The government’s business climate monitor last month turned “yellow-blue,” indicating that the nation’s export-driven economy is losing steam as US-China trade tensions and emerging market volatility deepen uncertainty, the National Development Council (NDC) said yesterday.
The overall business gauge shed two points to 22, dragged by weaker readings on industrial output and manufacturing industry sentiment, among other measures, the council said in a report.
“Domestic firms have turned cautious about their business outlook, as the US-China trade dispute and the rout in emerging markets linger,” NDC research director Wu Ming-huei (吳明蕙) told a media briefing.
The council uses a five-color system to describe the nation’s economic condition, with “green” indicating steady growth, “red” suggesting overheating and “blue” signaling a recession. Dual-color signs reflect a transition.
The economy is still expanding, although the pace has softened a bit amid increased downside risks, Wu said, adding that the main problem lies with private-sector confidence.
The government has been taking steps to shore up private investment in renewable energy, biotechnology and other areas, but has refrained from intervening in equity markets, Wu said.
The leading index series, which predicts the economic picture in six months, stood at 101.26 last month, down 0.11 percent from a month earlier, the report said.
Data on export orders, TAIEX closing prices and M1B monetary measures all showed negative cyclical movements, the report showed.
Semiconductor equipment imports, new construction area and net employment rates showed positive cyclical movements, it said.
The coincident index series, which reflects existing economic twists, increased 0.24 percent to 100.82 on the back of improvements in machinery and electrical equipment imports, and customs-cleared exports, the council said.
The indices for manufacturing shipments, trade and food sales, and non-agricultural employment posted negative movements, it said.
Wu said she did not see signs that the economy might take a downturn.
Instead, a stable job market and the advent of the peak sales season for tech products and clothing might lend support to consumer spending abroad and at home, she said, adding that unemployment last month dropped to a new low of 3.76 percent.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to