Despite the ripple effect on Taiwanese businesses, local academics and industry leaders have applauded China's belt-tightening measures announced earlier this year.
They pointed out, however, the risks facing China and warned Taiwanese companies to watch out for the impact of a potential increase in interest rates in the near future, driven by China's soaring consumer price index (CPI).
"I greatly applaud China's preventive steps to rein in its runway economy before an economic bubble materializes," said Chen Lee-in (
The step to suspend the establishment of new development zones could help farmers to keep lands for farming and thus have more stable economies, Chen said.
This is widely expected to moderate the rural problems that have been a headache to Beijing for decades, she added.
Tsai Horng-ming (
The measures are expected to cause industrial restructuring by eliminating ill and outmoded businesses, which are beneficial to competitive Taiwanese companies in the long run, he said.
In late April Chinese Premier Wen Jiabao (
China should carefully segment and identify overproducing industries when implementing belt-tightening measures, Chen said.
For example, parts of the aluminum industry still enjoy a gross margin as high as 9 percent, which indicates no overproduction and thus should not be added to the curb list, she added.
Echoing Chen, Tsai said that as unemployment could amount to 228 million people, Beijing should keep a fine balance in undertaking such artificial controls of the economy.
"If China's annual growth rate falls below 8 percent or 9 percent, then unemployment and bad loans problems could deteriorate and cause social instability," he added.
An increasingly likely rise in interest rates in China could more bad news for China-based Taiwanese companies, experts said.
Zhou Xiaochuan (
China's CPI growth rate last month reached 4.4 percent from a year ago, according to the figures released by National Bureau of Statistics of China earlier this month.
"Taiwanese companies should watch out for their receivables from their Chinese counterparts if the interest rate increases," Tsai warned.
Considering the administrative curbs and worsening power shortages in China -- which may last for the next year or two -- Taiwanese companies could put off their plans to set up plants in China in the near future, said Luo Huai-jia (
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
FACTORY SHIFT: While Taiwan produces most of the world’s AI servers, firms are under pressure to move manufacturing amid geopolitical tensions Lenovo Group Ltd (聯想) started building artificial intelligence (AI) servers in India’s south, the latest boon for the rapidly growing country’s push to become a high-tech powerhouse. The company yesterday said it has started making the large, powerful computers in Pondicherry, southeastern India, moving beyond products such as laptops and smartphones. The Chinese company would also build out its facilities in the Bangalore region, including a research lab with a focus on AI. Lenovo’s plans mark another win for Indian Prime Minister Narendra Modi, who tries to attract more technology investment into the country. While India’s tense relationship with China has suffered setbacks