{"id":8227,"date":"2026-08-02T00:35:24","date_gmt":"2026-08-02T00:35:24","guid":{"rendered":"https:\/\/pronews.in\/index.php\/2026\/08\/02\/growing-like-gangbusters-can-taiwan-maintain-its-economic-momentum\/"},"modified":"2026-08-02T00:35:24","modified_gmt":"2026-08-02T00:35:24","slug":"growing-like-gangbusters-can-taiwan-maintain-its-economic-momentum","status":"publish","type":"post","link":"https:\/\/pronews.in\/index.php\/2026\/08\/02\/growing-like-gangbusters-can-taiwan-maintain-its-economic-momentum\/","title":{"rendered":"Growing like \u2018gangbusters\u2019: Can Taiwan maintain its economic momentum?"},"content":{"rendered":"<div aria-live=\"polite\" aria-atomic=\"true\">\n<p>A Pacific island has become one of the biggest economic success stories of the year so far.<\/p>\n<p>Taiwan has witnessed a dramatic boom in recent months driven by the mania for artificial intelligence (AI). Earlier this year, its stock exchange soared to become the fifth largest in the world based on market capitalisation, the value of its publicly traded shares, overtaking\u00a0the United Kingdom, Canada and India.<\/p>\n<section>\n<h2>Recommended Stories <\/h2>\n<p><span>list of 3 items<\/span><\/p>\n<ul>\n<li><span>list 1 of 3<\/span><a href=\"http:\/\/www.aljazeera.com\/economy\/2026\/6\/29\/china-slaps-export-controls-on-dozens-of-japanese-entities\">China slaps export controls on dozens of Japanese entities<\/a><\/li>\n<li><span>list 2 of 3<\/span><a href=\"http:\/\/www.aljazeera.com\/news\/2026\/7\/29\/china-puts-squeeze-on-taiwan-with-new-maritime-patrols\">China puts the \u2018squeeze\u2019 on Taiwan with new maritime patrols<\/a><\/li>\n<li><span>list 3 of 3<\/span><a href=\"http:\/\/www.aljazeera.com\/news\/2026\/7\/26\/typhoon-noul-makes-landfall-in-china-with-hundreds-of-thousands-evacuated\">Typhoon Noul makes landfall in China, with hundreds of thousands evacuated<\/a><\/li>\n<\/ul>\n<p><span>end of list<\/span><\/section>\n<p>Much of that upward momentum has been driven by AI and other technology exports highly sought after by the United States.<\/p>\n<p>Last year, the US imported $201bn worth of goods from Taiwan, nearly double its rate from 2024, when it acquired $116bn in imports. In May, Taiwan eclipsed China to become the third-largest source of US imports, after Mexico and Canada.<\/p>\n<p>Experts have described Taiwan\u2019s market acceleration as a return to its status as a \u201ctiger economy\u201d \u2014 a term used to capture surging growth in East Asia. Much of the credit, they say, falls to its flourishing technology sector.<\/p>\n<p>\u201cArtificial intelligence helps explain the rising importance of Taiwan,\u201d said Chad Bown, a senior fellow at the Peterson Institute for International Economics.<\/p>\n<p>But critics warn that, while Taiwan\u2019s market remains strong, factors like tumultuous international relations, as well as demographic concerns, could complicate the island\u2019s long-term outlook.<\/p>\n<p>\u201cIt seems to be a win-win for now,\u201d said Reza Hasmath, an academic faculty adviser at The China Institute at the University of Alberta. \u201cBut Taiwan is just postponing a reality that\u2019s not sustainable.\u201d<\/p>\n<h2 id=\"an-economic-boom\">An economic boom<\/h2>\n<p>Taiwan\u2019s thriving export market helped boost its gross domestic product (GDP) to 8.63 percent in 2025.<\/p>\n<p>That rocket-ship trajectory continued into the first quarter of this year, when the GDP saw an exhilarating 13.69 percent rise.<\/p>\n<p>Government data released on Friday showed that the island is continuing that momentum, with its economy growing an impressive <a href=\"https:\/\/eng.stat.gov.tw\/News_Content.aspx?n=2320&#038;s=236529\" target=\"_blank\" rel=\"noopener\">12.92 percent<\/a> in the second quarter of the year, which ended in June.<\/p>\n<p>\u201cThe GDP growth is going like gangbusters,\u201d said Dexter Tiff Roberts, nonresident senior fellow at the Atlantic Council\u2019s Global China Hub.<\/p>\n<p>Roberts expects the trend to be \u201clong term\u201d, as Taiwan produces about 90 percent of the advanced chips used to power leading AI models.<\/p>\n<p>\u201cThat\u2019s not going to go away. We know the world, and the US, needs this,\u201d he added.<\/p>\n<p>While the AI boom is a global phenomenon, the US has become a major market for such chips, with billions of dollars flowing into the industry each year.<\/p>\n<p>US President Donald Trump, meanwhile, has pledged to bolster his country\u2019s status as \u201cthe world leader in artificial intelligence\u201d. His administration has claimed to attract more than $2.7 trillion in tech and AI investments since the start of his second term.<\/p>\n<p>To secure US access to Taiwan\u2019s cutting-edge semiconductor technology, the Trump administration signed an <span>agreement under which Taiwan will invest $500bn in the US. <\/span><\/p>\n<p><span>Half of that amount is expected to come in the form of direct investments by Taiwanese semiconductor and tech firms,<\/span><span> including through the development of onshore tech manufacturing.<\/span><\/p>\n<p><span>The rest is largely comprised of credit guarantees for additional investments from Taiwan in the US.<\/span><\/p>\n<p>Under the agreement, Taiwanese firms would be allowed to import 2.5 times the capacity of their US factories, without fear of steep tariffs.<\/p>\n<p>In a subsequent trade agreement, Taiwan agreed to reduce its tariffs on 99 percent of US exports.<\/p>\n<p>Taiwan has also boosted its tech exports to the US through investments in nearby Mexico, with cross-border plants manufacturing inputs for data centres in Texas.<\/p>\n<h2 id=\"unbalanced-relationship\">\u2018Unbalanced relationship\u2019<\/h2>\n<p>But Hasmath, the faculty adviser at the University of Alberta, warns that there are troubling signs on the horizon for Taiwan-US relations.<\/p>\n<p>Trump has long sought to eliminate trade deficits with US economic allies, and he has lashed out at countries that export more to the US than they import.<\/p>\n<p>Hasmath pointed out that Taiwan is building a robust trade surplus with the US, close to $200bn and counting. That could spark a backlash.<\/p>\n<p>\u201cThis is an unbalanced relationship and not conducive to Taiwan in the long term,\u201d Hasmath warned.<\/p>\n<p>Trump will not tolerate a hefty trade surplus for long, he added. Hasmath believes the US president will soon look to renegotiate his country\u2019s deals with Taipei.<\/p>\n<p>Roberts at the Atlantic Council, meanwhile, warned that Trump is \u201cmercurial\u201d \u2014 and with such a temperament comes \u201cuncertainty\u201d.<\/p>\n<p>Then there\u2019s the question of political upheaval in the US. Trump\u2019s approval ratings are low, and he is ineligible under US law to run for a third term as president.<\/p>\n<h2 id=\"demographic-problems\">Demographic problems<\/h2>\n<p>While Taiwan\u2019s economic boom is \u201cvery real\u201d and \u201cvery obvious\u201d, Roberts said there are clear vulnerabilities even on the domestic front.<\/p>\n<p>Taiwan\u2019s traditional export sectors like plastics and textiles are underperforming. Plus, Roberts pointed out that only a small fraction of the Taiwanese population is involved in the AI sector.<\/p>\n<p>\u201cA majority of the younger population is not in hi tech, so that\u2019s a real problem,\u201d he said.<\/p>\n<p>While the booming stock market has sparked a \u201cwealth effect\u201d \u2014 those with rising portfolios feel richer and are more inclined to spend \u2014 that helps the wider population only to an extent.<\/p>\n<p>With most of Taiwan\u2019s employment concentrated outside of the AI sector, economists have warned that the island could develop what\u2019s called a K-shaped economy, where the wealthy see growth, while the poorer segments of society stagnate or decline.<\/p>\n<p>The chip industry employs up to 350,000 people at most, experts say.<\/p>\n<p>Meanwhile, TSMC, Taiwan\u2019s biggest chip company, makes up to 40 percent of the stock market and provides four percent of the island\u2019s GDP growth. That lopsided proportion is \u201cunsustainable\u201d, according to Hasmath.<\/p>\n<p>Plus, Taiwan has a rapidly ageing population, with roughly a fifth of its population over the age of 65.<\/p>\n<p><span>The island also has other vulnerabilities. For example, it relies heavily on foreign imports of energy products, particularly oil, and has struggled with water scarcity.<\/span><\/p>\n<p>Then, there\u2019s the superpower next door: China. The government in Beijing considers Taiwan, a self-governing island, as its own territory, and it has taken aggressive measures to limit the island\u2019s ability to establish diplomatic relations of its own.<\/p>\n<p>That conflict has added fuel to the debate around Taiwan\u2019s growth, with a spokesperson for the Chinese government reportedly saying the island\u2019s growing proximity to the US tech sector will \u201cdrain Taiwan\u2019s economic interests\u201d and \u201chollow out\u201d the country\u2019s major industry.<\/p>\n<p>Hasmath said that, if the AI boom backfires on Taiwan, all of that ultimately adds up to a \u201crecipe for electoral change, a shift in government\u201d in Taipei.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>A Pacific island has become one of the biggest economic success stories of the year so far. Taiwan has witnessed a dramatic boom in recent months driven by the mania for artificial intelligence (AI). Earlier this year, its stock exchange soared to become the fifth largest in the world based on market capitalisation, the value &#8230; <a title=\"Growing like \u2018gangbusters\u2019: Can Taiwan maintain its economic momentum?\" class=\"read-more\" href=\"https:\/\/pronews.in\/index.php\/2026\/08\/02\/growing-like-gangbusters-can-taiwan-maintain-its-economic-momentum\/\" aria-label=\"Read more about Growing like \u2018gangbusters\u2019: Can Taiwan maintain its economic momentum?\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":8228,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-8227","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-travel"],"_links":{"self":[{"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/posts\/8227","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/comments?post=8227"}],"version-history":[{"count":0,"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/posts\/8227\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/media\/8228"}],"wp:attachment":[{"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/media?parent=8227"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/categories?post=8227"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/tags?post=8227"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}