The economy is likely to grow 3 percent next year, from an estimated 1.65 percent this year, as the nation emerges from the global slowdown amid potential headwinds, Australia and New Zealand Banking Group Ltd (ANZ) said in a report yesterday.
“We hold a cautiously optimistic view on Taiwan’s economy with its GDP forecast to grow by 3 percent next year,” ANZ senior economist on Greater China Raymond Yeung (楊宇霆) said in the report.
MOMENTUM
Growth momentum depends heavily on China’s economic performance as the economic correlation between the two has risen from 20 percent in 2003 to 77 percent this year and China has increasingly evolved from a base for global manufacturers to a massive consumer market, Yeung said.
ANZ expects China to see a strong recovery next year, with GDP to reach 8.1 percent, from 7.8 percent this year, the report showed.
However, downside risks remain as competition between the world’s technology giants pans out, the report said.
ELECTRONICS
Taiwan’s electronics sector has proved resilient this year amid a major downturn in demand for information and communications technology products, Yeung said.
“The intensified competition among major brands of smartphones and tablets has affected Taiwan’s original brand manufacturing whereas manufacturers of electronics parts have benefited from order-switching deals,” the economist said.
Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker, has survived the slowdown unscathed, while smartphone maker HTC Corp (宏達電) and PC vendor Acer Inc (宏碁) have suffered a decline in sales.
However, global demand for semi-conductors has started to see a correction given the latest book-to-bill ratios from industry body SEMI, Yeung said.
If the consumer electronics market were to be saturated, segments upstream in the supply chain will be adversely impacted, the economist cautioned, adding that Taiwan could be hard hit, as the tech sector represents 28 percent of total industrial production.
COMPETITION
Global competition could pose a serious challenge if Taiwan drags its feet in mapping out a long-term response strategy, ANZ said.
“Being a contractor is obviously insufficient in today’s environment as brand owners often earn much of the value added,” Yeung said, citing South Korea as a strong example of combining brand value with its technological infrastructure.
POLICIES
The government also needs to address the misalignment between its economic performance and income growth, a mismatch that has limited the government’s ability to tax and in turn leads to persistent fiscal deficits, Yeung said.
ANZ said it has yet to see a comprehensive policy package to cope with the fundamental issues affecting the labor market, fiscal situation and industrial affairs, though the government has launched several measures.
“Without a macro blueprint, it is difficult for business and the general public to evaluate the economic future in the long run,” Yeung said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained