Taiwan Boosts Added Value of High-tech Products

　　The Japanese Ministry of Economy, Trade and Industry recently issued a research report on changes of unit price in high-tech products trade in four East Asian countries: Japan, Taiwan, South Korea, and mainland China. According to the report, the championship in the “value-added ratio of high-tech products”(see footnotes of Table 1) from 1995 to 2003 went to Japan, while for Taiwan the ratio evidenced a rising trend.

　　The report indicates that the Unit Price Index (see footnotes of Table 1) of high-tech products in the Northeast Asian countries from 1995 to 2003 shows a rise in the added value of Taiwan’s high-tech products (see Table 1). For Japan, the share of high-tech products with unit price indexes greater than 1 grew from 58.6% in 1995 to 65.6% in 2003, putting Japan at the peak of Asia in terms of the value-added ratio of high-tech-products. For Taiwan, the share of high-tech products with unit price indexes greater than 1 increased from 20.4% in 1995 to 27.2% in 2003, showing that the added value of the island’s high-tech products is on a steadily rising trend. For the neighboring countries of South Korea and mainland China, however, the trend is downward. For South Korea, the share dropped from 25.7% to 24.7% from 1995 to 2003, and for mainland China, the decline was drastic: 37.9% to 24.2% from 1995 to 2003.

　　The study report indicates that in the division of labor of the electronics and information industries in East Asia, with the exception of Japan, the countries of the region remain in the position of contract producers and are finding it difficult to heighten their value-added ratios. Only for Taiwan is the curve rising, showing that the island’s manufacturing sector is moving firmly in the direction of high value-added production.

Table 1 Changes of the value-added ratio of high-tech products in Japan, Taiwan, South Korea, and China  (Unit: %)

　

Year	Japan	Taiwan	South Korea	China
1995	58.6	20.4	25.7	37.9
2003	65.6	27.2	24.7	24.2

Source: Ministry of Economic, Trade and Indsustry, White Paper on International Economy and Trade 2005; compiled by the Department of Economic Research, Council for Economic Planning and Development

Notes:
1. Unit Price Index of a product item= the ratio of (Export Unit Price)/ (Import Unit Price) for each high tech product.
2. The figures in the table indicate the “value-added ratio of high-tech product,”—that is, the share of products with a unit price index greater than 1.
3. A unit-price index greater than 1 indicates that the country exports the product with more highly added value in comparison with the imports. If the country has a relatively high share of product items with a unit price index greater than 1, then that country focuses on higher value-added production.

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