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)

<p dir="ltr" style="text-align:left;"></p><p>Taiwan’s economy was examined from various viewpoints in this paper, from traditional macroeconomic indicators to the island’s role in international production networks in its most competitive industry, electronics. How Taiwan – despite its size – became the 21^st largest economy (GDP), starting as an agrarian society in the 1950s, becoming a highly developed country today, in merely 70 years was explored through the findings of Robert Wade. The role of government in economic development is crucial. The rapid economic growth and development of Asian countries in the latter half of the 20^th century, starting with Japan, followed by South Korea, Taiwan, Hong Kong, Singapore cannot be entirely attributed to government policies, since for instance, in Hong Kong government intervention was relatively low, compared to the rigid hierarchy of the Japanese keiretsu or South Korean chaebols. Taiwan lay between Hong Kong and South Korea in government intervention. Through the careful selection of internationally competitive industries, initially heavy and chemical, then semiconductors, by public research institutions, the Taiwanese government facilitated their growth, applying different policy tools in the various stages of the level of development of these industries, for instance import substitution and export orientation. The period between 1951 and 1973 saw over 10% annual average growth rates, significantly higher than that of industrialised nations in, for instance, America or Western Europe.</p> <p>Globally today, Taiwan is most competitive in its electronics industry, particularly the production of the some of the highest capacity semiconductors, which is reflected by statistics: 30% of all industrial production value stems from electronics and 37% of all exports are integrated circuits, complemented by the fact that its trade to GDP ratio exceeds 100%, double that of the world average. Taiwan can remain competitive through 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 value chains (GVCs). Indeed, the island had a GVC participation index of 60.8% (% share in total gross exports), 15 percentage points higher that of the Asian average (WTO, 2018). The assessment of the geographical origin of VA in the Taiwanese exports of electronics provides insight into what production networks Taiwan is integrated in, what countries have important ties with the island and the electronics industry. An important paradigm could be seen, supported by other data in the paper, namely, the industrial hollowing-out of Japan, losing its dominance in Asia, coupled with the emergence of China, with initially most VA of Taiwanese exports originating in Japan in 1996, to that role taken by the PRC by 2018. The assessment of sectoral contributions to Taiwanese electronics exports underlines the importance of the services sector, and highlights the resource scarce Taiwan’s reliance on raw material imports, with most VA stemming, naturally, from within the industry. To better illustrate Taiwan’s role in global production networks, a topological network graph was adopted, assessing countries’ share in the VA of exports and imports – supply and demand perspective, respectively – on the aggregate level and within the ICT sector. Once again, the emergence of China as both a global supply and demand hub was the most notable change. Taiwan benefitted from the mainland’s growth, since the two countries are interdependent, with China being the largest export destination of Taiwan and 30% of all Taiwanese FDI going to the mainland. As tensions are ever so high between Taiwan and its mainland counterpart, a high interdependence bears risk. Taiwan has been trying to decrease said dependence by investing in emerging countries in Southeast Asia, known as the New Southbound Policy, but the high economic gains from GVC participation and geographic proximity to the PRC – not taking into account important cultural factors, such as a common language – ensure that the Straits will remain a point of high tension in the years to come. The intense globalisation and growth of international trade and emergence of international production networks has seen a decline since the last decade. More importance is placed on regional integration: from the notion of “glocalization”, to the increasing significance of regional value chains – as differentiated from GVCs. How Taiwan will fit into this new pattern of trade and whether tensions can ease between the PRC and the island, for the benefit of both nations remains to be seen, but with increasing protectionism after the Covid-19 pandemic and the normalisation of war and escalation of conflicts do not paint a bright picture.</p><br><p></p>

Intézmény

Budapesti Gazdasági Egyetem

Kar

Külkereskedelmi Kar

Tanszék

Nemzetközi Gazdaságtan Tanszék

Tudományterület/tudományág

NEM RÉSZLETEZETT

Szak

Nemzetközi gazdálkodás

Konzulens(ek)

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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