Sat, Nov 24, 2001 - Page 1 News List

October jobless rate rose to 23-year high, 5.33 percent

BLOOMBERG , TAIPEI

Taiwan's jobless rate hit a record high for the 10th straight month in October as manufacturers cut production and moved to China, threatening to dampen consumer spending and deepen Taiwan's worst recession since the 1970s.

Unemployment rose to 5.33 percent from 5.26 percent in September, the government said yesterday. That was the highest since the government began compiling figures in 1978, and the 14th consecutive increase.

The economy shrank 4.21 percent in the third quarter from a year earlier, falling into its first recession since 1974, as falling demand for electronics sapped exports and production.

Chunghwa Picture Tubes Ltd (中華映管) fired 350 workers last month after closing two Taiwan production lines, which it plans to move to China.

"Manufacturing costs here are much more expensive than in China," said Tony Chien, a spokesman at Chunghwa, which makes tubes used in personal computer screens.

The government doesn't expect the economy to start growing until next year as exports extend their slide and consumer spending, which makes up 61 percent of gross domestic product, stalls. So far, 11 interest-rate cuts in the past year haven't been enough to keep the economy growing as overseas demand tumbles and unemployment climbs.

Even if a revival in US growth lifts exports next year, the jobless rate may keep rising as migration to China saps demand for workers. Restrictions on investments bound for China are being relaxed ahead of the two countries' entry into the WTO next month, which may speed manufacturers' move to China.

The jobless rate will probably average 4.7 percent next year, up from 4.5 percent this year, said Chen Jin-cherng (陳金城), deputy director of the statistics agency's census department. WTO entry will add 0.2 percentage points to next year's unemployment rate, he said.

The number of people out of work rose to 527,000 in October from 519,000 in September, according to yesterday's report from the Directorate-General of Budget, Accounting and Statistics.

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