The government’s updated plan to boost private consumption by issuing stimulus coupons should provide much-needed support to the economy, given that the plan has multiple payment tools, and is larger in scale and has better rewards than the original version. That might dissipate some economists’ concerns that Taiwan might not record positive GDP growth this year, and fail to outperform major Asian economies such as Singapore and South Korea.
In the first quarter of this year, Taiwan outperformed most economies, with annual GDP growth of 1.54 percent, but the question now is how to keep the engine running. Domestic demand contributed 0.68 percentage points, or 44 percent, to last quarter’s GDP, and spurring domestic consumption has become one of the government’s top priorities. The nation’s manufacturing sector has been hurt by the COVID-19 pandemic, as people in Taiwan’s major export markets, such as China, the US and Europe, have delayed purchasing non-essential items amid a global economic downturn.
Large-scale containment measures and lockdowns worldwide have also constrained factory production and commercial activities, hurting demand for electronics, components and petrochemical products made in Taiwan. As a result, the production value of the nation’s manufacturing sector is expected to shrink 5.7 percent annually, the Industrial Technology Research Institute (工研院) said in its latest forecast.
While external demand is beyond the government’s control, domestic consumption and investment can be spurred via fiscal policies. The government is close to finalizing details of stimulus coupons worth NT$40 billion (US$1.33 billion), which is almost four times the original budget of NT$11.1 billion.
As the subsidy aims to boost consumption, the program should be expanded to cover all Republic of China citizens, National Development Council Minister Kung Ming-hsin (龔明鑫) said yesterday during an interview with Hit FM radio host Clara Chou (周玉蔻).
The plan would allow anyone, regardless of age or income, to pay NT$1,000 to obtain vouchers worth NT$3,000, which is a U-turn from the original plan of excluding high-income earners from the scheme.
To maximize the vouchers’ effectiveness, the government is to expand their use to pay for almost everything from snacks at night markets or coffee at convenience stores to travel and entertainment. However, they cannot be used to “hoard” everyday necessities, such as toilet paper, or make purchases online.
People would also be able to make payments not only through digital payment platforms as previously planned, but also by other means.
The government is considering allowing payments via credit cards, Kung said.
In 2008, the government launched a similar, yet less sophisticated scheme by issuing NT$86.5 billion of consumption coupons, or NT$3,600 for each recipient, to combat the fallout from the global financial crisis. That helped boost the nation’s GDP by 0.28 to 0.43 percent the next year, lower than the estimated 0.66 to 1 percent, as most people spent the money on daily necessities, rather than on extra items.
Although the budget for the new plan is less than half the amount of 2008, it might at least offer a lifeline to local retailers, restaurants, hotels and tourism businesses that are on the verge of collapse.
In their recent op-ed “Trump Should Rein In Taiwan” in Foreign Policy magazine, Christopher Chivvis and Stephen Wertheim argued that the US should pressure President William Lai (賴清德) to “tone it down” to de-escalate tensions in the Taiwan Strait — as if Taiwan’s words are more of a threat to peace than Beijing’s actions. It is an old argument dressed up in new concern: that Washington must rein in Taipei to avoid war. However, this narrative gets it backward. Taiwan is not the problem; China is. Calls for a so-called “grand bargain” with Beijing — where the US pressures Taiwan into concessions
The term “assassin’s mace” originates from Chinese folklore, describing a concealed weapon used by a weaker hero to defeat a stronger adversary with an unexpected strike. In more general military parlance, the concept refers to an asymmetric capability that targets a critical vulnerability of an adversary. China has found its modern equivalent of the assassin’s mace with its high-altitude electromagnetic pulse (HEMP) weapons, which are nuclear warheads detonated at a high altitude, emitting intense electromagnetic radiation capable of disabling and destroying electronics. An assassin’s mace weapon possesses two essential characteristics: strategic surprise and the ability to neutralize a core dependency.
Chinese President and Chinese Communist Party (CCP) Chairman Xi Jinping (習近平) said in a politburo speech late last month that his party must protect the “bottom line” to prevent systemic threats. The tone of his address was grave, revealing deep anxieties about China’s current state of affairs. Essentially, what he worries most about is systemic threats to China’s normal development as a country. The US-China trade war has turned white hot: China’s export orders have plummeted, Chinese firms and enterprises are shutting up shop, and local debt risks are mounting daily, causing China’s economy to flag externally and hemorrhage internally. China’s
During the “426 rally” organized by the Chinese Nationalist Party (KMT) and the Taiwan People’s Party under the slogan “fight green communism, resist dictatorship,” leaders from the two opposition parties framed it as a battle against an allegedly authoritarian administration led by President William Lai (賴清德). While criticism of the government can be a healthy expression of a vibrant, pluralistic society, and protests are quite common in Taiwan, the discourse of the 426 rally nonetheless betrayed troubling signs of collective amnesia. Specifically, the KMT, which imposed 38 years of martial law in Taiwan from 1949 to 1987, has never fully faced its
RSS