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Commercial Times: Taiwan's economic plight

Commercial Times: Taiwan's economic plight

According to the Council for Economic Planning and Development, Taiwan's economy flashed a "yellow-blue" light, signaling a slowdown, for the fourth consecutive month in November. The composite index of monitoring indicators dropped to 17, just one point above the "blue" light, which indicates a recession. The downswing can be attributed to the slowing world economy. But if we look at South Korea, we can see that the global downturn obviously has had a worse impact on Taiwan than on South Korea. Although South Korea has also experienced a slowdown in recent months, the country still managed to post a 13.8 percent export growth in November, with the unemployment rate dropping to 2.9 percent. By comparison, Taiwan's export growth plunged to 1.3 percent in the same month, while the jobless rate rose to 4.3 percent. The fundamental problem is the over-concentration of Taiwanese exports on electronic products. In the first half of this year, semiconductors and flat panels accounted for 25 percent of all Taiwanese exports, whereas South Korean exports were evenly distributed among semiconductors, flat panels, ships, cars and communications products. Despite the lackluster performance of semiconductors and flat panels during that period, South Korea's export sector continued to gain momentum from car, ship and steel products, which recorded export growth of about 30 percent. At a time when Taiwan's economy is moving fast toward a recession, the government should not only set its eyes on short-term stimulus measures but should also pay attention to the problems caused by Taiwan's over-reliance on its electronics sector. Only by doing so can it provide the economy with the momentum for stable growth. (Editorial abstract -- Dec. 29, 2011) (By Y.F. Low)


Updated : 2021-05-15 13:16 GMT+08:00