Despite concerns that a US economic slowdown would have a negative impact on Taiwanese exports, export orders rose 15.54 percent year-on-year to a record US$345.81 billion last year. Last month alone, exports rose 17.56 percent from a year earlier to US$31.02 billion, statistics released by the Ministry of Economic Affairs showed last week.
Given the brisk external demand for Taiwanese goods, people could wonder whether this strong performance is proof of resilience in the face of strong headwinds and a looming US recession.
Some have faith that rising demand from Asia could help Taiwan buffer its weakening sales to the US. The latest ministry data showed that Asian economies, especially Hong Kong and China, have emerged to become the biggest destinations of Taiwanese exports.
Last year, about US$91.42 billion in export orders went to Hong Kong and China, surpassing those to the US at US$84.53 billion, while total orders to Asia increased 18.71 percent from the previous year to US$178.57 billion last year.
But aggravating overseas financial turmoil and inflationary pressures worldwide are threatening to drag down global economic growth and therefore slow the demand for Taiwanese products.
The size of export orders has actually been on the decline for the past three months, with US$32.2 billion in October, US$31.89 billion in November and US$31.02 billion last month. It is not clear, however, if that decline was the result of seasonal factors or was triggered by the slowdown in the US.
Last week, UBS cut its forecast for global economic growth and predicted the US economy would slide into recession in the first half of this year. It said the slowdown would hurt Asia's export-dependent economies and named Taiwan, South Korea and most Southeast Asian economies among those that would be the hardest hit.
Citigroup last week also lowered its estimate for Asia's economic growth this year and predicted that Hong Kong, Singapore, South Korea and China would likely be the hardest hit economies in the region.
Standard Chartered Bank, meanwhile, cut its economic projection for Taiwan to as low as 2.7 percent this year because of concerns over slowing exports, and Goldman Sachs also reduced its forecast for Taiwan to 3.8 percent. It said Taiwan was the most vulnerable economy in the region because of increasing downside risk in the US high-tech markets.
No one knows exactly how a slowing US economy would affect customer spending there and to what extent a slowdown would drag down the world economy. But a global downturn is inevitable and no one is immune, not even China or India.
The situation can also become worse if the US government's US$150 billion economic stimulus package fails to kickstart the sagging US economy or the US Federal Reserve's emergency interest rate cuts last week fail to revive its economy. The US problem, as suggested by billionaire George Soros in an article published last week, is actually associated with a systemic problem -- an exploding credit expansion without regulatory checks.
The downside risk is greater and may have come earlier than expected. Taiwan's export sector will face more challenges this year as the economies in Europe have already started cooling down.
Several computer and electronics makers will begin this week to report their fourth-quarter earnings and their prospects for the coming months. The government is also scheduled today to release its monthly index of leading economic indicators, a key measure of the economy's direction over the next three to six months. Both private and public sectors should consider some countermeasures in the event of the looming US recession or global downturn.
US President Donald Trump has gotten off to a head-spinning start in his foreign policy. He has pressured Denmark to cede Greenland to the United States, threatened to take over the Panama Canal, urged Canada to become the 51st US state, unilaterally renamed the Gulf of Mexico to “the Gulf of America” and announced plans for the United States to annex and administer Gaza. He has imposed and then suspended 25 percent tariffs on Canada and Mexico for their roles in the flow of fentanyl into the United States, while at the same time increasing tariffs on China by 10
With the manipulations of the Chinese Nationalist Party (KMT) and the Taiwan People’s Party (TPP), it is no surprise that this year’s budget plan would make government operations difficult. The KMT and the TPP passing malicious legislation in the past year has caused public ire to accumulate, with the pressure about to erupt like a volcano. Civic groups have successively backed recall petition drives and public consensus has reached a fever-pitch, with no let up during the long Lunar New Year holiday. The ire has even breached the mindsets of former staunch KMT and TPP supporters. Most Taiwanese have vowed to use
As an American living in Taiwan, I have to confess how impressed I have been over the years by the Chinese Communist Party’s wholehearted embrace of high-speed rail and electric vehicles, and this at a time when my own democratic country has chosen a leader openly committed to doing everything in his power to put obstacles in the way of sustainable energy across the board — and democracy to boot. It really does make me wonder: “Are those of us right who hold that democracy is the right way to go?” Has Taiwan made the wrong choice? Many in China obviously
About 6.1 million couples tied the knot last year, down from 7.28 million in 2023 — a drop of more than 20 percent, data from the Chinese Ministry of Civil Affairs showed. That is more serious than the precipitous drop of 12.2 percent in 2020, the first year of the COVID-19 pandemic. As the saying goes, a single leaf reveals an entire autumn. The decline in marriages reveals problems in China’s economic development, painting a dismal picture of the nation’s future. A giant question mark hangs over economic data that Beijing releases due to a lack of clarity, freedom of the press