The Directorate-General of Budget, Accounting, and Statistics has projected that Taiwan’s per capita GDP will reach US$38,066 by 2025 and is expected to exceed US$40,000 in 2026. This milestone would mark the first time in 22 years for Taiwan’s per capita GDP to surpass that of South Korea. Jiann-Chyuan Wang, Vice President of the Chung-Hua Institution for Economic Research (CIER), notes that rapid growth in AI and semiconductors, combined with New Taiwan Dollar appreciation, has driven Taiwan’s economic growth rate to approximately 4.5%, outperforming South Korea. However, while semiconductors contribute nearly 40% of exports, they account for only 7% of employment. Issues of industrial concentration and unequal wage distribution persist, and with baby boomers entering retirement, Taiwan faces potential labor shortages. The country urgently needs to reform its retirement system, leverage the capabilities of its senior workforce, and introduce automation and foreign workers to maintain a competitive advantage.
In contrast, China’s economic recovery remains sluggish, with insufficient momentum across the three economic drivers of consumption, exports, and investment. In the first half of 2025, consumption accounted for 52% of GDP, exports for 31.2%, and investment for 16.8%, indicating weak domestic demand. Confronting depressed real estate markets and declining external demand, Beijing announced a 1.2 trillion RMB investment to launch the downstream hydroelectric project on the Yarlung Tsangpo River and advance the Xinjiang-Tibet Railway, signaling renewed reliance on large-scale infrastructure to stimulate the economy.
Meng-Chun Liu, Director of The First Research Division of CIER, analyzes that China’s central government is using public investment to compensate for local debt and real estate difficulties. While this approach can boost GDP in the short term, its long-term benefits remain limited. Deputy Director Chia-Hsuan Wu points out that China has failed to effectively complete structural transformation and continues relying on traditional infrastructure, risking diminishing marginal returns while facing heavier fiscal pressure following the pandemic.
Although Taiwan and China face different economic challenges, both share the common task of ensuring sustainable and balanced growth. Taiwan must address industrial concentration and labor force attrition, while China needs to avoid excessive dependence on infrastructure and pursue economic transformation with greater long-term benefits.
Author: CIER Editorial Team Date: September 15, 2025