The service sector has not yet emerged from a slump amid the COVID-19 pandemic, although the rate of decline eased last quarter, the Commerce Research Institute (商業發展研究院) said yesterday.
The coincidental cyclical composite index for the service industry continued to fall last quarter and did not bottom out in October last year as had been expected following the launch of the government’s Quintuple Stimulus Voucher program, the Taipei-based research body said.
The retreat persisted in January, although the leading cyclical composite index has been rising since July 2020, indicating that economic development is uneven, the institute said.
The findings reflect soft domestic demand, which has persisted amid COVID-19 scares, geopolitical conflicts and extreme climate factors that might continue to be a drag on the economy, it said.
The shadow of “stagflation” — a situation of high inflation and unemployment, and slow growth — looms large after Russia invaded Ukraine on Feb. 24, adding to the rise in energy and raw material prices, it said.
While Taiwan had impressive GDP growth last year thanks to strong manufacturing activity and exports, private consumption remained weak, the institute said.
That is because the service industry has been hit hard by pandemic restrictions, it said.
Government bailout and stimulus programs provided short-term relief, but failed to induce industrial transformation or upgrade so service providers could become more resilient and competitive, it said.
Australia, Canada, the EU, Japan and the US have imposed economic sanctions on Russia, putting the world at the most risk of stagflation since the energy crisis of the 1970s, it said.
Taipei should quickly draw up plans to offset lost imports to maintain the supply-demand balance and work closer with the private sector amid a digital transformation, and the move toward environmental, social and corporate governance business models, the institute said.
Overdependence on foreign markets should be reduced to bolster Taiwan’s economic resilience and make it less susceptible to external shocks, it said.
INFRINGEMENT: The investigation comes after a complaint from Vicor Corp, with the company seeking a limited exclusion order as well as cease-and-desist orders, the ITA said The US International Trade Commission (USITC) has launched a Section 337 investigation naming Taiwanese technology companies, including Hon Hai Precision Industry Co (鴻海), Delta Electronics Inc (台達電) and Quanta Computer Inc (廣達), as respondents. The Ministry of Economic Affairs (MOEA) pledged assistance if needed. The USITC said on Friday in a statement that it had voted to institute an investigation under Section 337 of the US Tariff Act of 1930 into certain vertical power delivery systems, related components and computing devices incorporating such systems. The investigation covers 20 companies from Taiwan, China, Germany and the US, the commission said, adding that it
IN GOOD FAITH: Lai said he appreciates Micron’s commitment to Taiwan and that it would continue expanding its investment in the country, while also working with labor President William Lai (賴清德) yesterday called for US memory maker Micron Technology Inc and its workers to negotiate “sincerely” ahead of a possible strike by the company’s union in Taiwan. Last week, a Taiwanese union representing workers at Micron said it had secured authorization from its members to strike over a dispute concerning the company’s bonus scheme, escalating a labor conflict at the chipmaker’s largest manufacturing hub. Micron employs about 15,000 people in Taiwan and has said it invested more than NT$1.6 trillion (US$49.6 billion) in the country. Speaking in Taichung at the opening of a new Micron advanced assembly and testing facility,
A man charged along with Super Micro Computer Inc co-founder Yih-Shyan “Wally” Liaw (廖益賢) of conspiring to send cutting-edge chips to China in violation of US export controls pleaded guilty, court documents said. Ting-Wei “Willy” Sun (孫廷瑋), a former outside contractor described by US authorities as a “fixer” who allegedly aided in the sales, pleaded guilty on Thursday at a hearing in federal court in New York as part of an agreement with prosecutors, court filings showed. Prosecutors claimed the men were part of a scheme to send Nvidia Corp-powered servers to an unnamed Southeast Asian company and then divert them to
Taiwan should not rule out any energy source or abandon environmental sustainability in favor of ideology and short-term benefits, President William Lai (賴清德) said in an interview, calling for a “professional assessment” of whether nuclear power should be reintroduced into Taiwan’s energy mix. In an online interview with influencer Yu Ting-hao (游庭皓) that aired yesterday, Lai reiterated his position on nuclear power. SHIFT Lai’s remarks marked a shift from the Democratic Progressive Party’s (DPP’s) longstanding opposition to nuclear power. As premier from 2017 to 2019, Lai pushed for more gas-fired power capacity while sticking to the DPP’s nuclear free homeland ideology and rejected the
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