Edmund Phelps, winner of the 2006 Nobel Prize in Economics, yesterday said the Chinese economy will grow more independent from the West over the next 10 years, driven by enterprise innovations and domestic consumption.
“China is surely moving toward less export-dependent and [is becoming] more dependent on domestic investment activities,” he told a Taipei forum titled “A vision of possible developments in the global economy.”
By then, its economic prowess — in terms of unemployment rate and workers’ productivity — will mirror the US in its best days, he said.
The Columbia University academic also pointed out that China will not fail in efforts to step up domestic innovations — a pivotal element he said US enterprises have been lacking, and that this will propel its investment activities to a greater height.
One of the reasons was rising Asian currencies against the greenback because of the sluggish US economy, which has seen enterprises investing less in commercial activities and productivity slumping in the past decade, Phelps said.
In Phelps’ view, the US is far from seeing a full recovery to pre-financial crisis levels, with unemployment hovering between 7 percent and 8 percent as the best case scenario.
This compares with a 4.6 percent US jobless rate during former US president George H.W. Bush’s administration and 5.6 percent in the mid-1990s, he said.
In contrast, Asia, especially China, and other emerging markets like Brazil will catch up with the US in economic growth.
This is because the US is in “the midst of a long structural slump,” obvious from the fact that more investors are shortsighted instead of looking far ahead with their investment portfolios, he added.
The Nobel laureate said US stocks are now closely linked to company quarterly -earnings, which strays from the fact that share prices should reflect investors’ anticipation of a company’s worth over the next five years.
“CEOs are now more concerned with hiding their quarterly earnings targets, rather than thinking about the company’s innovations for the next five years,” the 78-year-old Phelps said.
Phelps last year took up the position of president-dean of the New Huadu Business School at Minjiang University in Fuzhou, China.
He said this position offers him the proximity to study the impact of the Chinese economy.
Phelps yesterday also witnessed the signing of a memorandum of understanding between New Huadu and Taiwan’s National Chengchi University, which co-launched a program to develop entrepreneurship among their students.
A total of 60 students will be selected from both schools and sent for courses in Singapore.
They will be offered employment at New Huadu Industrial Group Co (新華都集團), a conglomerate based in Fujian Province that is engaged in the property, retail, tourism, mining and machinery sectors.
US PROBE: The Information reported that the US Department of Commerce is investigating whether the firm made advanced chips for China’s Huawei Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract maker of advanced chips, yesterday said it is a law-abiding company, and is committed to complying with all applicable laws and regulations including export controls. The Hsinchu-based chip giant issued the statement after US news Web site The Information ran a story saying that the US Department of Commerce has launched a probe into TSMC over whether it breached export rules by making smartphone or artificial intelligence (AI) chips for China’s Huawei Technologies Co (華為). “We maintain a robust and comprehensive export system for monitoring and ensuring compliance,” the statement said. “If we
DEMAND FOR AI CHIPS: Net income in the third quarter surged 31.2% quarter-on-quarter to NT$325.26 billion, the strongest quarterly return in the company’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday raised its revenue forecast to annual growth of 30 percent this year, thanks to strong and sustainable demand for artificial intelligence (AI) processors for servers. It was the second upward adjustment from 25 percent year-on-year growth estimated three months ago, despite recent concerns about whether the AI boom could be another technology bubble. “The demand is real. It’s real. And I believe it is just the beginning of this demand. Alright, so one of my key customers said the demand right now is ‘insane,’” TSMC chairman and chief executive C.C.
Starbucks Corp might have the more recognizable name, but 7-Eleven’s City Cafe remains the king of Taiwan’s fresh coffee market, helped by the convenience store chain’s extensive market presence and product diversification. President Chain Store Corp (PCSC, 統一超商), which runs both the 7-Eleven and Starbucks store chains in Taiwan, established the City Cafe brand in 2004. The brand took off when actress Gwei Lun-mei (桂綸鎂) became its spokesperson in 2007. City Cafe’s sales exceeded NT$10 billion (US$311.69 million) for the first time in 2015, surpassing the revenue of Starbucks Taiwan, and rose to more than NT$17 billion last year, exceeding the NT$14.98
COUNTRY-BASED: Setting ceilings on sales of the technology would tighten limits that originally targeted China’s ambitions in artificial intelligence amid security risks US officials have discussed capping sales of advanced artificial intelligence (AI) chips from Nvidia Corp and other American companies on a country-specific basis, people familiar with the matter said, a move that would limit some nations’ AI capabilities. The new approach would set a ceiling on export licenses for some countries in the interest of national security, according to the people, who described the private discussions on condition of anonymity. Officials in the administration of US President Joe Biden focused on Persian Gulf countries that have a growing appetite for AI data centers and the deep pockets to fund them, the people