The local operations of German companies struggled to meet their targets last year and fewer of them are anticipating profit growth this year as a global economic slowdown is likely to hamper their business, an annual business confidence survey released last week showed.
Only 34.3 percent of the companies achieved or exceeded their targets last year, a five-year low and a significant retreat from 49 percent in 2018 and 57 percent in 2017, according to the survey, which was conducted among 251 firms from Oct. 23 to Dec. 3 last year.
While external factors such as the global economy and cross-strait relations dampened the mood, it is up to the government to address problems such as import restrictions and bureaucracy, and to extend its programs that have had a positive effect on two-thirds of the firms, German Trade Office Taipei Executive Director Axel Limberg said at a news conference in Taipei on Thursday last week.
Most German companies in Taiwan are small or medium-sized enterprises in the machinery equipment, logistics, and sales and marketing sectors.
Many have benefited from the government’s New Southbound Policy, its “five plus two” innovative industries program and the welcome return of overseas Taiwanese businesses, the survey showed.
An overwhelming majority of respondents, 97 percent, said they are content with Taiwan as a business location and 40 percent plan further investment in the next two years, Limberg said.
However, almost 25 percent of the firms said that they are struggling with import restrictions that have had a negative impact on their allocation of resources and have led to higher prices, the survey showed.
The companies consider reduced bureaucracy the most efficient tool to attract more foreign investment, the survey showed.
“Less bureaucracy not only will lead to an increase in efficiency, but also cut paperwork and give foreign companies incentives to invest in Taiwan,” Limberg said, adding that the recognition of internationally accepted European certificates, testing procedures and standards would benefit the German firms.
Only 34.3 percent of the firms expect their turnover to increase this year, while just 31.3 percent are forecasting a growth in profit, down from 50.7 percent and 40.8 percent respectively the previous year, the survey showed.
A vast majority of the firms want the government to build reliable and widely available charging infrastructure for electric vehicles, saying that doing so would help reduce air and noise pollution, thereby enhancing quality of life.
HEAVY INVESTMENT: Moody’s affirmed the firm’s ‘Aa3’ rating with a ‘stable’ outlook due to its leading position in the industry and ability to match customer requirements Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue this year is expected to increase about 21 percent to NT$1.29 trillion (US$44.01 billion) from NT$1.07 trillion last year, driven by strong demand for advanced 5-nanometer and 7-nanometer chips mainly used in smartphones and high-performance computing devices, a Moody’s Investors Service report on Wednesday said. TSMC’s rate of revenue growth next year is to increase to 7.5 percent, the ratings agency said. The company, which supplies 5-nanometer chips for Apple Inc’s new iPad series, has introduced the advanced chips ahead of its competitors and gained a significant share of the market for the foundry industry’s
Shin Kong Financial Holding Co (新光金控) yesterday said that its insurance unit would adjust its investment portfolio after being banned from buying new stocks a day earlier by the Financial Supervisory Commission (FSC). “We will research what we can do based on the commission’s specific instructions after we receive the regulator’s formal documents,” Shin Kong Financial spokesman Sunny Hsu (徐順鋆) told the Taipei Times by telephone. The commission on Tuesday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$941,722) for reckless investment, and demanded that the insurer reduce its overseas investment ratio from 43 percent to 39 percent. The fine would affect
Taipei Times: When do you think the hospitality industry can return to how it was before the COVID-19 pandemic? How does Formosa International Hotels Group (FIH, 晶華酒店集團) fare this quarter and beyond? FIH chairman Steve Pan (潘思亮): The virus outbreak will have a serious impact on business travel, driven mainly by meetings, incentive travel, conferences and exhibitions over the past three decades. For the past six months, many businesspeople have grown used to exchanging information on the Internet, where more people can participate. The trend might sustain for three to five years until people are vaccinated and it is safe to
EQUITIES TAIEX moves sharply higher The TAIEX moved sharply higher yesterday as buying focused on Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) after a strong showing by its American Depositary Receipts overnight. However, the gains were capped after the benchmark index breached 13,000 points and ran into technical hurdles, prompting investors to turn cautious, dealers said. At the end of the session, the TAIEX was up 131.11 points, or 1.02 percent, at 12,976.76. Turnover was NT$206.328 billion (US$7.04 billion), with foreign institutional investors buying a net NT$18.47 billion in shares, Taiwan Stock Exchange data showed. TSMC rose 2.92 percent to close at NT$458.