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.
Taiwanese firms have increased investment in the Philippines in recent years as Manila’s ties with Washington deepen and global supply chains continue to shift away from China, an expert at the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The Philippines had not been among Taiwanese investors’ top choices in Southeast Asia, CIER Taiwan ASEAN Studies Center director Kristy Hsu (徐遵慈) said at a seminar in Taipei. However, Taiwan’s investment in the country has grown significantly since the COVID-19 pandemic, reaching US $257 million last year, a high in recent years, she said. Although Taiwan’s total investment in the Philippines still lags
Intel Corp regards Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) as a longstanding partner, as the US chipmaker would continue outsourcing production of advanced chips to TSMC, Intel chief executive officer Lip-Bu Tan (陳立武) said yesterday. “I don’t look at people as competitors. I look at the collaboration... Nvidia is also, you know, a good friend,” Tan told a news conference following his keynote speech at the Computex trade show in Taipei. “It’s a very trusted partnership for us... We are a big, top customer for them, and we’re going to continue doing that,” he said, referring to TSMC, the world’s largest foundry
Artificial intelligence (AI) agents would supplant smartphones as the center of people’s digital lives, fundamentally reshaping personal devices and driving a major computing upgrade cycle, Qualcomm Inc CEO Cristiano Amon said yesterday. In his keynote speech for this year’s Computex trade show in Taipei, Amon said that the rise of "agentic AI" — AI systems capable of reasoning, planning and carrying out tasks autonomously — would transform how people interact with technology across phones, PCs, vehicles and wearable devices. Describing the technology as the next major evolution in computing, Amon said that "2026 is the year of agents.” For decades, smartphones have sat
The average pay to employees by ASE Technology Holding Co (日月光投控) was the highest among the companies listed on the local main board last year, while contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) ranked seventh, the Taiwan Stock Exchange (TWSE) said on Monday. Data compiled by the exchange showed ASE Technology, the world’s largest chip packaging and testing services provider, paid its employees an average of NT$6.28 million (US$199,746) last year, up 40 percent from a year earlier. TSMC, the world’s largest contract chipmaker and the most profitable company in Taiwan, paid its employees NT$4.09 million on average, up
RSS