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Publications Topics Archive Topics Archive 2007 Vol.37- No.3 Taiwan Briefs
Publications Topics Archive Topics Archive 2007 Vol.37- No.3 Taiwan Briefs | Taiwan Briefs |
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BY Jane Rickards
In a relatively rosy forecast, the Cabinet-level Directorate General of Budget, Accounting and Statistics predicted in mid-February that Taiwan's economy would register 4.3% growth this year, an upward adjustment from the 4.14% it forecast last November. It based the assessment on expectations that Taiwan's trade momentum would continue to enjoy "a mildly increasing trend" during 2007, at the same time as domestic consumption shows an improvement. So far this year, however, exports have been hurt by a U.S. slowdown, which has created stockpiles of Taiwanese electronics products such as semiconductors, which are therefore likely to be a less important factor than usual in Taiwan's economic performance this year. But the domestic economy is expected to recover significantly as the credit-card crisis eases, analysts said. Spending is also expected to be fueled by a low unemployment rate - at least in the short term. At 3.79% in January, unemployment reached an almost six-year low. The statistics agency also calculated that last year's GDP grew by 4.62%, with net exports contributing 3.5 percentage points, and domestic demand - which took a battering from the credit-card crisis halfway through 2006 - contributing 1.12 percentage points. At 4.02%, Taiwan's economic growth in the fourth quarter of last year was faster than expected after an improvement in the consumer credit situation, the statistics agency said. Meanwhile, National Central University's Research Center for Taiwan Economic Development found that Taiwan's consumer confidence index (CCI) rose slightly in February, the local media reported. The reasons for the greater confidence were said to be declining oil prices and, again, the reduction in credit-card defaults. CROSS-STRAIT A SECOND CHANCE THAT TAIWAN MAY GET PANDAS The Leofoo Village Theme Park will reapply to the government for permission to bring over a pair of giant pandas from China, following the government's rejection of a similar application last year. China first offered the animals to Taiwan as a goodwill gift following a landmark trip to China by then-Kuomintang Chairman Lien Chan in 2005. The cuddly-looking creatures, which live in a panda park in Sichuan, immediately became something of a political football. Pro-independence politicians claimed that Beijing's offer of the bears - named Tuan Tuan and Yuan Yuan (tuanyuan means "reunion" in Mandarin) - were a Chinese propaganda ploy aimed at winning the public's support for eventual unification with China. Eventually the government last year rejected, on environmental grounds, the applications to house the bears from a handful of eager Taiwanese zoos. Undeterred, Hsinchu County's Leofoo says it will try again this year as it has examined the technical reasons for last year's rejection and believes it can now make a better case for its preparedness to care for the animals. DIRECT FLIGHTS NOW ROUTINE AT NEW YEAR Once feted as a dramatic breakthrough in cross-Strait relations, non-stop flights for the Lunar New Year holiday period have now become a regular and fairly ho-hum event. For the record, Taiwan and China this year organized some 96 flights that linked Taipei and Kaohsiung with the cities of Shanghai, Beijing, Guangzhou, and Xiamen. Six Taiwanese and six Chinese air carriers took part in the program that ran until the end of February. For political and security reasons, the planes were still required to take a detouring flight path that took them through Hong Kong air space. Taipei and Beijing appear to be no closer to making direct flights an everyday event. DOMESTIC DESPITE INDICTMENT, MA DECLARES HIS CANDIDACY Long noted for his squeaky-clean image and sparkling good looks, opposition Kuomintang (KMT) leader Ma Ying-jeou's reputation received a major tarring in mid-February when the Taiwan High Court Prosecutors' Office indicted him on corruption charges for irregularities in the use of his expense account while serving as Taipei mayor. Ma declared his innocence and immediately announced his plans to be a candidate in next year's presidential election. Accused of forgery and of having embezzled around US$333,000 from a special public relations allowance, Ma labeled the charges as politically inspired. The prosecutors said Ma illegally had the special allowance funds paid into his personal bank account and included the money when declaring his assets. For his part, Ma blamed the vague laws and regulations governing the special fund. His lawyers argued that he would not have openly declared the origins of these funds to the authorities if he were trying to steal them. Ma is generally considered to be the opposition politician with the best chance of defeating a Democratic Progressive Party (DPP) candidate in the 2008 presidential elections, and within hours after the indictment, the KMT removed a barrier to his nomination by abolishing a party regulation banning indicted members from running as candidates. Despite this, Ma resigned as KMT chairman, and was replaced as acting chairman by one of the former vice chairs, Wu Poh-hsiung. Ma's defenders allege that the indictment resulted from political pressure from the ruling DPP (despite the prosecutors' apparent willingness to take on the presidency with its earlier indictment of first lady Wu Shu-chen), and the ex-mayor's popularity with his party's grass-roots supporters appeared to remain unchanged. Meanwhile, the first lady's corruption trial continued throughout February with no verdict reached and Wu too unwell to appear in court for each hearing. DPP'S FOUR STARS ALL RUNNING FOR PRESIDENT In addition to Ma, four leading political figures from the ruling DPP have announced plans to run for president. Former premier Frank Hsieh led the charge by proclaiming his candidacy in mid-February. He was followed by DPP Chairman Yu Shyi-kun (also a former premier), who said he was the one most "capable of leading Taiwan forward." Then, in late February, Premier Su Tseng-chang stood in front of the picturesque Fort San Domingo in Danshuei and vowed to open a "new chapter in Taiwan's history" with his presidential bid. Finally, in early March, Vice President Annette Lu confirmed her presidential ambitions. Analysts said that Hsieh and Su, both of whom are perceived to have relatively moderate views on relations with China, currently are the most popular with the public of the four DPP candidates (but with the caveat that the election is still a year away and that Taiwan politics tend to be fast-changing). President Chen Shui-bian has been seeking to mediate among the candidates in hopes of working out a solution to prevent a potentially divisive competition for the nomination. The party's formal system for choosing a candidate is to hold both a primary election and a public opinion poll. The DPP schedule calls for announcing its presidential contender by May 30. WHAT'S IN A NAME? Unable to change the island's official title from "Republic of China" to "Taiwan," President Chen turned to advancing the Taiwanese national-identity cause by dropping references to "China" in the names of various government-owned organizations. The national oil company, the Chinese Petroleum Corp., has been converted into the CPC Corp., Taiwan. The China Shipbuilding Corp. has become CSBC Corp., Taiwan, and the Chunghwa Post Co. (Chunghwa means "Chinese" in Mandarin) is now the Taiwan Post Co. and is readying the first "Taiwan" stamp. Later, the nation's central bank announced on its web site that it had changed its name from Central Bank of China, Republic of China (Taiwan) to the Central Bank of the Republic of China (Taiwan). Government spokesmen explained that the changes were made because of frequent confusion by foreigners who thought the organizations belonged to China. But eliminating the original names - which were a legacy from the days when the KMT took refuge in Taiwan and dedicated itself to retaking the mainland - infuriated opposition politicians. The postal union also staged several rowdy demonstrations. DPP lawmakers and the government are also pushing to rename the "Chiang Kai-Shek Memorial Hall" to the "Taiwan Democracy Memorial Hall." LABOR PENSION FUND COMMISSION okayed Last month's issue of Taiwan Business TOPICS - with an editorial castigating the Legislative Yuan for failing to enact authorizing legislation for money in the Labor Pension Fund to be properly invested - was barely off the printing presses when lawmakers passed the necessary bill after a prolonged delay. The law that was enacted sets up a Labor Pension Fund Supervisory Commission to set investment policies and oversee the appointment of domestic and international fund managers. In the 17 months since the pension fund was created in July 2005, the total paid-in contributions, mainly by employers, came to more than NT$130 billion (about US$4 billion). But in the absence of the Supervisory Commission, the money had to be deposited in bank accounts, where it earned only meager returns for future pensioners. The political disagreement that kept the Commission from being formed earlier had to do with how the commissioners were to be selected. In the final version, the organization is to consist of a chairman, vice chairman, and 19 commissioners - with six to be labor union representatives, 10 scholars, and one delegate each from a national industrial federation, the Financial Supervisory Commission, and the Ministry of Finance. The original government plan had been mainly to select commissioners with financial-sector experience. INTERNATIONAL U.S. STATE DEPARTMENT RAISES CONCERNS The U.S. State Department voiced concern about Taiwan's changes in the names of state-owned companies (see story above). Washington opposes moves by Taiwan "that would appear to change Taiwan's status unilaterally or towards independence," said a department spokesman. "The United States does not, for instance, support changes in terminology for entities administered by the Taiwan authorities." Some critics said the department was mainly seeking to shore up Chinese cooperation for the six-party talks on North Korea's nuclear program - and that it was overreacting. Former Deputy Secretary of State Richard Armitage said he thought the name changes were unimportant, while Republican Congressman Tom Tancredo told Secretary of State Condoleeza Rice in a letter that the name changes were none of the State Department's business. "For the State Department to equate the renaming of a gas station with a change in Taiwan's international status is, to say the least, rather puzzling," he said in the letter. BUSINESS FORMOSA PLASTICS IN TALKS WITH BEIJING The Formosa Plastics Group in mid-February announced it was negotiating to set up a joint venture with a state-owned Chinese oil producer. Formosa's chief executive officer, William Wong, was quoted by international media as saying that Formosa Plastics might partner with China National Petroleum Corp. or China Petrochemical Corp., the mainland's two biggest oil companies, to build a refinery in China. Formosa Plastics Corp. Chairman Lee Chih-tsuen also said that the plastics giant was asking the Taiwan government, which fears that the island may become economically too dependent on China, to lift restrictions on building ethylene plants in China. TEXTILE PRODUCTION VALUE SHRINKS Research released by the Taiwan Textile Research Institute (TTRI) in late February found that the production value of Taiwan's textile industries declined 2.6% in 2006 compared with 2005. The institute said the textile production value reached US$13.8 billion last year and that exports exceeded imports by US$9.06 billion. But artificial fiber manufacturing decreased by 1.7% from the year before and yarn and fabric production also dropped 1.7%. The garment industry saw the biggest decline, by 10.5%. AIRLINES FEEL PINCH FROM HIGH SPEED RAIL Taiwan's domestic airlines have felt the impact of the high-speed rail system, which began operating in mid-January, though so far the blow has not been as severe as many had expected due to the high-speed rail's glitches in its ticketing system and difficulty in accommodating large volumes of luggage. Mandarin Airlines, a subsidiary of China Airlines, in February reported a 20% fall in its domestic passenger traffic, while a UNI Airways spokesman said occupancy on its planes flying the Taipei-Kaohsiung route had dropped from around 80% to 65%, local media reported. Seeing falling numbers of passengers, the island's four main domestic carriers applied to the Fair Trade Commission for the right to cooperate and jointly operate routes by April 1 at the earliest. Some of the airlines, such as UNI, are also looking at expanding their international flight programs to compensate for domestic losses. On the high-speed rail, the 90-minute ride between Taipei and Kaoshiung costs about 30% less than a domestic flight. According to local media, the Taiwan High Speed Rail Corp. posted revenue of NT$599.3 million in its first month of operation. |
