and Promotion Committee Planning overall investment promotion strategies MOEA sets up InvesTaiwan Service Center Providing one-stop investment support services Cabinet agencies set up investment promotion offices Proposing projects and soliciting investors 2010. central.09.

MOF FSC MOI MOEA. Intelligent Taiwan i-Taiwan 12 Projects 6. Kaohsiung Port-City Regeneration 3.Chinese-language ecommerce 10. Green energy industries MOTC MOEA National Science Council MOTC Science & Technology Advisory Group 4. Cloud computing Four main emerging intelligent industries 2. Internationalization of Taiwan’s cuisine 2. of Health GIO. Education Dept.32 Public Construction Projects and Rising Industries Investment Targets 1. Flood Prevention and Water Management 12. International logistics industries 6. MOEA MOEA MOEA. of Health Council of Agriculture Council for Cultural Affairs MOEA Dept.Green Forestation 11. Intelligent green buildings 4. High-end agriculture 6. Music and digital content 4. Urban renewal 8. MOTC MOEA Ministry of Education MOEA MOI Council of Agriculture Council of Agriculture Council of Agriculture MOEA. Biotechnology Authorities in Charge Science & Technology Advisory Group 2. International medicine 3. Farm Village Regeneration 9. WiMAX industry 9. Central Region New High-tech Industrial Cluster Program 4. Smart electric vehicles Authorities in Charge MOTC MOTC Investment Targets 1. Urban and Industrial Zone Renewal 8. MOTC. A Fast and Convenient Islandwide Transportation Network 2. Coastal Regeneration 10. Travel & tourism Six major rising 3. Financial services 7. Sewer Construction 1. Taoyuan International Aerotropolis 5. Cultural & creative enterprises 1. Council of Indigenous Peoples MOI MOEA MOEA MOI MOEA 3. Industrial Innovation Corridors 7. Medical care 5. Invention and patent commercialization 26 . MICE industry Ten key service 5.

2 trillion Others: NT$57 billion 27 Vigorous economy Sustainable Taiwan Accumulatin g intelligent 4. Total budget: NT$4 trillion Government investment: NT$2. Intelligent Taiwan 6. Coastal Regeneration Putting a new face on cities and countryside 8.74 trillion Private investment: NT$1. Kaohsiung Port-City Regeneration 3.95% per year from 2009 to 2016. Central Region New High-tech Industrial Cluster Program Developing regions adaptively Expanding domestic demand Improving investment environment Enhancing economic fundamentals Raising living quality 10.i-Taiwan 12 Projects Goals 1. Green Forestation Developing the environment sustainably Expected benefits Promoting economic growth: increasing real GDP on average by 2. Urban & Industrial Zone Renewal Creating favorable conditions for industrial innovation 5. Flood Prevention & Water Management 2. Sewer Construction 11. Industrial Innovation Corridors .000 job opportunities each year from 2009 to 2016. Creating job opportunities: creating on average 247. Farm Village Regenerati on 7. A Fast and Convenient Islandwide Transportat ion Network 12. Taoyuan capital International Aerotropolis 9.

28 . Planning for the promotion of these six industries has comprehensively covered all aspects of their development needs. laws and regulations. highend agriculture. and spread of applications. markets. and cultural & creative enterprises – with the aim of attracting private investment. green energy. including human resources.Six Major Rising Industries After successfully promoting the development of the semiconductor and panel display industries. and creating the next wave of industrial opportunity. the government is now focusing its attention on promoting the development of six major rising industries – biotechnology. increasing job opportunities. Goals   Biotechnology  Travel & tourism  Green energy  Medical care  High-end agriculture  Cultural & creative enterprises    Assisting enterprises to acquire key technologies Developing own brands Promoting diversification of export products Creating new competitive advantages for Taiwan’s industries. medical care. capital. technology. travel & tourism. timeframe.

Cloud computing Intelligent green buildings Invention and patent commercialization Smart electric vehicles Developing emerging ICT industries to cement the competitive advantages of domestic industry 29 . and speed up the provision of support for invention and patent commercialization.Four emerging intelligent industries The government will bolster strategies to promote such forward-looking emerging ICT industries as cloud computing. smart electric vehicles. and intelligent green buildings. to consolidate Taiwan’s industrial base.

Ten Key Service Industries The President’s economic and financial advisory panel has recommended 10 key service industries as focal targets for future development Cuisine internationalization Future development strategies Strengthening the international competitiveness of service industries Enhancing R&D and innovation Creating differentiated services Improving human resources development 30 Financial services Asia-Pacific Chinese-language e-commerce International and cross-strait medicine Digital content Urban renewal MICE industry International logistics Education WiMAX .

Core investment spheres of Invest in Taiwan (39 items) 2. Other projects (46 items) Projected total of private investment (NT$ billion) 246.Estimation of private investment for the first wave of Invest in Taiwan promotion Project classification 1.417 31 .667 Total (85 items) 434.75 187.

Smart handheld devices Others (including a fast and convenient islandwide transportation network. Cloud computing and WiMAX 8. National Science Council. Green energy and intelligent green buildings 10. Cuisine internationalization Authorities in charge MOTC MOI.417 32 .035 14.Summary of Core Investment Spheres of Invest in Taiwan Core investment spheres of Invest in Taiwan 1.500 187. Cultural & creative enterprises and digital content 5.100 13. MOEA Council for Cultural Affairs. international logistics. Department of Health MOEA.500 39. etc. Biotechnology and international medicine 6. GIO Council of Agriculture. New High-tech Industrial Clusters in Central Taiwan 4.) Total MOTC. MOTC MOTC.700 7.530 0. Smart electric vehicles 9.900 71. Taoyuan International Aerotropolis 2. MOEA MOEA MOEA.250 11.363 2. travel & tourism. Urban Renewal 3. industrial innovation corridors. proposals by the private sector Projected investment amount (NT$ billion) 14.872 12.667 434. MOI MOEA (proposals by the private sector) 66.

urban renewal. smart handheld devices.  Project locations in central Taiwan will be accorded selection priority. etc. etc. green energy. biotech. Project locations in northern Taiwan will be accorded selection priority. Southern Taiwan Core Investment Spheres Cultural & creative and digital content industries. cultural and creative industries. urban renewal. etc. tourism. smart electric vehicles. international medicine. cuisine internationalization. etc. Project locations in southern Taiwan will be accorded selection priority. cuisine internationalization. Central Taiwan Core Investment Spheres Ten Core Investment Spheres for Invest in Taiwan New high-tech industrial clusters. Eastern Taiwan Core Investment Spheres Innovative education. 33 .Locational Prioritization of Projects according to Regional Suitability Northern Taiwan Core Investment Spheres Aerotropolis. Project locations in eastern Taiwan will be accorded selection priority.

They should provide specialized. dedicated assistance tailored to the needs of each investment project. special processing. Investment promotion offices in each government agency should take active steps to attract investment and help remove investment barriers. Dedicated personnel and teams. Investment promotion under this plan should adhere to the service principles of providing support from specialist personnel and teams on a special basis and treating every project as a special case. conveying the government’s commitment to give the best possible support to local and foreign investors alike. and every project a special case. It should be adaptively focused and targeted at promoting the location of projects in their most suitable regions. 34 .Follow-up implementation Implementation Principles Investment promotion at home and abroad should match local industrial conditions and the needs of potential investors.

In the future.Follow-up on Key Initiatives Dedicated personnel. processing and case assistance for Invest in Taiwan This year. We will coordinate implementation of Invest in Taiwan with the annual investment promotion plans of industry and commerce associations and federations (such as the ROC National Federation of Industries). the US and Japan. teams. we have already sent investment promotion missions to India. Singapore November 2010 Japan August 2011 USA May 2011 India February 2011 35 . we will continuously conduct “Invest in Taiwan” activities in foreign countries.

and income will also be improved. • Jobs will be increased in every region. Industries for Homes Planning more room for Taiwan's industrial development in the next 10 years so that every industry will have its own place and every region will have its own feature industry. Everyone can share the benefits of industrial development 36 . Concept • Tailored to the unique local and industrial circumstances so that industries can have their home in appropriate locations to upgrade their competitiveness. to create more local jobs and raise Taiwanese people's income.APPENDIX II Home for Industries. Investment from home and abroad will be facilitated. Ideals • Ensure that every part of Taiwan has its own industries so that both physical and non-physical construction can complement investment to help the industries take root.

Industries for Homes • Planning the spatial development of Taiwan's industrial development for the next 10 years so that every industry can have its own home. Promotion Strategy • Working in concert with both domestic and international business recruitment to funnel investment directly to the appropriate regions. 37 . and every region will have its own feature industry to form a region-based brand. • Adjusting public investment in physical and non-physical infrastructure in alignment with industrial development distribution. to complement private sector investment and business recruitment.Home for Industries.

Through collaboration between central and local governments. Each county and city could then assess its situation from a local perspective to identify suitable home industries and requisite supporting measure (such as infrastructure. 38 . It will involve exploration of the most suitable industries for each region and directions for attendant improvement of local infrastructure.~Feb. it will consist of a series of symposiums held around Taiwan. etc.Home for Industries. we hope to create regional industries that are globally competitive. the second stage will revolve around establishing home locations for industries. Scheduled to take place from May to August 2011.) Second-Stage Symposiums (May 2011~ ) Based on the results of the first-stage symposiums. Various government agencies introduced the developmental advantages of emerging industries. Industries for Homes ◎ Implementation First-Stage Symposiums (Jan. manpower training. 24~Feb. 2011) 10 symposiums were held during Jan. 18 this year (2011).

39 . 22 counties and cities have submitted their target industries and suggestions. the central government's ideal of axial industries as well as the appropriate matching between industries and regions are now better understood. Industries for Homes ◎ Results from the First Stage Symposiums After the initial exchange of views among the central government agencies.Home for Industries. local governments. academics. and experts.

37 -7.09 1.76 3.98 -3.41 17.58 -17.75 -12.33 1. Accounting.36 -11.50 3.10 -12.64 6.70 5.38 0. Real GDP Growth (Change from a year ago) Domestic demand Economic growth Consumption Gross fixed capital formation Subtotal Private sector Public enterprises Gov't Increase in inventory Net foreign demand Total Exports Less: of Imports of goods & goods & services services Total Private Gov't 2004 2005 2006 2007 2008 2009 2010 2011f Q1r Q2p Q3f Q4r 2012f Q1f Q2f Q3f Q4f 6.41 4.97 5.39 4.40 5.65 3.83 -12.19 4.74 8.77 5.76 -0.97 5.46 1.08 -0.40 0.72 8.01 -17.31 -20.49 2.16 4.13 32.12 -0.80 -4. Aug 2011 40 .51 -14.36 -15. and Statistics (DGBAS).09 3.83 0.20 1.57 4.35 -3.01 3.57 0.36 1.55 -9.35 0.01 ---- ---- 9.90 2.02 -11. r = revised.66 -9.18 11.17 2.32 28.01 1.09 3.19 -0.93 0.96 2.24 7.07 25.40 0.18 2.57 0.86 -4.55 -12.03 4.51 -0. Source: Directorate-General of Budget.88 0.02 3.16 1.21 0.76 ------------ ------------ 25.93 1.12 3.20 5.86 2.99 4.71 2.38 3.60 -7.52 11.49 0.90 1.82 -11.25 9.70 6. f = forecast.40 7.57 1.10 -6.61 3.55 4.66 0.93 7.64 2.91 1.60 14.78 11.09 0.87 -8.53 3.44 5.12 7.04 5.18 -7.40 7.12 6.61 1.73 -1.91 1.88 4.61 -0.44 5.19 0.43 -7.90 -2.83 3.58 4.08 2.86 -1.42 -2.44 -1.59 2.65 6.93 -2.62 1.83 10.03 5.36 0.71 -1.39 4.71 -4.72 0.59 4.86 4.16 5.28 23.02 1.96 P = preliminary.36 0.69 -11.18 4.77 -8.71 -12.97 3.28 9.53 1.09 4.64 6.63 3.55 0.57 -1.STATISTICAL ANNEX TABLES I.58 8.50 4.81 6.59 1.71 4.48 4.98 0.98 2.61 -9.18 3.71 13.13 2.95 3.91 -6.42 -11.21 ---- ---- 15.18 16.

15 1.30 -1.96 2.34 -2.64 0.38 -0.55 -1.77 5. r = revised.49 4.02 -0.04 0.48 4.33 -0.82 2.46 -0.14 0. Source: Directorate-General of Budget. Contributions to GDP Growth (in percentage points) Domestic demand Economic growth Consumption Total Private Gov't Gross fixed capital formation Subtotal Private sector Public enterprises Gov't Net foreign demand Increase in inventory Total Exports Less: of Imports of goods & goods & services services 2004 2005 2006 2007 2008 2009 2010 2011f Q1r Q2p 6.32 1.49 0.33 1.02 3.70 1.14 -0.60 5.20 2.83 -0.70 5.12 -0.97 1.24 -2.46 -1.27 1.86 8.07 1.05 0.71 4.23 0.38 14.15 2.81 4.79 5.34 6.95 1.97 2.25 2.11 2.11 -3.STATISTICAL ANNEX TABLES II.50 0.12 0.93 10.31 0.43 0.86 1.27 0. Accounting.85 1.63 -1.43 1.46 0.03 3.12 -2.10 -0.58 4.85 0.35 3.81 6.59 0.06 4.08 0.04 0.16 5.47 0.65 2.19 0.89 0.25 -0.01 2.94 -2.63 1.35 0.05 -0.38 0.50 1.66 1.88 -0.47 2.22 -0.40 0.59 8.11 0.45 0.03 0.99 4.92 0.73 4.54 1.19 4.14 -0.17 8.49 2.04 0.19 0.68 Q3f Q4r 2012f Q1f Q2f Q3f Q4f P = preliminary.04 0.51 1.45 -1.54 -0.79 0.21 -1.67 2.81 0.08 0.03 3.59 0.09 0.60 -1.70 0. and Statistics (DGBAS).03 -0.03 3.56 2.20 5.29 -0.10 -0.19 -0.12 0. f = forecast.36 0.10 0.18 -1.88 4.89 0.00 0.86 4.22 4.02 0.27 -0.01 3.23 2.16 -0.28 -0.49 2.78 -1.02 0.44 5.25 0.52 3.23 -0.48 0.23 -7.42 -0.64 2.40 3.34 -0.01 4.10 -0.98 0.58 0.69 1.80 7.53 0.61 -6.59 1.82 4.24 -0.01 0.92 -0.04 -0.06 0.85 3.16 0.20 -0.06 -0.10 -0.07 0.97 -0.06 -0.19 -0.03 0.32 -0.13 16.66 3.03 4.04 0.11 1.85 -2.37 3.70 0.34 2.92 1.08 0.04 0.61 2.45 3.25 7.86 10.00 -0.92 2.73 -1.61 -2.31 0. Aug 2011 41 .27 4.62 -2.05 0.69 4.35 0.84 1.34 1.

tw. .gov. Quarterly updates can be found on the CEPD’s website at http://www. For inquiries call 886-2-2316-5682 or send an e-mail to bci@cepd.gov.Thank you This summary is prepared by the Department of Economic Research of the Council for Economic Planning and Development (CEPD).tw/encontent.cepd.