Rising consumption and booming intra-regional outsourcing will be the "twin revolution" driving economic growth to new heights in Asia Pacific in the coming years, with Taiwan becoming a key hub of Asia's supply chain, a MasterCard International economist said yesterday.
Singapore-based Yuwa Hedrick Wong (王月魂) said Taiwan's steady and strong exports confirm its position as an important link in the regional supply chain.
Taiwan saw its exports to other Asia-Pacific markets jump from US$4.9 billion in 1985 to US$62.5 billion in 2001, marking an astonishing average annual growth rate of 28.3 percent, he said, citing figures compiled by International Monetary Fund.
Another trade barometer, the Trade Complementarity Index set by the World Bank, also indicates bright prospects for the nation's trade with neighboring countries, Wong said.
The index measures how well the export performance of a country meets the import needs of other countries in the same region. The higher the index number, the better the prospects for that country's trade with other countries.
Taiwan's index climbed from 43.4 in 1985 to 68.5 in 2001, compared to Singapore's 61.3, Thailand's 57.3 and China's 47 in 2001.
But with the nation's R&D investment only accounting for 2.3 percent of its GDP last year, Wong suggests that the government put more effort in this field to enhance the nation's development as a knowledge-based economy.
Taiwan represents in miniature the region's overall economic transformation, where a growth model based on low value-added exports and investment will gradually diminish, to be replaced by growth fueled by rising consumption from an expanding middle class, Wong said.