The government has released a series of encouraging economic figures, including stronger-than-expected GDP growth of 2.92 percent for last quarter, which boosted the economic expansion for last year to 2.19 percent. That ended months of guessing about whether the nation would post another weak quarterly GDP figure of under 2 percent.
Consumer confidence has also jumped to a 22-month high this month as five out of six sub-indices rose, with the biggest increase shown in the stock market investment outlook and economic outlook over the next six months, according to a National Central University survey. The consumer prices indicator is the only one that dropped.
The National Development Council said the index of economic monitoring indicators flashed its first “green” light in about half a year last month, indicating that the economy should be on track for a pick-up.
However, these positive notes do not guarantee significant or comfortable growth for the economy this year, as the optimism has primarily been built on expectations about the US and European economies.
The US economy is expected to grow at a faster pace of 2.8 percent this year, from last year’s 1.9 percent, according to an IMF projection released earlier this month. The fund forecast the EU’s economy would grow 1 percent this year, from minus-0.4 percent last year.
There is a blind spot in the government’s economic optimism. Taiwan has steadily been benefiting less from global recoveries as a growing number of US companies mull moving factories back home and reducing outsourced production. China is also increasingly replacing Taiwan as a supplier of manufacturing services and electronic components to the West.
In addition, as the IMF has said, while advanced nations are expected to experience solid expansion in GDP this year, emerging countries should see growth decelerate. During the 2008 to 2009 financial crisis, emerging countries, mainly China, played a key role in providing crucial support to the world’s economy. However, those economies are now poised to undermine the global economic recovery, given their loss of strength and rising deficits. Some analysts are worried that China may suffer a hard landing by reporting GDP growth of under 7 percent or 7.5 percent this year and next.
Even worse, the US Federal Reserve’s stimulus tapering has triggered fears about a recurrence of an economic crisis in emerging markets and the fears are spreading, given the increasing capital outflow from Asia and other emerging markets, which in turn have triggered dramatic currency devaluations.
The recent devaluation of Argentina’s peso has raised fears that it could be the first sign of another recession. The peso plunged about 15 percent last week after Argentina’s central bank suddenly relaxed its currency controls. Some might say such fears are unrealistic, but these worries have made global investors jittery and caused drops in stock markets.
The TAIEX fell 135.74 points, or 1.58 percent, to close at 8,425.7 on Monday, the final trading day before the Lunar New Year holiday that begins tomorrow. Tokyo plunged 2.51 percent to 15,005.73, Seoul fell 1.56 percent to 1,910.34, Hong Kong shares dipped 2.11 percent to 21,976.10 and Chinese shares ended 1.03 percent lower at 2,033.30.
The New Taiwan dollar has depreciated about 7 percent since the beginning of the year, closing at NT$30.451 to the US dollar yesterday.
In a letter to the public last month, central bank Governor Perng Fai-nan (彭淮南) warned that the nation is facing a rough future because of its stagnating exports, weak economic strength and growing reliance on China to sell goods. Taiwan should focus on improving its economic fundamentals, he said.
Taiwan may not suffer the brunt of a new economic slump, but it must be well prepared for any potential risks by focusing on industrial upgrades and further opening of its markets.
Congressman Mike Gallagher (R-WI) and Congressman Raja Krishnamoorthi (D-IL) led a bipartisan delegation to Taiwan in late February. During their various meetings with Taiwan’s leaders, this delegation never missed an opportunity to emphasize the strength of their cross-party consensus on issues relating to Taiwan and China. Gallagher and Krishnamoorthi are leaders of the House Select Committee on the Chinese Communist Party. Their instruction upon taking the reins of the committee was to preserve China issues as a last bastion of bipartisanship in an otherwise deeply divided Washington. They have largely upheld their pledge. But in doing so, they have performed the
It is well known that Chinese President Xi Jinping’s (習近平) ambition is to rejuvenate the Chinese nation by unification of Taiwan, either peacefully or by force. The peaceful option has virtually gone out of the window with the last presidential elections in Taiwan. Taiwanese, especially the youth, are resolved not to be part of China. With time, this resolve has grown politically stronger. It leaves China with reunification by force as the default option. Everyone tells me how and when mighty China would invade and overpower tiny Taiwan. However, I have rarely been told that Taiwan could be defended to
It should have been Maestro’s night. It is hard to envision a film more Oscar-friendly than Bradley Cooper’s exploration of the life and loves of famed conductor and composer Leonard Bernstein. It was a prestige biopic, a longtime route to acting trophies and more (see Darkest Hour, Lincoln, and Milk). The film was a music biopic, a subgenre with an even richer history of award-winning films such as Ray, Walk the Line and Bohemian Rhapsody. What is more, it was the passion project of cowriter, producer, director and actor Bradley Cooper. That is the kind of multitasking -for-his-art overachievement that Oscar
Chinese villages are being built in the disputed zone between Bhutan and China. Last month, Chinese settlers, holding photographs of Chinese President Xi Jinping (習近平), moved into their new homes on land that was not Xi’s to give. These residents are part of the Chinese government’s resettlement program, relocating Tibetan families into the territory China claims. China shares land borders with 15 countries and sea borders with eight, and is involved in many disputes. Land disputes include the ones with Bhutan (Doklam plateau), India (Arunachal Pradesh, Aksai Chin) and Nepal (near Dolakha and Solukhumbu districts). Maritime disputes in the South China