The inflow of Chinese tourists next month will be positive for economic development but will make only a modest contribution to GDP, a global financial services company said, while raising its GDP forecast based on other factors.
UBS, the world’s largest manager of private wealth assets, said yesterday the economy would reap benefits from the arrival of Chinese tourists starting on July 18, but it might not be the economic godsend many have hoped for.
“Even if 10,000 Chinese were allowed to visit a day and spent NT$15,000 each during their stay, it would only raise the nation’s GDP by 0.5 percent,” said Kevin Hsiao (蕭正義), a chartered financial analyst at USB Wealth Management Research Taiwan. “But the public sentiment here is that they will bring in a huge fortune and fix the economy.”
Under the agreement between Taiwan and China, 3,000 tourists will be allowed per day.
Hsiao was optimistic about the economy, however, and raised his forecast for economic growth from 4.1 percent to 4.5 percent for this year, citing the the nation’s better-than-expected performance in the first five months.
Hsiao said exports jumped 17.4 percent between January and last month despite the economic slowdown in the US, the country’s second-largest trade partner.
“Trade with China rose 20.9 percent and trade with other Asian nations rose 26 percent during the period, more than offsetting the negative growth of 0.5 percent [in trade] with the US,” he said.
He predicted that Taiwan would continue to post export growth for the rest of the year, but the showing would not be equally lustrous in the second and third quarters because of the impact of inflation.
The government ended a six-month freeze on fuel prices on May 28 and will raise electricity rates on July 1.
The rising prices of fuel, food and raw materials have weakened domestic consumer spending and thus contributed less to the nation’s economic growth.
While the strong performance of exports is likely to drive GDP growth, Hsiao said the overall contribution from exports to GDP was declining. Exports in the first quarter accounted for 48 percent of GDP, down from 68 percent for 2005 to last year, he said.
To contain inflationary pressure, Hsiao said he believed that the central bank would hike interest rates by 0.125 percent at its quarterly meeting next week.
He said the adjustment would be modest considering the sharp rise in commodity prices, which rose 3.71 percent year-on-year last month. The negative real interest rate would dent consumer confidence, which is another concern, Hsiao said.
Shiina Ito has had fewer Chinese customers at her Tokyo jewelry shop since Beijing issued a travel warning in the wake of a diplomatic spat, but she said she was not concerned. A souring of Tokyo-Beijing relations this month, following remarks by Japanese Prime Minister Sanae Takaichi about Taiwan, has fueled concerns about the impact on the ritzy boutiques, noodle joints and hotels where holidaymakers spend their cash. However, businesses in Tokyo largely shrugged off any anxiety. “Since there are fewer Chinese customers, it’s become a bit easier for Japanese shoppers to visit, so our sales haven’t really dropped,” Ito
The number of Taiwanese working in the US rose to a record high of 137,000 last year, driven largely by Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) rapid overseas expansion, according to government data released yesterday. A total of 666,000 Taiwanese nationals were employed abroad last year, an increase of 45,000 from 2023 and the highest level since the COVID-19 pandemic, data from the Directorate-General of Budget, Accounting and Statistics (DGBAS) showed. Overseas employment had steadily increased between 2009 and 2019, peaking at 739,000, before plunging to 319,000 in 2021 amid US-China trade tensions, global supply chain shifts, reshoring by Taiwanese companies and
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) received about NT$147 billion (US$4.71 billion) in subsidies from the US, Japanese, German and Chinese governments over the past two years for its global expansion. Financial data compiled by the world’s largest contract chipmaker showed the company secured NT$4.77 billion in subsidies from the governments in the third quarter, bringing the total for the first three quarters of the year to about NT$71.9 billion. Along with the NT$75.16 billion in financial aid TSMC received last year, the chipmaker obtained NT$147 billion in subsidies in almost two years, the data showed. The subsidies received by its subsidiaries —
Taiwan Semiconductor Manufacturing Co (TSMC) Chairman C.C. Wei (魏哲家) and the company’s former chairman, Mark Liu (劉德音), both received the Robert N. Noyce Award -- the semiconductor industry’s highest honor -- in San Jose, California, on Thursday (local time). Speaking at the award event, Liu, who retired last year, expressed gratitude to his wife, his dissertation advisor at the University of California, Berkeley, his supervisors at AT&T Bell Laboratories -- where he worked on optical fiber communication systems before joining TSMC, TSMC partners, and industry colleagues. Liu said that working alongside TSMC
RSS