The Taiwan Research Institute (台灣綜合研究院) yesterday urged the central bank to weaken the New Taiwan dollar to support the nation’s export-reliant economy, which could grow 3.35 percent this year, down from the 3.43 percent it projected six months ago.
The Taipei-based think tank made the suggestion during an economics forum where economists expressed concerns about rising competition from the technology supply chain in China.
“The central bank can lend a helping hand to local exporters by weakening the New Taiwan dollar [against the US currency],” institute president Wu Tsai-yi (吳再益) said, adding that Japan and South Korea have aggressively eased monetary policies to back their exports.
The institute expects the NT dollar to trade at an average of NT$31.43 versus the greenback this year, softer than the closing price of NT$31.266 in Taipei yesterday.
A weaker NT dollar would benefit domestic exporters that are struggling to stay competitive on the world stage, where their Chinese counterparts have increasingly turned from partners to rivals, Wu said.
The bank is due to review interest rates and other monetary issues at its quarterly board meeting next week.
The institute expects exports to grow 4.84 percent this year from last year, down from a forecast made in December last year of 6.87 percent growth.
Taiwan must not ignore or minimize the challenges posed by the rise of the Chinese supply chain, National Central University economics professor Dachrahn Wu (吳大任) told the forum.
Taiwanese smartphone vendor HTC Corp (宏達電) losing market share to Chinese smartphone maker Xiaomi Inc (小米) reflects this trend, Dachrahn Wu said.
While currency depreciation would help enhance competitiveness for Taiwanese exporters, local firms must upgrade their technology and services to retain customers, he said.
Exports to China, the largest destination for Taiwanese exports with a 40 percent share, contracted by 6.9 percent from a year ago to US$46.67 billion for the first five months of this year, data from the Ministry of Finance showed.
The decline, while related to an economic slowdown in China, shows that China is cutting dependence on Taiwan for imports of electronic devices and technology solutions, he said.
The rise of the Chinese supply chain also weighs on global trade as Beijing seeks to focus on domestic demand through economic reform, Directorate-General of Budget, Accounting and Statistics Deputy Director Tsai Yu-tai (蔡鈺泰) said.
China’s adjustments have dampened global trade and the impact on Taiwan is more evident given its small GDP growth in recent years, Tsai said.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in