Facing competition from Chinese manufacturing, currency fluctuations, and the impact of 20% U.S. tariffs, Taiwan’s industrial competitiveness is confronting severe challenges. Jiann-Chyuan Wang, Vice President of the Chung-Hua Institution for Economic Research, points out that Taiwan’s long-term over-dependence on semiconductors has led to imbalanced industrial development. The island must seize opportunities presented by AI and high-tech development to channel more resources into traditional industries, promoting upgrading and transformation to avoid serious impacts on employment and regional economies.
Statistics show that since the U.S.-China trade war began in 2018, total manufacturing output has grown 23%, but this growth has been concentrated mainly in integrated circuits and electronic products. Traditional industries such as textiles and plastics/rubber have contracted, making the export structure even more lopsided.
Vice President Jiann-Chyuan Wang emphasizes that traditional industries encompass 25% of the nation’s employment population, and allowing them to relocate overseas could trigger unemployment and social problems. Taiwan’s economy is already showing signs of industrial polarization, urgently requiring policy measures to strengthen traditional industry upgrades, promote tax and regulatory reforms, and establish more comprehensive R&D support and infrastructure. Only by advancing both high-tech and traditional industries simultaneously can Taiwan seize opportunities in the new wave of global industrial transformation and achieve long-term, balanced, and sustainable development goals.
Author: CIER Editorial
Team Date: August 21, 2025