The central bank yesterday questioned the validity of a Bloomberg Benchmark report pulished yesterday stating that US president-elect Donald Trump might have the wrong currency in his crosshairs regarding the US’ trade deficit.
The report said that the New Taiwan dollar is undervalued by more than 25 percent against the currencies of its trading partners, giving its exporters a competitive advantage, while the yuan is more or less fairly valued, according to calculations by William Cline, a senior fellow at the Peterson Institute for International Economics in Washington, who took into account current and prospective trade flows.
“President-elect Donald Trump has accused China of ripping off the US on trade and threatened to brand the country a currency manipulator soon after taking office. Yet economists say his new best bud and China’s nemesis, Taiwan, is much better suited to bearing that damning label,” the report said.
The central bank said that the report is based on inaccurate information drawn from a blog post by Brad Setser, a senior fellow at the Council on Foreign Relations.
The blog post was published on the council’s Web site on Dec. 5.
Setser said that Taiwan’s current account surplus is far larger than China’s relative to their respective GDPs, while Taiwan’s central bank has been buying an average of between US$10 billion and US$15 billion of foreign currency annually in recent years, and conducted about US$3 billion of purchases per quarter this year.
In addition, deregulation in Taiwan has enabled massive private outflows, which help limit the need for central bank intervention to keep the currency down, at the cost of higher foreign currency risk taken on by financial institutions, Setser said.
In contrast, China has been selling foreign-exchange reserves to support its currency, weakening the case that China is managing its currency in ways that are adverse to US trade interests, Setser said.
The central bank said that a number of readers voiced their objections to Setser’s analysis.
One person said that Taiwan’s large foreign currency reserves and current account surplus are vital strategic assets in light of the nation’s political isolation.
US-based tech giant Google said yesterday that its efforts to build four underseas cables to connect Taiwan with the world had created more than 64,000 jobs and generated about US$26 billion in GDP for Taiwan as of 2021. The US company has transformed Taiwan into a strategic cloud infrastructure hub in the world. The four undersea cables are part of the company’s investments in cloud infrastructure in Taiwan, and on the back of the undersea cables, a data center and a Google Cloud Region, which is a geographic area in which Google provides infrastructure and services for deploying applications, Google said in
Huawei Technologies Co (華為) largely omitted mention of its controversial Mate 60 smartphone series at a grand showcase of its new consumer products yesterday. The Shenzhen-based company would increase smartphone production in response to demand, said consumer division chief Richard Yu (余承東), without naming the handset triggering that surge. The Mate 60 Pro earned international notoriety with its advanced made-in-China processor last month, causing concern in Washington about Huawei’s progress toward developing in-house chipmaking capabilities despite US trade curbs. Huawei’s new phones have fired up the company’s sales and were among the top sellers in China in the week before Apple Inc’s
SLUMP: The electronics, machinery and traditional industries posted the largest decline in the past year; overall, sectors showed gains over the previous month Taiwan’s industrial production index decreased 10.53 percent year-on-year to 91.38 last month, falling for a 15th consecutive month on an annual basis, as weak global economic growth continued to weigh on end-market demand and investment momentum, the Ministry of Economic Affairs said on Saturday. The industrial production index gauges output in Taiwan’s four main industries: manufacturing, electricity and gas supply, water supply, and mining and quarrying. Last month’s decline was the smallest contraction since March when the index dropped 16.03 percent from a year earlier. On a monthly basis, the index rose 7.28 percent, marking a second straight month of improvement,
Micron Technology Inc on Wednesday predicted a steeper loss than anticipated in the current quarter, indicating that an industry slump is still weighing on the largest US maker of memory chips. The company projected a fiscal first-quarter loss of as much as US$1.14 a share, excluding some items. Analysts had estimated a US$0.96 loss. On the bright side, revenue is expected to start recovering in the period. Micron predicted sales of US$4.2 billion to US$4.6 billion, compared with an estimate of US$4.21 billion. For Micron and competitors Samsung Electronics Co and SK Hynix Inc, this year has been brutal. Customers in their