Taiwan Adoption

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Economy

Taiwan has a dynamic capitalist economy with gradually decreasing guidance of investment and foreign trade by government authorities. In keeping with this trend, some large, government-owned banks and industrial firms are being privatized. Exports have provided the primary impetus for industrialization. The trade surplus is substantial, and foreign reserves are the world's third largest. Agriculture contributes less than 2% to GDP, down from 32% in 1952. Taiwan is a major investor throughout Southeast Asia . China has overtaken the US to become Taiwan 's largest export market and, in 2005, Taiwan 's third-largest source of imports after Japan and the US . Taiwan has benefited from cross-Strait economic integration and a sharp increase in world demand to achieve substantial growth in its export sector and a seven-year-high real GDP growth of 6.1% in 2004. However, excess inventory, higher international oil prices, and rising interest rates dampened consumption in developed markets, and GDP growth dropped to 3.8% in 2005. The service sector, which accounts for 69% of Taiwan 's GDP, has continued to expand, while unemployment and inflation rates have declined.