by William T. Wilson
The Heritage Foundation
August 01, 2014
Backgrounder
Taiwan has experienced a sharp deceleration in economic growth since the late 1980s and early 1990s when it was averaging lofty growth rates in the high single digits. Largely locked out of the free trade agreements proliferating across Asia, Taiwan is quickly becoming ever more economically dependent on China. Taiwan has also grown dependent on China for its outward-bound foreign direct investment (FDI). Accession to regional economic agreements and economic liberalization would allow Taiwan to create a more diverse, flexible network of economic relationships and fully operationalize its economy’s comparative advantages. Taiwan’s economic status quo is not sustainable; it can be changed with the right combination of policies. The United States should publicly encourage Taiwan’s bilateral and multilateral ambitions.



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