Taiwan this year fell three places to 17th in a global competitiveness ranking by Lausanne, Switzerland-based International Institute for Management Development (IMD).
It was the lowest ranking since 2009, after Taiwan lost points in the areas of economic performance, foreign investment and the labor market, the business school said in its annual report.
The result placed Taiwan behind major trade rivals Hong Kong, Singapore and China, although it managed to stay ahead of South Korea and Japan.
The school graded 63 economies in terms of economic performance, government and business efficiency and infrastructure.
Taiwan’s economic showing dropped two places, dragged by a serious retreat in foreign investment, the report said, as corporate managers voiced concern that the global industrial realignment might dim its economic outlook.
Persistent overconcentration on a few export destinations and products weighed on the nation’s international trade ranking, even though account surpluses continued to support GDP growth, the school said.
Electronic components, especially semiconductors, underpinned the nation’s outbound shipments to major trading partners, with China taking a 40 percent share, government data showed.
Nations at the top of the ranking share an above-par performance across all competitiveness factors, despite a varied competitiveness mix, IMD World Competitiveness Center director Arturo Bris said.
Asian nations that have fallen in the ranking this year show a need to improve their tangible and scientific infrastructure, Bris added.
However, Taiwan is the exception, the school said on its Web site.
Taiwan’s business efficiency fell five positions to 20th, while the labor market score fell sharply, the report showed.
Labor rules that require higher overtime pay and shorter working hours have estranged corporate managers, the National Development Council said.
“The retreat is an alarm signaling an economic downturn. The government will press ahead with the pursuit of an inclusive economic growth model that will benefit all participants,” council Minister Chen Mei-ling (陳美伶) told a news conference.
It is not surprising that China outpaces Taiwan in competitiveness, because it has spent more money on enhancing infrastructure, Chen said.
The government has been removing regulatory barriers and introducing measures to attract foreign investment and talent, she said. “It might take more time for foreign research institutes to observe positive changes.”
Foreign investments and tourist numbers have showed signs of growth this year, while the government is considering relaxing immigration rules, she said, after IMD warned that the brain drain problem might hurt Taiwan if left unaddressed.
The nation’s competitiveness has stagnated, while other nations have gained headway, Taiwan Institute of Economic Research (台灣經濟研究院) economist Gordon Sun (孫明德) said.
Firms in China and elsewhere are recruiting skilled labor from Taiwan with better compensation offers, Sun said, adding that the issue merits more attention from policymakers and firms.
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
United Microelectronics Corp (UMC, 聯電) expects its addressable market to grow by a low single-digit percentage this year, lower than the overall foundry industry’s 15 percent expansion and the global semiconductor industry’s 10 percent growth, the contract chipmaker said yesterday after reporting the worst profit in four-and-a-half years in the fourth quarter of last year. Growth would be fueled by demand for artificial intelligence (AI) servers, a moderate recovery in consumer electronics and an increase in semiconductor content, UMC said. “UMC’s goal is to outgrow our addressable market while maintaining our structural profitability,” UMC copresident Jason Wang (王石) told an online earnings
MARKET SHIFTS: Exports to the US soared more than 120 percent to almost one quarter, while ASEAN has steadily increased to 18.5 percent on rising tech sales The proportion of Taiwan’s exports directed to China, including Hong Kong, declined by more than 12 percentage points last year compared with its peak in 2020, the Ministry of Finance said on Thursday last week. The decrease reflects the ongoing restructuring of global supply chains, driven by escalating trade tensions between Beijing and Washington. Data compiled by the ministry showed China and Hong Kong accounted for 31.7 percent of Taiwan’s total outbound sales last year, a drop of 12.2 percentage points from a high of 43.9 percent in 2020. In addition to increasing trade conflicts between China and the US, the ministry said
RSS