ECON1086 - International Trade Report: Taiwan and Thailand

This report provides an analysis of international trade between Taiwan and Thailand, focusing on their economic backgrounds, trade openness, and the factors that influence their international trade relationships. The study examines the GDP growth of both countries, highlighting the economic differences between Taiwan and Thailand, including debt levels and capital cities. It explores how trade openness, measured by trade/GDP, reflects globalization's impact on economic, technical, and political aspects. The report investigates the changes in trade openness from 1985 to 2005, presenting data on trade as a percentage of GDP for both countries and analyzing the correlation between GDP per capita and trade ratios. Furthermore, it identifies the key drivers of openness, such as foreign direct investment (FDI) from Taiwan into Thailand, and discusses the implications of these factors. The report concludes by emphasizing the benefits of trade openness for countries like Thailand and Taiwan, highlighting the importance of efficient resource distribution and international trade's role in cultural globalization and learning opportunities.

Running head: International trade
International trade
Name of student
Course name
Course ID

1International trade
Table of Contents
Introduction................................................................................................................................3
Economic background of these countries..................................................................................3
Explain what type of globalisation does trade/GDP (also called openness) measure................3
Explain how openness has changed for these countries from 1985 to 2005..............................4
Correlation among GDP per capita and trade (% of GDP)........................................................5
Factors that you think drive openness........................................................................................5
Reference list..............................................................................................................................7

2International trade
Introduction
The study is showing detailed relationship of international trade among Taiwan and
Thailand and the study will be able to look at the policies that are helping or restricting the
development of international trade and commerce. Generation of the GDP as % of trade is an
important concept for most of the countries in the sense that through this factor, the
development of international relationship among these two countries.
Economic background of these countries
The GDP growth of Thailand is USD 504,993million and the GDP of Taiwan in the
year 2018 is around USD 589,391million. These has been seen that most of the parts of
Taiwan is facing high growth of GDP compared to Thailand. Now in order to indulge the
development of the economic activities it has been seen that country of Taiwan is having
35% of the debt and on the other hand the Thailand is having around 42% of debt
(Trade.gov.tw, 2019). The capital of Thailand is Bangkok and capital of Taiwan is Taipei and
both the countries are lying within the economic belt of Chinese and its subordinates. In
2017, the amount of bilateral trade among these two countries under New Southbound Policy
has increased by 15.58% amounting to about 10.76 billion US Dollar with Thailand being the
12th largest trading partner of Taiwan. Between 1959 and 2017, the Taiwan’s cumulative
investment in Thailand was around 14.44 billion US dollars. From all the statistics given it
can be said that among these two countries, Taiwan is richest (Trade.gov.tw, 2019).
Explain what type of globalisation does trade/GDP (also called openness) measure
The trade openness is basically showing the fact that through the involvement of the
globalisation, the improvement in technology and improvement in the investment is the main
aim of the globalisation. Mostly economic globalisation, technical globalisation and political
globalisation will be mainly measured by trade/GDP. Through the incorporation of this

3International trade
international trade the countries will be able to communicate with the international borders
and development of cash rotation among the countries will be rolled out. Through the
incorporation of better level of international trade, the two countries that has been mentioned
here will be increased. However, in 2015, the Taiwan’s GDP has fallen sharply in six years.
The forecasted growth of GDP is around 1.5% less compared to a growth of 3.6% of GDP in
2014. Not only the GDP rate has fallen but the export of the country to the biggest partner
China has fallen by 17.1% thus carving the biggest share of economic activities. From the
international trade along with growth in GDP is basically going to bring in cultural
globalisation that will bring in high learning opportunities for the employees.
Explain how openness has changed for these countries from 1985 to 2005
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
0
20
40
60
80
100
120
140
160
Trade (% of GDP) in Thailand
Year
Percentage of values
Figure 1: Trade (% of GDP) in Thailand
(Source: Data.worldbank.org, 2019)
The above diagram is showing the fact that trade percentage as part of GDP is going
on a high rate. The upward trend of the Thailand country is basically mainly due to intensive
level of investment within the country of Thailand by Taiwan.

4International trade
Figure 2: Trade (% of GDP) of Taiwan
(Source: Ceicdata.com, 2019)
On the other hand, the growth rate of trade in Taiwan is more or less showing mixed
trend so that the country is having high class of investment structure. This is important in the
sense that through the incorporation of high growth in the international business.
Correlation among GDP per capita and trade (% of GDP)
The value of the correlation coefficient among GDP per capita and trade ratio as
percent of GDP is around 0.942407499. The rate of correlation coefficient is close to 1. This
means that increased amount of trade ratio is going to increase the GDP per capita that means
share of GDP among the common people that are living within the country of Thailand.
Using this level of correlation, it can be easily highlighted that openness of trade is highly
beneficial for countries like Thailand and Taiwan. Now it is important to ignite the
development of resources and resources distribution should be in an efficient manner.
Factors that you think drive openness
The factors that has been considered as driver of openness is going to be highlighted
from the factor of high growth of extensive investment. Mostly the Taiwan company has
taken the initiative to invest heavily in Thailand and it has been seen that in order to drive the

5International trade
international trade it is important to bring in more amount of FDI that is going to highlight
the incorporation of better level of business operation.

6International trade
Reference list
Ceicdata.com. 2019. Taiwan Investment: % of GDP [1961 - 2019] [Data & Charts]
[Accessed 9 Aug. 2019], from https://www.ceicdata.com/en/indicator/taiwan/investment--
nominal-gdp
CNBC. 2019. Taiwan GDP falls for first time in 6 years. [online] Available at:
https://www.cnbc.com/2015/10/30/taiwan-gdp-falls-for-first-time-in-6-years.html [Accessed
9 Aug. 2019].
Countries, C. (2019). Country comparison Thailand vs Taiwan 2019. [online]
countryeconomy.com. Available at:
https://countryeconomy.com/countries/compare/thailand/taiwan [Accessed 9 Aug. 2019].
Data.worldbank.org. 2019. [Accessed 9 Aug. 2019], from
https://data.worldbank.org/indicator/NE.TRD.GNFS.ZS?
end=2005&locations=TH&start=1985
Taiwan-Thailand Economic Relat... 2019. [Accessed 9 Aug. 2019]., from
https://www.trade.gov.tw/English/Pages/Detail.aspx?nodeid=2910&pid=652112