Although retaining a stable outlook and an A+ sovereign rating for Taiwan, Fitch Ratings, an international rating agency, yesterday expressed concern over the nation's post-election political dispute. \n"We're incorporating political and cross-strait risks into our sovereign rating for Taiwan," Brian Coulton, senior director and head of Asia sovereign ratings at Fitch Ratings, said yesterday at a seminar in Taipei while presenting an overview of local conditions. \nCoulton said that the lingering dispute over Saturday's presidential election result is expected to extend the period of political uncertainty and undermine the legitimacy of President Chen Shui-bian (陳水扁). \nThe political stand-off may also entail the risk of reduced policy effectiveness, diminishing prospects for the nation's future banking reforms and fiscal policy adjustments, he added. \nHowever, only if protracted political tensions negatively impact the nation's upcoming economic recovery would Fitch Ratings consider revising its sovereign rating for Taiwan, Coulton said. \nPreviously, Chen's call for a referendum worried rating agencies about the possibility it would rile Beijing into detoriating the cross-strait relationship. But as the votes failed, Coulton said that the "no show" result greatly reduced the likelihood of military confrontation between Taiwan and China while easing concerns about the president's future moves toward a sovereign vote. \nWhile some Taiwanese businessmen worry that Chen's narrow election victory would slow the development of cross-strait links, Coulton said he believed the incumbent president would adopt a "pragmatic approach" when dealing with cross-strait issues in his next four-year tenure. \nChen yesterday vowed to begin mending the relationship with China during his second term, saying he had no pressure to get re-elected. \nCoulton further predicted the nation's economic growth rate (GDP) would hit 4.7 percent this year, saying several positive signs, including growing exports, bank credit and private consumption, indicate a healthy economic recovery. \nOn Monday, another international ratings agency, Standard & Poor's, also said that it would not change its view on Taiwan's credit ratings for the moment, since it expects the current political impasse to be resolved soon. \nBut S&P yesterday warned that the nation's banking sector still faced a lot of challenges ahead, although it had become healthier after the aggressive write-off of non-performing loans in the past three years. \nThe ratings agency estimated that the nation's bad-loan ratio may decline to between 5 and 7 percent by the year's end from its high of 15 percent at the end of 2001. \nMost industrialized countries have bad-loan ratios of less than 2 percent, so there was still room for improvement with Taiwan's bad-loan problem and financial transparency, S&P said. \n"The local banking sector should continue to reinforce its risk management before the arrival of the next economic recession," the ratings agency said in a statement.
From India to China to the US, automakers cannot make vehicles — not that no one wants any, but because a more than US$450 billion industry for semiconductors got blindsided. How did both sides end up here? Over the past two weeks, automakers across the world have bemoaned the shortage of chips. Germany’s Audi, owned by Volkswagen AG, would delay making some of its high-end vehicles because of what chief executive officer Markus Duesmann called a “massive” shortfall in an interview with the Financial Times. The firm has furloughed more than 10,000 workers and reined in production. That is a further blow
Answering to a reported request by Germany to help address a chip shortage in its auto industry, the Ministry of Economic Affairs (MOEA) yesterday said that it was in talks with domestic chip suppliers. Foreign media over the weekend reported that German Minister of Economic Affairs Peter Altmaier had sent a request to Taipei to ask Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to cooperate more closely with German automakers to provide microchips and sensors, to bridge a shortage that has emerged over the past few months. The MOEA said that it had not yet received the request and could therefore not elaborate
FOCUS ON FOUNDRIES: An analyst said that some investors would be disappointed because they were expecting a larger announcement of a partnership with TSMC Intel Corp’s incoming chief executive officer Pat Gelsinger on Thursday pledged to regain the company’s lead in chip manufacturing, countering growing calls from some investors to shed that part of its business. “I am confident that the majority of our 2023 products will be manufactured internally,” Gelsinger said. “At the same time, given the breadth of our portfolio, it’s likely that we will expand our use of external foundries for certain technologies and products.” He plans to provide more details after officially taking over the CEO role on Feb. 15, but Gelsinger was clear that Intel is sticking with its once mighty
AWARENESS NEEDED: The central bank urged lenders to know their customers before undertaking business for them and to seek funding in conventional ways The central bank yesterday said that it would take action against four foreign lenders for their involvement in helping companies trade in the deliverable forward market in contravention of foreign-exchange regulations. Some grain merchants newly based in Taiwan have since July 2019 been practicing questionable currency-trading activity, with the help of branches and subsidiaries of six foreign banks, the monetary policymaker told an unscheduled news conference. Affiliated firms as of July last year completed currency-related deals they referred to as trading that totaled US$11 billion, which was not in sync with their real business needs, the central bank said after wrapping up