Back to list

Washington-Beijing trade tensions to affect Taiwan's 2019 growth

2018/12/17 19:02:26

Taipei, Dec. 17 (CNA) The ongoing trade dispute between the United States and China is expected to slow the pace of Taiwan's gross domestic product (GDP) growth in 2019, a senior economic official said Monday.

Speaking on the sidelines of a Legislative Yuan hearing, Deputy Economic Affairs Minister Kung Ming-hsin (龔明鑫) said Taiwan's GDP will continue to grow next year but the pace of growth is likely to be slower than it was in 2018.

Concerns over 2019 GDP growth were heightened after flat panel maker Chunghwa Picture Tubes Ltd. decided Sunday to suspend production at its two plants in the Longtan and Yangmei districts of Taoyuan after announcing last week it would seek bankruptcy protection.

The suspension in production is affecting about 1,830 assembly workers, who account for about 41 percent of the company's 4,450 workers in Taiwan.

Faced with growth worries fueled by the flat panel maker's predicament, Kung admitted Taiwan's economic vitality next year will also be affected by external factors, in particular the Washington-Beijing trade dispute.

At the end of November, the Directorate General of Budget, Accounting and Statistics (DGBAS) lowered its forecasts for Taiwan's 2018 and 2019 GDP growth by 0.03 percentage points and 0.14 percentage points, respectively, from a forecast in August to 2.66 percent and 2.41 percent.

Kung said the global trade dispute has led many foreign buyers to put their purchasing plans on hold, in particular in the machinery sector, as manufacturers appear hesitant to expand their production capacity amid rising uncertainty.

Commenting on Chunghwa Picture Tubes, a supplier of small and medium sized displays, Kung said the company's fundamentals are weaker than its competitors in the sector and that Taiwanese flat panel vendors are generally doing well.

Chunghwa Picture Tubes announced on Dec. 13 it will file for bankruptcy protection as a global supply glut and falling demand caused by global trade uncertainty has led to financial difficulties that have impaired its ability to repay its debt, which the company said totals NT$34.8 billion.

Kung said the Ministry of Economic Affairs has stepped in and hopes to provide assistance to help the flat panel maker's operations return to normal.

Earlier Monday, the flat panel maker said it is in discussions with its suppliers to get access to materials to be able to resume production as soon as possible.

(By Liu Kuan-ting and Frances Huang)