Welcome to central Taipei where we're coming to you from the financial district.
As you mention, Taiwan has a lot of very diverse industries that revolve around exports,
but because of the slowdown we've been seeing around the world, exports have been down significantly from Taiwan.
In fact in July, exports were down by double digits.
And the strong Taiwanese dollar has not helped either, so the government and businesses are looking for windows of opportunity to try to reinvigorate Taiwan's economy.
In just three decades, Taiwan has evolved from its agricultural roots to an export powerhouse. Exports account for about 70 percent of its GDP.
Consumer electronics and technology lead the way, with brands like HTC, ASUS and Acer.
But fluctuating global demand makes Taiwan more vulnerable than its Asian peers, especially now.
With the global slowdown, exports have declined for six months running.
Taiwan Semiconductor is the world's largest contract chip maker, making chips for customers like Qualcomm and Fujitsu.
The company has had a profitable year so far, but the chairman and CEO is concerned about the global outlook, especially for the next two quarters.
If I were to have to rank U.S., China, Europe, and Japan, we are about the middle end of the supply chain. You are affected by the inventory situation.
Many Taiwanese companies provide components, so the global slowdown hits them hard.
But while exports are down, the domestic economy is fairly stable.
Taiwan's saving grace has been the resilience of its job market, because the job market's still staying relatively firm.
Unemployment [is] still at a relatively low level. It's only hovering around 4 percent.
That means that households have been able to spend. Consumers... or at least consumer confidence hasn't dropped off a cliff. Far from it.
The island has moved past its image of making cheap knickknacks. Its companies are among world leaders,
not just in consumer electronics, but in industries as diverse as bicycles and high-end saxophones.
Lien Cheng Saxophone is a fourth-generation family business making handcrafted instruments.
One of its biggest challenges is cheap competition from mainland China.
You can buy a saxophone from mainland China for RMB1,000 or $158.
How do we compete? We have craftsmanship and use better materials.
China has long considered Taiwan a renegade province, but the current pro-unification government has paved the way for better relations with Beijing.
Direct flights began in 2008, and both have agreed to trade using their own currencies, bypassing the U.S. dollar.
Recent tensions between Japan and China over islands in the East China Sea may even benefit Taiwan
if Chinese companies choose to do business with Taiwan over Japan.
We have been seeing tensions every now and then, and by historical pattern,
we haven't seen any of those tensions have affected economic ties between any of the countries in the region, especially between, you know, China and Taiwan.
Taiwan's service industry also has potential for growth. Coffee shop chain 85C has become very successful in China
and recently opened a branch in California, a sign that exporting services may be one way to battle today's economic headwinds.