Taiwan topped the list of 87 major economies in the world assessed in the book "Economic Growth," published by Harvard economics professor Robert Joseph Barro in 2004, in terms of the average GDP growth rate for the period from 1960 through 2000.
During the 40-year period, Taiwan's annual GDP growth reached an average of 6.2 percent, higher than Singapore's 6.2 percent, Singapore's 5.9 percent, and Hong Kong's 5.4 percent.
That was Taiwan's golden decades when it outshone the above-mentioned three other "Asian Dragons."
Gone were those glorious days. Taiwan's average GDP growth rate for the following 11 years was roughly half of that for the previous 40 years at 3.3 percent.
Its economic success story used to be dubbed as an "economic miracle." But some local economists warn that the miracle could fade away if the nation fails to speed up reform or reinvent its growth model.
The following are excerpts from special reports in the Monday editions of the United Daily News and its sister paper Economic Daily News on economic challenges facing Taiwan:
United Daily News:
During the 1990s, the then-Kuomintang government pledged to achieve per capita GDP of US$20,000 by 2000.
Such a goal, however, was not realized until 2011 because of a combination of factors, including polarized political confrontation following Taiwan's first-ever transfer of power between different political parties in 2000.
Through strenuous efforts, Taiwan was finally admitted to the World Trade Organization (WTO) in 2002. Taiwan has since seen expansion of its foreign trade.
Its export and import growth rates, however, have lagged far behind those of South Korea and Singapore, while roughly similar to Hong Kong's.
According to WTO statistics, Taiwan's two-way trade volume has increased by 137 percent over the past decade, rising from US$248.6 billion to US$589.9 billion.
During the same period, South Korea saw its foreign trade amount soar 243 percent and Singapore also posted a 221 percent growth.
In terms of place on the global foreign trade rankings, Taiwan dropped from the world's 15th largest trading nation in 2002 to 18th last year, while South Korea has emerged as the world's ninth largest trading power.
The Chung Hua Institution for Economic Research attributed Taiwan's decline in trade ranking in part to the practice of local companies receiving orders in Taiwan while producing them abroad.
Taiwan's slow progress in signing free trade agreements (FTAs) with major trade partners was cited as another reason.
Over the past decade, South Korea has signed eight FTAs that cover 45 signatory countries and Singapore has also signed 24 FTAs.
In contrast, Taiwan only managed to sign FTAs with four its diplomatic allies which account for only 1 percent of Taiwan's overall foreign trade.
Although Taiwan has signed an Economic Cooperation Framework Agreement with China, the Chung Hua Institution warned that China's advancement in upstream industries has gradually reduced its trade dependence on Taiwan. Over the long run, it said, Taiwan's export to China would shrink gradually. (June 18, 2012).
Economic Daily News:
The Hsinchu Science Industrial Park used to be Taiwan's pride, but industry insiders said the number of success stories in the park is getting ever less while the number of failed cases increasing.
The park, which used to be known as the Oriental Silicon Valley, could lose its glamor if Taiwan fails to speed up technological innovation and open its door wider to top-notch talent from around the world, some Hsinchu park business executives said.
They urged the government to take bold and speedy steps to adapt to changing world economic situations.
Some tycoons even suggested that Taiwan revise its constitution to have its president just serve one term instead of the current two terms to push incumbents to complete their campaign promises in a single term.
They further said they look forward to seeing the government follow the example of the South Korean government in helping them expand global market shares. (July 18, 2012).
(By Sofia Wu)