Taiwan’s economy boosted by country’s status as coronavirus haven

Taiwan’s economy boosted by country’s status as coronavirus haven

In a normal year, Steven Hong spends almost half of his time in Europe. The Taiwanese managing partner of financial advisory firm RedMoon would fly there on average once every six weeks, spending two weeks to a month visiting clients and attending board meetings in Switzerland, Luxembourg, France, Austria or Spain.

This year, everything is different. Since returning from a meeting in Hong Kong in January, Mr Hong has stayed put because Taiwan’s successful efforts to limit the spread of coronavirus has made his home country one of the safest places on earth.

“I have not stayed in one place this long for many years, but it is actually quite comfortable,” said Mr Hong.

With 797 cases and only seven deaths, Taiwan has avoided lockdowns and life has remained largely normal. Mr Hong is not alone in his choice: Hundreds of thousands of other Taiwanese have chosen to come home or at least stay as long as the pandemic is raging elsewhere.

For Taiwan’s economy, this influx of citizens who normally live abroad is creating a boom. In the third quarter, in-country private consumption by residents jumped 5.2 per cent compared with the same period in 2019, the fastest increase in almost a decade

“Citizens could not travel abroad, and the consuming population in the country increased,” is the cabinet statistics agency’s dry diagnosis.

Demand from wealthy residents who would normally consume abroad is boosting demand for high-end consumer goods and services. Silks Place Taroko, a five-star hotel in a marble gorge in eastern Taiwan where double rooms start at NT$11,000 ($390) a night, is fully booked until February 16.

Hoshinoya Guguan, a newly opened Japanese luxury hot springs resort where prices start from $300 per night, does not have any rooms available until mid-May.

Chen Mei-ling, who runs a bed and breakfast in a scenic tea-growing region in the mountains of central Taiwan, says his occupancy rates are now higher than before Taiwan closed its borders to foreign non-residents earlier this year. Ms Chen has raised prices twice already.

Restaurants are also profiting. “Our business is the best it has been in several years,” said the chef at one of Taipei’s leading European restaurants.

Mr Hong is a case in point. He says he dines out every day and enjoys the wide range of cuisines Taiwan has to offer. He also regularly attends concerts, and is using his extended stay for things he rarely finds the time for during his normal life of constant travel.

“I have had the chance to visit places in Taiwan I have never been before,” he said. “And I also meet up with old friends much more often.”

Although it is difficult to confirm exactly how many Taiwanese have come back at least temporarily, government statistics provide a clue. According to the National Immigration Agency, 251,640 more Taiwanese entered the country this year than exited — a net inflow almost four times the size registered last year.

Many foreigners working or studying in Taiwan have also been staying longer than planned, especially since the summer, delaying their return to countries where second and third waves of the pandemic are in full swing.

The government is keen to capitalise on the new appreciation for Taiwan as a safe haven. “Our strong public health performance is a once-in-a-lifetime chance to turn the tide and convince more Taiwanese people to come back and foreign friends to move here,” a senior official in the presidential office said.

He added that the global drive to separate supply chains from China as well as Beijing’s increasingly belligerent attitude towards Taiwan provided additional incentives for Taiwanese nationals to move back home.

In addition, the government has stepped up efforts to attract foreign talent during the pandemic under its Gold Card employment visa launched two years ago.

Ivan Yanakov, a Bulgarian pianist, is one of those who took the opportunity to move to Taiwan two months ago.

“Hong Kong used to be my base when I am in Asia, teaching masterclasses in China, South Korea or Japan, but I started thinking about moving to Taiwan last year when I saw what China was doing to Hong Kong,” he said, referring to the crackdown on the territory’s special status and freedoms.

“Then, when the pandemic came this year, I thought, that’s it, I’m moving.”

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Critics say Taipei will have to do more to remain attractive after the pandemic ends.

“Taiwan lacks some of what the best and brightest and wealthiest have grown used to living in Hong Kong, New York, or Shanghai,” said a Taiwan-born technology executive who normally splits his time between Hong Kong and the US.

He finds service standards in Taiwan inferior and forecasts that the country’s 40 per cent top tax rate will discourage most financial industry executives from moving back.

However, some of those now sheltering in Taiwan are considering staying on. “Many returning Taiwanese from the US and China are thinking, I should move back and be based here and conduct my business from here,” said Mr Hong.

“The only thing is that my wine and cigar inventory is running low.”

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