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Closer China ties reshape Taiwan industries' competitiveness: firm

Closer China ties reshape Taiwan industries' competitiveness: firm

Taipei, Aug. 26 (CNA) Warming ties between Taiwan and mainland China could bring opportunities as well as challenges to Taiwan's top-tier companies, but these corporations may not all face the same benefits from improved access to China, according to a research report of the Taiwan Ratings Corp.
"There is no doubt that the gradual normalization of economic relations between Taiwan and mainland China will offer new growth opportunities to many of Taiwan's industries. However, any potential growth is unlikely to be realized without an increase in credit risks," said the credit rating agency's chief ratings officer Susan Chu.
Closer links with China will partly reshape credit profiles of Taiwan's leading corporations, according to Daniel Hsiao, director of the agency's department of corporate and funds rating.
He elaborated that while positive impacts are expected in the transportation, real estate, petrochemical, semiconductor, packaging and testing as well as flat panel sectors, the fortune for cement and food processing industries may be mixed, and electronic components manufacturing and services may be negatively affected.
The credit rating agency's research covers Taiwan's top 100 corporations, of which hi-tech industries account for 53 percent; petrochemical 10 percent; steel 5 percent; retail businesses 4 percent; telecommunications, marine transportation and food processing each 3 percent; petroleum, cement, textiles and aviation each 2 percent; automobile 1 percent.
The research report meanwhile noted that while Taiwan's top corporations' credit quality were "largely resilient to the current global recession", the existing adverse factors of declining profitability and rising loan levels had a negative impact on perceived risk.
(By Lillian Lin)




Updated : 2021-06-23 20:48 GMT+08:00