Superficially, Taiwan looks stable, calm, even a little boring. Its people are mostly prosperous, with gross domestic capital per capita of more than $30,000 — not as high as Singapore or Hong Kong but well ahead of South Korea and most of the rest of Asia. Growth, while no longer spectacular, is chugging along at slightly more than 3 per cent a year and inflation is under control.
The central bank has kept interest rates steady at a marvellously precise 1.875 per cent since July 2011 and Medley Global Advisors, a macro research service owned by the FT, expects it to stand pat for at least the rest of this year.
Dig a little deeper, though, and Taiwan is battling to retool a mercantilist economic model that is no longer working well either for it or, indeed, for many of its regional peers. The island’s exports have dropped every month so far this year and are now expected to shrink 2.6 per cent in 2015, the first contraction since the crisis year of 2009.