Growth rate could exceed 6 percent, minister says

Taiwan's economic growth rate could surpass 6 percent this year, despite rising oil prices and China's efforts to cool down its hot economy, a major target of Taiwanese investment and trade, Minister of Economic Affairs Ho Mei-yueh (何美玥) said yesterday.

The government recently raised its economic growth forecast for this year to 5.87 percent, from a previous estimate of 5.41 percent, after the economy expanded at its fastest pace in four years in the second quarter.

But Ho said in a speech to business leaders that if the economy stays strong during the second half of the year, it could grow by more than 6 percent for the full year, the Central News Agency reported.

Some economists have warned that rising oil prices would drag down Taiwan's economy. But Ho said that the nation's industries have become less dependent on imported oil in the last 20 years. Much of the fuel-thirsty traditional manufacturing industry has relocated to China in search of cheap labor and land.

Other economists have cautioned that China's efforts to rein in its economic growth might hurt Taiwan, one of the nation's top markets for trade and investment.

China's economy grew by 9.1 percent last year, sparking worries the red-hot growth could ignite inflation and other financial problems. The rapid expansion in the steel, cement and construction industries has strained energy and transport, pushing prices higher.

But Ho said that China's economic clampdown mostly affects the steel, concrete and other industries that don't directly involve Taiwanese firms, the agency said.