The government’s relentless efforts to promote the signing of an economic pact with China were questioned yesterday when Standard & Poor’s (S&P) said in a report that Taiwan wouldn’t experience any solid benefit anytime soon.
S&P said in the report that President Ma Ying-jeou’s (馬英九) government would need “more substantial economic benefits” from an economic cooperation framework agreement (ECFA) with China to improve its popularity, which has been on the decline since August when the government reacted slowly to the disaster caused by Typhoon Morakot.
The international ratings agency’s remarks on the benefits of cross-strait rapprochement came after Vice President Vincent Siew (蕭萬長) told a Merrill Lynch investment forum yesterday that the two sides would sign an ECFA in the near future and Mainland Affairs Council Chairwoman Lai Shin-yuan (賴幸媛) said on Sunday that the pact could be inked by May or June.
Since Ma took the office nearly two years ago, the Chinese Nationalist Party (KMT) government has signed agreements with Beijing on cross-strait financial supervision, direct transportation and cooperation on tourism.
“Investors’ enthusiasm for improving relations is visible in the Taiwan stock market’s rally of the past year, but relations are still far from normal and it will take time before investors believe the recent changes are permanent and not prone to reversal under a new government,” Kim Eng Tan (陳錦榮), an S&P credit analyst based in Singapore, said in a statement yesterday.
The TAIEX rallied 78.34 percent last year, the biggest rise in 16 years, but the benchmark index has declined 6.01 percent so far this year, compared with the MSCI Asia Pacific Index’s increase of 1.88 percent over the same period.
S&P said in the report that companies would be more likely to commit to investing in Taiwan only when the benefits of closer economic ties emerge and there were no worries of an abrupt policy change on regional trade and investment agreements.
That will come at a price, however, as the government will not be able to push hard for tax increases and subsidy reductions, while its debt level and off-budget liabilities remain among the highest in the ratings agency’s “AA” rating category, Tan said.
“These liabilities will remain important constraints on the ratings for Taiwan for some time to come,” Tan said.
S&P lowered its outlook on Taiwan’s sovereign rating to “negative” from “stable” in April last year, citing concern about the government’s rising debt burden.
The ratings agency gave an “AA-” for the nation’s long-term credit rating.
DAMAGE REPORT: Global central banks are assessing war-driven inflation risks as the law of unintended consequences careens around the world, spiking oil prices Central banks from Washington to London and from Jakarta to Taipei are about to make their first assessments of economic damage after more than two weeks of conflict between the US and Iran. Decisions this week encompassing every member of the G7 and eight of the world’s 10 most-traded currency jurisdictions are likely to confirm to investors that the specter of a new inflation shock is already worrying enough to prompt heightened caution. The US Federal Reserve is widely expected to do exactly what everyone anticipated weeks ahead of its March 17-18 policy gathering: hold rates steady. The narrative surrounding that
Apple Inc increased iPhone production in India by about 53 percent last year and now makes a quarter of its marquee devices there, reflecting the US company’s efforts to avoid tariffs on China. The company assembled about 55 million iPhones in India last year, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly. Apple has accelerated its expansion in the world’s most populous country in recent years, bolstered
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) share of the global foundry market rose to almost 70 percent last year amid booming demand for artificial intelligence (AI), market information advisory firm TrendForce Corp (集邦科技) said on Thursday. The contract chipmaker posted US$122.54 billion in revenue, up 36.1 percent from a year earlier, accounting for 69.9 percent of the global market, TrendForce said. Its share was up from 64.4 percent in 2024, it said. TSMC’s closest rival, Samsung Electronics, was a distant second, posting US$12.63 billion in sales, down 3.9 percent from a year earlier, for a 7.2 percent share of the global market. In the
HEADWINDS: The company said it expects its computer business, as well as consumer electronics and communications segments to see revenue declines due to seasonality Pegatron Corp (和碩) yesterday said it aims to grow its artificial intelligence (AI) server revenue more than 10-fold this year from last year, driven by orders from neocloud solutions clients and large cloud service providers. The electronics manufacturing service provider said AI server revenue growth would be driven primarily by the Nvidia Corp GB300 server platform. Server shipments are expected to increase each quarter this year, with the second half likely to outperform the first half, it said. The AI server market is expected to broaden this year as more inference applications emerge, which would drive demand for system-on-chip, application-specific integrated circuits
RSS