HSBC, the world's second-biggest bank by market value, yesterday raised its estimate of Taiwan's economic growth this year to 6.5 percent from an earlier prediction of 5.0 percent.
"Demand for credit -- one of the key signs that an economic recovery is becoming self-sustaining -- is rising," HSBC economist Arthur Woo said yesterday in a report on the nation's economic outlook, adding that corporate demand has contributed to this pick-up.
The report said the nation's economic prospects are bright despite obstacles such as the political dispute over the presidential election.
The UK lender expects the situation to return to normal soon once tempers have cooled down.
"This is based on our belief that the politicians know that it is in Taiwan's best interests to show that its democratic process is functioning properly, particularly to the PRC government," the report said, adding that the political issue should result in no significant damage to either consumer or business confidence.
The bank, however, isn't enthusiastic about the economic stimulus packages proposed by either the Democratic Progressive Party or the Chinese Nationalist Party (KMT), saying that both made no specific or feasible pledges on how to improve the economy.
The bank also remains skeptical about any immediate benefits from direct cross-strait links -- a policy that both President Chen Shui-bian (
Competing agendas
"Direct trade links remain distant," Woo said in the report, "[The] links will require serious negotiations with Beijing, which may have a different agenda and timetable."
Despite the difficulty, Chen will have to pursue the links since the nation's economic relationship with China has deepened during his tenure, with approved indirect investment totaling US$7.7 billion last year from US$1.3 billion in 1999, the report said.
Since China has a significant impact on Taiwan's economy, there are concerns that the domestic export sector may be hit by efforts to cool the surging economy in China.
But HSBC concluded that China's importance shouldn't be exaggerated.
The lender said China's economy is likely to register another year of strong GDP growth, with an estimated 8.8 percent gain, though not at the same red-hot pace as the 9.1 percent in 1999.
Insulated
Downward pressure on China's demand for foreign goods is likely to be most visible in its appetite for investment and capital-intensive goods rather than consumer-related goods, raw materials or intermediate inputs, it added.
Taiwan should not suffer too much because most of its exports to China are either consumer-related goods or intermediate inputs, HSBC said.
HSBC also shrugged off concerns that the global manufacturing cycle is close to peaking, while dismissing worries that the nation faces growing inflationary pressures.
The US ISM manufacturing index suggests that Taiwan's exports would remain on a firm footing for the next six months, or well into the third quarter, the bank said.
"In short, it seems increasingly evident that Taiwan is likely to experience the best of both worlds, namely strong economic growth and benign inflation in the coming quarters," the report concluded.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six