The government last week released statistics showing unexpectedly low export growth for last month and a contracting trade surplus for the first six months through June, which prompted some critics to say Taiwan's export sector is losing steam and that the nation's economic competitiveness is declining.
On Thursday, the Ministry of Finance reported that export growth slowed to a surprisingly low 3.1 percent to US$14.88 billion last month, as lingering high oil and raw materials prices undercut global demand for the nation's goods. The ministry expected the weak trend in exports to continue and predicted export growth would be around 5 percent in the second half and at 6.7 percent for the full year.
Taiwan's export growth has been slowing since late last year due to excess inventories in the tech sector, rising US interest rates, China's measures to cool its economy and a strong local currency. Against this backdrop, the nation posted a trade surplus of US$420 million for the first six months of the year, marking a sharp decline of 89.1 percent from the year-earlier level, according to the ministry's data.
Both economists and industry leaders have expected the tech sector to see a recovery in the second half of the year, but the Bureau of Foreign Trade expects the trade surplus to slide almost 30 percent to an estimated US$4.25 billion this year from US$6.12 billion last year, after the government revised downward its projected economic growth rate for the year to 3.63 percent from the previous forecast of 4.21 percent.
Critics asserted that the nation is losing its export edge, saying that Taiwan has reported a more than US$10 billion trade surplus annually in 12 years out of the last two decades. They argued that the trends in the volume and value of international trade are undergoing a dramatic change, and the government shouldn't sit idly by and watch the situation worsen.
Indeed, we could fill a small library with studies about how narrowing export growth was caused by higher US interest rates and surging crude oil prices. We could carry on all day about this topic and discussions of industrial "hollowing-out" due to the relocation of high-tech firms to China, companies' sticking to contract manufacturing rather than engaging more in value-added product innovations, or the persistent political infighting that endangers the domestic business environment.
But the reality is that the room for the government to spur further export growth is rather limited. South Korea, Singapore and other export-oriented Asian countries are also facing the same situation amid the softening global industrial cycle and Beijing's effort to rein in rapid economic growth. But prospects for growth in domestic consumption and the services sector look much more promising.
People in Taiwan used to judge the nation's "competitiveness" by looking at the export sector alone. Goods shipped overseas are tangible, visible items such as notebook computers, LCD panels and other electronics. But intangible and invisible services have gained increased weight on the GDP, and a poll by the Taiwan Institute of Economic Research last month suggested that service providers were more positive than manufacturers about the economy, thanks to the brisk domestic real-estate market and a vigorous job market.
Therefore, despite slowing export growth, Taiwan can still maintain its competitiveness by acting to boost development in domestic consumption and investment, which the Academia Sinica has estimated will expand by 3.26 percent and 17.47 percent, respectively, this year from a year earlier.
The government's "Ten Major Infrastructure Products" and other economic stimulus packages should continue to buoy activities in the domestic construction and services sector. Yet the litmus test will be whether government is able to make these investments, despite the never-ending political infighting.
Saudi Arabian largesse is flooding Egypt’s cultural scene, but the reception is mixed. Some welcome new “cooperation” between two regional powerhouses, while others fear a hostile takeover by Riyadh. In Cairo, historically the cultural capital of the Arab world, Egyptian Minister of Culture Nevine al-Kilany recently hosted Saudi Arabian General Entertainment Authority chairman Turki al-Sheikh. The deep-pocketed al-Sheikh has emerged as a Medici-like patron for Egypt’s cultural elite, courted by Cairo’s top talent to produce a slew of forthcoming films. A new three-way agreement between al-Sheikh, Kilany and United Media Services — a multi-media conglomerate linked to state intelligence that owns much of
The US and other countries should take concrete steps to confront the threats from Beijing to avoid war, US Representative Mario Diaz-Balart said in an interview with Voice of America on March 13. The US should use “every diplomatic economic tool at our disposal to treat China as what it is... to avoid war,” Diaz-Balart said. Giving an example of what the US could do, he said that it has to be more aggressive in its military sales to Taiwan. Actions by cross-party US lawmakers in the past few years such as meeting with Taiwanese officials in Washington and Taipei, and
The Republic of China (ROC) on Taiwan has no official diplomatic allies in the EU. With the exception of the Vatican, it has no official allies in Europe at all. This does not prevent the ROC — Taiwan — from having close relations with EU member states and other European countries. The exact nature of the relationship does bear revisiting, if only to clarify what is a very complicated and sensitive idea, the details of which leave considerable room for misunderstanding, misrepresentation and disagreement. Only this week, President Tsai Ing-wen (蔡英文) received members of the European Parliament’s Delegation for Relations
Denmark’s “one China” policy more and more resembles Beijing’s “one China” principle. At least, this is how things appear. In recent interactions with the Danish state, such as applying for residency permits, a Taiwanese’s nationality would be listed as “China.” That designation occurs for a Taiwanese student coming to Denmark or a Danish citizen arriving in Denmark with, for example, their Taiwanese partner. Details of this were published on Sunday in an article in the Danish daily Berlingske written by Alexander Sjoberg and Tobias Reinwald. The pretext for this new practice is that Denmark does not recognize Taiwan as a state under