The Taiwanese Electronics Industry in Global Value Chains

Kócza Benjámin András (2023) The Taiwanese Electronics Industry in Global Value Chains. Külkereskedelmi Kar.

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Absztrakt (kivonat)

Taiwan’s economy was examined from various viewpoints inthis paper, from traditional macroeconomic indicators to the island’s role ininternational production networks in its most competitive industry, electronics.How Taiwan – despite its size – became the 21st largest economy (GDP),starting as an agrarian society in the 1950s, becoming a highly developedcountry today, in merely 70 years was explored through the findings of RobertWade. The role of government in economic development is crucial. The rapideconomic growth and development of Asian countries in the latter half of the 20thcentury, starting with Japan, followed by South Korea, Taiwan, Hong Kong,Singapore cannot be entirely attributed to government policies, since forinstance, in Hong Kong government intervention was relatively low, compared to therigid hierarchy of the Japanese keiretsu or South Korean chaebols. Taiwan laybetween Hong Kong and South Korea in government intervention. Through thecareful selection of internationally competitive industries, initially heavyand chemical, then semiconductors, by public research institutions, theTaiwanese government facilitated their growth, applying different policy toolsin the various stages of the level of development of these industries, forinstance import substitution and export orientation. The period between 1951and 1973 saw over 10% annual average growth rates, significantly higher thanthat of industrialised nations in, for instance, America or Western Europe.Globally today, Taiwan is most competitive in itselectronics industry, particularly the production of the some of the highestcapacity semiconductors, which is reflected by statistics: 30% of allindustrial production value stems from electronics and 37% of all exports areintegrated circuits, complemented by the fact that its trade to GDP ratioexceeds 100%, double that of the world average. Taiwan can remain competitivethrough its integration in global production networks, as an intermediary(parts producer), which was explored through the notion of value-added (VA)trade and the organisation of production networks into so-called global valuechains (GVCs). Indeed, the island had a GVC participation index of 60.8% (% sharein total gross exports), 15 percentage points higher that of the Asian average(WTO, 2018). The assessment of the geographical origin of VA in the Taiwaneseexports of electronics provides insight into what production networks Taiwan isintegrated in, what countries have important ties with the island and theelectronics industry. An important paradigm could be seen, supported by otherdata in the paper, namely, the industrial hollowing-out of Japan, losing itsdominance in Asia, coupled with the emergence of China, with initially most VAof Taiwanese exports originating in Japan in 1996, to that role taken by thePRC by 2018. The assessment of sectoral contributions to Taiwanese electronicsexports underlines the importance of the services sector, and highlights theresource scarce Taiwan’s reliance on raw material imports, with most VAstemming, naturally, from within the industry. To better illustrate Taiwan’srole in global production networks, a topological network graph was adopted,assessing countries’ share in the VA of exports and imports – supply and demandperspective, respectively – on the aggregate level and within the ICT sector.Once again, the emergence of China as both a global supply and demand hub wasthe most notable change. Taiwan benefitted from the mainland’s growth, sincethe two countries are interdependent, with China being the largest exportdestination of Taiwan and 30% of all Taiwanese FDI going to the mainland. Astensions are ever so high between Taiwan and its mainland counterpart, a highinterdependence bears risk. Taiwan has been trying to decrease said dependenceby investing in emerging countries in Southeast Asia, known as the NewSouthbound Policy, but the high economic gains from GVC participation andgeographic proximity to the PRC – not taking into account important culturalfactors, such as a common language – ensure that the Straits will remain apoint of high tension in the years to come. The intense globalisation andgrowth of international trade and emergence of international productionnetworks has seen a decline since the last decade. More importance is placed onregional integration: from the notion of “glocalization”, to the increasingsignificance of regional value chains – as differentiated from GVCs. How Taiwanwill fit into this new pattern of trade and whether tensions can ease betweenthe PRC and the island, for the benefit of both nations remains to be seen, butwith increasing protectionism after the Covid-19 pandemic and the normalisationof war and escalation of conflicts do not paint a bright picture.

Intézmény

Budapesti Gazdasági Egyetem

Kar

Külkereskedelmi Kar

Tanszék

Nemzetközi Gazdaságtan Tanszék

Tudományterület/tudományág

NEM RÉSZLETEZETT

Szak

Nemzetközi gazdálkodás

Mű típusa:	diplomadolgozat (NEM RÉSZLETEZETT)
Kulcsszavak:	economic development, electronics industry, Global Value Chains, international economics, Taiwan
SWORD Depositor:	Archive User
Felhasználói azonosító szám (ID):	Archive User
Rekord készítés dátuma:	2023. Szep. 07. 14:31
Utolsó módosítás:	2023. Szep. 07. 14:31

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