The year 2005 has so far witnessed steady progress in terms of Taiwan's continuous efforts to promote economic reform and industrial upgrading. Thanks to ongoing internal reforms across a wide range of areas, as well as favorable international economic environment, the Taiwanese economy is moving on a healthy track after the economic slump at the beginning of this century. In 2004, the economic growth rate reached 5.7 percent, showing significant growth from the 3.3 percent in 2003.
The economic performance in the first eight months of 2005 indicated mild growth of 3.65 percent. The values of exports and imports over the period reached $119.87 billion and $120.95 billion — an increase of 11.2 percent and 6.7 percent respectively over the same period last year. The performance is not at all impressive as compared with the 25.96 percent surge in 2004, or the $341.9 billion in total trade value, indicating that challenges remain in Taiwan's development.
With respect to foreign direct investment, Taiwan continues to be an active player, currently ranking as one of the top four foreign investors in China, Malaysia, Vietnam and Cambodia. Moreover, while inward investment has not been very encouraging in recent years, in 2004 it experienced a slight upturn, with total investment value climbing to $3.95 billion. It is hoped the trend will continue in 2005.
As far as the Kingdom is concerned, its economic reforms program, coupled with the relaxation of rules regarding business visas, could create an environment conducive to investment by the Taiwanese business community. The straws in the wind are clear, if the growing number of queries for Taiwan’s IT sector are anything to go by.
It is noteworthy that this growth, thanks mainly to liberalization of such important sectors as the fixed-line telecommunications and financial services, remains well above the historical level before 1997. This suggests that a gradual improvement in the domestic investment environment has encouraged more foreign investors to explore the domestic market and set up operational or regional bases for neighboring markets.
Taiwan's attempts to strengthen ties with international and regional trade communities have been somewhat successful. Since Jan. 1, 2002, when Taiwan completed its decade-long accession process to become a member of the World Trade Organization, it has sought to contribute to the world trade system not only by faithfully implementing its accession obligations, but also by participating actively in the Doha Round of trade negotiations.
At the regional level, Taiwan continued to play an active role in the activities of the Asia Pacific Economic Cooperation (APEC) Forum.
Taiwan’s experience in promoting SMEs should be of interest to Saudi Arabia, where SMEs comprise the bulk of the membership of the chambers of commerce and industry in the Kingdom. That the SMEs of Taipei have been forging ahead despite the choppy sea of cut-throat competition speaks volumes of the strong support they enjoy from Taiwan External Trade Development Council (TAITRA).
Some of the members of the Taiwan Trade Mission are considering a second visit to the Kingdom in the wake of the success they achieved during their September mission. The Taipei Economic & Cultural Representative Office has promised them full support in this regard.
It is a stated goal of the government to enhance bilateral relationships with its current or potential trading partners by developing Free-Trade Agreements (FTAs) with them.
These reforms should reassure Taiwan’s Saudi partners that they stand to boost their own competitiveness by engaging in business alliances with Taiwanese firms. That is the message being sent across by TAITRA.