The head of a regional economic research firm said yesterday growth may stagnant if the government doesn't formulate a tougher policy stand.
"Unless Taiwan adopts certain monetary and fiscal policy measures to revive the economy, there will be slow growth or no growth over the next few years," warned John Pickles, an economist and president of Taipei-based Asian Pacific Research Ltd.
Pickles made the comments yesterday as part of a speech held by the European Chamber of Commerce in Taipei.
The two policies the administration should adapt under the current economic circumstances, "include easing monetary policy and balance the budget," Pickles said.
"The central bank should be more aggressive on easing its monetary policy, including cutting interest rates and allow the NT dollar to depreciate further, since there is minimal risk of inflation. Compared with other competing countries' currencies, NT dollar has not actually depreciated in recent months," Pickle said.
"On the issue of balancing the budget, the administration should try to raise taxes," he said.
Pickles painted a sad picture of economic growth, predicting Taiwan's 2001's GDP growth rate is likely to be a negative 4 percent and the NT dollar is likely to fall to NT$35.50 against the US dollar by the end of this year.
He also questioned the recent Economic Development Advisory Conference (經發會) and President Chen Shui-bian's (陳水扁) leadership.
"The conference raised some deep issues. Chen was looking for a consensus [from conference members] on the legitimacy of his new economic policy, but his leadership [ability] is questionable," Pickles said.
"The [DPP] government seemed to focus most of its attention on the cross-strait relationship [during the conference] and it doesn't have the stomach to tackle the real economic problems," he said.
On solving Taiwan's current economic woes, Pickles proposed a number of solutions.
"The first step [for the administration] is to recognize the [Taiwan] economy is at an impasse after economic mismanagement over the last decade, and it needs to encourage growth and investment, which is outweighing the risk of inflation.
Another suggestion for the government is that the globalization of Taiwan's economy is a must.
"Much of Taiwan's manufacturing should have moved to China more quickly. Many of them did not move because they enjoy too much protection and privilege in Taiwan. However, chasing comparative cost advantages does not improve competitiveness," Pickle said.
The reason Taiwan's manufacturers should go to China as soon as possible is because of economic policy changes in the US.
"The US had been outsourcing from Taiwan during 1980s and 1990s. The US is now outsourcing from China. Hence, China is going to be a member of the World Trade Organization," Pickles said.
"Taiwan should try its best to be an internationalized economy, including investing in China. Moving in the opposite direction will make Taiwan's economy become a de-industrialized and marginalized economy."
Despite the skepticism, the pundit remained confident in Taiwan's economic future.
"A lot of entrepreneurs have been working hard to find their way out after much success in recent years. Unfortunately, they were not well represented at the conference," Pickles said.
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to