Doubts Remain Over Taiwan Growth

[LeveragedBuyout]

Doubts Remain Over Taiwan Growth - Real Time Economics - WSJ

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• July 31, 2014, 12:38 AM ET

Doubts Remain Over Taiwan Growth
ByFanny Liu

Container ships at Taiwan’s northern Taipei Port, 2012.
Agence France-Presse/Getty Images
Taiwan’s better-than-expected growth in the second quarter shows that the export-dependent economy is gaining momentum, but some economists question whether that can be maintained.

Shipments of electronic components to mobile-device makers including Apple Inc. have been for months propelling Taiwan’s economy, which is on course for the strongest growth in three years. The U.S. and China are Taiwan’s two biggest export markets and their economic recoveries have helped growth.

Barclays economist Waiho Leong expects Taiwan’s GDP to rise 4.1% this year, compared with his previous forecast of 3.6% and the government’s official target of 2.98%. Mr. Leong believes the economy, which relies heavily on electronics exports and tourism, could expand even more quickly at 4.5% in 2015.

“Overall, the strong Q2 GDP print and recent strong tone of incoming data provide further evidence that Taiwan is benefiting from the recovery in external demand, particularly from the U.S. and China,” Mr. Leong wrote.

For some observes, this reliance on the products of tech titans is a worry. Kevin Wang, an economist with Taishin Securities Investment Advisory, said Taiwan’s growth will be very much tied to new product launches for the next few years at least. That isn’t healthy as the economy could be hit if specific demand ebbs, though it is less of a concern if developed economies continue to recover, he said.

ANZ economist Louis Lam added that Taiwanese exports may lose competitiveness after China and South Korea sign a free-trade agreement as early as this year. More than 70% exports from Taiwan and South Korea overlap, Mr. Lam said.

“If Taiwan cannot make any progress in joining the Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership, Taiwan’s role in the global supply chain will be hit inevitably,” added Standard Chartered economist Tony Phoo.

He expects the economy to grow 3.90% in 2014. Taiwan President Ma Ying-jeou has said joining the TPP is one of his top priorities.

 

[terranMarine]

once we take control we'll save their economy

 

[Aepsilons]

He expects the economy to grow 3.90% in 2014. Taiwan President Ma Ying-jeou has said joining the TPP is one of his top priorities.

Not bad at all.

 

[visom]

once we take control we'll save their economy

GDP per capita tends to go down as a country grows in population, not rise.

 

[Edison Chen]

Taiwan is sucked up, even their entertainment industry is moving toward China.

 

[Aepsilons]

GDP per capita tends to go down as a country grows in population, not rise.

Correct. In fact, Taiwanese have substantially higher GDP per capita than China's ($7000 per annum). Taiwan's is $22,000.

Taiwan is sucked up, even their entertainment industry is moving toward China.

Or Japan.

 

[visom]

Correct. In fact, Taiwanese have substantially higher GDP per capita than China's ($7000 per annum). Taiwan's is $22,000.



Or Japan.

Musashi's quote is as deep as the stab wounds he put in his opponents.

 

[Aepsilons]

Musashi's quote is as deep as the stab wounds he put in his opponents.

 

[LeveragedBuyout]

Not bad at all.

Indeed, I would kill for that kind of growth rate in the US. But reform is a marathon, not a one-time event. Taiwan needs to keep moving forward with reforms and new trade deals to stay ahead of the curve before China and Korea kill it.

 

[Grand Historian]

I agree,college graduates are making the same amount of money as my father did when he graduated from college.(I'm not even calculating inflation so in reality it would be even lower)

 

[Aepsilons]

I agree,college graduates are making the same amount of money as my father did when he graduated from college.(I'm not even calculating inflation so in reality it would be even lower)

This is the reason why college students should invest in proper education , instead of basket weaving courses that are offered in liberal arts schools. One can't go wrong in business, economics, engineering, nursing, medicine, HR.

Those with majors in say, East Asian studies, Female Gender Studies, Art, Interpretive Dance, Music Theory, Art History ...will be graduating college wanting. Unfortunately.

 

[Zsari]

I agree,college graduates are making the same amount of money as my father did when he graduated from college.(I'm not even calculating inflation so in reality it would be even lower)

NPR program couple weeks ago tells a story of a father got out of high school in 1960's, got a job at GM with a 60k salary, while his son now recently out of high school, waiting tables for 8 buck an hour. Forget about inflation.

 

[TheTruth]

Taiwan invests and donates a great deal to China. If you don't think the vast majority of Taiwan's elite are totally invested in the restoration of the Chinese nation you're lying to yourself.