Taiwanese food-making tycoon Wei Ing-chou’s (魏應州) warning last week about the challenges facing the Chinese economy was hardly music to the ears of a government that has made cross-strait trade deregulation a cornerstone of its policy.
In a front-page story by the Chinese-language Economic Daily News on Tuesday, Wei — chairman of Tingyi (Cayman Islands) Holding Corp (康師傅控股), China’s biggest instant noodle maker and owner of the Master Kang brand — said that in a world economy hit by the US subprime mortgage crisis, “China’s economy will be facing the biggest changes in the next two to three years.”
Wei also said in the interview that in view of this changing environment, companies should pay particular attention to financial risk control and suggested that keeping “cash on hand” would be the best strategy for companies.
Wei’s warning is not an isolated call.
On Thursday, Gordon Chang (章家敦), the Chinese-American author of the 2001 book titled The Coming Collapse of China, said in a New York speech that China was “due for a post-Olympic recession.”
Chang also warned Taiwanese against investing in China, especially in its financial markets, over the next two to three years or even the next half-decade, the Central News Agency reported.
However, all the cross-trade policies unveiled by the Chinese Nationalist Party (KMT) government since President Ma Ying-jeou (馬英九) took office in May seem to downplay or even overlook the fact that China’s economic outlook is increasingly challenging in terms of growth creation and inflation control.
On Thursday, the government scrapped a regulation banning companies with more than 20 percent Chinese equity stake from listing on the nation’s stock markets. At the same time, it removed the prohibition on companies with 40 percent or more of their net assets invested in China from listing in Taiwan. The administration also agreed to allow companies to sell shares in Taiwan and use the proceeds for investment across the Strait.
No one in this country would oppose a modest degree of financial liberalization aimed at broadening domestic capital markets and attracting more foreign fund inflow — as long as the regulators have established adequate measures to safeguard shareholders’ interests and the economy as a whole.
The government has to realize that the best policy for the nation’s export-oriented economy is one that targets global markets — not just one focused on China, where many firms are already struggling to cope with a rising Chinese yuan, a reduction in export rebates, tightening loans and rising labor costs.
At this point, there is little relief in sight for the Taiwanese economy. The past week saw the stock market falling 3.2 percent after rising 6.1 percent a week earlier, making it the region’s worst performer.
The reasons are clear enough, given the latest slew of economic data: Leading indicators were flat in June for the second straight month, suggesting that the economic slowdown would persist; the latest consumer confidence poll showed the public had become more bearish last month compared with the previous month; several high-tech companies had issued conservative guidance on business prospects in the second half of the year.
Faced with the current market correction, investors need positive and constructive action from the government to boost confidence. Whether the market could regain its upward momentum would be dependent on macroeconomic factors, including global oil price fluctuations and their implications on corporate profits — not the Chinese economy alone.
It is almost three years since Chinese President Xi Jinping (習近平) and Russian President Vladimir Putin declared a friendship with “no limits” — weeks before Russia’s invasion of Ukraine in February 2022. Since then, they have retreated from such rhetorical enthusiasm. The “no limits” language was quickly dumped, probably at Beijing’s behest. When Putin visited China in May last year, he said that he and his counterpart were “as close as brothers.” Xi more coolly called the Russian president “a good friend and a good neighbor.” China has conspicuously not reciprocated Putin’s description of it as an ally. Yet the partnership
The ancient Chinese military strategist Sun Tzu (孫子) said “know yourself and know your enemy and you will win a hundred battles.” Applied in our times, Taiwanese should know themselves and know the Chinese Communist Party (CCP) so that Taiwan will win a hundred battles and hopefully, deter the CCP. Taiwanese receive information daily about the People’s Liberation Army’s (PLA) threat from the Ministry of National Defense and news sources. One area that needs better understanding is which forces would the People’s Republic of China (PRC) use to impose martial law and what would be the consequences for living under PRC
Chinese Nationalist Party (KMT) Chairman Eric Chu (朱立倫) said that he expects this year to be a year of “peace.” However, this is ironic given the actions of some KMT legislators and politicians. To push forward several amendments, they went against the principles of legislation such as substantive deliberation, and even tried to remove obstacles with violence during the third readings of the bills. Chu says that the KMT represents the public interest, accusing President William Lai (賴清德) and the Democratic Progressive Party of fighting against the opposition. After pushing through the amendments, the KMT caucus demanded that Legislative Speaker
Although former US secretary of state Mike Pompeo — known for being the most pro-Taiwan official to hold the post — is not in the second administration of US president-elect Donald Trump, he has maintained close ties with the former president and involved himself in think tank activities, giving him firsthand knowledge of the US’ national strategy. On Monday, Pompeo visited Taiwan for the fourth time, attending a Formosa Republican Association’s forum titled “Towards Permanent World Peace: The Shared Mission of the US and Taiwan.” At the event, he reaffirmed his belief in Taiwan’s democracy, liberty, human rights and independence, highlighting a
RSS