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.
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