TAIPEI (TVBS News) － Kaka is a restaurant manager who took over a hot pot restaurant around the time when the pandemic hit. Since then, the entire food service industry in Taiwan has been impacted and the wealth accumulated by Taiwanese has plummeted drastically.
"We encountered the pandemic right from the start, so business was greatly affected. We have had to spend more money on advertising. But you need to spend a lot on advertising, for there to be any returns," Kaka said. "We've had to spend more money in the beginning shipping costs, and other costs have continued to rise. So at most, we are just earning enough in order to pay our staff."
If we take a look at the compound annual growth rate, the growth of the overall wealth of mainland China has accelerated, with an average annual growth of 15%, compared with only 2.4% in Japan and 6.2% in Taiwan.
"In fact, Taiwan's economy has performed very well in the past four or five years, especially from 2019 to 2022 and 2023," Wang Jiann-chyuan, vice president of the Chung-Hua Institution Economic Research said. Of course, this is a prediction that our average growth rate will be about 3.91%.
"In Asian countries, it is probably one of the best. The U.S.-China trade war that started in 2018-2019 has affected a lot of semiconductor orders, there are rushed orders, transfer of orders, and some other changes and influences, so Taiwan's entire economy is actually doing very well," he added.
In addition, a report by the Credit Suisse Group explained that by 2026, more than 87.5 million people in the world will be worth more than US1 million, which will be an increase of 40.1% compared to 2021. Taiwan's millionaire population will also have an increase of over 86% compared to 2021, a much steeper growth compared to South Korea and Japan.
"In fact, we still performed well in the first half of 2022 mainly because in the second half of 2021. Cities in mainland China and Southeast Asia were on lockdown. Therefore, many delayed orders were transferred to Taiwan," he went on. "But starting in the second half of 2022, Taiwan encountered some problems because, including your exports, there is obviously not that much of an increase in orders, so the economy will deteriorate in the second half of the year."
During the pandemic, Taiwan's financial wealth and assets have continued to grow thanks to semiconductors and manufacturing exports. According to the International Monetary Fund's report, Taiwan's per capita GDP will grow from USD33,140 to USD35,510 in 2022. Compared with other Asian countries, South Korea's per capita GDP this year was USD33,590, while Japan's was 34,360, down 4% and 12.6% percent, respectively.
However, even if Taiwan has accumulated enough wealth to become one of the richest countries in Asia, the average citizen is not feeling the same sentiment, especially in the middle class. Hsu Chia-hao, chief of overseas investment at Allianz, said: "the market has changed a lot after the pandemic. In addition, there has been a war between Russia and Ukraine. And a trade war between China and the United States in recent years, so the market is actually very volatile."
"Investors have had to do one thing in recent years, that is, to gradually shift from the past, and not just focus on one single asset, but to change to a so-called multi-asset or fund of funds and invest in this relatively decentralized way," he continued.
"The second big change is that we are gradually seeing that the number of retired people has begun to increase, so the public's demand for retirement products has gradually increased. Therefore, for many interest-bearing products we see its investor subscriptions have actually increased," he remarked.
Under this changing environment, much of the general public is still struggling and trying to find ways to survive in the current economic sphere even though Taiwan is ranking high on the wealth charts.
