Managerial Economics

Name Divyanshu
Id 112933046

Case Question 23/11/2023

How did the COVID-19 pandemic outbreak affect Taiwan’s economy?

Taiwan's technology industry did well as the demand for electronic products increased during remote work
and online activities. Global supply chain disruptions, especially in manufacturing hubs like China, affected
Taiwan's production and exports. Taiwan's quick and effective response to the pandemic helped control the
virus's spread, allowing some economic activities to continue. Shifts in consumer behavior impacted sectors
like tourism negatively, but increased demand for tech products helped balance it out. Small businesses faced
difficulties, especially those reliant on local consumption and tourism. The overall uncertainty in the global
economy affected trade and investment in Taiwan.

How did the US-China trade war affect China’s economy?

The U.S.-China trade war, which began in 2018, had significant implications for China's economy. Here are
some key aspects of its impact:The U.S. imposed tariffs on a substantial amount of Chinese goods, and China
responded with its tariffs on U.S. goods. This trade dispute led to increased costs for businesses on both
sides, affecting the prices of imported and exported goods.Companies, both Chinese and multinational, had
to adjust their supply chains in response to the trade war. Some manufacturers moved production out of
China to avoid tariffs, causing shifts in global supply chain dynamics.The trade tensions contributed to a
slowdown in China's economic growth. Reduced exports, uncertainties among businesses, and changes in
investment patterns played a role in this economic deceleration.Chinese industries, particularly agriculture
and manufacturing, were significantly affected by the tariffs. For example, Chinese exports of agricultural
products to the U.S. were heavily impacted.
The trade war had a substantial impact on the technology sector. Restrictions on the sale of certain
technologies and components affected companies, especially those involved in telecommunications and
semiconductors.In response to economic challenges, the Chinese government implemented various stimulus
measures to support domestic consumption and investment, aiming to counteract the negative effects of the
trade war.The trade tensions also led to fluctuations in currency values. China's currency, the yuan,
experienced periods of devaluation in response to the uncertainties surrounding the trade negotiations.The
trade war had broader implications for the global economy. It affected supply chains, commodity prices, and
created uncertainties that impacted businesses and investors worldwide.
In January 2020, the U.S. and China signed a Phase One trade deal, which included commitments from
China to purchase more U.S. goods and address certain intellectual property concerns. This signaled a
temporary de-escalation in trade tensions.