Taiwan does not have the “Dutch disease,” Minister of Finance Su Jain-rong (蘇建榮) said yesterday, referring to an overreliance on a temporarily surging sector at the cost of other industries.
The government supports a variety of sectors, not just the semiconductor industry, whose development “does not harm other sectors,” he said.
Su’s comments came after opposition lawmakers said that Taiwan has become overly reliant on a few tech firms, while non-tech manufacturing sectors are declining.
Photo: CNA
The term “Dutch disease” was coined in 1977 by The Economist to describe the decline of the Dutch manufacturing sector after the discovery of the large Groningen natural gas field in 1959.
The Netherlands posted annual trade surpluses from 1970 to 1980 on the back of natural gas exports, which drove up the country’s currency and led to manufacturers becoming less competitive internationally, with many eventually moving their production abroad.
Lawmakers said the local economy is comparable to the Netherlands at the time.
Taiwan’s “small and open” economy is taking a similar development as the European country, with increasing reliance on chip exports, and profitability and wages in the chip sector and other industries increasingly diverging, they said.
Su dismissed the comparison, saying the government has sought to promote the “five plus two” industries by developing Taiwan into a regional technology hub, shoring up local firms that supply smart machinery, and developing green energy sources, biomedicine and national defense.
President Tsai Ing-wen (蔡英文) is seeking to establish a new agricultural model and a circular economy, Su said.
Local semiconductor firms command global leadership positions, but small and medium-sized firms in other sectors also contribute significantly to GDP growth and employ many people, he said.
The central bank has said that Taiwan’s non-tech manufacturers, such as suppliers of plastic and chemical products, remain competitive, although they generate less added value than local tech firms.
Local makers of steel products, bicycles and vehicle parts have gained significant global market shares, the central bank said.
However, non-tech manufacturers lag behind tech firms in terms of wages, but that is due to supply and demand in the job market, rather than resource distribution or currency movements, it said.
Local electronics suppliers have benefitted from a work-from-home boom during the COVID-19 pandemic and global supply chains moving away from China, the central bank said.
British Prime Minister Rishi Sunak’s government should take steps to cut UK reliance on semiconductors from Taiwan because of the threat posed by China, a draft strategy said. Chinese interference or an invasion of Taiwan would threaten Britain’s economy, according to the unpublished strategy seen by Bloomberg. That is because it would compromise supplies to and from Taiwan, which is home to more than 90 percent of the manufacturing capacity for all leading-edge chips, including the world’s pre-eminent silicon foundry, Taiwan Semiconductor Manufacturing Co (台積電). The strategy is important because semiconductors are used in everything from cellphones to cars, and shortages have
BIG SPENDERS: China’s reopening is a key ‘mega-theme’ for the sector, RBC Bank said, but it remains to be seen how much Chinese tourists will buy The European luxury sector is welcoming the end of pandemic lockdowns in China, as the return of big-spending Chinese tourists could sustain further growth. Prior to the pandemic, Chinese tourists visiting Europe were a major source of sales for luxury houses. The Chinese accounted for “a third of luxury purchases in the world and two-thirds of those purchases were made outside China”, said Joelle de Montgolfier, head of the luxury division at management consulting firm Bain & Co. Their return has led RBC Bank to revise up its growth forecast for the sector this year to 11 percent, from 7 percent previously. “China
‘IT HURTS TOO MUCH’: After talks between Blizzard and NetEase over their contract broke down, servers hosting Blizzard’s games in China were shut down Millions of Chinese gamers have lost access to World of Warcraft after a furious dispute between US title owner Activision Blizzard Inc and NetEase Inc (網易), its longtime local partner in the world’s biggest gaming market. Devotees of the popular game took to social media networks to bemoan the loss, with one posting an image of a failed connection message accompanied by crying emojis. “It really hurts my heart,” one wrote. “It hurts, it hurts too much,” another said. Massively popular worldwide, particularly in the 2000s, World of Warcraft — often abbreviated as WoW — is an online multiplayer role-playing game set in
The US Department of Justice (DOJ) on Tuesday accused Alphabet Inc’s Google of abusing its dominance in digital advertising, threatening to dismantle a key business at the heart of one of Silicon Valley’s most successful Internet firms. The US government said Google should be forced to sell its ad manager suite, tackling a business that generated about 12 percent of Google’s revenues in 2021, but also plays a vital role in the search engine and cloud company’s overall sales. “Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” the