The most effective and direct solution to reverse the nation’s declining exports would be to lure back Taiwanese businesses that are operating in China, Council for Economic Planning and Development Minister Yiin Chii-ming (尹啟銘) said yesterday.
Yiin said that if Taiwan wanted to boost exports, it could strengthen new market development, speed up the development of new industries or increase export competitiveness, but he added that these are structural problems that will take time to deal with.
The quickest, most effective and most direct solution, he said, is to promote the return of Taiwanese businesses based in China, which could rapidly spur Taiwan’s exports, investment and employment — all of which are among the government’s strategic goals.
Yiin was responding to government figures released on Tuesday which show that exports last month dropped 11.6 percent year-on-year, marking the fifth consecutive month of decline.
He said the mass relocation of companies over the past few years has caused the hollowing out of industries within Taiwan and the return of those businesses could support renewed industrial development and promote long-term economic growth.
With wages in China soaring and the global economy facing severe challenges, now is the time for Taiwanese businesses to return to their domestic base, Yiin said, but he also acknowledged that not all Taiwanese businesses in China were in a position to make such a change.
Meanwhile, Taiwanese exports are likely to rebound in the fourth quarter of this year thanks to the improving US economy, as well as the launch of new consumer electronics devices, Barclays PLC said yesterday.
The UK-based global banking firm said key tech product launches, such as Apple Inc’s iPhone 5, Ultrabooks and PCs equipped with Windows 8 operating system are scheduled in the latter part of the year.
Barclays has forecast that Taiwan’s GDP growth will reach between 1 and 1.5 percent in the third quarter and that the figure will then rise to 2 percent in the fourth quarter.
In addition, Barclays forecast that inflation will likely average about 2 percent in the second half, higher than the 1.5 percent seen in the first half.
This is because adverse weather is likely to sustain inflation pressures in the coming months, with this month’s Typhoon Saola already causing as much agricultural damage as June’s Typhoon Talim.
The bank revised its GDP growth forecast for Taiwan for this year to 1.7 percent from 3 percent due to continuing weakness in external demand and more severe production disruption in the petrochemical industry.