Taiwan’s foreign trade growth will likely slow as a result of significant spikes in international crude oil prices, the Cabinet’s top economic planner warned on Friday.
Chen Tain-jy (陳添枝), chairman of the Council for Economic Planning and Development (CEPD), made the downbeat forecast after presiding over a meeting on the economic impact of the continuing upswing in world oil prices.
High fuel prices will drive up transport costs and eventually impact on global trade, which could cause a slowdown in Taiwan’s trade growth, Chen said.
Shipping costs have already increased threefold, he said.
When fuel prices were lower, renowned companies in advanced countries pursued contractors in populous developing countries, such as China and India, to churn out their brand-name products to save labor costs, Chen said.
“But now many American companies have reopened domestic production lines in order to remain competitive in an era of high transport costs,” Chen said.
He said local companies should take their cue from this trend — particularly the nation’s thriving contract manufacturing industry.
High oil prices could drive the manufacturing sector to move toward more energy-efficient industries, he said.
Friday’s meeting brought together officials from the Ministry of Economic Affairs, the Ministry of Transportation and Communications, academics and various experts.
“It was the first in a series of similar brainstorming sessions that will follow in the coming weeks to chart new strategies to transform the negative impact of high fuel prices into a stimulus for future economic growth,” Chen said.
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