It has fended off an epidemic and is welcoming back firms that had decamped to China
THREE YEARS ago a prominent scholar declared that Taiwan’s economy was “on the brink of death”. The wording was extreme but the sentiment was widely shared. Taiwan faced a litany of seemingly intractable problems. Many of its best companies had moved to China; wages were stagnant; growth was grinding ever lower and the population was ageing rapidly. Its glory days as an Asian tiger—celebrated for its rapid development—seemed firmly in the past.
Yet in 2020 Taiwan has turned the clock back: it is, again, one of the world’s fastest-growing economies. Granted, its GDP is projected to expand by only about 2% this year. But it is in rare company, with fewer than a dozen economies expected to grow at all, thanks to the coronavirus. For the first time in decades, Taiwan’s economy is likely to grow faster than China’s. The question is whether Taiwan’s surprising strength marks a new departure, or whether it is simply a brief deviation from continued descent.
Two factors tied to the pandemic help account for Taiwan’s relative success this year. First, it was the only country to contain covid-19 without sweeping closures of schools, offices and shops. Its government, alert to new diseases in China, started screening visitors from Wuhan at the end of 2019, as soon as reports emerged of a mysterious pneumonia outbreak. Thanks to fine-grained contact-tracing and near-universal mask-wearing, life has carried on more or less as normal. Since July revenues for retailers and restaurants alike have increased compared with a year earlier.