[Finance] Central Bank Refutes Taiwan Has Dutch Disease with 3 Points; Traditional Industry Exports Gradually Recovering
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bellala 央廣＠＠3h ago
The AI business opportunity has exploded, driving high economic growth, but it has also sparked debate about Taiwan falling into the "Dutch Disease." The Central Bank refuted this from three aspects: growth momentum, linkage with domestic supply chains, and impact on other manufacturing industries. It pointed out that the divergence in performance between the electronics and information & communication (ICT) sector and traditional manufacturing is not unique to Taiwan. Japan and South Korea also face similar situations due to factors like China's low-price dumping, but exports from Taiwan's and South Korea's traditional industries are gradually recovering.
In the 1960s, the Netherlands discovered natural gas fields in the North Sea, leading to large natural gas exports in the early 1970s and 1980s. This brought trade surpluses and accumulated significant foreign exchange. However, the substantial appreciation of the Dutch guilder's real exchange rate weakened the production and exports of other industries, reducing their competitiveness. In 1977, The Economist first termed the problems faced by the Netherlands as "Dutch Disease."
Since 2018, benefiting from global supply chain restructuring and demand for emerging technologies, Taiwan's economic growth rate has surpassed the global average. In the past two years, driven by the AI boom, Taiwan has leveraged its complete semiconductor and server supply chain advantages, with both exports and investment acting as dual engines. Last year's economic growth rate reached 8.76%, and the Central Bank forecasts this year's growth rate to reach 9.45%.
The semiconductor industry has driven Taiwan's high economic growth, but it has also triggered discussions about Taiwan falling into the "Dutch Disease." In reference materials after the board of directors meeting, the Central Bank pointed out that although the ICT manufacturing sector's performance is better than that of traditional manufacturing, showing a divergent trend, traditional manufacturing continues to grow, striving towards high-value development, and actively participating in the AI supply chain for industrial upgrading and transformation. "Taiwan's current economic development is not the same as the phenomenon of Dutch Disease."
The Central Bank analyzed from three aspects: growth momentum, linkage with domestic supply chains, and impact on other manufacturing industries. Regarding growth momentum, Taiwan's ICT manufacturing sector has established a significant global leading position through continuous R&D expenditure and process innovation, classifying it as a knowledge- and technology-intensive industry. In the 1960s, the Netherlands relied on natural resource extraction, with prosperity dependent on the fluctuations of international commodity prices.
As for the linkage with domestic supply chains, Taiwan's ICT manufacturing sector is tightly integrated internally, with traditional manufacturing gradually participating and the ecosystem continuously expanding. In the 1960s, the Netherlands' resource industry had very low linkage with other domestic industries, making it difficult to generate technology diffusion effects.
Regarding the impact on other manufacturing industries, Taiwan's traditional manufacturing sector continuously enhances its competitiveness and added value through integration into the AI ecosystem and other methods. In the 1960s, the Netherlands saw a contraction in other manufacturing industries.
The Central Bank added that the divergence in performance between the ICT manufacturing sector and traditional manufacturing is not unique to Taiwan; Japan and South Korea also exhibit similar situations, mainly influenced by China's low-price dumping, US tariffs, and weak end-market demand. However, since the beginning of this year, exports of traditional industrial goods from Taiwan and South Korea have gradually recovered, with year-on-year growth rates of 7.7% and 8.3% respectively. (Editor: Liu Xianghua)
Source Link: https://www.rti.org.tw/news?uid=3&pid=215630
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