The Ministry of Audit’s latest report shows that the nation’s 23 state-owned enterprises (SOEs) posted a combined revenue of NT$3.716 trillion (US$118.7 billion) and expenditure of NT$3.477 trillion last year, leaving an annual surplus of NT$239 billion for the year. The report indicates that only three SOEs reported losses last year and that the combined surplus of the 23 SOEs was about 29 percent higher than the NT$184.3 billion estimated surplus in the government’s budget approved by the legislature.
Employees and union representatives of state-run businesses are asking for higher wages, which, they suggest, might encourage their peers in the private sector and benefit the nation’s economy.
The corporatist model in Taiwan’s economy has long endorsed that companies, whether state-run or privately owned, distribute bonuses and pay raises when they are making enough money to share their earnings with employees. The SOEs’ scorecard for last year seemed fantastic and almost everyone would have agreed that a pay raise is accordingly the next move.
However, the public knows this will not happen soon because Cabinet officials last month said that civil servants and SOE employees would not receive pay raises until wage increases were implemented for employees of private enterprises. Several lawmakers are putting enormous effort into pushing for the passage of amendments to four related laws that provide tax incentives to publicly traded companies that share their profits with employees and raise wages.
However, who actually contributed to the national coffers? From the ministry’s report, the central bank made the most money among the 20 profitable SOEs last year. Without its NT$198 billion — 83 percent of total profit — which the bank gained through its forex investments and interest income, Taiwanese SOEs would have made a much smaller contribution.
State utility Taiwan Power Co (Taipower) was next with profits of NT$14.1 billion, compared with the NT$17.5 billion loss it made in the previous year. Although it was Taipower’s first profitable year since 2006 — thanks to falling international prices of some key raw materials for electricity generation — the firm still faced an accumulated deficit of NT$208.4 billion as of the end of last year. In other words, last year’s profit was tiny compared with the firm’s accumulated losses over the years.
In contrast, the ministry’s report shows that refiner CPC Corp, Taiwan (CPC), the Taiwan Railways Administration (TRA) and BankTaiwan Life Insurance Co were the three SOEs that remained unprofitable last year. CPC led the pack with a loss of NT$33 billion, a stark contrast with the NT$17.2 billion in earnings it had forecast for the year. BankTaiwan Life Insurance registered a loss of NT$842 million, a reversal of its previously projected profit of NT$252 million for the year. Meanwhile, the TRA registered losses of NT$3.7 billion last year, after predicting a loss of NT$6.2 billion. What is clear from their lackluster performances is not only heavy deficits, but also persistent inefficiency.
The perennial issue of state firms’ lack of competitiveness is not new. Over the years, the government has repeatedly vowed to reform SOEs, but its pledges are nothing but empty words. The biggest problem facing the government is an inability to overcome obstacles posed by strongly vested interests in state companies, especially with top management positions filled with political appointments to reward government supporters and loyal party figures.
Therefore, without any real action being taken to improve the supervision of SOEs and reform the state firms’ ownership structure and management, Taiwan will have to continue relying on its central bank to make contributions to the treasury every year.
US President Donald Trump has gotten off to a head-spinning start in his foreign policy. He has pressured Denmark to cede Greenland to the United States, threatened to take over the Panama Canal, urged Canada to become the 51st US state, unilaterally renamed the Gulf of Mexico to “the Gulf of America” and announced plans for the United States to annex and administer Gaza. He has imposed and then suspended 25 percent tariffs on Canada and Mexico for their roles in the flow of fentanyl into the United States, while at the same time increasing tariffs on China by 10
As an American living in Taiwan, I have to confess how impressed I have been over the years by the Chinese Communist Party’s wholehearted embrace of high-speed rail and electric vehicles, and this at a time when my own democratic country has chosen a leader openly committed to doing everything in his power to put obstacles in the way of sustainable energy across the board — and democracy to boot. It really does make me wonder: “Are those of us right who hold that democracy is the right way to go?” Has Taiwan made the wrong choice? Many in China obviously
US President Donald Trump last week announced plans to impose reciprocal tariffs on eight countries. As Taiwan, a key hub for semiconductor manufacturing, is among them, the policy would significantly affect the country. In response, Minister of Economic Affairs J.W. Kuo (郭智輝) dispatched two officials to the US for negotiations, and Taiwan Semiconductor Manufacturing Co’s (TSMC) board of directors convened its first-ever meeting in the US. Those developments highlight how the US’ unstable trade policies are posing a growing threat to Taiwan. Can the US truly gain an advantage in chip manufacturing by reversing trade liberalization? Is it realistic to
Last week, 24 Republican representatives in the US Congress proposed a resolution calling for US President Donald Trump’s administration to abandon the US’ “one China” policy, calling it outdated, counterproductive and not reflective of reality, and to restore official diplomatic relations with Taiwan, enter bilateral free-trade agreement negotiations and support its entry into international organizations. That is an exciting and inspiring development. To help the US government and other nations further understand that Taiwan is not a part of China, that those “one China” policies are contrary to the fact that the two countries across the Taiwan Strait are independent and
RSS