Taiwan owes part of its economic growth to the Kingdom’s strong support and stable crude oil supply to Taiwan. Besides oil, the other main Saudi exports to Taiwan are petrochemical products, raw plastic materials, copper, aluminum, and granite.

The Kingdom is one of the major economic partners of Taiwan. It ranked as Taiwan’s 5th leading import source and 26th export destination. The bilateral trade surged from $7.9 billion in 2005 to $16.2 billion in 2008 and almost doubled during those four years. However, last year, due to the global financial crisis, the volume of bilateral trade dropped to $9.34 billion, with Taiwan’s exports to Saudi Arabia standing at $674 million and its imports from the Kingdom amounting to about $8.7 billion. The Kingdom remained Taiwan’s top trading partner in the Middle East, accounting for 34.3% of its bilateral trade with this region.

Taiwan’s major exports to this country include motor vehicle spare parts and accessories, machine spare parts and accessories, petrochemical products, etc. In the private sector, large Taiwanese enterprises are participating in several investment projects in Saudi Arabia. For example, Al-Jubail Fertilizer Company (Albayroni) was established as a joint venture between the Taiwan Fertilizer Company (TFC) and Saudi Basic Industries Corporation (SABIC) with a capital outlay of $744 million.

In 1997, Albayroni became the largest investment project of TFC which purchases urea products from Albayroni and also acts as the marketing arm for its 2EH and DOP products. To cite another example, Saudi Kayan’s EO (Ethylene Oxide)/EG (Ethylene Glycol) Plant is part of Saudi Kayan’s petrochemical complex currently under development in the Al Jubail Industrial City. In October 2006, the EPC contract was awarded to CTCI Corporation of Taiwan. The project was completed in June, 2010.

Taiwan, in contrast, has developed strengths in the manufacturing sector and high-quality human resources over the years. Taiwan has unquestionable advantages in information technology, particularly in the areas of semiconductors, flat panels, notebook computers and computer accessories. In fact, Taiwan is the world’s second biggest producer of IT hardware, second only to the United States. It is the number one supplier of semiconductors, optoelectronic information and communications products, and enjoys more than 70% share of the global market.

It is also the world’s second biggest producer of thin film transistor-liquid crystal displays (TFT-LCDs), and the third largest maker of PC products. It ranks among the world’s top three manufacturers of 34 products and is a major supplier of precision instruments, machine tools, materials and fine chemicals as well. This rich expertise could help the Kingdom realize its ambitions to enhance its scientific and technological development, diversify its domestic business expansion, and encourage private entrepreneurs. 

Taiwan and China signed the landmark Economic Cooperation Framework Agreement (ECFA) on June 29, 2010. This will improve Taiwan’s position as a base for exploring the East Asian market. On the other hand, as a key member of the Gulf Cooperation Council (GCC), Saudi Arabia can also serve as a platform for Taiwanese businesses to explore the regional market in the Middle East. In the final analysis, the trade and investment figures as well as the complementary economic structures of the two partners indicate that there is good potential for boosting bilateral relations in terms of trade and investment.

As for future cooperation, the possibilities are immense. Saudi Arabia has harnessed its oil resources in building up its domestic infrastructure. It has been promoting an environment-friendly climate, creating new wealth resources, and generating more job opportunities for its people. The Saudi government, in collaboration with the private sector, has embarked on new mega projects, estimated at over $380 billion, which offer immense opportunities to foreign investors.

The six Economic Cities Projects form the cornerstone of the Kingdom’s drive to attract more foreign investment. These projects would boost the national economy, create over a million new jobs, homes for 4-5 million residents, besides contributing $150 billion to the Saudi GDP.

These promising developments follow in the wake of a gradual recovery from the global recession caused by the financial tsunami in the Q3 of 2008. However, the economic and trade activities between the two partners are expected to improve as indicated by official statistics from January to June, 2010. During this period, bilateral trade surged by 76.45% to reach $6.55 billion, with Taiwan’s exports to the Kingdom standing at $399.53 million, while its imports amounted to about $6.15 billion.