Business executives from the nation’s top enterprises are gloomy about next year’s business climate, including factors such as lackluster US and European demand, rising raw material costs and fluctuating exchange rates, a survey said yesterday.
According to the poll conducted by the Chinese-language CommonWealth Magazine on Taiwan’s top 1,000 companies, 85.5 percent of CEOs said they were bearish on next year’s business climate, marking a sharp contrast to last year’s result, which showed 88.1 percent of respondents held a bullish view on this year’s prospects.
Almost 90 percent of respondents said the government’s estimate of achieving GDP growth of 4.3 percent next year was “overly optimistic,” the survey showed.
The survey was conducted between Nov. 28 and Dec. 15 and included questions on the economy, competitiveness and investment plans, the Taipei-based magazine said in a statement.
As many as 83.9 percent of CEOs surveyed rated the “continued slump in the US and European economies” as the biggest challenge next year, with 42.8 percent viewing rising raw material costs as the second-biggest challenge, while 38.5 percent regarded exchange rate fluctuations as the third-biggest challenge, the survey showed.
More than 40 percent of CEOs said they would freeze employee numbers and not offer pay raises next year. About 41.9 percent of respondents may boost investment in China, while 10.8 percent plan to expand in Vietnam. About 47.7 percent aren’t planning any increases in investments, according to the survey.
Meanwhile, the landmark Economic Cooperation Framework Agreement between Taiwan and China has had no impact on business, the survey showed, with 34.9 percent of CEOs polled saying the agreement, signed in June last year, won’t benefit their companies, while 45.5 percent said the pact may help in the future.
President Ma Ying-jeou (馬英九), who is seeking to keep his Chinese Nationalist Party (KMT) in office when he faces voters next month, has staked his re-election on closer ties with China and the economic agreement that his administration engineered last year.
Democratic Progressive Party presidential candidate Tsai Ing-wen (蔡英文) has said the closer relations with the nation’s largest trading partner and military rival threatens its sovereignty and makes its economy a hostage to China.
While the survey showed that 63.2 percent of the nation’s CEOs support Ma’s China policy, only 36.5 percent of the general public do so. More than half — 55.1 percent — of the CEO’s gave Ma’s economic policy a passing grade, while 30.7 percent of Taiwanese did so, according to the magazine.
CommonWealth said the business executives are much more supportive of Ma’s China and economic policies because they have much larger stakes in China than the general public and feel that Ma’s approach toward China is in their interests.