The government will redouble efforts to attract overseas Taiwanese corporations to invest more at home to help prop up the sluggish domestic economy, according to local media reports.
The reports cited Yiin Chii-ming, head of the Cabinet-level Council for Economic Planning and Development (CEPD), as saying that relocation of manufacturing companies to China and other areas over the past two decades has undermined Taiwan's economic growth momentum.
"Now is time for us to entice overseas companies to launch new investment projects in Taiwan or relocate their overseas production lines back home," Yiin said.
Yiin's remarks came after the Directorate General of Budget, Accounting and Statistics (DGBAS) cut its forecast Tuesday for the country's gross domestic product (GDP) growth for 2012 to 2.08 percent from a previous estimate of 3.03 percent amid slumping exports and stagnant global economy.
The following are excerpts from local media coverage of economic issues facing the country:
Taiwan saw declines in both exports and domestic investment in the first half of this year. Yiin said the CEPD will arrange five forums from the second week of August to discuss economic stimulus measures.
Yiin said Premier Sean Chen will preside over the forums whose themes will focus on labor, trade, energy, financial services and tourism/conference/exhibition industries.
Meanwhile, the Ministry of Economic Affairs said it is coordinating the quasi-official Taiwan External Trade Development Council to send trade delegations to emerging markets where Taiwan has not yet set up permanent offices to seek export orders.
Exports tend to contribute 70 percent to Taiwan's annual GDP growth in recent years, the ministry said it will work hard to find new export outlets to bolster domestic economic growth.
On the investment front, the Executive Yuan's investment promotion task force has directed relevant government agencies to come up with effective measures to boost private investments.
Among others, the Public Construction Commission will call a meeting in the coming week to discuss introduction of the private finance initiative (PFI) mechanism to create private- public partnership.
Under the PFI system, private capital will be used to finance public infrastructure projects, Cabinet sources said. (Aug. 1, 2012).
Economic Daily News:
According to DGBAS data, Taiwan posted a marginal 0.11 percent GDP growth in the first half of this year, lagging behind South Korea's 2.6 percent and Singapore's 1.65 percent.
Hong Kong has so far only published its first-quarter GDP growth at 0.4 percent.
DGBAS officials said Taiwan's lackluster economic performance was closely related to complicated structural factors. Most noteworthy was that Taiwan's exports to China posted an 8.8 percent decrease, larger than the country's overall export decline of 4.7 percent.
Kao Chih-hsiang, a DGBAS division chief in charge of economic forecast, said China-bound export contraction indicates that China's import substitution policy has taken toll on Taiwan's exports to China, particularly flat panel and solar energy products.
Under the import substitution policy, China has encouraged local production to replace imports, a move that has turned cross-Taiwan Strait industrial relations from mutually complementary to competitive.
Meanwhile, the Central Bank of Republic of China denied a media report Tuesday that negotiations for a cross-strait currency clearance agreement has hit snags.
"Negotiations have been proceeding smoothly as scheduled," the bank said in a statement.
Banking sources said the two sides will sign a memorandum of understanding (MOU) on currency clearance after the eighth round of high-level cross-strait meeting to be held in Taiwan Aug.8-9.
The long-talked-about currency clearance pact will be signed in the form of "MOU" instead of "agreement" to avoid the thorny sovereignty issue, the sources said. (Aug. 1, 2012).
(By Sofia Wu)