Taiwan's Surprising Boom

This caught my eye:

Taiwan kept borrowing costs unchanged and raised its growth forecast for the year in a rare display of optimism in a world grappling with the economic effects of the pandemic.

The central bank’s decision to hold the interest rate reflects confidence in an economy where the stock market is near a record high, exports are booming and the Covid-19 pandemic is being held at bay.

The economy is now expected to grow by 1.6% this year — up from June’s 1.5% forecast — driven by government spending and private investment as supply chains get relocated from China, central bank Governor Yang Chin-long told reporters Thursday.

You might argue that 1.6% of RGDP growth is not a boom. But consider that Taiwan’s population growth rate is only 0.2%. A growth rate of 1.4% in per capita terms is fairly normal for a rich economy like Taiwan. And notice that while the unemployment rate briefly spiked during the COVID crisis, it’s rapidly plunging back toward the 3.7% level of the 2018-19 boom.

Meanwhile, China’s export machine is reaching new all-time highs:

Note that while the graph title says “imports”, the graph actually shows China’s share of global exports.

The WSJ reports that China’s domestic economy is also doing well:

China’s economic recovery accelerated in August, with retail sales, the last holdout among the economy’s major components, returning to pre-coronavirus levels by showing their first month of growth this year.

Other major indicators, including factory production, investment and property activity, all gathered pace, China’s state-run statistics bureau said Tuesday, signaling a robust rebound for the world’s second-largest economy. The main official measure of joblessness, the urban surveyed unemployment rate, edged down to 5.6%, the lowest since it stood at 5.3% in January, when the coronavirus began to affect hiring. That is comfortably below the government’s targeted ceiling of around 6% for the year and down from the record high of 6.2% in February.

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