Taiwan's GDP rose as much as 8.5% compared with a year earlier in seasonally adjusted terms and 9.2% in unadjusted terms. Compared with the previous quarter it rose 4.2%, or 18.0% at an annualized rate.Businessweek said it was even higher:
Bloomberg in its version claims that only now did Taiwan exit the recession, because only now did the yearly change turned positive, but usually the criteria for this is when the quarterly change turns positive, and the quarterly change turned positive already in the second quarter.
Not only has Taiwan exited the recession, it has in fact now recovered the entire loss in output during it, so that real GDP is slightly higher now than the previous peak in output reached during the first quarter of 2008. By contrast, while America, Japan and the EU has all recovered in the sense that quarterly change has turned positive, the absolute level of output remains below the peaks.
The main cause of Taiwan's recovery is the boom in neighboring mainland China. While political relations are still frosty (and turned even frostier after Taiwan recently bought advanced military equipment from America), trade and investment relations have increased dramatically, causing higher growth in both countries, and making war less likely.
Another reason for Taiwan's boom is its low tax and low government spending (only about 18% of GDP) policies.
Those of us walking around and looking at the packed restaurants and wondering "what recession?" were actually onto something. The NY Times looked at the Asian economies, which by and large are doing well. Their comments on Taiwan are pretty good:
Taiwan's economy saw its strongest growth in five years in the fourth quarter, surging 9.2 percent with help from stimulus-fueled demand from China for the island's high-tech exports.
For all of 2009, Taiwan's economy contracted 1.9 percent, the Directorate General of Budget, Accounting and Statistics said Monday. That was the biggest contraction since 1951, the agency said. It predicted economic growth of 4.7 percent for 2010.
Political disputes between Taiwan and the mainland also are a question mark going forward. Taiwan’s president, Ma Ying-jeou, has been working to complete agreements that would lift some barriers on cross-Straits trade and investment. The agreements, Mr. Ma has argued, would aid Taiwan’s economy and help keep the island competitive with neighboring countries that have recently signed free-trade deals with China.Certainly the big Chinese stimulus drove much of the recovery in Taiwan, but from my perspective another factor was that Asia's banks, under conservative regimes of control and in many cases state-owned, had been spared the "financial innovation" of Wall Street that had resulted in unregulated, criminal casino markets whose implosion had wreaked havoc across the West and destroyed many banks.
But the political opposition has mounted street rallies against Mr. Ma’s efforts, warning that the pacts could cost Taiwan jobs by, among other things, reducing tariffs on low-cost mainland imports. His political foes have also complained that his representatives have conducted negotiations with Beijing out of public view and warn that the deals may erode Taiwan’s de facto political independence from the mainland.
Economic growth, if it is for real, is good news for KMT in the upcoming elections, especially in December.
Speaking of trade with China, I blogged before on the problem of how smuggled crap from China is killing industries in all the countries it trades with. The CNA ran a piece today on smuggled day lilies, apparently brought in through Vietnam.
Naturally, the day lilies in question are a third the price of local day lilies, have too much sulfur dioxide, and are whiter, implying they've been bleached.
But banned Chinese agricultural products have found their way into Taiwan either through smuggling or being represented as the product of a third country.
Citing customs statistics, DPP Legislator Pan Men-an said Tuesday that 73,830 kilograms of dried day lily, purportedly from Vietnam, were imported into Taiwan in 2009, a 27 percent rise from the 58,108 kilograms that entered Taiwan's market in 2008.
Last month alone, another 39,984 kilograms of dried day lily were imported into Taiwan to satisfy higher demand during the Lunar New Year holiday, Pan said.
The shipments have invariably been accompanied by Vietnamese certificates of origin, but Pan said Vietnam does not produce a lot of day lily, and he contended that fake certificates of origin were used to get around the ban on importing the agricultural product from China.
- Taiwan to reconsider indefinite detention in wake of Chen case
- Hanjie has a gorgeous hiking itinerary in Tainan County.
- A collection of reviews of Martin Jacques' recent and controversial book on China.
- AGW: Climate Progress with an excellent post on the media screw-ups in the withdrawal of a paper on rising sea levels, once again pounced on by the anti-science crowd. As always, ineptly: the paper was withdrawn because its estimate of the sea level rise was too low.
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