The Impact of Global Financial Crises on the Family in Taiwan

The Impact of Global Financial Crises on the Family in Taiwan

Lih-Rong Wang (National Taiwan University, Taiwan) and Fen-ling Chen (National Taipei University, Taiwan)
DOI: 10.4018/978-1-4666-5031-2.ch003
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Abstract

Family plays an unusually important role in Taiwanese society, and this chapter analyzes the consequences of global financial crises on the family in Taiwan. With its export-oriented economy, Taiwan is vulnerable to global vacillations. In the periods from 1997 to 2004 and from 2008 to the 2009, Taiwan experienced mass unemployment and family suffering. This chapter deals with the effects of the economic recession on family finances and family attitudes involved. The study shows how the anxiety affected the willingness of people to have children and/or support their parents. Furthermore, the victims of financial crises had a greater awareness of the necessity of providing intergenerational support, but they also wanted to have fewer children. The data clearly presents that economic hardship changes the traditional generational contract as well.
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Background

Taiwan’s economy has been strong in recent decades. Since the 1960s, Taiwan has developed labor-intensive export-orientated industries. In the 1970s, transnational corporations transferred production processes of electronic industries to Taiwan. Taiwan became a home to the OEMs (original equipment manufacturers) of many famous companies in developed countries (Tuan, 1992, p. 55). In the 1990s, a buyer-driven global commodity chain was established: companies in Taiwan receive orders for merchandise from developed countries, which subcontract to China or other countries in Southeast Asia. The merchandise was then shipped to the developed countries directly (Gereffi, 1999). After four decades of development, Taiwan achieved the position of an important economic entity: in 2004, it was the third-highest foreign reserve country and received the fourth-highest ranking in competitive performance.

Taiwan’s economic growth was not affected a lot by the economic crisis of 1998 but the massive earthquake of 21st September, 1999 in Jiji, Nantou County, had a huge impact on the society and also economic growth. The death toll was about 2500 people and more than 100.000 people lost their homes. The economic growth rate was -2.17%. This case demonstrates well that a natural disaster can be a big role in influencing the economic development of the society, far more than external shocks created by regional or global economic crises or fluctuations. Meanwhile, in the first and second quarters of 2008, Taiwan’s economic growth rate maintained its strengths with the economic growth rate staying between 4% to 6%. However, from the third and fourth quarters 2008, Taiwan could not escape from the impacts of global financial tsunami. Serious negative growth reached to -8.41% in the fourth quarter and -1.05% in the third quarter. In fact, things got even worse in the first quarter of 2009, and the negative economic growth rate reached the peak, -10.13%. And fortunately, during the second quarter of 2009, Taiwanese economy started to improve with the economic growth of -7.54%. (see Table 1)

Table 1.
GNP per capita/economic growth rate (1998- June 2009) (US$)
YearEconomic Growth Rate (%)Average GNPGNP per Capita
19984.5512,77311,552
19995.7513,73712,324
20005.7714,72113,090
2001-2.1713,34811,692
20024.6413,60411,914
20033.5014,01212,242
20046.1515,15613,252
20054.1616, 11314,075
20064.8016,53214,455
20075.7017,29915,122
20080.0617, 54215,153
  Q1    6.25    4,705    4,137
  Q2    4.56    4,372    3,766
  Q3    -1.05    4,444    3,824
  Q4    -8.61    4,021    3,426
2009(f)-4.0416, 28013,974
  Q1 (r)    -10,13    4, 061    3,510
  Q2 (p)    -7.54    3,871    3,314

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