On Friday, Singapore’s latest economic data showed its economy contracted for a second consecutive quarter in the third quarter, bringing the city-state to the brink of recession. This news was all the more worrisome because Singapore was the first nation in the region to release third-quarter GDP figures and its performance can shed some light on Taiwan’s export-oriented economy.
The Ministry of Finance said on Tuesday that exports dropped 1.6 percent year-on-year last month to US$21.85 billion. The decline, the first in more than six years, was a surprise to industry watchers because it was a sharp reversal from an export growth of 18.4 percent in August and showed an across-the-board weakness in the country’s major export markets, especially China (including Hong Kong), which President Ma Ying-jeou’s (馬英九) government hopes will re-energize Taiwan’s economy.
A closer look at the export data showed Taiwan’s trade surplus dropped 74.3 percent to US$810 million last month from the same period last year. Moreover, in the third quarter, the surplus fell 90 percent to US$460 million from the second quarter’s US$4.72 billion and 86 percent from the first quarter’s US$3.3 billion. This has alarming implications for GDP growth in the fourth quarter, not to mention the whole year.
Given the escalating global financial turmoil, the central bank cut its policy rate from 3.5 percent to 3.25 percent on Thursday, following other central banks’ efforts to preemptively stem liquidity problems. Central bank Governor Perng Fai-nan (彭淮南) admitted that the risk of economic drawback domestically has increased.
While Perng emphasized that the economy was not at risk of a recession, the latest economic forecast for Taiwan by the IMF — along with other predictions made by various foreign brokerages — show Taiwan is facing growing headwinds.
On Wednesday, the IMF sharply cut its forecast for Taiwan’s economic growth next year from its 4.1 percent prediction in April to 2.5 percent on the back of the global downturn. However, in its latest World Economic Outlook, the fund said Taiwan’s economy was likely to grow 3.8 percent this year, up from its April estimate of 3.4 percent.
On Thursday, Standard Chartered Bank lowered its forecast for Taiwan next year from 4.8 percent to 3.1 percent, after Deutsche Securities cut its forecast from 3.3 percent forecast in June to 1 percent.
The benchmark TAIEX has plunged nearly 40 percent since the beginning of this year. No one knows when the market will bottom out. So Taiwan is unlikely to achieve the Ma administration’s target of 4.3 percent growth this year and 5.08 percent next year.
Finally, Minister of Economic Affairs Yiin Chii-ming (尹啟銘), who once predicted the TAIEX could rise to 20,000 points under the new government, said on Thursday that the public would suffer at least another year of hardship amid the current global financial crisis.
Yiin’s words were a reminder of what then minister of economic affairs Lin Hsin-yi (林信義) said eight years ago — the public needed to be prepared for days of hardship in 2001. Lin’s words were followed by a record GDP contraction of 2.17 percent in 2001.
As a spate of recent government measures have failed to boost market confidence, people have to wonder how far away we are from a repeat of 2001.
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
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
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