Taiwan Grows America

Taiwan: quietly a major economic partner

Michael Turton
American Citizens for Taiwan | 美臺會
5 min readNov 19, 2018

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University of Southern California — the most popular school for Taiwanese studying in the United States

This week The American Institute in Taiwan (AIT), America’s officially unofficial representative office in Taiwan, reported that more Taiwanese than ever are studying in the US:

The number of Taiwanese enrolled at US colleges and universities
last academic year reached 22,454, the third consecutive increase, the
American Institute in Taiwan (AIT) said yesterday.

Except for enrollments in non-degree programs, Taiwanese student numbers increased at all levels. This export of American education to 22,454 Taiwanese students is the sweet frosting on the multi-layered cake of Taiwanese economic relationship with the United States, one that has quietly become one of the most important economic relationships the US has.

Taiwan is America’s 7th largest agricultural export market

Taiwan’s imports and investments create hundreds of thousands of jobs
in the US. For example, the island powerhouse is America’s 7th largest agricultural export market. In 2017 Taiwan bought $3.5 billion in
agricultural exports (source) from American producers. For US organic foods, high-end agricultural products with large margins, Taiwan is the fourth largest market in the world.

Taiwan-created jobs by state (ROC representative office)

Fundamentally, Taiwan is a huge trade partner. The ROC’s representative office in the US notes:

Taiwan was the 10th largest U.S. trading partner in 2016 with two-way
trade in goods exceeding $65 billion. Further, Taiwan was the export destination for over $11 billion in U.S. services exports in 2016, yielding a surplus for the U.S. of over $4.1 billion. Taiwan is the 14th largest export market for the United States, and for agriculture in particular, its 7th largest export destination. As a result, Taiwan is an important and growing source of job creation for the United States. U.S. Government data show that U.S. goods and services exports to Taiwan, combined with investment by Taiwan-affiliated companies throughout the United States, support 322,728 well-paid U.S. jobs.

An advertisement for Washington State cherries; fruit is often used as a gift in Taiwan

Every state, no matter how distant, benefits. Take California. Taiwan is California’s fifth-largest export market, worth $7 billion. Taiwan-based firms operating in California include restaurant chains like Din Tai Fong and 85C, China Airlines and the shipping firm Wan Hai, and tech firms such as Kingston and Pantronix. Taiwan’s economic activity generates 90,000 jobs in California alone. Taiwan’s other effects cannot be measured: the nation provides thousands of bright young people who spend years working in California’s companies, gaining experience and making connections that further benefit both nations.

It seems natural that California would have an intimate relationship with Taiwan, but the US east coast also has a dynamic relationship with the island. Faraway Maine still sends over $60 million in exports to Taiwan, the bulk of which is computer and electronics-related, not fish and paper. Similarly Pennsylvania exports $360 million to Taiwan. North Carolina exports nearly $275 million to Taiwan and a number of Taiwan-affiliated firms have a presence there.

Head of MOST Chen Liang-gee (center), MIT STPI Director-general Yuh-Jzer Joung (left), and Roger Mark of MIT IMES (right).

Imports, exports, and investment are the most obvious way Taiwan interacts economically with the US to the benefit of both. Many major US universities have research agreements with research institutes and universities in Taiwan. These include technology giants such as Carnegie Mellon and MIT. Just last year the Ministry of Science and Technology (MOST) added MIT to its growing cooperation in medical research with US universities. Other partners include Massachusetts General Hospital and Stanford. US and Taiwan universities have various exchange programs and partnerships with many universities in Taiwan.

In a recent piece on the US-Taiwan relationship, Heritage’s Riley Walters observes of the technology and investment relationship:

Cross-border investment between the U.S. and Taiwan was more than $1 billion in 2017. Companies like Amazon, IBM, Microsoft, and Yahoo have plans to invest in artificial intelligence development in Taiwan. But the levels of bilateral investment are not reciprocal. Taiwanese companies invest almost four times as much in the U.S. as American companies invest in Taiwan. Taiwanese investment in the U.S. was $837 million in 2017. This trend will likely continue to increase over the next few years given an announcement by Taiwanese company Foxconn to invest $10 billion in production facilities in Wisconsin.

Of course, Taiwan is a major maker of semiconductors and thus, a key purchaser of semiconductor manufacturing equipment and services from the US.

Yet, despite the longstanding economic connections between Taiwan and the US, much remains to be done. The US needs to resume TIFA talks with Taiwan. When the US finally restarts those talks, it needs to have them led by the Trade Representative, not the deputy, to fulfill the spirit of the Taiwan Travel Act, passed this year unanimously by both houses of Congress. The Heritage Foundation has also called for a high-level economic dialogue to be established with Taiwan, an excellent idea.

The U.S. state of Wyoming’s Taipei trade office was officially opened on Oct. 3, 2018 by Governor Matt Mead, in a bid to foster greater economic, technological, and tourist exchange.

The US should also think about fostering people-to-people links that build long-term economic relationships. For example, the US government should create government-supported pathways for more students from Taiwan to study in the US and for talented students from Taiwan to do internships in US firms. Taiwan supporters should be calling on their state governments to engage in a variety of exchanges with Taiwan, emphasizing not only Taiwan’s obvious ability to purchase their products, but that students from Taiwan can become immigrants who will boost state economies by starting companies and fostering trade. More exchanges of state government and Taiwan government officials, and state-level trade delegations should be a goal. Other forms of exchange, such as sister city and university-university exchanges, should be systematically encouraged. After all, ultimately, relationships between peoples are relationships between people.

Taiwan supporters should be calling on their state governments to engage in a variety of exchanges with Taiwan

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Michael Turton
American Citizens for Taiwan | 美臺會

Michael Turton is a longtime expat in Taiwan, who operates the well known blog The View from Taiwan on Taiwan politics, history, and culture.