As some stock markets around the world opened the new year with substantial increases in share prices on Friday, people may have hoped they could comfortably bid farewell to a dismal year while welcoming a more promising one.
Better think twice. There’s little reason to be optimistic about the global economy after several countries on Friday continued releasing weaker-than-expected economic data in the face of the ongoing global slump.
It started with Singapore, where the government said its economy might contract as much as 2 percent this year — worse than its November forecast of a 1 percent contraction or less — as the global downturn cut into demand for its goods.
A few hours later, South Korea said its exports fell 17.4 percent last month from a year earlier, which forced the export-dependent economy to post an annual trade deficit of US$13 billion last year — its first since 1997. Seoul now forecasts the nation’s exports might grow a mere 1 percent this year from last year.
The bad news didn’t stop there, however, as a slew of surveys around the world showed on Friday that last month China’s manufacturing output declined for a fifth month, Australian manufacturers faced shrinking output for a seventh month, US factory activity fell to a 28-year low and Eurozone manufacturers ended their collective output at an all-time low.
In Taiwan, the government’s most updated data showed domestic manufacturers posted a sharp decline in industrial production in November, the largest drop since late 2001.
These dismal manufacturing figures from countries around the world suggest that major economies are all suffering along with the US because of a lack of new orders. The data also meant that as the global manufacturing sector ended last year with deep concerns of a recession, this year is set to be a very difficult one.
In anticipation of this unprecedented challenge to their economies, several governments launched economic stimulus packages late last year, some including massive public projects, in a bid to boost domestic demand and fill the void left by slowing exports.
Policymakers have also acted with back-to-back interest rate cuts to create a loose monetary environment for households and companies, hoping this would lead to higher consumer spending and business investment. Some even took the unusual step of nationalizing key industries to avoid systemic risks.
Their efforts have however so far failed to generate economic results to contain the crisis. The reason their efforts haven’t worked wasn’t because the measures they took were wrong, but because the global slump this time is many times worse than people can imagine.
Some countries are already in recession while others are in danger of heading into one. But unlike previous recessions that tended to be brief and mild, the recession this time is likely to be longer in duration and far more severe in scope. Economists at Moody’s said the recession was formidable because of “the unparalleled magnitude and systemic cast of the financial crisis.”
Since the outlook remains grim in light of slowing orders, this year will surely be a bleak one marked by rising unemployment in particular. Therefore, there’s no reason to be optimistic.
If caution is the only antidote to the economic uncertainty, governments should avoid rash decisions and remain vigilant against civic unrest and trade protectionism that usually appear with rising unemployment. Should cross-border collaboration be necessary to prevent the world economy sliding into a protracted recession, governments should show people a much stronger and coordinated policy.
Trying to force a partnership between Taiwan Semiconductor Manufacturing Co (TSMC) and Intel Corp would be a wildly complex ordeal. Already, the reported request from the Trump administration for TSMC to take a controlling stake in Intel’s US factories is facing valid questions about feasibility from all sides. Washington would likely not support a foreign company operating Intel’s domestic factories, Reuters reported — just look at how that is going over in the steel sector. Meanwhile, many in Taiwan are concerned about the company being forced to transfer its bleeding-edge tech capabilities and give up its strategic advantage. This is especially
US President Donald Trump’s second administration has gotten off to a fast start with a blizzard of initiatives focused on domestic commitments made during his campaign. His tariff-based approach to re-ordering global trade in a manner more favorable to the United States appears to be in its infancy, but the significant scale and scope are undeniable. That said, while China looms largest on the list of national security challenges, to date we have heard little from the administration, bar the 10 percent tariffs directed at China, on specific priorities vis-a-vis China. The Congressional hearings for President Trump’s cabinet have, so far,
US political scientist Francis Fukuyama, during an interview with the UK’s Times Radio, reacted to US President Donald Trump’s overturning of decades of US foreign policy by saying that “the chance for serious instability is very great.” That is something of an understatement. Fukuyama said that Trump’s apparent moves to expand US territory and that he “seems to be actively siding with” authoritarian states is concerning, not just for Europe, but also for Taiwan. He said that “if I were China I would see this as a golden opportunity” to annex Taiwan, and that every European country needs to think
For years, the use of insecure smart home appliances and other Internet-connected devices has resulted in personal data leaks. Many smart devices require users’ location, contact details or access to cameras and microphones to set up, which expose people’s personal information, but are unnecessary to use the product. As a result, data breaches and security incidents continue to emerge worldwide through smartphone apps, smart speakers, TVs, air fryers and robot vacuums. Last week, another major data breach was added to the list: Mars Hydro, a Chinese company that makes Internet of Things (IoT) devices such as LED grow lights and the
RSS