Taiwan’s manufacturing and services industries are showing signs of slowing down the Taiwan Economic News reported on Tuesday. The Taiwan Institute of Economic Research (TIER) said that manufacturing edged up a mere 0.24 percent in July, while services fell 2.61 percentage points during the same period. Indicators in the construction industry were less than favorable and a construction slowdown is predicted.
TIER has predicted that overall growth will slow down in the second-half of the year. Moreover, the percentage of manufacturers surveyed who foresee a better climate over the next six months fell 4.7 percent from the previous month.
These numbers are in stark contrast to the figures announced in the Taiwan Economic News a few days ago. With high trade growth and low inflation in the first half of this year, one would have thought that the chances of another economic slowdown were minimal.
However, it appears one is right around the corner.
What went wrong? First-half numbers — and especially the second-quarter figures — looked promising and with the Economic Cooperation Framework Agreement (ECFA) expected to begin next month, one would expect a much more positive forecast.
President Ma Ying-jeou’s (馬英九) administration and the Chinese Nationalist Party (KMT) government has spent so much time over the past year and a half emphasizing the benefits of the ECFA that it has sometimes seemed as though they were attempting to will economic prosperity into being.
This latest economic forecast should have Taiwanese asking not only what information its leaders have been reading but also what was the purpose of imposing the ECFA.
Pushed as a pragmatic and “purely” economic document that promised both immediate (early harvest list) and long-term economic advantages, the ECFA was viewed by many economists and politicians as skewed in Taiwan’s favor, and it was rammed through Taiwan’s legislature as a policy designed to save Taiwan from looming and inevitable economic marginalization.
Instead, the ECFA appears to have fallen stillborn from the Chinese Communist Party (CCP)-KMT party presses from which it was born.
The numbers simply do not add up. Before the ECFA was even signed, Taiwan’s economy was already showing signs of recovery; trade, with year-on-year growth of over 46 percent, was thriving. The ECFA was imposed as a necessary measure to save Taiwan’s “failing” economy, which was being threatened with marginalization (even though the numbers were already indicating a strong recovery).
The ECFA was then signed after economic recovery appeared certain and trade numbers were growing rapidly. Now, after the ECFA has been signed, second-half growth is expected to slow. What gives?
Reality is finally beginning to rear its ugly head. The ECFA, instead of being purely economic, is almost entirely political. Not only has it served CCP-KMT interests by bringing Taiwan and China closer economically (although it would appear with few actual economic benefits) and politically, it has also served as a tool the KMT can use to continue to force its agenda through the legislature and into Taiwanese homes. The continuous advertisements on television and radio promoting the ECFA even after the agreement has been signed only serve to underscore its political, not economic, consequences.
If KMT lawmakers disagree, then we already have the gloomy economic numbers to prove it.
Nathan Novak is a student of China and the Asia-Pacific region with a particular focus on cross-strait relations.
Because much of what former US president Donald Trump says is unhinged and histrionic, it is tempting to dismiss all of it as bunk. Yet the potential future president has a populist knack for sounding alarums that resonate with the zeitgeist — for example, with growing anxiety about World War III and nuclear Armageddon. “We’re a failing nation,” Trump ranted during his US presidential debate against US Vice President Kamala Harris in one particularly meandering answer (the one that also recycled urban myths about immigrants eating cats). “And what, what’s going on here, you’re going to end up in World War
Earlier this month in Newsweek, President William Lai (賴清德) challenged the People’s Republic of China (PRC) to retake the territories lost to Russia in the 19th century rather than invade Taiwan. He stated: “If it is for the sake of territorial integrity, why doesn’t [the PRC] take back the lands occupied by Russia that were signed over in the treaty of Aigun?” This was a brilliant political move to finally state openly what many Chinese in both China and Taiwan have long been thinking about the lost territories in the Russian far east: The Russian far east should be “theirs.” Granted, Lai issued
On Tuesday, President William Lai (賴清德) met with a delegation from the Hoover Institution, a think tank based at Stanford University in California, to discuss strengthening US-Taiwan relations and enhancing peace and stability in the region. The delegation was led by James Ellis Jr, co-chair of the institution’s Taiwan in the Indo-Pacific Region project and former commander of the US Strategic Command. It also included former Australian minister for foreign affairs Marise Payne, influential US academics and other former policymakers. Think tank diplomacy is an important component of Taiwan’s efforts to maintain high-level dialogue with other nations with which it does
On Sept. 2, Elbridge Colby, former deputy assistant secretary of defense for strategy and force development, wrote an article for the Wall Street Journal called “The US and Taiwan Must Change Course” that defends his position that the US and Taiwan are not doing enough to deter the People’s Republic of China (PRC) from taking Taiwan. Colby is correct, of course: the US and Taiwan need to do a lot more or the PRC will invade Taiwan like Russia did against Ukraine. The US and Taiwan have failed to prepare properly to deter war. The blame must fall on politicians and policymakers