Taiwan’s over-reliance on electronics exports is one of the reasons why the country’s economy is suffering, Formosa Plastics Group (台塑集團) chairman William Wong (王文淵) said on Saturday.
“The stagnant economy is not just due to a global business down cycle,” Wong said at the opening of the annual sports gala of Formosa Plastics, one of Taiwan’s largest conglomerates.
The country’s over-dependence on electronics exports and the declining prices of exports are the two biggest problems contributing to the economic crisis, he said.
As long as those two factors remain, Taiwan will never be able to avoid the effects of the global business slowdown, he warned, he added.
Under such conditions, whenever there is a slowdown in the global economy, Taiwan will be affected, he said.
In Taiwan, electronics make up over 40 percent of total exports, while in South Korea, Taiwan’s major rival in the world market, the figure is only 20 percent.
He said industries such as petrochemicals, automobiles and shipbuilding each account for about 10 percent of South Korea’s exports.
“Only with a balanced industrial structure can a country cope with the global downturn,” he said.
The growth forecast for Taiwan’s GDP this year was lowered to 1.05 percent, from 4.04 percent last year, due to the global slowdown, which resulted largely from the European sovereign debt crisis and the slow recovery of the US economy.
In his address, Wong said the investment environment in Taiwan is disappointing.
For example, two major investment projects by Formosa Plastics were halted because of “various factors,” he said.
He was referring to the company’s plans to expand its naphtha cracker in Yunlin County and build a new factory to produce hydrogenated styrene block copolymers, a high-value-added rubber product.
Taiwan has adopted some of the strictest standards in the world for assessing the environment impact of industrial investment projects, Wong said.
Meanwhile, investments by his business group have been welcomed in Texas and in Fujian Province, China, where the group has factories, Wong said.
Formosa Plastics would like to increase its investments in Taiwan, he said.
In addition, he urged the relevant authorities and local governments to “ignore irrational opposition by some organizations” and allow major investment projects to proceed.
Formosa Plastics’ plan to expand the naphtha cracker in Yunlin was suspended in late last year following safety concerns among local residents, after a series of fires occurred at the massive petrochemical compound.
Wong also said Formosa Plastics Group will hold a meeting on Wednesday to hammer out the specifics of a bid to buy Next Media Group (壹傳媒集團).
A consortium led by Chinatrust Charity Foundation chairman Jeffrey Koo Jr (辜仲諒) reportedly signed a memorandum of understanding with Next Media on Oct. 15 to buy its titles Apple Daily, Next Magazine, Sharp Daily as well as Next TV.
Wong and a Singapore-based equity fund are part of the consortium, local media reports said.