Many German companies in Taiwan optimistic about economic prospects: GTO

Taipei, Feb. 22 (CNA) The German Trade Office (GTO) Taipei released its annual business confidence survey on Thursday which showed nearly 60 percent of German companies in Taiwan are optimistic about the country's economic prospects over the next three years, but see cross-strait tensions and the labor shortage as challenges.

As part of the "German Business Confidence Survey Report 2023/2024," 251 German companies were asked for their take on various issues ranging from different aspects of business performance and their concerns about Taiwan's business environment, to the challenges they think lie ahead. The response rate was 39 percent.

About 46 percent of the companies said they are expecting Taiwan's economy in 2024 to improve compared to 2023, a 22.5 percent increase from last year's 23.4 percent, according to Axel Limberg, chief representative and executive director of the German Trade Office in Taipei, who presented the report on Thursday.

The companies' predictions for the next three years are even more optimistic, with 59.2 percent saying they expect Taiwan's economy to improve over the next three years -- a big rise on last year's 34.5 percent, the survey found.

In terms of business performance, however, the report found that companies were less satisfied than they were in 2022, with this year's survey finding that 59.2 percent consider their business performance to be good or very good, down from a record high of 73.3 percent logged in 2022.

One of the possible reasons for lower satisfaction is increased operating costs, with the report citing Rahil Ansari, CEO of Volkswagen Group Taiwan, as saying that while the supply chain had made progress normalizing in 2023, "costs increased."

The most valued aspect of Taiwan's business environment by German companies, according to the survey, is the reliability of business relations, with 57.1 percent surveyed agreeing. Other aspects also valued include the stability of the economy (53 percent), qualifications of staff (45 percent), and social stability and security (45 percent).

Regarding sustainability, 82.7 percent of the surveyed companies said they have made formal commitments regarding sustainability, with a total of 72.2 percent saying their Taiwanese customers demand sustainable products.

Almost half of the companies (45.9 percent) feel positive about the Taiwanese government introducing a carbon fee in 2024, according to the report.

One of the most pressing domestic issues for German companies in Taiwan is the recruitment of skilled workers, Limberg said.

Nearly two-thirds (64.9 percent) of the companies surveyed reported difficulties filling open positions with suitable personnel. Technicians (49.2 percent) and engineers (41.3 percent) were the most frequently mentioned vacancies.

Global economic growth (59.2 percent) and Taiwan's economic growth (54.1 percent) remain the most significant concerns for businesses as they were in 2022.

Cross-strait relations also remained a major concern, with 54.1 percent saying so, as they did last year when 54 percent agreed. Escalating tensions are increasingly seen as a burden: more than a third (36.8 percent) say their supply chains have been negatively affected, with more businesses expecting their future commercial activities to be impacted, according to the survey.

At the event, the GTO Economic Outlook 2024, the "German Business Confidence Survey Report 2023/2024" was officially handed over to Deputy Economics Minister Chen Chern-chyi (陳正祺).

Chen addressed the challenges faced by businesses, saying that the government has been investing in strengthening the power grid, diversifying power sources, and stepping up measures to recruit foreign talent and skilled labor.

He also stressed that it is President Tsai Ing-wen's (蔡英文) policy and commitment to cross-strait peace that "will not instigate or provoke Beijing," while standing firm on the issue of Taiwan's sovereignty.

"President-elect Lai [Ching-te (賴清德)] has also reiterated that he is open to dialogue with Beijing," while also working with like-minded partners, he added.

Jörg Polster, director general of the German Institute Taipei, was another guest of honor who delivered welcoming remarks.