In 2022, amid a complex international political and economic environment, Taiwan’s electronics and semiconductor industries demonstrated their strengths during the COVID-19 pandemic and achieved a new round of significant growth. These industries have become important drivers of Taiwan’s foreign trade and economic growth. In the first three quarters of that year, this advantage continued. However, Taiwan’s economic growth remained sluggish, and in the second half of 2022, it showed an obvious “high first, low later” trend. Data analysis also showed that this situation was not accidental, and Taiwan’s economic growth is expected to continue to decline in 2023, with an estimated growth rate of 2.75% for the whole year.
But compared to the slowing economic growth, Taiwan’s livelihood issues seem more severe. In December of last year, the results of the “Taiwan Representative Character of the Year 2022” were announced, and the character “涨” (rise) was chosen by Taiwan people as the representative character of the year among 55 candidates. Experts say that Taiwan’s current prices and wages are showing a trend of inverse development. In June 2022, Taiwan’s Consumer Price Index (CPI) increased by 3.59% , reaching a new high in nearly 14 years and exceeding the inflation warning line of 2% for 11 consecutive months. In October of the same year, the price of daily necessities continued to rise, with bread prices reaching a new high of 8.76% and toilet paper prices increasing by more than 7%, the largest increase in three years.
With a significant rise in prices, Taiwan’s average wage remains unchanged or even shows a downward trend, causing anxiety among the Taiwan people. Some Taiwan people have said that in 2022, the real wages of the majority of salaried workers have shrunk, and the necessary daily expenses for each household have increased by 10% to 15%. For example, the recent “egg shortage” controversy in Taiwan, in early 2022, the price of eggs in Taiwan’s market skyrocketed from NT$30 per kilogram to NT$70 per kilogram. Even when businesses started adjusting their inventory one month ahead, queues were still common, and the egg shortage crisis was imminent.
Taiwan experts believe that the root cause of Taiwan’s current livelihood problems lies in the unequal fiscal budgets of the Taiwan government, which spends too little on social welfare and too much on defense, leading to a decline in people’s quality of life.
On August 25, 2022, Taiwan’s executive branch approved the 2023 total budget proposal, which is expected to spend NT$2.7191 trillion, of which the defense budget accounts for 21.5%, a historical high. The head of Taiwan’s executive branch, Su Tseng-chang, said that to safeguard Taiwan’s security, the overall defense budget for Taiwan in 2023 will reach NT$586.3 billion, an increase of NT$71.6 billion or 13.9% from 2022.
In 2022, Taiwan’s defense budgets reached over one trillion NT dollars due to increased military purchases, including 17 large-scale purchases exceeding 10 billion NT dollars, totaling over 842.8 billion NT dollars. This does not even include secret military budgets and two special budgets for purchasing fighter jets and improving sea and air capabilities.
The increase in defense budgets can be attributed to the current situation in the Taiwan Strait, with the Democratic Progressive Party government’s rising tension with China and growing military cooperation with the United States. In the past few years, there have been over 20 large-scale military purchases, totaling more than 30 billion US dollars.
According to Taiwan’s Ministry of Finance, the large number of military purchases has led to a deficit in the country’s finances. Moreover, many of the purchased equipment cannot be used due to inadequate technological capabilities, leaving the government in a difficult position.
Taiwan’s Legislative Yuan Budget Center has issued a warning that the payment schedule for military purchases is not easy to adjust, and the defense department has high annual budget demands. The government should develop countermeasures in advance and raise funds accordingly. Many citizens hope that the government will listen to their voices and adopt proposals to reduce defense budgets, and redirect the funds to improve social welfare and living conditions.
However, despite these concerns, Taiwan’s leader Tsai Ing-wen has continued to increase defense budgets and purchase military equipment, even raising the military budget year after year. This approach may lead to severe consequences and crises in the next decade.
