Taiwan's 2025 GDP Forecast: 3.05% Growth Despite Export Downturn

Taipei [Taiwan], July 18 (ANI): TaiwanIts economy is predicted to increase by 3.05 percent in 2025, backed by robustexportpositive momentum during the first half of the year, which is anticipated to slow down in the second half, as reported by the Chung-Hua Institution for Economic ResearchCIER), reported Focus Taiwan.

According to the report, CIER projected GDPgrowth is expected to slow to approximately 1.08 percent in the second half of 2025, compared to an estimated 5.17 percent rise in the first half.

The anticipated slowdownis linked to the lasting effects of Trump-era tariff policies and a high base effect from early 2025.

As per the news website,CIERstated that the first-half growth surpassed forecasts because international buyers increased their orders to evade US tariffs.

TaiwanThe technology industry also saw advantages from robust demand, especially fueled by AI-related developments.exports, the platform reported.

The Trump administration first introduced significant tariffs on April 2, featuring a 32 percent tax onTaiwanThese goods, prior to being suspended for 90 days beginning April 9, were intended to aid in trade negotiations.

CIER estimated Taiwan's exportgrowth is expected to slow down to 6.71 percent in the third quarter and drop further to 2.55 percent in the fourth quarter, marking a significant decrease from 20.29 percent in the first quarter and 27.12 percent in the second quarter.

For the entire year of 2025,Taiwan's exportThe organization stated that exports are projected to rise by 13.74 percent, while imports are anticipated to go up by 15.28 percent.

CIERPresident Lien Hsien-ming pointed out that although there are tariff obstacles,TaiwanIts power in artificial intelligence development is expected to maintain growth momentum through the second half of the year.

Lien also warned that the Trump administration could levy duties ranging from 15 to 20 percent onTaiwanThese goods due to strong business connections. He cautioned that increased tariffs could lead to higher inflation in the U.S. by increasing the cost of imports.

Private investment growth is projected to slow down each quarter during 2025, decreasing from 20.77 percent in the first quarter to 3.96 percent in the second, 2.31 percent in the third, and 1.69 percent in the final quarter.

CIERprojects private investments to increase by 7.03 percent this year, with fixed capital formation expected to rise by 6.60 percent to support the overall growthGDP growth.

Private spending is expected to rise by 1.57 percent in 2025, influenced by a strong base from the prior year.

While a stronger TaiwanThe dollar is anticipated to ease import price pressures, while recent natural disasters have increased food costs, and labor shortages have led to higher expenses in the service industry.

CIER expects TaiwanThe consumer price index is expected to increase by 1.89 percent in 2025, staying under the central bank's 2 percent warning level.

As the American currency declines in value,CIER forecasts the TaiwanThe dollar is expected to average NT$30.32 against the U.S. dollar in 2025, rising by 5.92 percent from 2024.

Looking ahead, CIER projects TaiwanThe economy is expected to expand by 2.48 percent in 2026, as per the projections mentioned in the report by Focus.Taiwan. (ANI)

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Will U.S. tariffs drive China's manufacturing mouse out of the Asean maze?

"Each investment is a risk," and Chinese factories are experiencing "significant losses" by manufacturing in Southeast Asian countries subjected to Trump's tariffs, as reported by industry experts.

Chinese exporters, such as Huang Yongxing, are seeking clear responses to begin producing and delivering products from their factories located in China or Southeast Asia.

And the responses— or at least the updates— that Huang receives, he posts on his social media account through weekly updates that have become popular among owners of small and medium-sized businesses as unpredictable and changing tariff policies from Washington keep reshaping the profit margins for manufacturers.

They are now confronted with a long-term challenge regarding investments, as some of their international factories are facing the threat of US President Donald Trump's "reciprocal"tariffs as high as 40 percent on 14 nations, many of which are key markets for Chinese exports.

Are you curious about the most significant issues and developments happening globally? Find the information you need withSCMP Knowledge, our latest platform featuring curated content including explainers, FAQs, analyses, and infographics, presented by our acclaimed team.

Trump's action, revealed on Monday, places Southeast Asia—China's biggest export market—within Washington's trade focus, simultaneously impacting Chinese exporters' transshipment plans across the region.

Uncertainty surrounds the U.S. approach to transshipment, as high tariffs are hinted at without clear implementation plans, causing significant concerns for Chinese investors looking to invest abroad.

In reply, numerous Chinese firms—those that have already gone global and others intending to expand internationally—have had limited choice but to proceed cautiously.

Huang, a lighting product exporter located in Zhejiang province, has had to frequently adjust its plans to establish a factory in Cambodia because of the changing trade policies under Trump in recent months.

"Customers were urging me to establish production in Southeast Asia, but this involves double costs—maintaining my Chinese factory while investing in a new one," he mentioned in a recent video shared on WeChat, China's widely used messaging application.

Due to underdeveloped local supply chains, it will require at least two years to acquire new clients. The actual cost would be twice as high, yet there would be only a single source of revenue.

Six of the 10 Association of Southeast Asian Nations members are impacted, with Cambodia, Thailand, Indonesia, Laos, and Myanmar encountering tariffs between 25 to 40 percent. Among these, Laos and Myanmar would face the highest tariffs at 40 percent, making the cost increase render Chinese companies' method of re-exporting to the US through these nations almost ineffective.

Influenced by years of increasing trade measures and policy changes, the current weighted average tariff on Chinese imports is estimated at 42 per cent, as reported by Morgan Stanley. UBS estimates the rate at43.5 per cent.

No matter what decision you make, it always seems incorrect," said another lighting supplier, Levi Tan, from Guangdong province. "Those individuals who have already constructed factories are unable to sleep at night.

Industry experts have cautioned that, although the "going global" trend remains strong, increasing uncertainty about tariffs is quickly reducing the strategic options available to Chinese exporters.

"Without consistent expectations, each investment becomes a risk," noted supply-chain expert Liu Kaiming, who has experience with rerouting models.

Cambodia currently possesses a relatively comprehensive industrial chain specifically in the garment sector, while Laos and Myanmar only have isolated factories," Liu explained. "If they are placed on the high-tariff list, re-exports from Laos and Myanmar would become nearly impossible, and Chinese factories operating there will certainly face significant losses.

Liu stated that he is convinced Southeast Asia will remain a crucial factor in reshaping China's supply chain, although he noted that the process is turning out to be significantly more challenging than many companies had originally anticipated.

From enhancing production capabilities to raising capital, all expenses are increasing," Liu stated. "Trump's policy changes happen so often that many business owners feel as if whatever they do is the wrong decision.

Hardware exporter Kevin Huang from Guangdong shared similar worries, pointing out how ongoing modifications in US tariff regulations are increasing immediate risks. "Some of my colleagues have just completed establishing their factories but are now experiencing cash-flow difficulties," he mentioned.

With his American clients "experiencing losses and postponing payments," Huang stated: "I'm afraid to keep shipping right now, and all I can do is get ready to handle the bad debt."

Some local producers, however, perceive an unforeseen benefit.

"If Southeast Asia faces tariffs, we could potentially gain a competitive advantage," stated Wang Shui, a pet product manufacturer based in Guangdong.

We don't fear tariffs. Provided we can offer high-quality items, customers will continue to place their orders. Numerous products are beyond the production capabilities of Southeast Asia.

Nevertheless, Wang recognized that the overall trade situation was becoming more unstable.

Whether remaining in China or venturing overseas, manufacturers are encountering extraordinary uncertainty," he expressed. "As US policies change constantly, no one can predict what will come next.

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Chinese AI Stocks Rise on DeepSeek Momentum as Beijing Seeks Growth Boost

Artificial intelligence is set to become "a key driver for China's modernization," according to Huachuang Securities, aligning with the positive perspective of Morgan Stanley, UBS, and other institutions.

Chinese artificial intelligence (AI)Stocks are anticipated to resist a slowdown in various sectors, as the mainland utilizes technology to enhance business efficiency and stimulate economic recovery, as per investors and analysts.

Companies including Meituan and Xiaomiwere expected to gain from an influx of AI adoption that would reshape business strategies, as per Morgan Stanley, with investors seeking new success stories followingDeepSeek's breakthroughIn the field of generative AI technology, China Asset Management, one of the largest mutual fund companies on the mainland, stated last month that the nation's AI implementation—currently at a 5 percent adoption rate—is poised for rapid expansion, akin to the growth of personal computers in the 1980s.

"Artificial intelligence is likely to serve as a major force behind China's modernization," stated Yao Pei, an analyst from Huachuang Securities, in a report released this month. "There are numerous factors driving AI development, and it is anticipated that AI will integrate into every sector," particularly in electronics, computing, and media, Yao mentioned.

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DeepSeek's unexpected rise this year brought China's technology shares back into the public eye, fueling hope that the nation could still take the lead in AI despite U.S. export restrictions. Investors are now spotting fresh opportunities in the sector following their investments in platform-focused developers of large language models likeAlibaba Group Holding and Tencent Holdings. Alibaba holds ownership of the Post.

China's largest online travel agencyTrip.com Group, short-video platform operator Kuaishou Technology and budget e-commerce operator PDD Holdingsinclude companies that are poised to benefit from AI applications, as noted by Morgan Stanley. Additional possible winners are electric vehicle manufacturers.BYD and Nio, as well as a manufacturer of home appliancesMidea Group, it was mentioned in a report in May.

In contrast to the US, which held an advantage in AI computing, China prioritized efficiency—highlighting income derived from AI-driven products and cost reductions resulting from increased productivity, according to the US investment bank.

"A more competitive AI environment is expected, with DeepSeek possibly encouraging rivals like ByteDance, Tencent, Alibaba, and others to lower model costs and integrate AI into their business processes," it stated.

The worldwide AI infrastructure market, valued at $35.4 billion in 2023, is expected to expand at a yearly growth rate of 30 percent between 2024 and 2030, according to Kate Lakin, research director at Putnam Investments in the United States, in a report released last month. She noted that this growth might face temporary interruptions due to shifts in U.S. policies regarding technology exports to China and evolving tariff situations.

The global wealth management division of UBS stated in a report released on Tuesday that the enduring long-term development in artificial intelligence will continue to fuel growth within the technology sector, noting that the effect of American technological restrictions on major Chinese tech companies would be minimal.

"The advanced productive forces exemplified by AI are expected to serve as the key driver in overcoming the 'middle-income trap' and redefining the global economic structure," China Galaxy Securities stated in a report released in June.

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This piece was first published in the South China Morning Post (www.scmp.com), a top news outlet covering China and Asia.

Copyright (c) 2025. South China Morning Post Publishers Ltd. All rights reserved.

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