Taiwan prosperity safe despite slowdown.

Taiwan offers two interesting signals from its transportation sector. One comes from an April 9, 2007 report from the China Economic News Service (CENS), which says that sales of new cars in Taiwan reached a 20-year record low in the first quarter of 2007. CENS cited Taiwan's Ministry of Transportation and Communication (MOTC) as its source.

Poor performance in the automotive sector is generally taken as a sign of a building economic slowdown. A consensus has been developing since the final quarter of 2006 that Taiwan would experience a slowdown in 2007.

April 2007 estimates from the International Monetary Fund (IMF) show GDP declining from growth of 4.6 percent in 2006 to 4.2 percent in 2007. The IMF expects a slight improvement in 2008 with GDP growing 4.3 percent.

A second signal from Taiwan's transportation sector less obviously promises medium and long term economic growth. On January 5, 2007, according to the International Herald Tribune (Neuilly), Taiwan began high speed train service between its two largest cities Taipei and Kaohsiung City.

The train, which travels at about 185 mph, reduces travel time between Taipei and Kaohsiung from four hours to 90 minutes. There are eight major cities along the route.

"In the short run," says the Tribune, "the new line is expected to transform how and where people live, work and get from one place to the other. In the long run, it is expected to help turn what are now comparatively small towns and cities between Taipei and Kaohsiung into new industrial and commercial centers."

Over the longer term, this kind of major upgrade of infrastructure increases the density of connectivity within Taiwan. It provides redundancy in the transportation network-a key element in any economy as protection against environmental shocks.

After March 31, 2007, train service is being expanded to 23 trips per day. Service will continue to expand in the following months to 60 trips per day.

The high speed train project was 27 years in the making, and was one of the largest construction projects of its kind, according to a 2007 posting on the Railway Technology (London) website.

Unemployment in Taiwan has been steadly decreasing since 2002 when the unemployment rate was 5.2 percent. By 2004 unemployment was down to 4.4 percent, and in 2006 it was 3.9 percent. In 2007, the IMF expects the rate of unemployment to decline still further to 3.8 percent, and then to 3.7 percent in 2008.

An April 9, 2007 Bloomberg News filing said, "Electronics are Taiwan's top export, accounting for about half the economy." This strong export position along with growing domestic demand will enhance Taiwan's prosperity.

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