Despite the recovering global economy, Taiwan’s small and medium-sized enterprises (SME) are less bullish than their counterparts in Asia with their business confidence remaining at the lowest level in the region, an HSBC survey showed.
The semi-annual survey, which polled 6,031 businesses from 20 markets in December, said all Asian markets showed increased confidence levels except for Taiwan, which dropped one point.
CONFIDENCE
Taiwanese SMEs’ confidence index in terms of economic outlook stood at 97 in the fourth quarter of last year, far below the average level of 112 in Asia, the survey showed, adding that a level of more than 100 showed optimism.
“This is because most of the Taiwanese SMEs focus on European and US markets,” Russell Liu (劉政瑩), senior vice president and head of CMB Business Banking at HSBC, told the Taipei Times yesterday.
With these two Western markets failing to see a strong rebound from the financial crunch, Taiwanese SMEs tend to feel less upbeat when compared with their Asian peers, Liu said.
“Business confidence among SMEs across Asia has already exceeded pre-September 2008 financial crisis levels,” he said.
UNSTABLE
More than 40 percent of polled Taiwanese SMEs said unstable financial conditions such as credit, exchange rates and interest rates remained the biggest obstacle to their international business, the survey said.
Liu also said that because of cultural familiarity, low costs and relaxed cross-strait policies, up to 30 percent of Taiwanese SMEs planned to engage in trade with China in the following two years.
Twenty-one percent said they would trade with Southeast Asia and 14 percent said they would trade with North America.
The survey said nearly 60 percent of Taiwanese SMEs were most concerned about possible hikes in raw material prices in the next six months, while 48 percent worried about the US and global economic prospects, followed by 39 percent that worried about fluctuations of the local currency.
In addition, up to 87 percent of surveyed SMEs in Taiwan said they would maintain current employment levels, with only 9 percent planning to increase staff, the survey said, adding that less than 50 percent would increase their capital spending.
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