Taiwan`s Domestic Stability: An Economic Perspective

Abstract

This paper analyzes Taiwan’s stability from an economic perspective. It first discusses challenges to Taiwan r economy, with particular focus on the influence of China’s economic rise. In recent years, the PRC’s policy toward Taiwan has been to contain and isolate Taiwan politically in the international community while at the same time striving to attract Taiwan s capital and technology by means of the mainland’s economic strength. Almost all East Asian countries, including Taiwan, have felt enormous pressure from China. The paper also examines whether Taiwan s economy has the wherewithal to weather this economic storm and avoid any political or social instability that could be caused by economic depression. The argument is that although Taiwan’s economic performance has not been outstanding in recent years, long-term depression in Taiwan is unlikely. As the global economy recovers, so should Taiwan’s fortunes. However to ensure Taiwan’s economic security and maintain strong international competitiveness in the long term, Taiwan should follow the overall principle of “consolidating the island’s original equipment manufacturer (OEM) base, creating indigenous brands, and expanding niches.”