e Source: National Statistics of Taiwan, DGBAS, Central Bank of the Republic of China, BMI executive summary - core Views Key risks to outlook chapter -: political outlook - sWot analysis - BMi political risk ratings - Foreign policy - retracting china trade agreement carries considerable economic risk < ALACRA META ABSTRACT>From a political perspective, the recent student protests against the trade pact with mainland China may catalyse a widening divide within the ruling Kuomintang (KMT) party, which would inadvertently lead to some instability within the political environment. In the event that the trade pact is rescinded, taiwan could suffer longer-term economic implications stemming from not only a deterioration in ties with china, but also the inability to establish much-needed free trade agreements with its other trade partners. ...Moreover, a rigid labour market, coupled with fast deteriorating demographics will serve to erode the attractive of Taiwan s business environment. taBle: lonG-terM MacroeconoMic forecasts -- chapter -: Business environment -- sWot analysis -- BMi Business environment risk ratings -- Business environment outlook -- infrastructure -- taBle: BMi Business and oPeration risK ratinGs -- taBle: BMi leGal fraMeWorK ratinG -- taBle: laBour force Quality -- taBle: asia, annual fdi infloWs -- taBle: trade & inVestMent ratinGs -- operational risk -- chapter -: Key sectors -- -- taBle: defence exPenditure, --------- -- Freight -- taBle: rail freiGht -- taBle: road freiGht -- taBle: air freiGht -- taBle: MaritiMe freiGht -- taBle: trade -- other Key sectors -- taBle: oil and Gas sector Key indicators -- taBle: PharMa sector Key indicators -- taBle: autos sector Key indicators -- taBle: telecoMs sector Key indicators -- taBle: food and drinK sector Key -- taBle: infrastructure sector Key indicators -- chapter -: BMi Global assumptions -- Global outlook -- Growth increasingly polarised taBle: GloBal -- taBle: deVeloPed states, real GdP GroWth, -- taBle: BMi Versus BlooMBerG consensus real GdP GroWth forecasts, -- taBle: eMerGinG MarKets, real GdP GroWth, -- - Business Monitor International Ltd www taiwan Q- ---- core Views Taiwan s economy slowed in Q--- likely on the back of a moderat- ing expansion in private consumption and exports. While we remain fairly constructive on Taiwan s trade prospects in the near term, we do not believe that recovering demand in the US and Europe will be able to overcome the drag from China s slowing economy, which will inadvertently weigh on the island s economy given its heavy reliance on the mainland. ...Key risks to outlook Downside risks to Growth Forecast: should we see a re-emer- gence of a crisis in the eurozone, or a downward spiral in china s economy, we can expect taiwan to head into a sharp recession. - Business Monitor International Ltd www executive summary
...The country enjoys a robust democracy that has been in operation since ----, with both main political blocs enjoying periods in office � the pan-blue (Chinese nationalist) coalition won the presidency in the ---- and ---- elections, while a pan-green (pro-independence) coalition president was elected in ---- and ----. ...Taiwan s education system has improved in line with the country s rapid industrialisation and is often placed in the upper echelons of international rankings. Although Taiwan receives no official rating on the UN s Hu- man Development Index (owing to its lack of recognition as an independent nation), a ---- Taiwanese government estimate based on the criteria of the index gave the island a score of -.---, indicating a very high level of development and the --th highest globally. This good quality of life and Taiwan s highly homo- geneous population (-- are Han Chinese) make for a stable society, free from extensive internal unrest over the long term. ...For example, when China launched missiles into the waters surrounding Taiwan in the run-up to the island s first presidential elections in ----, the US responded by sending ships into the Taiwan Strait in its biggest naval mobilisation in Asia since the Vietnam War. Additionally, under the ---- Taiwan Relations Act, the US government is obliged to equip Taiwan with defensive mili- tary hardware�something that helps make a mainland invasion -- Business Monitor International Ltd www taiwan Q- ---- cross-straits risks to remain
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