The outlook for Taiwan's economy in the second half of this year is bright compared with the doom and gloom around the world, as local companies are raising wages and expect business growth as a result of Taiwan's opening to independent Chinese tourists.
"Taiwan is experiencing a recovery very different from in the past," said Gordon Sun, deputy director of the Taiwan Institute of Economic Research's macroeconomic forecasting center. "This time, we are seeing the service sector turning around ahead the manufacturing sector."
In the manufacturing sector, employee numbers returned in the past two months to the levels prior to the 2008 global financial crisis, but the numbers in the service sector reached that level six to seven months ago.
Additionally, although 70 percent of Taiwan's economic growth in 2010 came from the manufacturing sector, the service sector contributed 2.96 percentage points to the 6.55 percent increase in the gross domestic product (GDP) during the first quarter of 2011, a ratio rarely seen.
Furthermore, Tony Phoo, a Taipei-based economist of Standard Chartered Bank, noted that consumer confidence remained strong in Taiwan, as the good performance of retail sales had lasted until April, beyond the traditionally high demand season in the first quarter.
Meanwhile, local companies such as Taipei 101, Hotai Motor and Wowprime Corp. have been treating their employees to overseas trips, while businesses across sectors have raised wages to prevent their workers from leaving in search of better jobs.
An employment outlook survey published June 14 by the workforce consultant company Manpower found that Taiwanese employers placed only behind their Indian and Brazilian counterparts in terms of the strongest hiring intentions in the world.
Regarding the effects of the recent plasticizer contamination of food products, the retail sector does not expect consumption to be dampened as they have seen that consumers are more willing to buy quality goods despite a higher price tag.
Sales of towels made in Taiwan grew 20-30 percent from last year, while hypermarket chain Carrefour in Taiwan recorded 20 percent annual growth in sales of fresh vegetables and fruits in May and June. High-end food processors that cost NT$3,000-NT$4,000 (US$104-US$138) also sold better than NT$990 blenders.
With domestic demand in Taiwan being fueled by the country's improved relations with China and its opening up to Chinese tourists, the recent launch of the free independent traveler program for Chinese visitors is expected to benefit a wider range of Taiwanese businesses beyond hotels and stores that cater to tour groups. (CommonWealth 474)(translated by Kay Liu)