Taiwan’s chief executive officers are more worried than foreign peers about a global economic downturn and only a few are confident about revenue growth for this year, a survey by PricewaterhouseCoopers LLP (PwC) showed.
Forty-seven percent of Taiwanese chief executive officers expect the global economy to deteriorate this year, while 25 percent hold neutral views and 27 percent anticipate a pickup, according to the survey of 245 companies, most of them from the technology sector.
Globally, 29 percent share the concern about a recession, while 42 percent look at continued improvement and 28 percent have a neutral outlook.
“The findings show Taiwanese CEOs are more pessimistic probably because local firms are more vulnerable to the trade dispute between the US and China,” PwC Taiwan chairman Joseph Chou (周建宏) told a media briefing.
Taiwan is home to the world’s largest contract chipmakers, as well as the manufacturers of camera lenses, casings, touch panels and other critical components used in smartphones, laptops, TVs and other consumer electronic products.
The US and China account for more than half of Taiwanese exports.
Respondents deemed the trade spat the biggest challenge to corporate operations this year at 36 percent, followed by geopolitical uncertainty at 29 percent, policy uncertainty at 25 percent and foreign-exchange volatility at 23 percent, the survey found.
Globally, policy uncertainty and excessive regulation sit atop the list of concerns.
Weak sentiment explains why only 19 percent of Taiwanese chief executives expressed confidence about revenue growth for this year, lower than the 35 percent average for global peers, it said.
To cope with trade tensions, 40 percent of local chief executives aim to adjust their supply chain strategy and 39 percent plan to shift part of their business from China to other markets, it said.
Some firms intend to cut capital spending, others plan to slow investment in foreign markets and the remaining seek to maintain the status quo, it said.
Despite the adjustments, China gained importance for Taiwanese companies, with the rating increasing to 75 percent this year from 72 percent last year and 68 percent in 2017, it said, adding that the US ranked second with 52 percent and Japan came third with 23 percent.
For the first time, Vietnam outranked Germany as the fourth most important market at 18 percent.
A fast-growing economy and population in Vietnam lent support to the country as an investment destination, Chou said.
Nearly 90 percent of local chief executives expressed the hope that the government would assume a more active role in the development of artificial intelligence (AI), which would reshape local industry, it said.
However, 70 percent of respondents expect AI to take away jobs rather than create them, it said.
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