Last week, an opposition lawmaker took issue with the central government’s financial health, after the Ministry of Finance’s latest “National Debt Clock” data showed that the average debt per capita had climbed to NT$274,000 (US$8,484.55) as of May 10, an all-time high for Taiwan.
The nation’s outstanding debt with a maturity of more than one year was NT$5.994 trillion and the amount of short-term outstanding debt was NT$419.1 billion, based on the ministry’s data. Overall, the national debt totaled NT$6.413 trillion, equivalent to NT$274,000 per capita on average, compared with NT$250,000 at the end of last year and an average of NT$242,000 over the past eight years under former president Tsai Ing-wen (蔡英文).
The ministry denied that the nation’s debt problem had deteriorated, as suggested by Chinese Nationalist Party (KMT) Legislator Lee Yen-hsiu (李彥秀), adding that the rising debt mainly stemmed from short-term fund management, especially an allocation of NT$100.1 billion to Taiwan Power Co for the state utility’s recapitalization needs. After the ministry on Saturday paid off short-term loans of NT$48 billion, the debt figure would drop to NT$272,000 per capita on average, it said, adding that the number would fall further following a NT$115 billion debt repayment scheme expected to start next month.
The ministry began publishing the “National Debt Clock” data online in December 2010 to remind government agencies to monitor their spending and maintain fiscal discipline. The national debt includes long-term and short-term debt, with the short-term debt tending to be volatile as the ministry manages short-term loans for various funds.
As a result, the ministry sees the ratio between the outstanding balance of its long-term debt and the average GDP over the past three years as a perfect gauge of the nation’s debt burden, aiming to keep central government borrowing below the legal limit stipulated in the Public Debt Act (公共債務法) at 40.6 percent of average GDP over the past three years.
As the debt ratio has remained within an appropriate range over the past few years — at 28.3 percent last year and 26.5 percent as of May 10, compared with 33 percent in 2016 and a peak of 36.3 percent in 2012 — the ministry said there is no expected fiscal deterioration and no growing debt burden.
National debt tends to climb in the first half of a year due to government agencies’ needs at the start of the year, such as Lunar New Year holiday bonuses for civil servants and national health insurance subsidies, as well as funds earmarked for local governments, with the figure usually moving lower in the second half following the collection of tax revenue.
After all, Taiwan’s national debt is still manageable and the nation’s financial risks remain low. Nevertheless, there is no denying that the central government’s outstanding balance of long-term debt increased from NT$5.398 trillion in 2016 when Tsai took office in May of that year. How to bolster fiscal resilience and continue to reduce its debt burden is a major challenge facing Minister of Finance Chuang Tsui-yun (莊翠雲).
What is important for the nation is not the debt, but whether the money borrowed is used to drive economic growth and further national development. Taiwan’s debt problem might be less serious than that of many other countries, but the government needs to adhere to fiscal discipline and always retain enough revenue to be prepared for potential shocks.
In their recent op-ed “Trump Should Rein In Taiwan” in Foreign Policy magazine, Christopher Chivvis and Stephen Wertheim argued that the US should pressure President William Lai (賴清德) to “tone it down” to de-escalate tensions in the Taiwan Strait — as if Taiwan’s words are more of a threat to peace than Beijing’s actions. It is an old argument dressed up in new concern: that Washington must rein in Taipei to avoid war. However, this narrative gets it backward. Taiwan is not the problem; China is. Calls for a so-called “grand bargain” with Beijing — where the US pressures Taiwan into concessions
The term “assassin’s mace” originates from Chinese folklore, describing a concealed weapon used by a weaker hero to defeat a stronger adversary with an unexpected strike. In more general military parlance, the concept refers to an asymmetric capability that targets a critical vulnerability of an adversary. China has found its modern equivalent of the assassin’s mace with its high-altitude electromagnetic pulse (HEMP) weapons, which are nuclear warheads detonated at a high altitude, emitting intense electromagnetic radiation capable of disabling and destroying electronics. An assassin’s mace weapon possesses two essential characteristics: strategic surprise and the ability to neutralize a core dependency.
Chinese President and Chinese Communist Party (CCP) Chairman Xi Jinping (習近平) said in a politburo speech late last month that his party must protect the “bottom line” to prevent systemic threats. The tone of his address was grave, revealing deep anxieties about China’s current state of affairs. Essentially, what he worries most about is systemic threats to China’s normal development as a country. The US-China trade war has turned white hot: China’s export orders have plummeted, Chinese firms and enterprises are shutting up shop, and local debt risks are mounting daily, causing China’s economy to flag externally and hemorrhage internally. China’s
During the “426 rally” organized by the Chinese Nationalist Party (KMT) and the Taiwan People’s Party under the slogan “fight green communism, resist dictatorship,” leaders from the two opposition parties framed it as a battle against an allegedly authoritarian administration led by President William Lai (賴清德). While criticism of the government can be a healthy expression of a vibrant, pluralistic society, and protests are quite common in Taiwan, the discourse of the 426 rally nonetheless betrayed troubling signs of collective amnesia. Specifically, the KMT, which imposed 38 years of martial law in Taiwan from 1949 to 1987, has never fully faced its
RSS