Taiwan, the island nation only 120 miles from the coast of Mainland China, has found itself in a slowing economic climate, facing increased competition from rival East Asian nations.

According to Taiwan's national news agency, the Central News Agency (CNA), the Chung-Hua Institution for Economic Research (CIER) reduced its forecast for the country’s economic growth this year to 4.58 percent from its previous 5.02 percent estimate.

Speaking at a press conference, Liu Meng-chun, director of CIER's Center for Economic Forecasting, cited, among other factors, Europe's debt crisis, and general global economic malaise, to the reduced growth prediction.

By contrast, Taiwanese GDP surged by 10.88 percent in 2010.

However, Liu noted that Taiwan’s economy was relatively stronger and more resilient than such nations as Japan and the U.S.

Similar to forecasts by Taiwan Research Institute and Goldman Sachs, CIER has a favorable long-term view on the Taiwanese economy, but caution that it faces some significant near-term problems.

Chu Yun-peng, an economist at Taiwan’s National Central University, said at the press conference that Taiwan could not escape the global economic slowdown.

There is no other choice but to be conservative [at the moment], he said.

Similarly, Christina Liu, the minister for the Council for Economic Planning and Development (CEPD), warned that Taiwanese exports would be negatively impacted by current global economic travails.

Indeed, the Ministry of Finance reported last week that Taiwanese exports climbed 9.9 percent (year-over-year) to $24.61 billion last month. While that may sound like a healthy jump, it was actually the third-lowest annual growth figure since the dark days of 2008.

The pace of export orders are also slowing, according to data from the Ministry of Economic Affairs.

Minister Liu urged the government to loosen investment regulations as a means of ramping up export business. She cited South Korea, where imports surged by 30.5 percent (year-over-year).

One of Taiwan’s moist prominent business leaders, Morris Chang, chairman of Taiwan Semiconductor Manufacturing Corp. (NYSE: TSM), the world’s largest chipmaker, has echoed Liu’s gloomy prognostication on the economy.

According to the Taipei Times newspaper, Chang warned that as Europe and the U.S. struggle with debt crises, the semiconductor industry will; face serious headwinds. He said that the American economy is unlikely to recover until 2013 and that Europe’s debt morass is worse than previously thought. Such a pervasive weakness in the global financial landscape will reduce demand for chips used in electronics from PCs, TVs, handsets, etc.

He further warned that China would be unlikely to come to the rescue since it is facing high inflationary risks on its own.