Taiwan and South Korea have emerged as the principal beneficiaries of Asia’s artificial intelligence boom. Bank of America estimates show that global demand for AI technologies is turbocharging business activity and adding to the government budgets of those economies, while China is capturing only a limited share of the upside.
Since the start of the year, AI technology exports from South Korea have jumped by 57% year‑on‑year, from Taiwan by roughly 44%, and from China by 21%. Despite Korea’s fastest growth rate, Taiwan is reaping the largest macroeconomic payoff. Taipei’s deep exposure to the tech sector means that export proceeds flow straight into the domestic economy. Taiwan and Korea are busy taxing exporters and recycling those windfall revenues into fresh investment and support for internal demand.
China’s picture is markedly different. Although the country is expanding tech exports, weak domestic demand and local government financing constraints blunt the positive spillovers for the broader economy.
The divergence is already shaping central bank policy. Economies swimming in export dollars, such as Taiwan and South Korea, face inflationary pressures that give their central banks scope to raise interest rates. The Chinese regulator, by contrast, is contending with sluggish household spending and is preparing for further monetary easing to shore up domestic demand.
