On December 11, 2025, a report from Taiwan by Epoch Times mentioned an article from The Economist that raised concerns about hidden risks in Taiwan’s economic landscape. One major factor highlighted was the long-term suppression of the New Taiwan Dollar exchange rate by the central bank, giving rise to various issues and referred to as the “Taiwan Syndrome.” On the 10th, a symposium was jointly organized by various public policy entities in Taiwan, inviting scholars and experts to discuss issues related to the exchange rate of the Taiwanese Dollar.
The UK magazine, The Economist, recently published an article discussing the hidden risks in Taiwan’s economic landscape, citing its Big Mac Index, which pointed out that the long-term suppression of the New Taiwan Dollar exchange rate by the central bank has led to a decline in purchasing power, rising housing prices, accumulated financial risks, and labeled it as the “Taiwan Syndrome.”
The Central Bank of the Republic of China released a press release stating that the Big Mac Index is flawed, and the iPhone Index results show a significant disparity, therefore the conclusions based on it are not valid. Moreover, the U.S. Department of the Treasury has never demanded an appreciation of the New Taiwan Dollar.
Zhang Zhuqin, the host and Director of the North American Taiwan Research Association, expressed that Taiwan has been frequently featured in international media recently, and The Economist’s publication of the “Taiwan Syndrome” article has caused a stir domestically, sparking widespread discussions on whether the Taiwan Dollar exchange rate has been undervalued in the long term. The event aimed to analyze the exchange rate issue from different levels of economic expertise and provide insights on how to interpret Taiwan in the (international) media.
Researcher Chen Xi’an from a Taiwanese think tank pointed out that The Economist views Taiwan’s long-term suppression of the New Taiwan Dollar exchange rate and the imbalanced industrial structure as the “chronic illness” of economic development. However, when commenting on Taiwan’s economic issues, The Economist and many international media outlets often overlook the political, economic, and social context that Taiwan has been facing in the long term, such as geopolitical risks and the limitations of the industrial transformation path.
Chen Xi’an emphasized that the suggestions put forth by The Economist, such as adjusting the exchange rate and promoting domestic demand and industrial diversification, may seem straightforward but involve complex issues regarding industrial structure and policy coordination. The core issue lies in Taiwan’s need to find a reform path that truly suits its own conditions, rather than simply adopting the narratives of international media.
President Lu Yaozhi of Taipei Maritime University analyzed that The Economist’s article has sparked a narrative battle domestically while providing an opportunity for the entire population to further understand the exchange rate issue. He highlighted the need to continue investing in the development of the service industry, raise wage levels, invest in high-end manufacturing to drive the development of traditional manufacturing, and promote “financial deepening” to increase investment product options and enhance the investment market utilizing the accumulated capital by the public.
Associate Professor Liu Yushe from the Department of Communication Management at Shih Hsin University stated that Taiwan’s unique international status makes Taiwanese people highly sensitive to any international exposure. However, reading international media requires media literacy to discern the accuracy of the basic information quoted, the academic basis for the analytical framework or arguments used, and to differentiate between facts, opinions, and emotions.
Regarding the discussion on The Economist’s article today, according to the opinion of Wu Congmin, a professor of economics at National Taiwan University, due to the conservative and stable policy of the Central Bank of Taiwan, the New Taiwan Dollar exchange rate has indeed been long undervalued. Taiwan’s low-interest rate policy indirectly affects the exchange rate, with the low exchange rate attracting a large amount of funds into real estate, leading to soaring property prices. The positions of life insurance in overseas investments (mainly in U.S. bonds) are significant, causing wealth distribution imbalance, which is an interwoven reality of the financial market, something that The Economist did not specifically point out.
Research Assistant Wang Guochen from the First Institute of Economics of the Chung-Hua Institution for Economic Research raised the question, “Should we pursue a sustainable trade surplus?” Theoretically, Taiwan’s trade surplus with the United States would elevate the New Taiwan Dollar against the U.S. dollar. Appreciation of the exchange rate would dampen exports, stimulate imports, and hence reduce the trade surplus. Thus, Taiwan’s long-term trade surplus actually implies exchange rate manipulation.
Wang Guochen further explained that suppressing the exchange rate is equivalent to curbing domestic consumption, benefiting firms’ export competitiveness, which is akin to redistributing wealth, i.e., subsidizing investment with consumption. He posed the question of whether Taiwan should strive to earn a significant amount of money or pursue a quality life, a question worth contemplation for everyone.
After the discussion, the host and the youth participants raised questions on topics like “rising prices,” “the central bank’s intervention in depreciation but not appreciation,” and “how international situations affect Taiwan’s economy,” prompting in-depth analysis and responses from the panelists.