Revealing the causes and countermeasures against the decline in the quality of life in China and Taiwan

In this study, we investigated the outcomes of Taiwan and China's long-term pursuit of current account surpluses, which has not enhanced the quality of life, but has resulted in excessive capital, thereby initiating inflation and the subsequent asset bubbles. It is argued that an increase in foreign-exchange reserves drastically reduces the quality of life (consumer confidence). Furthermore, the internationalization of China's currency (Renminbi) can help Taiwan and China escape the USD trap, prevent the asset bubble formation, and enhance the quality of life.