Terry Gou, chairman of the Hon Hai Group, recently made three predictions: the economy in Europe is in really bad shape, the United States will definitely not be good in 2013, and China’s export slump will worsen.
In other words, Gou is saying that people should prepare for hard times ahead.
Not coincidentally, former Japanese Vice Finance Minister Eisuke Sakakibara, also known as “Mr. Yen,” said that 2012 and 2013 could well be the worst two years in the global economy since the end of the Second World War.
Looking back at the financial tsunami of 2008, Europe and the United States were battered, but China stood alone, and an “emerging China” has become a hot topic.
Since the Greek crisis that erupted last year, there has been no end insight to the debt crisis in Europe. In the United States, the launching ofa third round of quantitative easing is only a matter of time in view of the doldrums in its economy.
Under these circumstances, China’s exports are bound to be affected.
Facing with shrinking exports and domestic problems, we are not exaggerating when we say that Taiwan’s hard times are around the corner.
As exports decrease, the government needs to stimulate domestic demand. But statistics released by the Ministry of Economic Affairs show that public confidence is low due to rising consumer prices triggered by utility and fuel rate hikes.
The results will not only affect the GDP growth but will result in higher joblessness and public uneasiness, which are problems not to be overlooked.
The Ma administration should realize that even if utility rate hikes are inevitable, it should not let working class people despair and allow the faith of the middle class to crumble.
Austerity should start with the government, and the rich should take the greater social responsibility.
More importantly, the public should have faith that the governmentis willing to face the hard times with them and not lead them into the abyss. (Editorial abstract -- May 26, 2012)
(By Lilian Wu)