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CORONAVIRUS – The situation in Taiwan

 

1. General situation

Taiwan has been successful in keeping the local COVID infection rates low until a majority of the population has been vaccinated. For a population of 23 million people, Taiwan had a total of 20,480 recorded cases and 850 deaths by the end of Feb. 2022. The full vaccination rate of the whole population has risen to 80% and booster rate to 35% (Source: COVID-19 Dashboard Taiwan https://covid-19.nchc.org.tw). Though the ultra-transmissible Omicron variant threatened to upend Taiwan’s mostly COVID-free existence during the lunar new year period in Jan.~Feb., Taiwan has kept the pathogen at bay better than most other countries.

Since Feb. 2022 after a surge of imported cases brought back during the peak season of lunar new year holidays, the pandemic appeared to be well under control with only sporadic local infection cases and these cases were identified during the tracked persons’ quarantine period. The number of imported cases remained at 2 digits given the huge influx of returning passengers. Life, work and social life in Taiwan could remain operational and free. The authorities urge the public to continue to follow epidemic prevention and control measures to protect the general community. Mask-wearing, registration of footprint location by mobile phone, social distancing are always recommended. The authorities take an extremely cautious policy to respond to the calls for gradual border opening.

2. Gradual Border Opening and Control Measures

May-Aug. 2021 Border Closure for Non-residents and Non-citizens

Taiwan closed the border to all non-citizens and non-residents since mid-May 2021 when Taiwan suffered a surge of imported COVID-19 cases and non-trackable local cluster infections, in the meantime applying effective contact tracing, and rigorous testing to defend against the Delta variant.

Sept. 2021: Border Opens for Limited Groups of Foreigners

Since Sept. 2021, border control measures were gradually relaxed for a limited groups of foreigners as Taiwan was able to isolate imported cases and track local infection cases. Foreigners of the following groups are allowed for entry:

  1. Holders of Alien resident Certificate (ARC), Alien Permanent Resident Certificate (APRC) or Gold Card;
  2. Foreign spouses of Taiwan passport holders and their children under age of 20;
  3. International students and foreign professors and researchers with evidences;
  4. Spouses and children of foreign residents in Taiwan, excluding migrant workers and students, can apply for a special entry permit to enter Taiwan.
  5. Offshore wind farm seafarers and crews with entry permits.

Mar. 7, 2022: Border Opens for Business Visitors With Valid Entry Visa

As of Mar. 7, 2022, the borders are again open for business visitors. Foreign nationals may enter Taiwan for business activities including business visits, investment, fulfilment of contractual obligations, and employment.

In order to enter Taiwan, non-resident visitors shall apply for a valid entry permit from Taiwan’s representative office in the departing country. Belgian business visitors intending to visit Taiwan for business reasons are advised to contact the Taipei Representative Office in the EU and Belgium (https://www.roc-taiwan.org/be_en ) for updates and documents required to apply for the business entry visa.

All arrival visitors are required to present a negative PRC-test report conducted 2 days before their boarding.

Control Measures for All Visitors On Entry

Mandatory quarantine for all arrivals will be reduced to 10 days from originally 14 days, starting 00:00 on March 7, 2022 (incoming flight's scheduled arrival time in Taiwan).

Non-resident business travellers must cooperate with all epidemic prevention measures, provide related documents for entry, and abide by related regulations once entry. All travellers arriving from outside Taiwan and granted entry shall comply with the following rules:

  1. Required quarantine period and quarantine location:
    1. The number of days an arrival should quarantine will be shortened to 10 days, and the day of arrival counts as Day 0; a seven-day self-health management will be required starting the 11th day.
    2. The arrival should quarantine at home or a residence of his or her family or friends, and the principle of one person per residence should be observed. If the principle of one person per residence cannot be followed, the arrival should complete the 10-day quarantine at a quarantine hotel. All arrivals are required to take a quarantine taxi for the transport between arrival airport to his/her quarantine accommodation.
    3. Family members/household members who arrive on the same day may choose to quarantine together in their home or a residence of their friends or family or they may stay in the same quarantine quarter depending on their willingness and room types of the quarantine hotel where they stay. However, due to the space of single rooms, it is not recommended that more than two people share a room.
  1. Testing measures:
    1. PCR testing (a total of two are required):
      1. Arrivals will undergo a PCR test upon arrival (Day 0) as currently required.
      2. Before the end of quarantine (the 10th day of quarantine), arrivals will undergo another PCR test at a hospital or a location arranged or designated by their local government. Those testing negative should continue to practice a seven-day self-health management after being released from quarantine.
    2. At-home Rapid Testing (a total of five tests):
      1. At-home rapid tests: a test will be made on the third, fifth and seventh days of quarantine and on the third, sixth or seventh day of self-health management, respectively.
      2. At-home rapid test kits will be provided by the staffs at the Taiwan’s incoming international airport.

3. Exit strategy

In view of the Omicron variant’s extremely transmissible nature and the relative vulnerability of Taiwan’s aging population, Taiwan adopts a near-Zero COVID-case policy by way of border controls, vaccination and different risk-levels of prevention and management measures.

While Taiwan’s ability to cope with a COVID outbreak has improved considerably over the past two years, the government’s messaging about the pandemic has largely remained the same. Each day the CECC’s press conference reports on total case numbers and details about the sources of infections. The focus is on the present, with little said about future directions. There is no set date for when these border measures will be fully lifted even though the business communities have been urging Taiwan to reopen to the world and to find ways to live with the virus.

4. Economy

a. Growth and Economic Outlook

The effects of the pandemic have been limited domestically and economic activities actually increased as a result. Domestic capacity expansion of semiconductor manufacturers and the reshoring of oversea companies in response to emerging demands for new technological applications, as well as the demand rebound associated with the global economy recovery, supported Taiwan’s economy. As a result, Taiwan’s economy performed exceptionally well in 2021 with a GDP growth of 6.28%. One of the reasons the Taiwan economy performed so well in 2021 was that the manufacturing sector and the country’s domestic supply chain were not affected by COVID. With the COVID-19 situation improving at home, the rollout of stimulus vouchers, and businesses chalking up robust profits, demand for manpower and wages have risen in both the public and private sectors.

Despite the high comparison base of 2021, the 2022 economic growth is estimated by the government and many think tanks at 3~4%, mainly driven by real private consumption recovery supported by the easing of the COVID-19 situation, gradual easing of restrictions, and improving job conditions.  

b. Foreign Trade: Exports and Imports

Taiwan’s exports and imports both performed exceptionally well in 2021. According to Taiwan Minister of Finance’s statistics data, Taiwan’s 2021 exports totalled USD446.45 billion, up 29.4 percent from a year earlier, while its imports totalled USD381.17 billion, rising by 33.2 percent. Taiwan recorded a trade surplus of USD65.42 billion in 2021, up 10.92 percent from a year earlier. As export orders have continued such momentum, it is expected that Taiwan’s exports will maintain solid in 2022.

Taiwan’s main export products are electronics (33.1% of total), information, communication and audio-video products (10.8%), base metals (8.8%), plastics & rubber (7.1%), machinery (7.5%).

In 2021, exports of Taiwan-made electronics components rose 26.9 percent from a year earlier to USD172.01 billion, with semiconductor outbound sales growing 27.1 percent from a year earlier to USD155.50 billion.

Exports of Taiwan information and communications gadgets, as well as audio and video devices, also showed strong growth, climbing 24.8 percent from the previous year to USD61.35 billion.

Exports of base metals, plastics/rubber, machinery, and chemical items rose 44.5 percent, 40.5 percent, 27.0 percent, and 40.5 percent, respectively, to USD36.82 billion, USD29.87 billion, USD27.84 billion and USD23.41 billion in 2021.

Taiwan’s main export partners are Mainland China & Hong Kong (40% of total), ASEAN countries (18.3%), USA (12%), Europe (9%) and Japan (7%).

In 2021, China and Hong Kong were still the largest buyers of Taiwan's goods, accounting for a total USD188.91 billion, up 24.8 percent from a year earlier. Other major markets were the Association of Southeast Asian Nations (ASEAN) bloc (USD70.25 billion, up 32 percent), the United States (USD65.70 billion, up 30.0 percent), Europe (USD38.49 billion, up 36.8 percent) and Japan (USD29.21 billion, up 24.8 percent). Despite the geopolitical tensions with China, Taiwan's trade surplus with China and Hong Kong hit a new high of USD104.74 billion in 2021, while the trade surplus with the United States was also a record reaching USD26.62 billion.

Imports increased by 33% thanks to domestic investments in machinery equipment, transportation equipment, and construction. Imports of capital investments from Europe amounted to USD69 billion. Mainland China remained Taiwan's largest merchandise import partner in 2021, with an import value of approximately USD82.5 billion.

c. Domestic Investments

Investments are expected to grow continuingly. The growth rate of fixed investments are estimated to grow by 15% in 2021, slowing to 3% in 2022, according to Taiwanese authorities. Domestic investments are mainly driven from reshoring Taiwan’s overseas companies; accelerating investments of the semiconductor industry; investments in 5G infrastructure, offshore wind energy, airline companies and container shipping companies expanding fleet capacity.

d. Foreign Exchange Reserves

Taiwan’s foreign exchange reserves rose by USD466 million to a record USD548.87 billion in Jan. 2022, as exporters offloaded US dollars and local investors raised stakes in US dollar-based assets ahead of anticipated interest rate hikes. Taiwan currently ranks the world’s no. 5 with the largest foreign currency reserve.

e. Business Confidence

Business confidence displayed positively in various newly released 2022 Business Climate Surveys released by the American Chamber of Commerce, Germany Trade Office in Taiwan and local think tanks. The majority of respondents were upbeat about Taiwan’s economic performance, as well as about revenue growth at their own businesses in Taiwan for the coming years. Such a positive result is striking, given the heightened concerns about the pandemic, concerns regarding the government’s capacity to meet its energy transition goals within the next few years and to handle regional geopolitical tensions including those related to cross-Strait relations.

f. Risks

Nonetheless, downside risks remain from increasing concerns about Mainland China’s economy, geopolitical tensions with China, global supply-chain disruptions, the threat of a coronavirus variant , Taiwan’s continuous border controls and mandatory quarantine requirements, and inflation rate.

Besides, during the current invasion war of Ukraine by Russia, price stability and prevention of the short supply of imported natural resources and raw materials are two main considerations for the government. Taiwan itself lacks natural resources and  therefore dependent on imports.

5. Useful links

For updates of entry restrictions for foreigners to Taiwan in response to COVID-19 outbreak

6. Dossier Coronavirus

Het coronavirus heeft een wereldwijde impact, niet alleen op de gezondheid maar ook op de economie. Ook uw export kan hiervan gevolgen of zelfs hinder ondervinden.

FIT monitort de risico's dagelijks en ons buitenlands netwerk informeert u over alle implicaties voor Vlaamse exporteurs op hun internationale activiteiten.

In het dossier Coronavirus vindt u een aantal nuttige tips, adviezen en inzichten in de economische impact van de verspreiding van het virus op internationaal ondernemen.

Met vragen over internationaal ondernemen in tijden van Corona, kan u terecht bij exportadvies-corona@fitagency.be.

3 maart 2022