Taiwan has a dynamic capitalist economy with gradually decreasing government guidance of investment and foreign trade. In keeping with this trend, some large, state-owned banks and industrial firms have been privatized. Exports, led by electronics, machinery, and petrochemicals have provided the primary impetus for economic development. This heavy dependence on exports exposes the economy to fluctuations in world demand. In 2009, Taiwan's GDP contracted 1.9%, due primarily to a 20% year-on-year decline in exports. In 2010 GDP grew 10.9%, as exports returned to the level of previous years, and in 2011, grew 5.2%. However, 2012 growth will likely be less, according to most forecasters, because of softening global demand. Taiwan's diplomatic isolation, low birth rate, and rapidly aging population are major long-term challenges. Free trade agreements have proliferated in East Asia over the past several years, but so far Taiwan has been excluded from this greater economic integration largely because of its diplomatic status with the exception of the landmark Economic Cooperation Framework Agreement (ECFA) signed with China in June 2010. The MA administration has said that the ECFA will serve as a stepping stone toward trade pacts with other regional partners, and negotiations on a deal with Singapore began this year. Follow-on components of ECFA, including deals on trade in goods, services, and investment, have yet to be completed. Taiwan's Total Fertility rate of just over one child per woman is among the lowest in the world, raising the prospect of future labor shortages, falling domestic demand, and declining tax revenues. Taiwan's population is aging quickly, with the number of people over 65 accounting for 10.9% of the island's total population as of 2011. The island runs a large trade surplus, and its foreign reserves are the world's fourth largest, behind China, Japan, and Russia. Since 2005 China has overtaken the US to become Taiwan's second-largest source of imports after Japan. China is also the island's number one destination for foreign direct investment. Three financial memorandums of understanding, covering banking, securities, and insurance, took effect in mid-January 2010, opening the island to greater investments from the mainland's financial firms and institutional investors, and providing new opportunities for Taiwan financial firms to operate in China. Closer economic links with the mainland bring greater opportunities for the Taiwan economy, but also poses new challenges as the island becomes more economically dependent on China while political differences remain unresolved.

$366.4 billion (31 December 2011 est.)

$377.3 billion (31 December 2010 est.)

$1.134 trillion (31 December 2011 est.)

$1.022 trillion (31 December 2010 est.)

$792.2 billion (31 December 2011 est.)

$751.5 billion (31 December 2010 est.)

$784.1 billion (31 December 2010)

$657.3 billion (31 December 2009)

$354.7 billion (31 December 2008)

Rice, vegetables, fruit, tea, flowers; pigs, poultry; fish

Electronics, communications and information technology products, petroleum refining, armaments, chemicals, textiles, iron and steel, machinery, cement, food processing, vehicles, consumer products, pharmaceuticals

1.002 million bbl/day (2010 est.)

2.38 million bbl (1 January 2011 est.)

6.229 billion cu m (1 January 2011 est.)

Electronics, flat panels, machinery; metals; textiles, plastics, chemicals; optical, photographic, measuring, and medical instruments

China 28.1%, Hong Kong 13.8%, US 11.5%, Japan 6.6%, Singapore 4.4% (2010 est.)

Electronics, machinery, crude petroleum, precision instruments, organic chemicals, metals

Japan 20.7%, China 14.2%, US 10%, South Korea 6.4%, Saudi Arabia 4.7% (2010 est.)

$390.6 billion (31 December 2011 est.)

$387.2 billion (31 December 2010 est.)

$125.8 billion (31 December 2011 est.)

$101.7 billion (31 December 2010 est.)

$61.39 billion (31 December 2011 est.)

$63.38 billion (31 December 2010 est.)

$137.3 billion (31 December 2011 est.)

$124.5 billion (31 December 2010 est.)

New Taiwan dollars (TWD) per US dollar -