Deutsche Welle (English edition)
How Taiwan beat China to be Asia's top-performing economy
For the first time in three decades, Taiwan outpaced China's economy in 2020. The island's handling of the coronavirus pandemic was the envy of the world, while demand for its semiconductors spurred growth.
The world gasped in amazement at China's impressive 6% to 11% annual GDP growth over the past decade as the People's Republic became a truly global powerhouse. Last year, however, the coronavirus pandemic wrecked that incredible trajectory, leading to China's slowest expansion since 1976 at just 2.3%.
Instead, the region's top-performing economy was Taiwan, the contentious territory that China sees as its own, which saw economic output expand by 3.11%. The island, which was widely praised for its handling of the health crisis, also benefited from demand for its technology during global lockdowns and the subsequent trade rebound.
"Taiwan is one of the very few economies that still posted positive GDP growth in 2020," Angela
Hsieh, regional economist at Barclays Asia Pacific, told DW. Hsieh pointed to "exceptionally strong exports" and singled out the island's semiconductor sector which grew 22.1% versus 5.6% for South Korea.
Boosted by chip shortage
The pandemic sparked major supply chain and logistics disruption around the world, which initially dramatically slowed global trade. But then Taiwan's semiconductor industry, which provides the microchips that are used in computers, smartphones, games consoles and electric vehicles, got a boost from the shift to remote working.
Demand was so strong, it spurred a global shortage that is likely to continue throughout 2021.
"Despite the pandemic, Taiwan's exports actually rose by 4.9% year-on-year," Rajiv Biswas, APC chief economist at IHK Markit, told DW. He said strong deliveries to Greater China were "a key factor supporting buoyant electronics demand," which rose nearly 15%. The mainland accounted for more than 40% of
Taiwan's total exports.
Taiwan's strong manufacturing capabilities and complete supply chain have helped it dominate the global microchip marketplace despite strong competition from South Korea, Japan, China, the United States and India. Last year, semiconductor output from Taiwan reached $115 billion (€94.8 billion).
Ta i w a n Semiconductor Manufacturing Company (TSMC) is the world's third- largest
semiconductor firm and alone accounts for more than 50% of the global contract chipmaking market, according to Seeking Alpha.
Taiwan's chip foundries also benefited late in the year when former US President Donald Trump's administration restricted China's chipmakers from using US technology, which led to Chinese electronics giants stockpiling chips.
Pandemic handling lauded
Another reason for Taiwan's economic prowess last year was itshandling of the COVID-19 pandemic. When the coronavirus first emerged in Wuhan, Taiwan implemented tough containment measures. Flights were restricted, widespread testing and quarantining was implemented, along with an effective track-and-trace program.
To date, just nine people have died from COVID in Taiwan and the island has seen less than a thousand cases.
The successful response helped the economy bounce back quickly, when regional competitors were still facing several production delays and had to account for tighter social distancing rules. Taiwan, on the
other hand, was seen as a reliable alternative amid a sudden rebound in global demand and was able to deliver rush orders to clients, Hsieh said.
"Taiwan's well- managed COVID situation also helped buoy domestic tourism. This helped ease the contraction in private consumption, providing timely compensation for the missing international tourism receipts," the Barclays economist added.
2021 stronger still
While Taiwan is unlikely to
beat China for GDP growth in 2021, the economy is expected to grow by 4.6%, according to the territory's statistics bureau. The World Bank, meanwhile, estimates that the Chinese economy will grow 7.9%.
However, Taiwan will continue to benefit from the major global chip shortfall that last month forced auto giants, Volkswagen, Ford and GM to temporarily shut down production.
Such is the shortage, last week VW — which until now pro
cures chips indirectly via suppliers like Robert Bosch and Continental — said it would consider sourcing straight from manufacturers to protect its supply.
"The extent of the global shortages of critical electronics components has become so severe that high-level consultations have been held with Taiwan involving key industry bodies as well as government officials from major industrial economies including the US and Germany," IHK Markit's Biswas told DW.
He said many of Taiwan's chipmakers had continued production over the Lunar New Year holidays earlier this month in order to try to meet backlogs of orders.
With demand expected to remain strong, TMSC has said it will increase capital spending by between $25 billion and $28 billion in 2021, a 60% increase from last year. Its local competitor, UMC, plans to lift spending on capital equipment by around half.
One black spot on the horizon is Taiwan's vaccine procurement strategy, which has suffered delays partly as a result of the successful handling of the pandemic. The island is lower down the priority list amid a global vaccine shortage.
Taiwan's tourism sector, which was hammered by the impact of the pandemic, is set to benefit from the return of foreign visitors. The island of nearly 24 million people welcomed 12 million tourists in 2019, the majority of which from elsewhere in Asia. China, Japan and Hong Kong topped the arrivals table. It plans to partially lift restrictions on foreign arrivals from next month.
All advertising is in some sense a form of falsification. But while once the message probably had an actual thing — a car or a hamburger, perhaps — to sell, today the message itself is often the product.
"The source of value is the watching labor performed by the audience — this, after all, is the activity that produces audience attention, which is the good being sold," Zoe Sherman, a lecturer at Merrimack College, told DW.
The audience's job is to watch and this work is paid in kind, with entertainment rather than in monetary wages, Sherman suggests. "The media generates a surplus by generating revenues through the sale of advertising space that exceed the cost of generating the content that attracted the audience," she adds. Her explanation may also go some way to explaining rising obesity figures in the US.
So, when business and politics become so closely entwined — as they did so egregiously during the presidency of Donald Trump — it can hardly come as a surprise that aspects of public discourse became infected by idioms directly borrowed from marketing and entertainment.
Political analysts Jaroslaw Kuisz and Karolina Wigura call it "populistainment," a mixture of politics, populism and entertainment, when the media becomes a theater for an ongoing performance aimed at capturing and keeping the audience's attention.
"If serving dopamine is the only way to catch the attention of a bored brain, it is no surprise that many politicians practice it. Just as in markets, where there is demand, supply follows," Wigura told DW.
In this vein, then, it matters little if what sells is misinformation. The content is merely a
product, like data or bananas, with a supply chain, selling platform and distribution network. Companies may directly or indirectly position themselves along this supply chain.
Direct positioning: Ideological entrepreneurs
Political pundits in the US like Glenn Beck, the late Russ Limbaugh and Alex Jones became what Sherman calls "ideological entrepreneurs," televangelists for the internet age.
At the height of his popularity in 2017–2018, Jones attracted 2 million weekly listeners to his syndicated and streamed radio show, and his website, infowars.com, had 20 million monthly visits.
Infowars. com's business model seems largely based on monetizing fears it itself helps create and fan. For example, when the Food and Drug Administration sent a warning letter to Jones saying it had found infowars.com was selling products such as SuperSilver Whitening Toothpaste that claimed, without scientific foundation, to boost immunity to COVID-19, it was perhaps not a coincidence that Jones had spent the previous months promoting the view that authorized vaccination was a fraud cooked up by "liberal elites."
About 80% of the revenue of Free Speech Systems, the parent company of infowars.com, was from store sales, according to a 2018 profile of Jones in the German weekly magazine Der Spiegel.
"Promoters of fringe views,
like extremist politicians, vendors of quack cures and conspiracy theorists like Jones, will always find a respectful audience among people who are doing their own research about the world," Rupert Cocke, who writes a blog explaining conspiracy theory called Sharpen the Axe, told DW.
Since 2013, Jones' business model has been almost totally based on revenue via sales of infowars.com-branded healthrelated products. Distributor Genesis Communications Network (GCN) operates a barter system, paying radio hosts with advertising time, which Jones does not sell on but uses to advertise his own products.
"Jones is a media-savvy, politically alert opportunist, as well as a smart businessman, so he will exploit any and all opportunities to grab attention and make money," Hilde Van den Bulck from Drexel University in Philadelphia told DW.
With Aaron Hyzen from the University of Antwerp, she has studied the Jones phenomenon for years. Jones, she says, even cultivated a relationship with ex-President Donald Trump to boost sales.
"As alternative influencers, having to operate in a digital attention economy, their identities are extensions of the commodities being sold," Hyzen says.
Quickly adapting brands
Others share this view. "They themselves are brands that have to quickly adapt to emerging conspiracy narratives and developments," says Clare Birchall, an academic at Kings College London. "As such, they create complex conspiracy cosmologies and, on the back of this, sell books, merchandise and services," she told DW.
"In short, there is always someone making money off of conspiracy theories. In the case of platforms such as 4Chan/8Chan/8Kun, they use their alleged championing of free speech to allow wild conspiracies to thrive on their platforms as it creates traffic that will see ads for the platform owner's book company," Hyzen adds.
Conspiracists also tap into political donations, which is big business in the US, where small donors and large corporate donors make up most of the money for political campaigning.
"My take on Jones is that he's first and foremost an opportunist," Jessica Reaves, editorial director of the Center on Extremism at the Anti-Defamation League (ADL), told DW. "That's not to say he doesn't believe the things he says. I think he fully buys into the dangerous and cruel conspiracy theories he's peddled around Sandy Hook, for example — just that his primary goal is to be the center of attention for as long as possible. And that means being loud and controversial."
Indirect positioning: social media
The turbocharge that accelerated the commodification of conspiracy theories and pushed them from whacky extremists' bedrooms into the mainstream, however, has been the rapid democratization of digital production and broadcasting.
"This is about the opportunities for self-promotion offered by social media platforms, new avenues for monetization online, and an emboldened populist politics that encourages conspiracist subjectivities that can be affirmed through forms of consumption," Birchall says.
Social media platforms, search engines, data brokers and any other entities whose business model relies on data extrac
tion infrastructure stand to gain the most financially in this datafied era, Birchall adds.
"By the time social media started banning Jones [from mid-2018] and QAnon [from late-2020] related profiles, they had achieved their goal of bringing fringe ideas into the mainstream," Van den Bulck agrees.
From August 2018 on, social media like Facebook, YouTube and, later, Twitter, took down Jones' accounts, while Apple removed his podcasts from iTunes and PayPal withdrew its services from infowars.com's onsite store.
"Lest we consider this a purely altruistic act of corporate social responsibility, such measures are as much a cost-based strategy," says Birchall. "The platforms presumably decided that the negative publicity from complacency towards disinformation with connections to violent or deadly outcomes would be more damaging than the loss in revenue from deplatformed conspiracy content, traffic and merchandise," she says.
Social media did not invent conspiracies nor can they be blamed for an individual deciding to believe in a conspiracy rather than facts, Van den Bulck argues. "However, the web and especially social media serve as meeting ground, community building, an 'information' resource and as a megaphone," she notes.
And, moreover, after Twitter banned his accounts in October 2018, Jones' syndicated radio show was picked up by a conservative radio network. Jones' celebrity status also meant that mainstream media continued to fixate on him, its disquiet also generating clicks — and revenues for him and them.