It is time for businesses to host banquets and give out gifts to their employees as the year’s end approaches. Year-end banquets are for many Taiwanese an opportunity to reflect on their hard work and the blessing of having a job amid a sluggish economy.
However, even those who are fortunate enough to enjoy a feast with a group of colleagues may still feel sad about the stagnation of wage growth over the past several years. During the first nine months of this year, real wages after adjustment for inflation declined 1.1 percent year-on-year and regressed to the same level they were at 15 years ago, according to the latest government figures.
One of the great challenges in this export-reliant nation is to create more jobs with higher salaries for young people. Our economic problems did not appear from nowhere and they are not likely to vanish anytime soon, regardless of who sits in the Presidential Office or who takes the helm of the Cabinet.
A failure to ensure decent jobs and higher consumption is a serious threat to economic progress. Therefore, it is difficult not to pay attention to the latest GDP data released by the Directorate-General of Budget, Accounting and Statistics (DGBAS) on Friday, which show the growth of private consumption expanding this year by the slowest pace since 2009.
Private consumption is a key component of GDP, but consumer spending has been so low in recent years that single-digit annual increases have become the norm, and this is not sufficient to support the economy. This year, according to the DGBAS forecast, growth in private consumption is likely to decline to 1.46 percent from 1.62 percent last year and 3.10 percent in 2011.
The latest economic data also indicate weak growth momentum in other GDP components such as private investment, government spending and net exports (exports minus imports). Although there are signs that private investment will increase 5.32 percent this year and 4.37 percent next year after two consecutive years of contraction, the strength of private investment is not sufficient to offset broad-based weaknesses in other components.
For now, the DGBAS expects the economy to expand 1.74 percent year-on-year this year, which is lower than the 2.31 percent it estimated in August and represents the second straight year of GDP growth of less than 2 percent.
One reason the economy is struggling this year is that exports are likely to contract 2.03 percent year-on-year this quarter, while full-year exports will likely only increase by 0.44 percent from last year. There is no doubt that deteriorating external demand is adversely affecting domestic investment and private consumption.
It is important to note that two factors leading to weaker export performance are increasing competition from China and the information technology orientation of the nation’s industrial structure, which is more prone to market volatility than at any other time in recent years.
The government’s efforts to set up “free economic pilot zones,” secure free-trade agreements with New Zealand and Singapore, and ink more trade pacts with China under the Economic Cooperation Framework Agreement show that policymakers want to open up and stimulate economic growth. However, the stable export growth that fueled economic development over past decades is losing steam, and China is becoming a competitor.
Has the government found solutions to deal with these problems or does it still believe that opening up more of the market to China and encouraging local businesses, talent and money to flow into China will boost the economy rather than sucking it dry?
The GDP figures are a wake-up call to the government that things may get worse next year if it cannot identify the blind spots in its economic policies.
Recently, China launched another diplomatic offensive against Taiwan, improperly linking its “one China principle” with UN General Assembly Resolution 2758 to constrain Taiwan’s diplomatic space. After Taiwan’s presidential election on Jan. 13, China persuaded Nauru to sever diplomatic ties with Taiwan. Nauru cited Resolution 2758 in its declaration of the diplomatic break. Subsequently, during the WHO Executive Board meeting that month, Beijing rallied countries including Venezuela, Zimbabwe, Belarus, Egypt, Nicaragua, Sri Lanka, Laos, Russia, Syria and Pakistan to reiterate the “one China principle” in their statements, and assert that “Resolution 2758 has settled the status of Taiwan” to hinder Taiwan’s
Can US dialogue and cooperation with the communist dictatorship in Beijing help avert a Taiwan Strait crisis? Or is US President Joe Biden playing into Chinese President Xi Jinping’s (習近平) hands? With America preoccupied with the wars in Europe and the Middle East, Biden is seeking better relations with Xi’s regime. The goal is to responsibly manage US-China competition and prevent unintended conflict, thereby hoping to create greater space for the two countries to work together in areas where their interests align. The existing wars have already stretched US military resources thin, and the last thing Biden wants is yet another war.
As Maldivian President Mohamed Muizzu’s party won by a landslide in Sunday’s parliamentary election, it is a good time to take another look at recent developments in the Maldivian foreign policy. While Muizzu has been promoting his “Maldives First” policy, the agenda seems to have lost sight of a number of factors. Contemporary Maldivian policy serves as a stark illustration of how a blend of missteps in public posturing, populist agendas and inattentive leadership can lead to diplomatic setbacks and damage a country’s long-term foreign policy priorities. Over the past few months, Maldivian foreign policy has entangled itself in playing
A group of Chinese Nationalist Party (KMT) lawmakers led by the party’s legislative caucus whip Fu Kun-chi (?) are to visit Beijing for four days this week, but some have questioned the timing and purpose of the visit, which demonstrates the KMT caucus’ increasing arrogance. Fu on Wednesday last week confirmed that following an invitation by Beijing, he would lead a group of lawmakers to China from Thursday to Sunday to discuss tourism and agricultural exports, but he refused to say whether they would meet with Chinese officials. That the visit is taking place during the legislative session and in the aftermath