What can you learn after reading this article?
- It is difficult to compare the level of national living standards using a single indicator.
- Low prices, high savings, and overall high output value put Taiwan on the list.
- The overall economic prosperity is in sharp contrast with personal salaries, which has become the source of the relative sense of deprivation among Chinese people.
At the end of October 2023, the American financial websiteInsider MonkeyAfter integrating the International Monetary Fund (IMF) global economic data map, a list of the “20 richest countries in the world” was released. The ranking shows that Taiwan ranks 12th in the world, surpassing Japan and South Korea to become the only country in East Asia on the list, and is not far behind the United States, which ranks 8th. It is also the third country in Asia after Singapore, which ranks first in the world, and Brunei, which ranks 10th.
Insider Monkey wrote in the list that Taiwan occupies a key position in the global consumer electronics supply chain. It is also home to the world’s largest chip foundry, TSMC, and the headquarters of many large electronics companies, making it one of the economic powers. .
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In fact, this is not the first time that Taiwan has demonstrated its high competitiveness in economic development internationally. Published by the Institute of Management, Lausanne (IMD) in Switzerland.IMD World Competitiveness Annual Report“, Taiwan’s ranking has improved for five consecutive years, ranking 6th among 64 countries participating in the competition. It has outstanding performance in the four major indicators of government efficiency, enterprise efficiency, infrastructure and economic performance.
(You may also want to know:Taiwan ranks 6th in the world in IMD world competitiveness. The biggest reason comes from “enterprise effectiveness” >>）
Despite winning international recognition, Taiwanese people expressed indifference after the list was released.
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In particular, data shows that Taiwan’s per capita GDP (PPP) is US$73,344, which when converted into New Taiwan dollars means that the annual per capita income can reach 2.305 million, which makes many people doubtful.
The list doesn’t look that rich?The devil hides in the algorithm
Looking at this list of the “20 richest countries in the world”, you may find that there is a slight gap between these countries on the list, such as Brunei and San Marino, and the generally recognized “rich countries”.
Generally speaking, when conducting international comparisons of people’s living standards in various countries, the most common indicator is gross domestic product per capita. Gross domestic product per capita, or GDP per capita (Gross Domestic Product per capita, GDP per capita), is an economic indicator calculated in currencies of various countries and is often used to measure the overall development of a country’s economy and the average income of its population.
However, GDP assumes that within the same economy, the output value of goods and services is completely divided equally, that everyone has equal income, and that differences in currency value and prices are ignored. When conducting international comparisons, it is not enough to accurately reflect the relative situation of the actual living standards of the people.
In order to make a fairer cross-national comparison,IMFAnother weighted economic indicator “GDP per capita (PPP)” (GDP per capita, current prices) is used. The unit of each country’s “GDP per capita” is adjusted to international dollars, and calculated after incorporating purchasing power parity (PPP), in order to bridge the differences in currency values and basic living expenses between countries.
After the weighted calculation of GDP per capita (PPP), the original rankings showed a big reshuffle. Taiwan also jumped from 37th to 12th.
Taiwan’s high savings and low prices are the main reasons for being on the list
So where does the annual per capita income of NT$2.305 million come from?
In addition to the astonishing output value created by Taiwan’s large-scale technology and manufacturing industries, the low prices of basic living expenses and the common saving habits of the Chinese people are the key reasons why Taiwan has joined the “rich club”.
Take the global price of Big Mac released by The Economist in July this year as an example. In Taiwan, a Big Mac burger sells for 75 yuan (approximately US$2.39), accounting for only 42.8% of the price in the United States. The lowest among the 55 countries and regions evaluated.
In addition, according to data released by the World Bank in 2022, Taiwan’s price level ranks 73rd in the world, lower than the global average. Low price levels mean a relative increase in the purchasing power of money and a relative increase in per capita wealth.
It is worth noting that the consumer price (CPI) referenced by purchasing power parity only covers consumer expenditures such as food, clothing, housing, transportation, education, and entertainment in daily life. Non-consumer goods such as house prices, checks, and bonds will not be recorded. For Taiwan, where housing prices are astonishing but people’s living standards are stable, this indicator obviously cannot correspond to people’s actual cost of living.
In addition, Taiwan’s businesses and people’s mentality of “having money but being reluctant to spend it” has kept Taiwan’s savings rate high in the world rankings. The accumulation of high financial assets with high savings, low investment, and low consumption has also become one of the main reasons for the distortion of economic indicators.
Rich or poor?Taiwan is rich overall but poor individually
However, compared to the applicability of economic indicators. The issue of Taiwanese people’s “indifference to GDP” may eventually return to the fundamental salary issue.
according toMinistry of LaborAccording to the latest statistics, Taiwan’s “average monthly total salary per person” in October 2012 was NT$51,143.and neighboring East Asian countriesSouth Korea(approximately NT$97,334),Japan(approximately NT$64,896) and other places, the gap is particularly stark.
Taiwan’s low-wage situation has also been hotly debated internationally. A special report by Singapore’s Channel News Asia (CBN) in December focused on rising prices and low wages, exposing the low-wage dilemma faced by Taiwan’s young generation.
The report converted the average salary to “bubble milk tea” and found that in 2012, the average salary could buy about 1,097 cups of pearl milk tea, but by 2022, there were 244 fewer cups. This realistically reflects the stagnant wages in the era of inflation. pressure.
Even though living supplies are cheaper than those in the world, we can enjoy the same quality material conditions at a lower cost. The asymmetry between GDP prosperity and wages further highlights the “feeling of poverty” among Chinese people and creates a sense of relative deprivation. the root of.
In this regard, the Academia Sinica also released a survey explaining that in the past 15 years, Taiwan’s real GDP has grown, but the share of labor compensation has not changed much. In other words, the source of low wages is probably not a distribution problem, but the inevitable result of Taiwan’s choice to produce low value-added goods under international low-price competition, resulting in a low value of domestic industries.
At this moment, Taiwan should think about how to increase the added value of its industries in order to get rid of the dilemma of wage stagnation.
Main reference materials:InsiderMonkey、Wisevoter、IMF
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2023-12-24 01:58:28
