Taiwan’s 2020 economic growth looks to outpace mainland China’s for first time in decades

Not since 1991 has self-ruled Taiwan seen greater annual economic growth than that reported by the world’s current second-largest economy

The island’s economy grew 3.9 per cent in the third quarter from a year earlier, and it is expected to grow 3.3 per cent in the fourth quarter

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The Taiwanese government has revised up its annual economic growth estimate for 2020 to 2.5 per cent. Photo: Bloomberg

Published: 6:15am, 12 Dec 2020Updated: 7:12am, 12 Dec 2020

Taiwan’s economic growth rate may exceed that of mainland China for the first time in nearly 30 years, according to official estimates and those from economists.

The Taiwanese government revised up its annual growth estimate to 2.5 per cent at the end of last month. Although the mainland government has not announced a growth target for this year, economists have said it could be around 2 per cent, in light of a relatively quick recovery from the coronavirus this year.

If confirmed when the figures come out early next year, it would be the first time Taiwan’s growth has surpassed mainland China’s since 1991.

Both mainland China and self-ruled Taiwan emerged as two of the best-performing economies in containing the coronavirus, despite their different approaches. China has also tried to retain foreign investment from Taiwan, which has been falling.

“The main reason why Taiwan may end up with average growth data that is about the same or even higher than China’s is that Taiwan was able to avoid a very large fall in output at the beginning of the year,” said Louis Kuijs, head of Asia economics at Oxford Economics.

“In China, we saw a lockdown and the closing down of a huge part of the economy in the first quarter. Taiwan is probably the best example that didn’t have to [resort to] such a broad-based closing down of the economy.”

In the third quarter, the island’s economy grew 3.9 per cent from a year earlier, and it is expected to grow 3.3 per cent in the fourth quarter, according to the Taiwanese government. The island’s economic growth has been propelled by strong domestic investment, particularly in the semiconductor industry, and by exports of electronic products.