As the world opens up, can Taiwan avoid getting left behind?


Since the start of the Covid-19 pandemic until fairly recently, Taiwan has looked like a good place to be.  Surrounded by water and so able ensure that Covid cases were not brought on to the island, life appeared to be carrying much more normally than in cities overseas.   Case numbers were kept relatively low, and the majority of these were detected on entry, in quarantine.  The total number of people who have died of Covid-19 there is still less than 1000 – fewer than are dying each day in the USA.

Things are moving on, though, as the majority of the industrialised world is, in various ways, learning to coexist with the virus.  Where does that leave Taiwan?

Taiwan’s economy is built on a strong manufacturing base, exporting large amounts of integrated circuits, LCDs, computers, machinery and petrochemicals, and famous for being the world’s number one producer of semiconductors.  She has trade surpluses with many economies, and healthy foreign reserves.  At a time when the rest of the table is short of crucial supplies, Taiwan looks to be, in more ways than one, “holding the chips”.  

Germany’s imports from Taiwan, for instance, are valued at USD6.1 billion annually, but that’s just 1.7% of the island’s total exports.

However, there are challenges.  Domestic consumption has taken a hit, and efforts to stimulate this through the issuing of vouchers not been as effective as hoped, for at two significant reasons.  Firstly, that with many people leaving the workforce (not least because of a rapidly aging population), vouchers are not in themselves enough to make people spend more, when external circumstances are inclining them to be cautious and save.   Secondly, the current “closed border” situation, which is affecting not only tourism but inbound an outbound business travel, is unsurprisingly having a negative affect on many businesses, both directly and indirectly. 

 Working from (an island) home is all very well for a while, but it’s probably not sustainable for an export powerhouse in today’s global economy, even when that “home” is shared by 11 million other people.  Taiwan does not, after all, have the mainland’s benefit of an enormous domestic market, to fall back on.  Predictions are that GDP growth will fall back in 2022, unless she decides on a more nuanced, long-term way of dealing with Covid.

In an age of global supply chains, Taiwan has great importance relative to its size, and many European businesses cannot afford to be cut off from her for long.  Times like these make the benefits of having trustworthy, experienced local representation even clearer than ever – which is why so many choose to partner with Melchers there. 

And it’s not all about managing sourcing from Taiwan. This is a place that continues to seek out and import technology in the form of industrial equipment, materials and tools, all required in order to keep improving and upgrading that powerful export machine.  And Taiwan’s consumers are sophisticated too, with a taste for quality goods - a great opportunity for western businesses willing to make the effort to understand her unique market and culture.


Melchers in Taiwan

Melchers established a firm foothold in Taiwan in 1971, and since 1993 has been known as Melchers Trading GmbH (Taiwan Branch), a fully owned subsidiary of Melchers Group in Bremen, Germany. Melchers operates out of five offices in three locations on the island - Taipei, Taichung and Kaohsiun, and employs more than 100 professionals, assisting international partners with marketing and sales, sourcing, and business development, across sectors ranging all the way from industrial machinery to consumer and luxury goods.


Contact us:

We are here for you
You can reach us by phone from Monday to Friday between 09:00 and 17:00.
+49 421 17691233