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COVID-19 in Taiwan: Economic Impacts
and Lessons Learned*
Chun-Chien Kuo
Department of International Business
National Taipei University of Business
No. 321, Sec. 1, Jinan Rd.
Zhongzheng District
Taipei City 10051, Taiwan (R.O.C.)
cckuo@ntub.edu.tw
Abstract
This paper illustrates Taiwan’s experience in controlling the virus and curbing the impact of COVID-19
on its economy.All the following factors contributed to Taiwan’s ear ly success in ghting COVID-19: the
early establishment of a command center,the “precision-prevention” model of strategies that includes
tight border controls and strict quarantine policy,the procuring of sufcient anti-pandemic medical sup-
plies, and educating residents about public health awareness (e.g., promoting face mask wearing in public,
maintaining proper social distance, and handwashing procedures). In addition, the country’s medical
facilities and a national health insurance program that are already in place along with the utilization of
technology and big data also played a crucial role during the pandemic. Taiwan’s success story may open
up opportunities for the countr y to assume a leading role as a facilitator in the reallocation of the global
supply chain and the creation of a new worldwide health coalition that includes Taiwan, unlike its lonely
efforts 17 years ago when SARS hit the Southeast Asian and Pacic regions.
1. Introduction
As COVID-19 continues to rage and spread in countries around the globe, Taiwan has
only 486 confirmed cases and 7 deaths, compared with the 22,067,280 confirmed cases and
777,674 deaths globally as of 18 August 2020 when the infection rate was 20 cases per mil-
lion, as shown in Table 1. Taiwan has been recognized as one of the most successful nations
fighting against the virus along with New Zealand and Vietnam. Due to the close economic
and geographic ties between Taiwan and China, these low figures were impressive, which
has gained Taiwan widespread acknowledgment and respect from all countries. Several
months after the COVID-19 outbreak in January, Taiwan remains a relatively safe place
without painful lockdowns, unlike elsewhere in the world.
*The author is indebted to Professor Wing Thye Woo for his warm invitation and valuable sugges-
tions on this paper.
Asian Economic Papers 20:2 © 2020 by the Asian Economic Panel and the Massachusetts Institute of
Technology
https://doi.org/10.1162/asep_a_00805
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
Table 1. The global COVID-19 situation: Taiwan
and selected countries
Country Confirmed Deaths
Infection rate
per million
Global 22,067,280 777,674 2,831
United States 5,612,027 173,716 16,942
Brazil 3,363,235 108,654 15,808
India 2,706,450 51,955 1,959
Russia 932,493 15,872 6,389
UK 319,197 41,369 4,699
German 217,281 9,261 2,592
France 219,069 30,429 3,355
Taiwan 486 7 20
The Philippines 169,913 2,687 1,542
Indonesia 141,370 6,207 516
China 84,871 4,634 59
Singapore 55,938 27 9,552
Japan 55,667 1,099 440
Korea 15,761 306 307
Malaysia 9,212 125 284
Hong Kong 4,525 69 603
Thailand 3,381 58 48
Vietnam 983 25 10
Australia 23,773 438 931
New Zealand 1,643 22 328
Source: Worldmeter, Policy Research Indicator Database (updated until
18 August 2020).
When the first outbreak in China happened in January, the Taiwan government quickly
responded by introducing strict quarantine measures, exercising health monitoring pro-
cedures, and immediately instituting contact tracing of infected individuals at the border.
Public awareness of the protocols of social distancing, hand washing, and mask wearing
have been credited as the reason behind the lack of a large-scale spread in the local com-
munity. Taiwan’s earlier detection and aggressive responses tended to be better than those
in other countries. The government’s prudent and immediate response is characterized
by the term “advanced deployment” (ch¯
aoqián bù sh ˇ
u). Taiwan is one of the few places in
the world that allows its citizens to have a near-normal life in the pandemic—for instance,
citizens can work and attend school. This paper aims to describe Taiwan’s experiences in
controlling the virus and also indicate and explain the impacts of COVID-19 on Taiwan’s
economy. Section 2 illustrates the overall trend and development of COVID-19 cases in Tai-
wan. Section 3 lists the factors that have helped Taiwan keep COVID-19 under control so
far. The impact of COVID-19 on Taiwan’s economy will be discussed in Section 4. Section 5
summarizes the lessons and concludes.
2. COVID-19 in Taiwan: Evolution and trends
2.1 The current situation in Taiwan
Taiwan has accumulated 481 confirmed cases and 7 deaths as of 13 August 2020. Table 2
summarizes the current profile of Taiwan confirmed COVID-19 cases. Among these 481
confirmed cases, 55 (11.43 percent) are local cases, 36 (7.48 percent) are Navy fleet–related,
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
Table 2. The profiles of Taiwan’s COVID-19
confirmed cases
Category Subcategory Number Percentage
Origin Local 55 11.43
Foreign 390 81.08
Navy fleet 36 7.48
Sex Male 246 51.14
Female 235 48.85
Symptom With 399 82.95
Without 58 12.05
Uncertain 24 4.98
Age, years <20 25 5.19
20–40 279 58
40–60 108 22.45
60+69 14.34
Region Greater Taipei Area 27 49.09
North 44 80
Central 10 18.18
South 1 1.81
East 0 0
Others 0 0
Source: CDC Taiwan, and author’s summary updated to 13 August 2020.
Note: Greater Taipei Area includes Taipei City, New Taipei City and
Keelung City. The North includes Taoyuan County, Hsinchu County,
Hsinchu City, Miaoli County, and Greater Taipei Area. The Central
area covers Taichung City, Changhua County and Nanto County. South
Area includes Yunlin County, Chiayi City, Chiayi County, Tainan
City, Kaohsiung City, and Pingtung County. The East includes Yilan
County, Hualien and Taitung County. Others includes Kinmen County,
Lienchiang County, and Penghu County.
and 390 (81.08 percent) are of foreign origin. Among the 426 non-local cases, the top
three countries are the United States, the UK, and the Philippines.1Most non-local cases
are Taiwanese citizens who traveled and entered the Taiwanese border from highly
affected countries; noticeably, among the surge of 32 new foreign immigrant cases in
July, 20 were from the Philippines, which is currently experiencing a rapid second wave
of COVID-19.
In terms of symptoms, there are 399 cases (83 percent) with symptoms, 82 asymp-
tomatic cases (12 percent), and 24 uncertain cases (5 percent). There are 246 male cases
(51 percent) and 235 female cases (49 percent). The age distribution is as follows: there are
25 cases (15 percent) in those younger than 20 years of age, 279 cases (58 percent) for the
20–40 years age group, 108 (22 percent) for the 40–60 years age group, and 69 cases
(14 percent) for those aged 60 years and older. The young and middle-age cohorts account
for 80 percent of total cases for all ages. Figure 1 further shows the infection rates for the
different age groups in Taiwan. The highest infection rate occurs in the 20–24 age group
(6.98 per 100,000). The higher infection rate in the younger age cohort is consistent with
1There are 95 U.S.-related cases followed by 72 UK-related cases as of 29 August.
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
Figure 1. The COVID-19 age-group infection rate per 100,000 in Taiwan
Source: CDC Taiwan website.
most countries’ experiences, since young people tend to overlook the COVID-19 threat.2
Younger people perceive that they are stronger and can recuperate easily if infected by the
virus, thus their wide participation in social events without social distancing or wearing
face masks, thereby increasing their risk factor.
When we look at the regional distribution for all 55 local confirmed cases, 44 come from
the north (including 27 cases from the Greater Taipei Area), 10 cases from the central area,
1 from the south, and zero cases from the east. Almost 80 percent are from the north, with
cases from the Greater Taipei Area alone accounting for almost half of the total number
of local cases. Both the north and Greater Taipei Area are more populated compared with
other parts of Taiwan. The lesser-populated east and other islands (Kinmen, Matsu, and
Penghu) have no reports of confirmed cases yet.
Figure 2 shows the number of COVID-19 confirmed cases, recovered individuals, deaths,
and active trends starting from late January to early August for Taiwan. The active case
curve reached its peak around the end of March and started to decline and remained stable
after late May. It indicates that Taiwan had successfully flattened the COVID-19 curve.
According to the standard S-E-I-R (Susceptible, Exposed, Infectious, Recovered) model of
the epidemic, if the effective reproduction number R(t) is less than 1, an infectious person
will, on average, transmit to fewer than one other susceptible person. This will lead to a
2The World Health Organization recently announced that the average global infected rate for the
age 15–24 cohort had increased from 4.5 percent in February to 15 percent in July.
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
Figure 2. COVID-19 confirmed cases, recovered cases, active cases, and deaths in Taiwan
Source: CDC Taiwan, and Johns Hopkins University CSSE.
decline in active cases in the population, hence a flatter curve. Good hygienic behaviors—
such as wearing face masks, avoiding crowded places or unnecessary group gatherings,
improving personal hygiene protections, and timely border control—are the main factors
that have helped Taiwan keep the effective reproduction number low. Figure 3 shows that
Taiwan was among the few countries to have successfully flatten the COVID-19 infection
curve at an early stage, along with Vietnam, New Zealand, and South Korea. Japan’s rising
curve since late June indicates a possible second-wave outbreak.
2.2 Key dates since the rst reported outbreak in Taiwan
Informed by its previous experience with SARS, Taiwan responded weeks earlier than
other governments by screening arrivals from China and then closing its borders to trav-
elers coming from China, despite its close economic linkage with China. Taiwan’s Centers
for Disease Control immediately ordered the testing and tracing of all passengers who had
returned from Wuhan when China notified the World Health Organization (WHO) that it
had several cases of an unknown pneumonia on 31 December 2019.
Government statistics indicate that more than 1 million Taiwanese live or work in China
and travelers between Taiwan and China numbered about 10 million annually during the
2016–18 period, including travelers through the “three mini links.”3There were thousands
3Since 19 June 2008, the Kinmen and Matsu islands are liberalized for postal, transportation, and
trade links with Fujian Province, China.
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
Figure 3. COVID-19 active cases: Taiwan, New Zealand, and neighboring Asian countries
Source: CDC Taiwan, Johns Hopkins University CSSE.
Note: HK =Hong Kong; TW =Taiwan; NZ =New Zealand; VN =Vietnam; KR =South Korea; JP =Japan.
of regular cross-strait flights every week before the outbreak. On 26 January, five days af-
ter its first confirmed case, Taiwan rapidly acted to ban all arrivals from Wuhan. It also
substantially reduced the existing 50 flight routes between China and Taiwan and limited
them only to five airports,4only permitting Taiwanese nationals to enter the country. On
8 February, the government closed the “mini three links.” This quick decision of shutting
down the majority of flights effectively reduced the possible spread from China in these
early stages.
Being one of China’s close neighbors with inseparable economic ties, Taiwan’s situation
looked dim and pessimistic when the first wave of COVID-19 infections started from China
in January. China and Hong Kong account for nearly 40 percent of Taiwan’s exports and
over one-fifth of Taiwan’s imports. China is also Taiwan’s main overseas manufacturing
production site. Based on Taiwan’s close economic and transportation links with China,
Johns Hopkins University predicted Taiwan could have the second highest risk behind
Thailand among 23 high-risk countries in January after the initial outbreak in Wuhan. In
reality, Taiwan only recorded a relatively low number of 486 confirmed cases out of its 23
million population as of 18 August 2020.
4The remaining five airports are Beijing Capital International Airport, Shanghai Pudong Interna-
tional Airport, Shanghai Hongqiao International Airport, Xiamen Gaoqi International Airport, and
Chengdu Shuangliu International Airport.
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
Table 3. Important dates for the COVID-19 response in Taiwan
Date Incident
2020/1/20 Establish the Central Epidemic Command Center (CEEC)
2020/1/21 First confirmed case
2020/2/6 “Name-based Mask Distribution System 1.0” was put in place
2020/2/7 Expand border control; Cut cross-strait airlines from 50 lines to only four cities in China: Beijing,
Shanghai, Xiamen, Chengdu
2020/2/9 First asymptomatic confirmed case
2020/2/10 Closure of the “mini three links”
2020/2/16 First COVID-19 death (case number 19, a 60-year-old taxi driver)
2020/2/25 First confirmed pediatric case reported involving an 11-year-old child
2020/2/27 CECC upgrade from Level 1 of emergency administration to Level 1
2020/3/5 Face-mask policy stage 1
2020/3/6 First hospital gathering case
2020/3/12 WHO officially announce COVID-19 is a pandemic; “Name-based Mask Distribution System 2.0”
(using an online channel) was introduced
2020/3/23 Quarantine compensation of NT$ 1,000 per day announced
2020/3/24 No international airline transit through Taiwan
2020/4/9 Mandated mask wearing requirement on public transportation; violation fine NT$ 3,000–15,000
2020/4/11 Chinese Professional Baseball League (CPBL) season opening
2020/4/12 The last new local confirmed case
2020/4/14 With proper social distance, group gatherings allowed for a maximum of 100 persons indoors
and 500 outdoors; the first date without any new confirmed case
2020/4/18-2020/5/3 22 Navy fleet–related confirmed cases
2020/4/22 “Name-based Mask Distribution System 3.0” (pre-purchasing at convenience stores) was
introduced
2020/5/8 CPBL game audience extended to allow 1000 persons
2020/5/11 Indoor gatherings extended to allow 250 persons
2020/5/12 The first month without any local case reported
2020/7/21 The 100th day without any reported local case
2020/7/26 Travelers arriving in Taiwan from the Philippines must undergo COVID-19 testing at airports
and observe quarantine measures staring 26 July 2020
2020/8/1 CECC request the wearing of masks at elevators, schools, movie theaters, study centers, and KTV
loungers
Source: Author’s own summary based on CECC released news.
Table 4. Taiwan exports by commodity (unit: US$ 100 million)
2018 2019
2020
January–May
Annual
change (%)
Structure of
exports (%)
Total 3,340 3,292 1,309 1.5 100
Electronic components 1,108 1,125 495 19.4 37.8
Information and audiovideo products 353 426 176 9.5 13.5
Basic metals 316 279 102 −11.7 7.8
Machinery 256 235 88 −10.2 6.7
Plastics, rubbers 253 226 82 −13.2 6.3
Chemicals 222 187 69 −13.8 5.3
Optical equipment 117 113 44 −0.4 3.4
Minerals 145 140 38 −31.8 2.9
Electrical machinery products 108 107 42 −4.6 3.2
Transport equipment 112 113 41 −4.3 3.2
Textile products 101 92 31 −20.7 2.4
Others 250 249 99 0.5 7.6
Source: Department of Statistics, Ministry of Finance.
Table 3 summarizes the important dates for Taiwan in fighting COVID-19 since the Jan-
uary outbreak. A businesswoman who had returned from Wuhan was Taiwan’s first con-
firmed case reported on 21 January. 21 July marked the 100th day without any new local
cases for Taiwan, as shown in Table 4. The lack of any new local cases over the past 100
days indicates that there is no sign of community transmission in Taiwan.
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
In terms of the government’s response to the virus, people living in Taiwan could still en-
joy free movement and public services. Schools, public transportation, offices, restaurants,
and retail stores are open for domestic consumption as usual. Before entering all indoor
working places and buildings, body temperatures are checked and hand sanitizers are
sprayed upon request. The wearing of face masks while taking public transportation, taxis,
and in closed confined spaces is compulsory.5All group gatherings of more than 500 per-
sons outdoors and 100 persons indoors have been cancelled on the advice of the Central
Epidemic Command Center (CECC).6The CECC also recommends that people keep a dis-
tance from each other of at least 1.5 meters indoors and 1 meter outdoors.
3. What factors enabled Taiwan to atten the COVID-19 active curve earlier?
Under the severe threat of the COVID-19 pandemic, what are the factors that enabled Tai-
wan to keep the virus under control and flatten the infection curve so successfully? On
its official COVID-19 news website, Taiwan’s government lists some key success factors
behind its success including its previous SARS experience, a well-functioning central epi-
demic command center, transparent information, good resource allocation, timely border
control, smart community transmission prevention, advanced medical technology, and
the good etiquette of its citizens. As the virus spread globally, the Taiwan government
responded quickly with simultaneous plans of disease prevention, industrial relief, and
economic stimulus packages. Disease prevention focuses both on strict border controls and
community prevention strategies. In this section, key measures by the Taiwan government
are addressed in detail.
3.1 Timely establishment of the Central Epidemic Command Center (CECC)
The CECC headed by Health Minister Chen Shih-Chung was established on 20 January to
roll out a series of epidemic control measures. The CECC not only investigates confirmed
and suspected cases, but also works with government ministries and local governments to
coordinate the response across Taiwan, including allocating funds, mobilizing personnel,
and advising on the disinfection of schools. The CECC adopted a “precision prevention”
strategy that allocates the limited medical resources in Taiwan to the most high-need ar-
eas with the help of artificial intelligence technology to diagnose and trace possible cases.
Taiwan’s earlier and aggressive response to set up its command center with its philosophy
of “advance deployment” (ch¯
aoqián bù sh ˇ
u) helped Taiwan to calm fears and boost public
confidence in the government, which would turn out to be crucial in the future stages of
combating the virus.
5Those who do not wear a face mask while taking public transportation such as MRT, buses, trains
will be fined up to NT$ 15,000 ($500).
6CEEC extended the numbers to 1000 persons and 250 persons for outdoor and indoor gatherings
later in May as the virus spread stabilized since late April.
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
3.2 Border control and quarantine policy
According to Oxford’s COVID-19 Policy Tracker data, Taiwan is one of the first few Asian
countries to implement a strong travel ban. The rapid border control helped to reduce the
influx of potentially infectious individuals from China in the early stage of the outbreak.
Taiwan adjusted its border control policy differently depending on the risk levels of each
country. All foreign countries had been categorized by Taiwan at the highest risk tier of
Level 3 on 19 March 2020. Since then, all foreigners without a valid Alien Resident Cer-
tificate (ARC) are prohibited from entering Taiwan. All returning Taiwanese citizens and
foreigners with valid ARCs must follow health management procedures upon arrival at
the airport. They are required to fill out a health declaration form at the customs checkpoint
and then quarantine themselves for 14 days either at home or at a designated quarantine
center at their own expense, but with partial government subsidy.7Transport from the
airport to the quarantine site of choice must be done by family members or a designated
quarantine taxi.
All passengers must report any symptoms to health authorities during that 14-day pe-
riod, while the location data on their cell phones is monitored to ensure that they comply
with the quarantine requirements. Leaving their residences or shutting off their phones
triggers an alert. Local authority officers will make phone calls twice a day to ensure
that those quarantining are not circumventing the cell phone tracking by leaving their
phones at home. Failure to report symptoms or to abide by the quarantine rules can lead to
heavy fines.
3.3 Face mask policy
Face masks are the most important tool for Taiwanese residents to protect themselves and
prevent the virus from propagation. The virus’s effective reproduction number R(t) will
reduce substantially if the majority of the population wear face masks. Face masks were
requisitioned and distributed by the government to guarantee the availability of supplies.
To ensure the steady supply of masks, the government quickly banned manufacturers
from exporting them, implemented a rationing system, and set the maximum price at just
16 cents each. (The ban on the exports of masks was eventually removed on 30 June.) A
national committee was established to spearhead efforts for the production of general med-
ical masks and surgical masks domestically. It quickly deployed 60 mask production lines
that enabled daily mask production to be increased from 1.88 million to 19 million as of the
end of April 2020.
Taiwan then utilized its National Health Insurance (NHI) system to facilitate the mask
distribution for its residents. On 6 February, the “Name-Based Mask Distribution System
7Those subject to and abiding by the 14-day quarantine measure are eligible to receive NT$ 1,000
(US$ 33.80) daily compensation from the government.
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
1.0” was implemented, which allowed citizens to purchase face masks in person from ap-
proximately 6,280 NHI-contracted pharmacies and 340 health centers with their national
insurance cards. Citizens were assigned different dates according to the last digit of their
national ID number to avoid long queues. Meanwhile, a mobile application was launched
to help citizens purchase face masks more conveniently: The app contained a GPS-guided
virtual map that would display store names, locations, opening hours, and contact infor-
mation, even showing the available number of masks in stock at each store. The system
was later upgraded in March to allow online purchases. From 22 April, citizens can order
masks from more than 10,000 convenience stores using their NHI cards. The CECC also
announced in July 2020 that the name-based mask distribution system would last until at
least the end of the year to ensure sufficient masks are available for purchase.
Beside face masks, the government also kept tabs on the domestic demand of medical sup-
plies. For example, it closely monitored the daily production and distribution of medical
grade alcohol, and coordinated with Taiwan Tobacco and Liquor Corporation and Taiwan
Sugar Corporation to increase production of alcohol for general consumers’ daily cleaning
needs, as well as to meet the demand for medical use. Taiwan had successfully managed
to not only sooth the irrational purchasing behaviors causing by fears of COVID-19 at the
early stage, but also intervened successfully to ensure that supplies were sufficient to meet
the rising demand.
3.4 Medical facilities and National Health Insurance
Taiwan is embedded with relatively abundant and affordable high-quality medical facili-
ties. According to the 2019 edition of the CEOWORLD magazine Health Care Index, which
ranks 89 countries based on factors that contribute to overall health, Taiwan was ranked
number 1, above South Korea (second place) and Japan (third). With a population of 23
million, Taiwan is equipped with 1,150 negative-pressure wards, the third highest density
in the world. All confirmed COVID-19 cases identified within the border, whether they are
Taiwanese or foreigners, with severe or mild conditions, with or without symptoms, are
all to be treated in hospital negative-pressure wards. Medical expenses of all confirmed
patients are completely borne by the government. Taiwan’s health insurance system,
which covers 99 percent of the population, has been crucial to fighting the spread of the
COVID-19 outbreak.
3.5 Transparent information
Since 21 January, the CECC holds a daily press conference for communication with the me-
dia and the public. In this press conference, the CECC announced the number of COVID-19
cases every day until 7 June, when there were no local confirmed cases reported for 56 con-
secutive days (four possible virus incubation periods). The daily press conference was later
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
changed to a weekly press conference or done on an ad hoc basis whenever new cases oc-
cur. This open and transparent conference kept the public informed about the development
of COVID-19 in Taiwan.
The timely and transparent press conferences help to mitigate people’s worries and reduce
uncertainty about the disease, thus improving public trust in government, which in turn,
yields more public cooperation in fighting COVID-19. Besides these press briefings, the
government also provided access to the NHI database for both public and private sectors.
All current information about COVID-19 can be obtained via the Centers for Disease Con-
trol website, the regular CECC press conferences, the d-Referral platform, and the NHI
Cloud system.
3.6 Technology use
Taiwan applied its artificial intelligence and big data technology not only to detect and
track cases, but also to enforce and monitor the home quarantine process. Health care
workers can use the NHI Cloud system to check a patient’s travel history and determine
whether a patient is potentially infected with COVID-19 based on the patient’s symptoms,
so that necessary patient diversion measures can be taken immediately. Medical institu-
tions could also use the electronic referral platform to upload medical information of peo-
ple under home quarantine to monitor infection conditions. This use of technology helped
Taiwan to diagnose and track possible COVID-19 infections, as part of its so-called “preci-
sion prevention” strategy.
At the border, not only are temperature monitors installed, but all passengers also need to
scan a QR code and report their travel history and health symptoms online. That data is
then uploaded directly to Taiwan’s Centers for Disease Control big data system. Within the
community, the local health department established a process for medical diagnosis and
treatment via telephone hotline so that people subject to home quarantine can call the local
health bureau for assistance when they require medical attention. This telecare mechanism
can also reduce the risk of community infections. The use of technology in Taiwan helped
the government to quickly determine direct contacts of confirmed cases, test them, and
then place them in home quarantine.
3.7 Public education and cooperation
The government asked television and radio stations to broadcast hourly public service
announcements on how the virus is spread, the importance of washing hands properly,
and when to wear a face mask. The government constantly encouraged citizens to develop
good personal hygiene habits and maintain social distancing. Public cooperation in ac-
commodating these new lifestyle habits for epidemic prevention as per the government’s
recommended measures was crucial to prevent the spread of the virus.
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
4. COVID-19 economic impacts on Taiwan’s economy
4.1 Overall economic impacts: Business, trade , economic growth
Taiwan’s economic structure consists of roughly 60 percent service, 35 percent manufac-
turing, and a tiny agricultural industry.8The service sector has been hit hard since the out-
break in January due to border controls and social distancing measures. Regarding the
manufacturing sector, as an export-oriented economy, Taiwan is vulnerable to reduced
global trade flows and recessions caused by lockdowns around the world. The weaker
external demands and disruption of supply chains inevitably hurt Taiwan’s exports and
overall economy. The International Monetary Fund forecasted Taiwan’s GDP growth to
contract (4 percent) less than other advanced economies (6 percent) in 2020. On the con-
trary, the government and private sector institutions expect positive growth for Taiwan.9
In fact, Taiwan had achieved a 1.59 percent GDP growth for the first quarter in 2020 and
–0.73 percent for the second quarter. In the second quarter, a simultaneous decrease for
all expenditure components except an increase in capital formation led to the fall in GDP
growth rate.10 The rise in capital formation may have come from returning Taiwan busi-
nesses from China due to the ongoing U.S.–China trade dispute. U.S. dollar depreciation
may also be another reason.
Taiwan’s GDP growth rate was only hit mildly by the COVID-19 pandemic. Its growth per-
formance puts Taiwan ahead of the largest economies in the world, which have suffered
more from the pandemic. Chiang11 shows that the impact of COVID-19 on Taiwan’s econ-
omy is restrained compared with other countries that have recorded larger contractions:
Singapore (−2.2percent),EU(−2.7 percent), United States (−4.8 percent), China (−6.8 per-
cent), and Hong Kong (−8.9 percent) for the first quarter in 2020.
Taiwan’s exports sailed through the storm without much impact despite the decline in
global demand due to the pandemic. The strengthening export performance on elec-
tronic components, electronics, and optical instruments even outweighed the downward
8In 2017 the services sector contributed 62.82 percent of GDP and employs around 60 percent of the
labor force, followed by the manufacturing sector, which accounts 35.37 percent of employment
and employs about 36 percent of the labor force in Taiwan. The agriculture sector contributes only
1.7 percent of GDP and employs about 5 percent of the labor force in Taiwan.
9The public and private institution forecasted positive GDP growth rate for Taiwan are as fol-
lows: Taiwan National Statistics (2.37 percent), Central Bank of Taiwan (1.92 percent), Chung-
Hua Institute for Economic Research (CIER) (1.03 percent), Yuanta-Polaris Research Institute
(1.50 percent).
10 According to the latest Directorate of Budget, Accounting and Statistics (DGBAS), domestic de-
mand, government consumption, and exports continued to decline for the first two quarters except
an increase in capital formation from 1.32 percent to 2.19 percent in the second quarter.
11 “The Impact of COVID-19 on Taiwan’s Economy and Future Prospects.” Taiwan Insight, May
2020.
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
Table 5. Industrial production index (yoy) growth rate by the selected manufacturing sector
(unit: %)
Manufacture
Electronic
components
and parts
Chemical
materials
Basic
metals
Computer,
electronics, and
optical
instruments Machinery
2019 −0.45 0.11 −4.39 −7.94 28.51 −13.74
Q1 −4.96 −10.32 −4.19 −1.26 28.73 −9.47
Q2 −1.01 −2.70 −3.68 −8.29 28.99 −13.33
Q3 2.02 6.75 −5.38 −10.51 30.73 −16.19
Q4 1.84 5.76 −4.32 −11.40 25.91 −15.61
2020
Q1 9.66 25.49 −1.17 −1.79 12.88 −10.20
Q2 4.83 23.26 −5.97 −6.30 10.48 −11.02
Source: Ministry of Economic Affairs, Taiwan.
spiral of overall global demand and the appreciation of the NT dollar for the past two quar-
ters. Table 4 shows that exports of electronic components and information and audiovideo
products reached 19.4 percent and 9.5 percent increases, respectively, from January to May
2020 compared with 2019. These two categories, added up, account for more than half of
Taiwan’s total exports.
According to the Purchasing Managers’ Index for manufacturing in March 2020, Taiwan
along with China and India experienced expansion, while the United States, Malaysia,
Thailand, Indonesia, the Eurozone, South Korea, and Vietnam fell into contraction.12 It
seems that the pandemic had little impact on Taiwan’s manufacturing industry so far.
Manufacturing activities in Taiwan have maintained normalcy, even receiving some or-
ders transferred from other countries trapped by lockdowns. Table 5 summarizes the per-
formance of the selected manufacturing subsectors in Taiwan. The overall manufacturing
sector saw a 9.66 percent growth rate in Q1, with a 4.83 percent increase in the first two
quarters of 2020 compared with 2019. The main contribution came from electronic compo-
nents and parts, which had grown 25.49 percent and 23.26 percent for the past two quar-
ters, respectively. The other significant contribution was from computer, electronics, and
optical instruments, which saw an impressive 12.88 percent and 10.48 percent climb, re-
spectively. However, other sectors such as chemical materials, basic metals, and machinery
had negative growth rates.
Tourism and food sectors were hit most in the service sector. Table 6 shows a huge
75.1 percent decline in foreign tourists, with a 42.1 percent fall in hotel room revenue and a
25.7 percent drop for hotel food and drinks for the past two quarters. The tourism industry
was hit badly mainly due to the strict border controls, as few foreigners were allowed to
enter Taiwan. However, as the virus spread has stabilized without any local cases found
12 “Taiwan’s Early Success Against Coronavirus Cushions Economy.” Financial Times, April 2020.
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
Table 6. Taiwan’s selective inner demand indexes
Foreign
tourists
(thousand) TAIEX index
TAIEX volume
(bn)
Hotel room
revenue (bn)
Hotel food
revenue (bn)
2019 Jul 989 10,846 107.2 2.3 2.0
2019 Aug 1,031 10,469 113.9 2.3 2.0
2019 Sep 794 10,816 109.5 2.0 2.1
2019 Oct 939 11,140 122.9 2.3 2.2
2019 Nov 990 11,559 122.4 2.4 2.3
2019 Dec 1,143 11,854 118.3 2.5 2.5
2019 (total) 11,864 10,790 109.4 268 264
2020 Jan 813 11,962 144.8 2.2 3.2
2020 Feb 357 11,624 131.8 1.0 1.2
2020 Mar 78 10,138 167.8 0.5 0.9
2020 Apr 3 10,329 150.9 — —
2020 May 3 10,877 166.8 — —
2020 Jun — 11,490 183.9 — —
2020 Jan–June 1,254 11,010 158.6 3.8 5.3
Rate compared to
last year (%)
−75.1 5.6 54.9 −42.1 −25.7
Source: Department of Statistics, Ministry of Finance.
Table 7. Sales revenue growth rate (yoy) by
selected service sectors (unit: %)
Wholesale Retail Food service
2019 −2.1 3.1 4.4
Q1 −3.2 −0.6 6.1
Q2 −3.5 3.9 4.0
Q3 −2.3 4.7 3.7
Q4 0.6 4.2 4.1
2020
Q1 3.5 −0.8 −6.8
January −13.1 2.0 17.7
February 15.9 −0.8 −17.4
March 7.8 −3.5 −20.7
Q2 −2.5 −5.7 −12.7
April −1.0 −10.2 −22.8
May −6.8 −5.8 −8.7
June 0.3 −1.1 −16.6
Source: Ministry of Economic Affairs, Taiwan.
for months, the government has started to promote domestic tourism since July, with a
corresponding rise in the hotel business.
Table 7 indicates that food service sales dropped 6.8 percent and 12.7 percent for the first
and second quarters, respectively, in 2020. Restaurants were forced to alter their strategies
by rearranging their layouts to follow social distancing requirements or to join online food
delivery platforms. Table 7 also shows the decreased growth in the retail industry for the
past two quarters due to shrinking consumer demand. Some hospitality and non-essential
retail businesses such as fashion and cosmetics also suffered due to a plummet in consumer
and business spending caused by travel restrictions and social-distancing measures. The
wholesale sector had a 3.5 percent increase in the first quarter and a negative 2.5 percent in
the second quarter. Although wholesale, retail, and food service showed a negative growth
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
in the second quarter, the outlook for the third quarter is better as the virus has been under
control since April in Taiwan.
4.2 Impact on the main sectors of industry: Winners and losers
Taiwan’s National Development Council released a report of five industries heavily af-
fected by the COVID-19 pandemic: (1) airlines and tourism, (2) electronic components,
(3) machine tools, (4) petrochemicals, and (5) automotive parts. The airline and travel in-
dustries have been hit drastically by the pandemic with the sharp drop in demand for
air travel. As a result, two main local carriers, EVA and China Airlines, and their sub-
sidiaries have been forced to completely cancel or limit flights to numerous destinations.
These airline companies adjusted their business strategy to pivot to shipping packages
instead of passengers on their flights or redirected international flights into domestic
flights. With these measures, China Airlines surprisingly regained a positive revenue in the
second quarter.
Hotels and restaurants are among the worst hit sectors. According to the latest statistics
from the Labor Insurance Bureau, there were a total of 45,594 claims for first-time unem-
ployment compensation from January to May 2020. This is a 23.75 percent increase com-
pared with that of 2019 and creates a new record for the last ten years. There were 5,011
workers who received first-time unemployment compensation from January to May 2020
from the hotels and restaurants sectors, compared with only 1,804 workers during the same
period in 2019. The dramatic 177 percent increase in these sectors compared with the aver-
age 23.75 percent increase reveals how hotels and restaurants bore the brunt from COVID-
19. However, as the situation stabilized in Taiwan, business bounced back gradually,
spurred by the government’s promotion of domestic travel. The electronic components,
machine tools, and auto-parts sector mainly suffered from weak external demand from
China and global markets, and petrochemicals demand was also hit hard by the falling oil
prices amid the pandemic crisis.
However, Taiwan has actually benefited from an increase in sales for some products, espe-
cially information and communication technologies products and semiconductor products
since the outbreak of the pandemic. Exports of electronic components had increased by
19.4 percent from January to May 2020. Taiwan’s leading semiconductor company, Taiwan
Semiconductor Manufacturing Company, enjoyed a 42 percent increase in first-quarter rev-
enue compared with last year. Foreign demand for high-technology products have risen
strongly due to the increase in videoconferencing and online activities to support work-
from-home and social distancing guidelines around the globe. Exports of information and
audiovideo products thus increased by 9.5 percent from January to May 2020.
According to Taiwan’s Ministry of Economic Affairs, export orders received by Taiwan-
based companies in March grew more than 40.4 percent to US$ 40.26 billion from the
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
previous month despite the economic impact of the pandemic. That represents an increase
of US$ 11.58 billion in export orders from February and a year-on-year growth of 4.3 per-
cent. Demand for electronic products jumped by 24 percent compared with the same pe-
riod in 2019. Face masks and other medical and health care products also witnessed a huge
influx of rush orders from abroad.13
4.3 Government relief and stimulus policy to boost the economy
Taiwan’s COVID-19 relief measures are composed of three types: financial aid, employ-
ment assistance, and tax breaks. Taiwan’s quick government response is expected to
reduce the possible negative impacts of the COVID-19 pandemic on the economy and so-
ciety. The government had approved a number of special relief packages amounting to a
total of NT$ 1.05 trillion (US$ 35 billion), around 5.5 percent of Taiwan’s 2019 GDP. This
economic relief package includes a NT$ 210 billion (US$ 6.94 billion) special budget14 for
relief and stimulus funding, NT$ 140 billion (US$ 4.63 billion)15 special funds, and NT$ 700
billion (US$ 23.13 billion) worth of loans and credit. The Ministry of Economic Affairs al-
located NT$ 97.5 billion (US$ 3.25 billion) for financial bailouts, aiming to revitalize local
consumption and to support businesses, especially small enterprises and service-sector
family businesses such as night market vendors or hairdressers. They are eligible to receive
subsidies of up to 30 percent of their power and water bills and up to 40 percent of their
salary costs.
The government also rolled out relief assistance programs with “stimulus coupons”16 to
encourage consumption and boost the local economy; however, the effectiveness of the
stimulus coupons has been disputed.17 On 14 August, the government further released
a new relief package for the severely hit tourism industry, with wage subsidies to hotel
employees of up to 40 percent of their regular wages (up to NT$ 20,000) and a monthly
handout of NT$ 10,000 to self-employed tourist guides for three months. These timely relief
measures will continue to counter the expected foreseeable negative economic impacts
brought by the COVID-19 pandemic.
13 The face mask export ban was removed on 30 June.
14 The NT$ 210 billion special budgets are the funds for the Ministry of Health and Welfare, Min-
istry of Economic Affairs, Ministry of Transportation, Ministry of Agriculture, Ministry of Cul-
ture, Ministry of Education, Ministry of Labor, Ministry of Science and Technology, and Ministry
of Interiors.
15 The NT$ 140 billion special funds includes the Employment Security Fund, Tourism Development
Fund, National Development Fund, etc.
16 Residents can use NT$ 1,000 to exchange NT$ 3,000 worth of coupons. The coupons will be ac-
cepted at an estimated 140,000 restaurants around Taiwan, as well as 280,000 businesses in shop-
ping centers, 10,000 night markets, and 1,700 arts and culture spots.
17 There is a NT$ 2.2 billion administrative cost for the coupons. Based on the MPC estimates from
Kan et al. (2017) Dr. Kan estimated in a conference in August that it can only contribute to a 0.08
percent GDP (around NT$ 15.27 billion) increase.
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
4.4 Challenges and opportunities
The COVID-19 outbreak is expected to have similar economic impacts as the SARS out-
break in 2003, for which Lee and McKibbin (2004) had written that fears of infection will
lead to a substantial decline in consumer demand, especially for the travel and retail sales
sectors. The uncertainty of COVID-19 reduces confidence in the future and the inadequate
expenditure on public health in developing countries to avoid another future major pan-
demic outbreak. Taiwan will also face the inevitable decline in consumer demand, but Tai-
wan’s adequate investment in public health places it in a better position to fight against
COVID-19 as compared to SARS.
Even though Taiwan has successfully kept COVID-19 under control so far, there are still
challenges and opportunities that Taiwan will face in the future. The first challenge is the
possibility of a second wave amid gradual loosening of border controls and increased do-
mestic travel with fewer people wearing face masks. Since 21 July (the date on which no
local cases had been reported in Taiwan for 100 accumulative days), many have started
to relax their cautionary measures and have gone on “revenge” trips around the country,
which have led to crowds at famous tourist landmarks without proper social distancing.
For example, 290,000 tourists were reported to have traveled to Penghu in July 2020. This
number of visitors not only exceeded the total of 269,645 visitors from January to June, but
was a greater increase compared with the 182,860 tourists in July 2019.
Vietnam and New Zealand, both deemed as models for the successful containment of the
virus along with Taiwan, offer a glimpse of what can happen if a second wave breaks out.
COVID-19 restrictions have been reintroduced across New Zealand after four new cases
were diagnosed in Auckland. On 12 August, Auckland was placed on an alert Level 3 for
three days.18 This new outbreak has sent one-third of the population back into lockdown
and placed the rest of the country under various restrictions. Vietnam went 99 days with-
out any new cases only to see a surge of new infections in July at the port city of Danang.
The situation in Taiwan’s neighboring countries also seems pessimistic: Japan, Hong Kong,
and the Philippines face mounting cases, and South Korea is enduring a possible second
outbreak from a church gathering in August. Taiwan’s loosened border controls and a rise
in domestic travel, along with the September reopening of schools and the onset of the flu
season, will further exacerbate the risk of another wave of infections in Taiwan.
The second challenge comes from cross-strait relations with China. Tensions between Tai-
wan and China have elevated to new heights since President Tsai’s inauguration in 2016.
18 There are four alert levels in New Zealand: Level 1 (Prepare) =the disease is contained; Level
2 (Reduce) =the disease is contained, but the risk of community transmission remains; Level 3
(Restrict) =there is high risk the disease is not contained; Level 4 (Lockdown) =likely the disease
is not contained.
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
This conflict may escalate even more and is expected to cause greater uncertainty that may
be detrimental to investments from abroad.
Nevertheless, opportunities emerge. The first is the increasing possibility of forming a new
international health coalition that would include Taiwan. Despite Taiwan’s early warnings
about the virus in January, the exclusion of Taiwan from the WHO did not help other coun-
tries to be sufficiently informed about COVID-19 to take the appropriate measures to fight
against the virus. Taiwan’s strong performance in fighting COVID-19 may increase other
countries’ trust in Taiwan’s public health management abilities. With help from larger
economies such as the United States and the EU, the possibility for a new health coalition
that would include Taiwan’s participation can be achieved. This new coalition is not to
replace the current WHO, but would serve as a complementary role. The world simply
cannot ignore any potential contribution from Taiwan in containing the virus. Global co-
operation in public health without excluding any country is essential to fight against the
pandemic. A new health coalition including Taiwan is a win–win situation for the world
and Taiwan.
Other short-run opportunities are emerging under the shadow of the pandemic.
E-commerce can benefit from lockdowns and social distancing policies in many countries.
More people are shopping online to order food, daily necessities, and commodities via the
Internet. There are also more people choosing to ride a bicycle for work and leisure instead
of taking public transportation. This new trend has seen Giant, a famous Taiwan bicycle
producer, overloaded with export orders for the past months due to the rise in commuters
who cycle.
The pandemic, which has made many countries aware of their growing economic depen-
dence on China for goods in several critical sectors, has led to calls to delink global sup-
ply chains of major industries from China. Taiwan’s successful handling of the pandemic
makes Taiwan an attractive and relatively safe place for manufacturing. This may win
more long-term contracts from both returning Taiwanese and foreign businesses. Inter-
national companies have been searching for supply-chain providers outside of China since
the 2019 U.S.–China trade war. Van der Veen and Van Mechelen19 write that the COVID-
19 pandemic and the U.S.–China trade war have increased pressure on American firms to
consider diversifying their supply chains away from China. Vietnam, Mexico, and Taiwan
are the main beneficiaries of the shift in U.S. imports. If the pandemic continues while Tai-
wan maintains its good epidemiological performance, it can have opportunities to gain
a more important role in the future realignment of the global supply chain in industries
19 “Decoupling U.S.–China Supply Chains: High Tech on the Move.” RaboResearch—Economic
Research, July 2020.
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
such as 5G, artificial intelligence, big data, printed circuit assembly supply chains, and the
semiconductor subsector.
5. Lessons and conclusions
Sachs (2020) notes that the key takeaway of the successful Asia-Pacific experience is the
ability to control the epidemic through improved hygiene practices and the isolation of
infectious individuals rather than a reliance on deep economic shutdown.
What lessons can Taiwan teach the world so other countries can learn to stop the spread
of the virus? First, its previous SARS experience makes the Taiwanese populace a highly
alert society that is willing to cooperate in practicing hygienic habits like wearing masks
and washing hands frequently. Secondly, an affordable and high-coverage national health
insurance system also plays a crucial role in Taiwan’s fight against COVID-19, aiding the
“precision prevention” strategy that Taiwan relies on to trace cases and allocate medical
resources such as face masks. Third, the timely government reaction to set up a centralized
command center helped to prevent the virus from spreading in the initial stages. Countries
that responded earlier and aggressively tend to have better responses than those who do
not. Information that was provided regularly and transparently by the government can
also ease public uncertainty caused by COVID-19. Fourth, the Taiwan government’s in-
tervention to secure relevant medical supplies also contributes toward ensuring public
confidence and also preventing the medical system from being overloaded. This pandemic
taught us another important lesson: Medical supplies are essential, strategic products that
are as important as national defense equipment. It is better for countries to manufacture
medical supplies themselves rather than rely on supply chains from abroad.
Besides strict border controls, quarantine policy also plays an important role to keep the
virus from spreading. As an island, Taiwan has a geographic advantage. Without land
borders with other countries, it is relatively easier for Taiwan to enforce border control.
The use of technology for contact tracing and isolation of those potentially exposed to
the virus is crucial to Taiwan’s successful efforts to prevent the COVID-19 spread at the
early stage.
However, some deficiencies and criticism exist for Taiwan’s strategy. Even though Tai-
wan’s number of confirmed cases and deaths are low, the lack of wider screening and uni-
versal testing are under scrutiny. Health Minister Chen Shih-Chung expressed that Taiwan
does not need to apply universal testing, which will only waste Taiwan’s limited medical
resources, and should continue to utilize its medical resources effectively with the “preci-
sion prevention strategy.” He believes that clinics and hospital can serve as the frontline
position against COVID-19 instead of employing universal testing, since it is cheaper to go
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COVID-19 in Taiwan: Economic Impacts and Lessons Learned
to a hospital than to set up massive testing sites in Taiwan because of the country’s afford-
able national health insurance, unlike other countries. Additionally, the government can
make necessary adjustments to its border control and quarantine policy according to the
new developments around world. For example, the government can institute mandatory
country-specific testing and categorized quarantine policy at the border, such as it imple-
mented for travelers from the Philippines when the latter’s infection numbers rose sharply
in July.20
Even as COVID-19 continues to spread across the globe, more and more countries have
started to loosen their border controls and lockdown measures in the hope of reviving their
economies to pre-pandemic levels. Taiwan is no exception when it comes to lifting restric-
tions on inbound entries. From August 2020, an average of 2,000 passengers enter Taiwan
every day, with numbers expected to continue to rise. This rise in traveler inflow will put
greater pressure on the corresponding mandatory self-quarantine measures, such as poten-
tially giving rise to an inadequate number of quarantine centers that will make the current
precision-prevention strategy more difficult to enforce.21
References
Kan, Kamhon, Shin-Kun Peng, and Ping Wang. 2017. Understanding Consumption Behavior: Evi-
dence from Consumers’ Reaction to Shopping Vouchers. American Economic Journal: Economic Policy
9(1):137–153.
Lee, Jong-Wha, and Warwick J. McKibbin. 2004. Globalization and Disease: The Case of SARS. Asian
Economic Papers 3(1):113–131. Available at: https://doi.org/10.1162/1535351041747932.
Sachs, Jeffrey. 2020. Comparing COVID-19 Control in the Asia-Pacific and North Atlantic Regions.
Asian Economic Papers 20(1):30–54. Available at: https://doi.org/10.1162/asep_a_00795.
20 Travelers arriving in Taiwan from the Philippines must undergo COVID-19 testing at airports and
observe quarantine measures starting 26 July 2020.
21 The demand for quarantine places increases because of increasing passengers from more marked
low-risk countries and the opening for all the foreign students in high schools and below to return
from 19 August.
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Sherr y Tao Kong Comments on COVID-19 in
Taiwan: Economic Impacts and Lessons
Learned
Sherry Tao Kong, Peking University: While the COVID-19 pandemic is ongoing in
most parts of the world, Taiwan has emerged as a shining example, characterized by one
of the lowest infection rates globally and a death toll remaining below double digits. No
doubtmuchcanbelearnedfromtheTaiwanexperience,notjustbecauseofhowitsuccess-
fully contained the COVID-19 beast per se, but equally, if not more importantly, because of
the fact that this has been achieved without painful socioeconomic disruption.
Demonstrated by convincing and detailed statistics, the author provides a systematic anal-
ysis of Taiwan’s experience. The paper represents a well-documented summary of the chief
protagonists responsible for Taiwan’s success, including a well-functioning command
center with a science-based approach (the so-called early deployment attitude), the
precision-prevention strategies, sufficient medical supplies, adequate public awareness,
and the provision of medical facilities. The author also emphasizes how digital technol-
ogy and big data were applied in a meaningful and effective manner. Thanks to the timely
actions taken by the governing authorities, Taiwan entered a virtuous cycle in which the
initial number of infected cases was relatively small, thus making the task of identifying
subsequent suspicious cases manageable, and kept screening and treatment well within the
limits of their medical system.
Without taking anything away from the important factors listed by the author, individ-
ual leadership (for instance, demonstrated by the head of the Central Epidemic Command
Center), as well as a vibrant and well-functioning civil society at the grassroots level, also
played a tremendous and positive role in Taiwan’s efforts in curbing the pandemic. More-
over, seemingly small measures such as setting the price of masks and suspending mask
export, were, in reality, non-trivial matters and required much determination and coordi-
nation on the side of the authorities.
As intuitive as these measures may sound, the contrast between Taiwan’s experience and
that of many other parts of the world is mind-boggling. Inevitably, such stark contrast begs
several important questions, for instance, why have other countries failed to implement
similar measures, and, when taken in other places, why did similar measures not achieve
comparable results? This sounds analogous to the famous quote by Leo Tolstoy that “[a]ll
Asian Economic Papers 20:2 © 2021 by the Asian Economic Panel and the Massachusetts Institute of
Technology
https://doi.org/10.1162/asep_a_00826
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Comments
happy families are alike; each unhappy family is unhappy in its own way.”1Maybe there is
a need to look beyond what Taiwan has achieved, and to seek deeper causes that enabled
the more immediate factors to function well. To this end, if the measures taken by gov-
ernments can be viewed as a series of actions of policymaking and implementation, it is
probably useful to break the procedure into a smaller number of steps and examine where
things can go wrong, and where efforts of containing COVID-19 may have been derailed in
other regions of the world.
First, while curbing the pandemic is clearly a shared objective in most if not all societies,
countries do vary to a considerable extent with regard to their values and priorities, be it
human life, economic cost, political popularity, or social stability. These somewhat compet-
ing priorities ultimately lead governments onto vastly differing paths. Second, the specific
challenges identified for one country are likely to be a function of its prevailing conditions,
such as the provision of public health care, the degree of socioeconomic inequality, house-
hold living arrangements, and general attitude toward its government. As a result, the
exact issues that need to be tackled by each country are of different degrees of complexity
and in turn, diagnosing the key issues facing respective countries can be a challenging task,
particularly against a backdrop of great uncertainty. If analyzing the situation is where
the problem starts, formulating coping strategies is where things start to go wrong. With
the benefit of hindsight, we now understand that certain ideas, such as “herd immunity,”
were doomed from the start. Lastly, with a reasonable grasp of the issue and a set of rea-
sonable policies, effectiveness in execution holds the key for the final outcome of infection
numbers, death rates, and social and economic costs.
Viewed within this framework, Taiwan clearly had the advantage of possessing a well-
developed and resourced medical system, reasonably high average living standards and
education levels across its population, moderate socioeconomic disparity, in addition to a
general respect for safeguarding public interest. In addition, and probably more crucially,
the general trust of the public in the authorities, as well as the competence of its govern-
ment, are underlying deeper reasons for Taiwan’s success. In this light, the implications
of Taiwan’s good practice may be limited due to the fundamental differences in the pre-
conditions and the absence of related factors in other countries necessary for ensuring the
implementation of government policies as seen in Taiwan.
Aside from its stunning record of curbing COVID-19 without sacrificing free movement
and public service provision, Taiwan finds itself in an enviable position considering the
economic impact of the pandemic. With countries around the world experiencing both
supply and demand shocks, economies are struggling to get back on their own feet, but
Taiwan is enjoying a rebound of external demand for its information and communications
1 From Leo Tolstoy’s 1877 novel Anna Karenina.
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Comments
technology and semiconductor products. This is clearly the exception rather than the norm.
The Taiwanese government’s relief and stimulus package constituted a sensible and pre-
dictable mix of financial aid, employment assistance, and tax breaks. The author rightly
points out that rigorous examination as to the effectiveness of these policies is needed. To
this end, perhaps a related question would be whether these standard assistance packages
can be provided in a more targeted manner, especially with the availability of big data and
digital technology. The case of using big data and financial technology (fintech) in main-
land China to inform risk-management decisions is of useful reference. Moreover, it would
not be correct to attribute the health of the Taiwanese economy primarily to these pack-
ages. Rather, Taiwan’s economic situation seems more a product situated in the greater
context of the global economic and geopolitical framework.
Looking to the future, with the possibility of second-round outbreaks looming on the hori-
zon, how Taiwan, as well as other parts of the world, can forge a concerted effort to combat
this virus and probably learn to live with it represents a critical issue for all economies to
tackle. To this end, as the author mentioned, opportunities have presented themselves—
online business platforms are playing an increasingly important role as part of the rapidly
developing digital economy. It is possible that the COVID-19 crisis will turn out to be a
forceful push for innovations, the adoption of new technologies, and reform measures that
would not have been possible otherwise.
Wen-jen Hsieh Comments on COVID-19 in
Taiwan: Economic Impacts and Lessons
Learned
Wen-jen Hsieh, National Cheng Kung University: This paper presents an over-
all picture of Taiwan’s fight against the COVID-19 pandemic in Taiwan, from its efforts
to curb the coronavirus from spreading to its population and the relevant impacts of the
pandemic to its domestic economy. The author suggests that many of the “precision-
prevention” strategies implemented, learned from the country’s 2003 SARS experience,
are the key factors that have resulted in the relatively mild health and economic impacts
to Taiwan.
120 Asian Economic Papers
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Comments
As COVID-19 is a rather new and complicated issue, this paper is valuable in terms of
introducing Taiwan’s Centers for Disease Control disease prevention strategies to the
international community, as many of the countries and regions around the world may be
still suffering badly from the pandemic. However, this paper could have contributed more
if the following information were provided:
1. This paper may benefit from more literature being reviewed as there is only a loose the-
oretical background to the topic discussed. Although it is understandable that COVID-
19 is a still an ongoing topic in which direct theoretical frameworks may be still under
construction, I highly encourage the author to review academic literature with even a
slight relevance to this topic.
2. The author seems to claim that everything about Taiwan’s economic performance is
attributable to COVID-19, but this may be biased unless there is solid evidence. This
paper provides the performance data of certain import/export (trade) and industrial
sectors to support its argument descriptively. However, this seems loosely connected,
and there can be further “sorting” and analyzing of the data. By making reference to
McKibbin and Fernando (2020), who explore seven potential scenarios regarding the
economic outcomes from COVID-19, I strongly suggest the that author carry out a
scenario analysis for the study of this paper, which will also expand the discussion
and exploration of this article. The reason is that the global COVID-19 pandemic is
not likely to reach a practical end for the foreseeable future with an effective vaccine
still under development, so how Taiwan performs in the potential second wave of the
epidemic remains rather unclear. To this end, the scenario analysis would provide us
with at least a preliminary analysis to these unknown variables and if executed well,
might also provide certain analytical foundations for future studies and further enhance
academic discourse.
3. Moreover, the author is also encouraged to implement a deeper comparison of the epi-
demic prevention strategies as well as the related economic performances between Tai-
wan and other Asian countries (South Korea, Japan, Vietnam, etc.). The comparative
analysis would be helpful as each country has its own distinctive characteristics that
would require specific policies that can be difficult to copy or imitate. It is obvious that
Taiwan is quite successful in containing the effects of COVID-19 thanks to its previ-
ous experience of the 2003 SARS epidemic, but what about South Korea, which had
also been through both the 2003 SARS and 2015 MERS outbreaks—especially when
Taiwan and South Korea are often compared in terms of their political, social, and eco-
nomic aspects? Another benefit of a robust comparative analysis is that the comparison
process allows researchers to review the current and past situations of the compared
subjects more practically. This paper could also have chosen a specific research method-
ology rather than a news-like narration about an issue with complicated and broad con-
texts. The author can refer to the writings on the SARS outbreak by Chou et al. (2004)
121 Asian Economic Papers
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Comments
or Hanna and Huang (2004) (the latter of which has already been cited by the author)
for guidance.
4. If the author could gain access to certain quantitative data, regression analysis is also
suggested. Through the estimated regression results, we may be able to look beyond
the current situation and provide certain preliminary predictions to future situations.
Besides, although statistical regression could be considered as a “cracked crystal ball”
(which means that regression results merely provide general prediction at best), it is
better to have relevant causal relations than having nothing and the quantitative results
could complement the qualitative descriptions.
5. The title of this paper includes the words “economic impacts,” but seems to fall short on
providing the definition of the term. Whether this refers to the performance of trade, the
rising unemployment rate, the contraction of GDP growth rates, the reorganization of
the industrial supply chain, business performance, or something else should be clearly
specified by the author in the text.
In sum, this paper provides a detailed introduction to Taiwan’s fight against the COVID-19
epidemic, which many of the countries worldwide have struggled to successfully con-
tain. However, the broad range of the topic may deviate from the focus of this article and,
without a robust research methodology, would end up as a purely descriptive narration
of events that have been already covered by the media. Thus, the author is encouraged, on
the basis of the available data and timeframe, to utilize certain research methods such as
regression models, scenario analysis, or comparative analysis to not only try to provide its
own distinctive viewpoint but also add value to the paper for potential future studies.
References
Chou, Ji, Nai-Fing Kuo, and Su-Ling Peng. 2004. Potential Impacts of the SARS Outbreak on Taiwan’s
Economy. Asian Economic Papers 3(1):84–99. Available at: https://doi.org/10.1162/1535351041747969.
Hanna, Donald, and Yiping Huang. 2004. The Impact of SARS on Asian Economies. Asian Economic
Papers 3(1):102–112. Available at: https://doi.org/10.1162/1535351041747978.
McKibbin, Warwick, and Roshen Fernando. 2021. The Global Macroeconomic Impacts of COVID-19:
Seven Scenarios. Asian Economic Papers 20(2). Available at: https://doi.org/10.1162/1535351041747932.
https://doi.org/10.1162/asep_a_00827
122 Asian Economic Papers
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