On Wednesday, the Directorate-General of Budget, Accounting and Statistics (DGBAS) published its latest statistics on national wealth, indicating that in 2009, the nation’s average net household wealth and average net individual wealth reached a record high.
According to the DGBAS, the average net household wealth in Taiwan reached NT$9.79 million (US$337,300) in 2009, increasing NT$920,000 from NT$8.87 million in 2008, while the average net individual wealth in Taiwan was NT$3.3 million in 2009, NT$350,000 higher than the NT$2.95 million recorded in the previous year.
National wealth refers to the total value of wealth and goods generated by all citizens’ economic activities. It is defined as the total value of assets — including tangible assets such as real estate and household appliances; foreign assets such as foreign currencies and overseas mutual funds; and domestic assets such as cash, deposits, life insurance, pension funds and securities. Net national wealth is calculated by deducting liabilities — mainly home mortgages.
Without a doubt, the record net household wealth and net individual wealth figures reported in 2009 are a reflection of the nation’s economic recovery following the global financial crisis that hit the nation one year before.
Take, for example, investments in securities, such as stocks, bonds and mutual funds. Investors earned some of their money back on a rebounding stock market, with an average increase of NT$530,000 in securities income for households and NT$180,000 for individuals, DGBAS data show.
However, the statistics have raised eyebrows. Even though the DGBAS attributed the wealth increase mainly to a more than 40 percent rise year-on-year in securities investment, annual growth of nearly 24 percent in cash and deposits and an 18 percent addition in net foreign assets from a year earlier, its national wealth data are surprising because they also show each family in Taiwan owned NT$3.64 million worth of real estate, NT$450,000 worth of household appliances and NT$6.28 million in financial assets in 2009.
One explanation for the seemingly skewed national wealth statistics is that the figures are average values of some people who made fortunes and others who reported losses. Therefore, it is possible that some people made a massive fortune amid a recovering stock market compared with some others who lost vast amounts of money. In other words, statistics do not lie, but neither do they tell the whole story.
What is of interest is that according to the DGBAS’ previous data, annual disposable income for average households was NT$888,000 in 2009, down 2.9 percent from 2008 and marking the lowest level since 2003. The average figure for individuals was NT$266,000 in 2009, down 2.6 percent from a year earlier and the lowest since 2005. So how is it possible that national wealth increased while disposable incomes fell? It makes no sense.
In fact, disposable income data provide another example of deceiving statistics. The DGBAS’ latest disposable income data released in the middle of last month showed the average annual disposable income last year was NT$274,000 for individuals, up 3 percent from 2009, but that the average disposable income for households grew just 0.2 percent to NT$889,000 per household, even though the nation’s GDP expanded 10.88 percent last year from 2009.
For many Taiwanese who are still suffering with stagnant salaries, signs of economic recovery are far from being reflected in their daily life. While most people feel no benefit from the economic upturn, the government apparently intends to use the wealth data to paint the nation’s economy in as rosy a light as possible. We should know the government does not lie — but it is just speaking for a handful of rich people and wealthy families.
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