Domestic demand, not trade with China, contributed most to Taiwan’s economic growth momentum last year, Vice Minister of Economic Affairs Lin Sheng-chung (林聖忠) said yesterday.
“Roughly 80 percent of our 10.88 percent GDP growth registered in 2010 was driven by domestic consumption,” Lin said.
The American Chamber of Commerce (AmCham) in Taipei’s observation that nearly half of Taiwan’s GDP growth last year came from trade with China was a misunderstanding, Lin said.
AmCham chairman Bill Wiseman said at a news briefing on Wednesday that Taiwan has become too reliant on China, which he said drove 47 percent of the country’s economic growth last year — far higher than the 25 percent average in G20 nations.
Lin said the government’s own statistics counter this claim. Domestic consumption accounted for 8.48 percentage points of Taiwan’s 10.88 percent GDP growth last year, while net external demand — or exports minus imports — made up only 2.4 percentage points of the growth rate.
“The figures indicate that our 2010 growth was mainly driven to increases in private consumption and private investment,” Lin said, adding that the ratio of exports contributing to Taiwan’s GDP growth last year was actually lower than those posted in previous years.
However, he said the landmark Economic Cooperation Framework Agreement has continued to help expand Taiwan’s exports.
For instance, shipments to China and Hong Kong accounted for 41.8 percent of Taiwan’s overall exports last year, but the share dropped to 40.9 percent in the first four months of this year, indicating that the agreement has not made Taiwan over-reliant on the Chinese market, the minister said.
Moreover, he said, Taiwan’s trade with the EU and ASEAN has continued to grow. Last year, ASEAN member states accounted for 13.47 percent of Taiwan’s overall foreign trade, up from 13.33 percent in 2009.
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