Newspaper article China Post

Government Falling Short on Promotion of Economic Strategies

Newspaper article China Post

Government Falling Short on Promotion of Economic Strategies

Article excerpt

(ProQuest: [...] denotes non-USASCII text omitted)

The National Conference on Economic and Trade Affairs held by the Cabinet recently came to a close, and as usual, opening up the local economy, launching the Free Economic Pilot Zones and signing cross-strait trade pacts were championed by the officials present.

While the three-day conference was attended by a number of ministers and ranking officials, such as Premier Jiang Yi-huah ([...]), Finance Minister Chang Sheng-ford ([...]), National Development Council Minister Kuan Chung-ming ([...]) and 150 or so others, it failed to form innovative ideas that boost the nation's economy.

Thanks to a global economy on track for recovery, the nation has made headway in the first half of 2014. Exports have gone up. The manufacturing sector is expanding. Private consumption is growing. The job market is also improving. Nevertheless, there is no strong evidence to indicate that they are the results of sound government strategies. Taiwan is just piggybacking on an improved world economy.

The Cabinet's Directorate-General of Budget, Accounting and Statistics (DGBAS) forecast that Taiwan's exports will grow 3.1 percent in 2014, which is lower than the 4-percent growth in global trade forecast by the IMF.

Taiwan is known as an export-oriented economy. Output value derived from foreign demand once contributed the majority of GDP. The trend, however, is reversing. Export value has not contributed as much to the nation's GDP in recent years and output derived from domestic demand is catching up.

Taiwan's economic strategy deserves a review. It is clear that Taiwan's economy is very much reliant on mainland China as about 40 percent of Taiwan's exported products are shipped there. It has also become Taiwanese enterprises' top manufacturing hub.

Besides speaking the same language and cheap labor, low land acquisition costs and favorable taxation have wooed many Taiwanese companies. This path of performing contract work, however, is relatively easy compared with the road of innovation that involves higher risks. …

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