The loss of diplomatic ally El Salvador to Beijing will have little effect on Taiwan’s economy or financial stability due to the nation’s relatively low exposure, financial and economic officials said yesterday.
The Latin American nation is Taiwan’s 73th-largest trading partner, with bilateral trade totaling US$60.28 million last year, an increase of 12.14 percent from a year earlier, the officials said.
The figure accounted for only 0.03 percent of Taiwan’s GDP, they said.
The diplomatic setback might call a free-trade agreement into question, but the government has yet to receive a formal notice, they said.
Unilaterally terminating the agreement would require a notification period of 180 days, during which the agreement would remain in effect, the officials said.
Under the agreement, Taiwan exports 3,500 tax-free items to El Salvador, while allowing the import of 5,600 tax-free items from the Latin American nation, they said.
Local firms mainly sell plastic products, machinery equipment and auto parts to El Salvador, and import sugar cane, recycled paper and steel products, they added.
The two sides have also inked memorandums of understanding on intellectual property protection, exhibition cooperation as well as coffee and other business exchanges, the Bureau of Foreign Trade said.
Walter Yeh (葉明水), executive president of the Taiwan External Trade Development Council, said the trade promotion body would bypass El Salvador during an upcoming trip to Latin America and would call off a biannual trade show scheduled for November.
“We will need further assessments on trade events in the long term,” Yeh said.
Taiwan’s financial institutions have a mild exposure to El Salvador due to the absence of bank branches there, the Financial Supervisory Commission said.
As of last month, domestic banks had NT$19.59 million (US$637,488) in exposure to El Salvador and had set aside NT$135,000 as provision or impaired assets, the commission said.
Local investors have NT$4.15 billion in exposure to El Salvador through onshore and offshore trust funds, accounting for less than 1 percent of the funds’ net worth, the commission said.
Domestic life insurance, security and futures companies have zero exposure, it added.
Polytronics Technology Corp (聚鼎科技) yesterday announced that it is buying Henkel AG’s thermal clad dielectric material (TCLAD) business division for US$26 million as the Taiwanese firm aims to improve its technology, product portfolio and revenue performance. Polytronics, headquartered in the Hsinchu Science Park (新竹科學園區), is a supplier of protection components and heat dissipation materials. The firm entered the metallic heat-dissipation substrate market in 2007 and developed a unique solventless production process. Its board of directors approved signing an agreement with Henkel to acquire the German chemical firm’s TCLAD division in the US. The purchase includes all assets and business interests, including equipment,
SIZE MATTERS: Medium-sized hotels that do not have the support of parent groups are more vulnerable and are forced to take action, a REPro Knight Frank researcher said About 50 hotels across Taiwan are seeking to exit the market as they succumb to the bleak business outlook amid international travel restrictions imposed to combat the COVID-19 pandemic. Yomi Hotel (優美飯店) on Minsheng E Road, Sec 1, in Taipei is seeking to transfer ownership with an asking price of NT$950 million (US$32.15 million) and a pledge for a lease contract that guarantees a 3 percent return. The budget hotel, with room rates that start from NT$1,400 per night, maintains normal operations, but has been struggling since March, when the government placed restrictions on inbound and outbound travel. Occupancy rates for hotels in
‘SENSITIVE MARKETS’: The previously unannounced project would involve the company handing over control of data to a third party to sidestep privacy concerns Google has abandoned plans to offer a major new cloud service in China and other politically sensitive countries due in part to concerns over geopolitical tensions and the COVID-19 pandemic, two employees familiar with the matter said, revealing the challenges for US tech giants to secure business in those markets. In May, the search giant shut down the initiative, known as “Isolated Region” and which sought to address nations’ desires to control data within their borders, the employees said. The action was considered a “massive strategy shift,” said one of the employees, who added that Isolated Region had involved hundreds of employees
GOGOROS TO GO: The scooter maker’s CEO said that the electric vehicles ‘are the perfect complement to a program designed to stimulate the Taiwanese economy’ Minister of Economic Affairs Wang Mei-hua (王美花) yesterday announced a draw to encourage people to claim their Triple Stimulus Vouchers digitally. The prizes include movie tickets and 25 electric scooters donated by Gogoro Inc (睿能創意), Wang said. The Ministry of Economic Affairs said that it would hold a scooter draw every day for the next 10 days, beginning yesterday, after which there would be a draw every week for 15 weeks. The first winner was a Taiwan Cooperative Bank (合庫銀行) credit card user, the ministry said. The benefits of claiming the vouchers digitally extend beyond the draws, with many businesses offering special deals for
RSS