Edmund Phelps, winner of the 2006 Nobel Prize in Economics, yesterday said the Chinese economy will grow more independent from the West over the next 10 years, driven by enterprise innovations and domestic consumption.
“China is surely moving toward less export-dependent and [is becoming] more dependent on domestic investment activities,” he told a Taipei forum titled “A vision of possible developments in the global economy.”
By then, its economic prowess — in terms of unemployment rate and workers’ productivity — will mirror the US in its best days, he said.
The Columbia University academic also pointed out that China will not fail in efforts to step up domestic innovations — a pivotal element he said US enterprises have been lacking, and that this will propel its investment activities to a greater height.
One of the reasons was rising Asian currencies against the greenback because of the sluggish US economy, which has seen enterprises investing less in commercial activities and productivity slumping in the past decade, Phelps said.
In Phelps’ view, the US is far from seeing a full recovery to pre-financial crisis levels, with unemployment hovering between 7 percent and 8 percent as the best case scenario.
This compares with a 4.6 percent US jobless rate during former US president George H.W. Bush’s administration and 5.6 percent in the mid-1990s, he said.
In contrast, Asia, especially China, and other emerging markets like Brazil will catch up with the US in economic growth.
This is because the US is in “the midst of a long structural slump,” obvious from the fact that more investors are shortsighted instead of looking far ahead with their investment portfolios, he added.
The Nobel laureate said US stocks are now closely linked to company quarterly -earnings, which strays from the fact that share prices should reflect investors’ anticipation of a company’s worth over the next five years.
“CEOs are now more concerned with hiding their quarterly earnings targets, rather than thinking about the company’s innovations for the next five years,” the 78-year-old Phelps said.
Phelps last year took up the position of president-dean of the New Huadu Business School at Minjiang University in Fuzhou, China.
He said this position offers him the proximity to study the impact of the Chinese economy.
Phelps yesterday also witnessed the signing of a memorandum of understanding between New Huadu and Taiwan’s National Chengchi University, which co-launched a program to develop entrepreneurship among their students.
A total of 60 students will be selected from both schools and sent for courses in Singapore.
They will be offered employment at New Huadu Industrial Group Co (新華都集團), a conglomerate based in Fujian Province that is engaged in the property, retail, tourism, mining and machinery sectors.
SEEKING CLARITY: Washington should not adopt measures that create uncertainties for ‘existing semiconductor investments,’ TSMC said referring to its US$165 billion in the US Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona. “New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce. TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s
The government has launched a three-pronged strategy to attract local and international talent, aiming to position Taiwan as a new global hub following Nvidia Corp’s announcement that it has chosen Taipei as the site of its Taiwan headquarters. Nvidia cofounder and CEO Jensen Huang (黃仁勳) on Monday last week announced during his keynote speech at the Computex trade show in Taipei that the Nvidia Constellation, the company’s planned Taiwan headquarters, would be located in the Beitou-Shilin Technology Park (北投士林科技園區) in Taipei. Huang’s decision to establish a base in Taiwan is “primarily due to Taiwan’s talent pool and its strength in the semiconductor
An earnings report from semiconductor giant and artificial intelligence (AI) bellwether Nvidia Corp takes center stage for Wall Street this week, as stocks hit a speed bump of worries over US federal deficits driving up Treasury yields. US equities pulled back last week after a torrid rally, as investors turned their attention to tax and spending legislation poised to swell the US government’s US$36 trillion in debt. Long-dated US Treasury yields rose amid the fiscal worries, with the 30-year yield topping 5 percent and hitting its highest level since late 2023. Stocks were dealt another blow on Friday when US President Donald
UNCERTAINTY: Investors remain worried that trade negotiations with Washington could go poorly, given Trump’s inconsistency on tariffs in his second term, experts said The consumer confidence index this month fell for a ninth consecutive month to its lowest level in 13 months, as global trade uncertainties and tariff risks cloud Taiwan’s economic outlook, a survey released yesterday by National Central University found. The biggest decline came from the timing for stock investments, which plunged 11.82 points to 26.82, underscoring bleak investor confidence, it said. “Although the TAIEX reclaimed the 21,000-point mark after the US and China agreed to bury the hatchet for 90 days, investors remain worried that the situation would turn sour later,” said Dachrahn Wu (吳大任), director of the university’s Research Center for
RSS