Houston Community News >> Sluggish Taiwan Economy Calls for Change
3/20/2008 Taipei (AFP)-- Investors have
been pumping funds into the Taipei market on the prospect of an
opposition win in Saturday’s presidential vote and closer ties with
China — and relief for cab driver Liao En-tsu.
For Liao, the flip side of the sluggish economy has seen his salary almost halve in five years and he sometimes waits hours to pick up a fare.
He says the poll will give him a chance to vote for the Kuomintang’s (KMT) candidate Ma Ying-jeou over Frank Hsieh of the ruling Democratic Progressive Party.
“As a taxi driver, I can feel the pain when consumers want to save money, preferring public transport to a private taxi,” he told AFP as he waited at a corner for a call from cab control.
In the last five years the Taipei stock market has under-performed against other Asian bourses amid slowing economic fundamentals.
But the last few months have seen investors pump funds into the market on expectation of a KMT win, sending the Taipei weighted index up over 10 percent since late January despite the global credit crunch ravaging most exchanges, dealers say.
Ma has vowed to tap into booming China via a “common market” on trade.
He has urged closer economic exchanges such as lifting a ban on direct air links, relaxing rules on China-bound investment, allowing mainland investors access to Taiwan’s manufacturing sector, letting in more Chinese tourists and establishing a mechanism to protect mutual investments.
On the surface Taiwan — the world’s 17th largest economy — rumbled along nicely in 2007. Gross domestic product grew 5.7 percent, exports were up 10.1 percent, and inflation held steady at 1.8.
Electronics and information technology are the core of the economy, making up nearly 30 percent of GDP.
Analysts say the underlying picture is not so rosy.
IBT Securities analyst Ma Chi-zen said the benefit of surging exports was not trickling down to the public.
He said a large chunk of the exports actually came from growing Taiwanese investment in China. Exclude those, he said, and last year’s GDP growth falls to less than three percent. The share of exports from China “shows the benefits (for Taiwan) on paper, not the real benefits. The mainland market is the real beneficiary.”
Aidan Wang, an analyst with Yuanta Securities Investment Consulting, said inflation had eroded wage growth to just one percent in real terms, prompting consumers to tighten their belts.
Except for a blip in 2004, annual consumer spending has risen between 0.67 and 2.61 percent in the eight years the DPP has run the country.
For Liao, the flip side of the sluggish economy has seen his salary almost halve in five years and he sometimes waits hours to pick up a fare.
He says the poll will give him a chance to vote for the Kuomintang’s (KMT) candidate Ma Ying-jeou over Frank Hsieh of the ruling Democratic Progressive Party.
“As a taxi driver, I can feel the pain when consumers want to save money, preferring public transport to a private taxi,” he told AFP as he waited at a corner for a call from cab control.
In the last five years the Taipei stock market has under-performed against other Asian bourses amid slowing economic fundamentals.
But the last few months have seen investors pump funds into the market on expectation of a KMT win, sending the Taipei weighted index up over 10 percent since late January despite the global credit crunch ravaging most exchanges, dealers say.
Ma has vowed to tap into booming China via a “common market” on trade.
He has urged closer economic exchanges such as lifting a ban on direct air links, relaxing rules on China-bound investment, allowing mainland investors access to Taiwan’s manufacturing sector, letting in more Chinese tourists and establishing a mechanism to protect mutual investments.
On the surface Taiwan — the world’s 17th largest economy — rumbled along nicely in 2007. Gross domestic product grew 5.7 percent, exports were up 10.1 percent, and inflation held steady at 1.8.
Electronics and information technology are the core of the economy, making up nearly 30 percent of GDP.
Analysts say the underlying picture is not so rosy.
IBT Securities analyst Ma Chi-zen said the benefit of surging exports was not trickling down to the public.
He said a large chunk of the exports actually came from growing Taiwanese investment in China. Exclude those, he said, and last year’s GDP growth falls to less than three percent. The share of exports from China “shows the benefits (for Taiwan) on paper, not the real benefits. The mainland market is the real beneficiary.”
Aidan Wang, an analyst with Yuanta Securities Investment Consulting, said inflation had eroded wage growth to just one percent in real terms, prompting consumers to tighten their belts.
Except for a blip in 2004, annual consumer spending has risen between 0.67 and 2.61 percent in the eight years the DPP has run the country.
(Contributed by AFP)