Taiwan’s economy is facing greater downside risks as indicated by a slew of new financial data and a bearish business outlook issued by industry heavyweights. As Taiwan has an export-oriented economy, it is prone to changes outside its control. As global economic uncertainty and geopolitical tensions mount, the government should prepare with continuous measures to keep the nation’s economic growth and investor confidence in check.
The TAIEX fell 1.23 percent yesterday, breaching the key level of 13,000 points and totaling a 29 percent fall so far this year, as it hit 12,966.05 points. Local and foreign institutional investors turned bearish on the local equity market yesterday, selling NT$10.087 billion (US$315.25 billion) of local stocks. The New Taiwan dollar yesterday tumbled NT$0.113 to NT$31.997 against the US dollar, hitting a six-year low.
The Taiwan Stock Exchange has repeatedly called on investors to act rationally amid fluctuations on local stock markets, saying that local companies have greater resilience against downturns. Investors are not convinced by those assertions as they know that the stock market can go south in a flash, especially with the world economy on the brink of recession and as central banks struggle to tame inflation.
Deputy Minister of Finance Frank Juan (阮清華), who serves as executive secretary of the National Stabilization Fund, hinted early this month that the NT$500 billion fund would continue buying shares on local stock markets to buoy the TAIEX. Taiwan Semiconductor Manufacturing Co (TSMC) stock was one of the major targets, Juan said, as the company has the heaviest-traded shares on the local stock market.
However, doubts were raised among local investors as the TAIEX has slumped about 9.5 percent since the fund’s intervention.
As part of the government’s intervention, the Financial Supervisory Commission (FSC) last week introduced further curbs on short selling after the TAIEX plunged to its lowest level in nearly two years. Starting on Wednesday last week, the volume of intraday securities lending to short sell a stock was lowered to 10 percent of the stock’s average daily trading volume over the previous 30 sessions, down from 20 percent. The commission also raised the cost of short selling by increasing the amount of money an investor must deposit for securities borrowing to 120 percent of a stock’s value, up from 100 percent.
Yet TSMC shares extended previous losses yesterday, tumbling 3.64 percent to close at NT$397, amid growing fears that a global economic slowdown would further dampen the already sluggish demand for consumer electronics, smartphones and computers. TSMC shares have plummeted more than 37 percent since the start of this year. The world’s biggest contract chipmaker slashed its capital spending this year by 18 percent to US$36 billion, as demand for 7-nanometer chips used in smartphones and PC’s weakened. It is also cautious about its business outlook for next year.
Taiwan’s exports last month dipped into negative territory, down 5.3 percent year-on-year to US$37.53 billion, ending 26 months of expansion, according to Ministry of Finance statistics. The ministry said demand for almost all product categories sagged amid surging global inflation and monetary tightening, and warned of hardship ahead as Taiwan’s exports are likely to weaken further this quarter, persisting through the first half of next year.
Taiwan’s economy is expected to expand at a lower pace of 2.8 percent next year, compared with 3.3 percent this year, the IMF projected.
With the external environment worsening, the government should introduce more stimulus measures to spur domestic demand, offset external shock and regain investor confidence.
You wish every Taiwanese spoke English like I do. I was not born an anglophone, yet I am paid to write and speak in English. It is my working language and my primary idiom in private. I am more than bilingual: I think in English; it is my language now. Can you guess how many native English speakers I had as teachers in my entire life? Zero. I only lived in an English-speaking country, Australia, in my 30s, and it was because I was already fluent that I was able to live and pursue a career. English became my main language during adulthood
Somehow, US intelligence identified “the Houthis’ top missile guy” and pinpointed his exact location. At 1348 hours (Washington time), March 15, President Trump’s national security advisor Mike Waltz texted, “positive ID of him walking into his girlfriend’s building.” The unsuspecting Romeo entered. High above, the drone monitoring the building registered a flash. When the smoke cleared, Mr. Waltz texted, “…And it’s now collapsed.” RIP. The star-crossed “top missile guy” had been target number one in the now uproarious US Navy bombing campaign on that Sunday against the Yemeni rebels who have been holding the Red Sea hostage since October 19,
Taiwan on Monday celebrated Freedom of Speech Day. The commemoration is not an international day, and was first established in Tainan by President William Lai (賴清德) in 2012, when he was mayor of that city. The day was elevated to a national holiday in 2016 by then-president Tsai Ing-wen (蔡英文). Lai chose April 7, because it marks the anniversary of the death of democracy advocate Deng Nan-jung (鄭南榕), who started Freedom Era Weekly to promote freedom of expression. Thirty-six years ago, a warrant for Deng’s arrest had been issued after he refused to appear in court to answer charges of
The Opinion page has published several articles and editorials over the past few weeks addressing Taiwan’s efforts to leverage unique or strong aspects of its culture to increase international awareness of the nation. These have included submissions by foreign journalists and overseas students, highlighting how bubble milk tea, Guinness World Record attempts, the entertainment sectors, impressive scenery, world-class cuisine and important contributions to the high-tech supply chain can enhance Taiwan’s recognition overseas and therefore its soft power. That entails competing for attention in already crowded sectors. Other nations, after all, offer popular entertainment exports, beautiful scenic spots and great food.
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