Why Taiwan

Taiwan is home to some of the world’s most important technology companies, placing it at the centre of many global supply chains for advanced semiconductors, electronic components and consumer electronic devices. For the past several decades, Taiwan has focused on attracting more foreign investment through several incentive programs and expanded free trade zones. Although investment is concentrated in the manufacturing and electronics sectors, FDI has increased across Taiwan’s economy, including information and communications technology, professional services and real estate. Foreign businesses and investors play a substantial role in the Taiwanese economy. Since 2023 more than 40 per cent of the Taiwan Stock Exchange’s value has been capitalised by foreign investment.

Taiwan’s distinctive role as a key manufacturer of semiconductors and electronic components has well positioned the country to capitalise on the expansion of the Artificial Intelligence sector, driving consistent economic growth. (Figure 1). Taiwan is the 16th largest exporter of goods globally. Its leading exports are electronics, basic materials and metal products, plastics and rubber, chemicals and machinery. Taiwan’s stable economic environment is underpinned by the world’s 4th largest foreign reserve holdings, totalling over AUD 930.2 billion in 2025.

Taiwan’s population of 23.6 million people boasts a highly educated workforce. It faces some labour supply challenges due to population ageing and fertility rates that remain below replacement levels. To maintain adequate levels of labour for continued economic growth, the Taiwanese authorities have eased foreign worker restrictions for some industries.

Taiwan is an important regional market in East Asia. Its high GDP, trade intensity, and AI capability make it a hub for economic activity. Along with Australia, Taiwan is a member of the Asia-Pacific Economic Cooperation forum and maintains close economic ties with countries throughout the region, promoting trade and cross-border investment. Taiwan is an export-oriented economy and its strategic integration into regional and global economies provide strong prospects for continued growth.

While Australia and Taiwan do not have official diplomatic relations, they maintain strong people to-people links, economic ties and share important values such as promoting rules-based, open and stable trade throughout the Indo-Pacific region. Taiwan is Australia’s twelfth largest trading partner and a top 20 FDI destination. Two-way trade between Australia and Taiwan totalled AUD 30.6 billion in 2024. More information on Australia’s relationship with Taiwan is available in Section 5.1 and from the Department of Foreign Affairs and Trade’s Taiwan Brief.

Although Taiwan is committed to maintaining favourable conditions for continued foreign investment and economic cooperation, its relationship with mainland China presents some potential risks for investors. Australian businesses should be mindful of changing regional conditions when doing business in Taiwan.

Comparing key indicators: Taiwan and Australia

Figure 1: Real GDP Growth – Taiwan and world average (2020-2030f), %

Taiwan’s strong economic performance, demographic trends, advanced technology ecosystem, and AI innovation offer significant opportunities for Australian trade and investment. From providing basic staples such as food, fuel and metal ores to advanced technology manufacturing equipment and services, Taiwan’s economy is attractive for many types of foreign businesses. This section highlights the key business sectors for Australian companies.

Education

Education is an important facet of Australia and Taiwan’s strong people-to-people links. Australian educational institutions are very highly regarded and a popular choice among Taiwanese students studying abroad. As of 2024, over 11,000 Taiwanese students study in Australia. Since signing the Australia-Taiwan English Language Learning Partnership Action Plan in 2022, Australia has become a preferred provider of English language education in Taiwan. Bilingualism is a priority for the Taiwanese authorities and workforce as the economy becomes increasingly integrated into global markets. Australian businesses have an opportunity to offer transnational education programming across all levels of the Taiwanese educational system.

Food and agribusiness

Due to limited arable land, Taiwan imports a significant share of its agricultural products, offering many opportunities for Australian businesses throughout the value chain. Australian agricultural products are popular and highly regarded among Taiwanese consumers. Taiwan’s food processing sector is largely export-oriented and has consistently high demand for quality ingredients. Australian businesses provide many staples such as dairy products, wheat and sugar. Other primary products such as animal feed are also in high demand. Due to rising household incomes and greater attention to health and nutrition, the Taiwanese market is also attractive for Australian exporters of high quality produce, meat and beverages, many of which command higher than average prices in the region.

Metals and processing technology 

Taiwan is a major manufacturer and exporter of metal products such as fasteners, metal sheets and steel. Taiwanese producers focus primarily on manufacturing high-quality products for use in high- tech industries like aerospace creating significant demand for raw metal inputs such as iron ore, titanium and copper. Australia is Taiwan’s largest source of iron ore, with exports totalling AUD 1.6 billion in 2024-2025. Like many other steel-producing nations, Taiwan is seeking to decarbonise its heavy industries, presenting an opportunity for Australian businesses to provide services and expertise related to green steel production.

Health and biotechnology

Taiwan’s healthcare system is highly developed, but expansion is needed to provide for its ageing population. By 2060, people aged 65 and up are expected to constitute over 40 per cent of the population in Taiwan. Taiwan is heavily reliant on imported medical equipment and demand for advanced devices is expected to grow. Australian exporters should be aware that all medical devices must be approved and licensed by the Taiwanese Ministry of Health and Welfare (MOHW). Taiwan and Australia are also part of a joint Health and Biotechnology Partnership aimed at developing health solutions and fostering growth in the sector. Growing demand and strong bilateral trade ties offer many opportunities for Australian businesses looking to participate in the dynamic biomedical industry, including in clinical trials.

Energy and green economy

Taiwan relies on imports for most of its energy needs, and Australia is a top import source, supplying approximately half of the coal used in Taiwan in 2024 and around 40 per cent of its liquid natural gas (LNG). In 2024, Taiwan obtained less than 7 per cent of its electricity from renewable sources. However, Taiwan’s National Development Council’s 2050 net- zero plan includes phasing out coal and increasing renewable power imports and generation capacity. This creates opportunities for businesses in green energy technologies. Taiwan’s geographical conditions make it a favourable place to build offshore wind power generation. Taiwan has also included hydrogen as a possible green energy source in the net-zero plan, offering an additional opportunity for Australian businesses to engage in the sector.

Technology

Taiwan has a highly developed technology sector with many opportunities for entry. Australia and Taiwan cooperate across a range of science and technology innovations and Taiwanese authorities have introduced several policies and programs to incentivise investment in the sector. Key opportunities for Australian businesses include providing information processing and cybersecurity software, remote sensing and nanosatellites, advanced manufacturing and agricultural technologies, semiconductor-related technologies and services, drones, artificial intelligence solutions and quantum computing capabilities. Taiwan is generally open to foreign investment in these areas, although Australian businesses should be aware of restrictions in certain areas of the sector. Foreign operators of other telecommunications equipment also require approval from local offices and must comply with Taiwanese cybersecurity management standards.

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