The economic growth gap between Taiwan and South Korea is expected to further widen next year, tilting favorably toward South Korea, according to an economist.
Chen Hsin-hung (陳信宏), a division director at the Chung-Hua Institution for Economic Research (中經院), made the comment in the latest electronic newspaper from the Industrial Development and Investment Center under the Ministry of Economic Affairs.
Citing an assessment by Global Insight, an economic forecasting agency, Chen reported that the gap in economic growth rates between Taiwan and South Korea will broaden to 2.7 percentage points next year from an estimated 0.4 percentage points this year in South Korea's favor.
Global Insight forecast that Taiwan's and South Korea's economies will grow by 3.5 percent and 3.9 percent this year, while its growth forecasts for the two economies for next year are 3.3 percent and 6 percent, respectively.
Chen ascribed the changes to fast technological progress in South Korea thanks to its innovation and brand-building strategies that have led to an advantage in product quality.
Handsets, LCDs and online games produced by South Korean firms have swept through the entire world, Chen said, adding that its automobiles and home appliances have also begun to win international acclaim.
The South Korean government's effort to promote innovate technologies has been the major driving force behind the country's astonishing progress since the 1997 Asian financial crisis, Chen said, noting that its research and development budgets increased by 14.7 percent in 2002.
In the face of China's fast rise, South Korea has made it clear that it will continue investing in high-tech research and upgrading production efficiency, he said.