Business and Finance

Taiwan unlikely to follow South Korea, US in dropping interest rates

Central bank to keep interest rates frozen for 12th consecutive quarter

Taiwan News
Date: 2019/07/19
By:  Taiwan News, Staff Writer

TAIPEI (Taiwan News) — Taiwan’s central bank is not expected to lower interest rates despite

Governor of the Central Bank Yang Chin-long (楊金龍)
Governor of the Central Bank Yang Chin-long (楊金龍) (By Central News Agency)

precedents set by other countries, and it expects improved growth in the second half of the year.

In light of their recent economic downturn and ongoing trade war with Japan, the South Korean central bank has decided to lower interest rates from 1.75 to 1.5 percent, reports the Liberty Times. Korea’s position as Taiwan’s main export rival has led observers to speculate as to whether Taiwan would follow suit after 12 quarters without any change in rates.

The LTN reports that the central bank of Taiwan is unlikely to adjust key interest rates and will maintain the status quo set in July 2016. The bank chose to keep the discount rate at 1.375 percent at a quarterly policy meeting in June, as it expected stable inflation in the near future.

At a press conference last month, the governor of the central bank, Yang Chin-long (楊金龍) was asked if Taiwan would follow the U.S. if it were to lower interest rates. Yang responded by saying that “Taiwan is in a different situation to the U.S. (and) has to consider different factors and won’t necessarily follow suit.”    [FULL  STORY]

Four more companies commit to investing Taiwan amid trade war

Focus Taiwan
Date: 2019/07/19
By: Liao Yu-yang and Frances Huang

Image taken from Pixabay

Taipei, July 19 (CNA) Another four Taiwanese companies have pledged to boost their investment in Taiwan amid the trade friction between the United States and China, raising total pledges to more than NT$450 billion (US$14.52 billion) so far this year.

The four companies have promised to increase their investment in Taiwan by more than NT$8.2 billion in total, which is expected to create an additional 2,000 jobs, the Ministry of Economic Affairs (MOEA) said Friday .

They are electro-acoustic product supplier Merry Electronics Co., paper product manufacturer Cheng Loong Corp., power management solution provider AcBel Polytech Inc., and an optoelectronics maker that has asked not to be identified, the MOEA said.

The planned investments by the four companies have raised the total amount pledged under an MOEA program to encourage overseas Taiwanese companies to return home or invest more in their existing operations in Taiwan to NT$452 billion from 93 companies, the MOEA said.

Companies raise less with SPOs in first half

UNCERTAINTY: Many firms said that they postponed raising capital, as they did not know if new investments would be a good idea in light of the US-China trade spat

Taipei Times
Date: Jul 20, 2019
By: Kao Shih-ching  /  Staff reporter

In the first half of this year, local companies raised 16.52 percent less through secondary public offerings (SPO) than they did a year earlier, as trade tensions between the US and China have put a strain on new investments, the Financial Supervisory Commission (FSC) said on Thursday.

The NT$253.64 billion (US$8.17 billion) raised was the lowest in three years, compared with NT$271 billion in 2017 and NT$303 billion last year, FSC data showed.

An SPO is the sale of new shares by a company that has already made an initial public offering (IPO), Securities and Futures Bureau Deputy Director-General Tsai Li-ling (蔡麗玲) told a news conference.

The number of companies that conducted SPOs in the first six months dropped to 111, from 127 a year earlier, Tsai said, adding that 109 of the firms raised funds in Taiwan and two raised funds overseas.    [FULL  STORY]

Over 50 major manufacturers mull shifting production away from China: Nikkei

With no end in sight for US-China trade war, companies eye Southeast Asia, India

Taiwan News
Date: 2019/07/18
By: Zin Kao, Taiwan News, Staff Writer

Qingdao Port
Qingdao Port (By Associated Press)

TAIPEI (Taiwan News) – With the U.S.-China trade war at a stalemate, more than 50 major global enterprises, including Apple Inc., are weighing whether to shift their production sites away from China, the Nikkei News reports.

More than 50 manufacturers are either planning or considering moving away from China, estimates Nikkei news.. Last month, the news agency reported that Apple is considering moving 15 to 30 percent of its production capacity out of China.

Chinese acoustic components producer GoerTek (歌爾聲學), one of the outsourcing manufacturers for Apple, will soon start producing AirPods on a trial basis in Vietnam. The first wave of Indian-made iPhones, assembled by Foxconn’s local unit, are expected to hit the market as soon as next month.

U.S. laptop producers HP and Dell are considering shifting as much as 30 percent of manufacturing to Southeast Asian countries, and Nintendo is considering doing the same for its Switch video game console. Beyond the consumer electronics industry, footwear companies ASICS and Brooks and construction equipment manufacturer Komatsu (小松製作所) are also exploring the prospect of moving production to Southeast Asia, the U.S., or Japan.    [FULL  STORY]

TSMC counting on 5G, phone launches

PROGRESS: Faster development of 5G technology should lift demand for chips used in smartphones, base stations, autonomous vehicles and Internet of Things, TSMC said

Taipei Times
Date: Jul 19, 2019
By: Lisa Wang  /  Staff reporter

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chip

Taiwan Semiconductor Manufacturing Co chief executive C.C. Wei, left, and chairman Mark Liu, center, listen while chief financial officer Lora Ho speaks at a news conference yesterday in Taipei on the company’s second-quarter results.
Photo: Liao Chen-huei, Taipei Times

The Sinner's Prayermanufacturer, yesterday gave a robust outlook for the second half of this year on expectations that accelerating 5G network deployment and launches of premium smartphones would fuel demand for advanced 7-nanometer chips.

After a bleak first half, TSMC chief executive officer C.C. Wei (魏哲家) told investors that “we have begun to see demand increasing.”

“Moving into the third quarter of this year, TSMC’s business continues to be driven by new product launches of premium smartphones, an acceleration of worldwide 5G deployment and increasing adoption of our industry-leading 7-nanometer technology by high-performance computing applications,” Wei said.

The Hsinchu-based chipmaker counts Apple Inc, Hisilicon Technologies Co (海思) and Advanced Micro Devices Inc as major clients.    [FULL  STORY]

Taiwan-EU trade in goods hit record high in 2018

European Union largest source of FDI flow to Taiwan in 2018

Taiwan News
Date: 2019/07/17
By: Huang Tzu-ti, Taiwan News, Staff Writer

TAIPEI (Taiwan News) – Trade between Taiwan and the European Union (EU) reached 51.9 billion

Cover of EU-Taiwan Relations 2019 report (EETO photo)

euros in 2018, hitting a historical high, according to the EU-Taiwan Relations 2019 report published on Tuesday (July 16).

Taiwan moved up one notch to become the EU's 15th most significant trading partner in goods in 2018. The island's position as the 21st most important export partner for the trading bloc remained unchanged from 2017. Bilateral trade in services between the EU and Taiwan amounted to 10.2 billion euros in 2017.

The two sides saw the overall trade in services rise by 45.6 percent compared with 2010. The EU kept its status as Taiwan's largest source of foreign direct investment in 2018, accounting for 30 percent of its total FDI stock, according to the report.

The annual report, released by the European Economic and Trade Office (EETO), provides insights into bilateral relations on trade, investment, human rights, climate change, the environment, and circular economy. According to the EETO, Taiwan is an attractive market, as its laws protect intellectual property with limited government intervention.    [FULL  STORY]

Taiwan shares end down on resurging worry over global trade

Focus Taiwan
Date: 2019/07/17
By: Frances Huang

Taipei, July 17 (CNA) Shares in Taiwan closed lower Wednesday amid renewed concerns among investors about the trade frictions between the United States and China following recent downbeat comments on the issue by United States President Donald Trump, dealers said.

Selling focused on the bellwether electronics sector, which could be hardest hit by the global trade war, as investors locked in their recent gains, while old economy and financial stocks generally moved lower in line with the broader market, dealers said.

Market sentiment was also affected by dwindling hopes of an interest rate cut by the U.S. Federal Reserve after Washington reported better than expected retail sales for June, dealers said.

The weighted index on the Taiwan Stock Exchange (Taiex) ended down 57.57 points, or 0.53 percent, at 10,828.48, after moving between 10,804.34 and 10,861.11. Turnover totaled NT$112.88 billion (US$3.63 billion) during the session.    [FULL  STORY]

CIER trims growth forecast to 2.06%

BETTER PROSPECTS: The revision follows disappointing exports in the first half of the year, but the institute expects outbound shipments to turn positive in the second half

Taipei Times
Date: Jul 18, 2019
By: Crystal Hsu  /  Staff reporter

The Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) yesterday revised down its forecast for the nation’s GDP growth this year, but said it expected the figure to remain above 2 percent as robust capital spending helps mitigate the pain of slower exports.

The institute now expects the economy to expand by 2.06 percent, down from its previous forecast of 2.15 percent.

“The nation’s economic growth might stay above the 2 percent mark, as it improves each quarter,” following a lackluster 1.7 percent increase in the first half, CIER president Chen Shi-kuan (陳思寬) said.

The second half is usually the high season for consumer electronic devices, which should benefit Taiwanese companies in their global supply chains.    [FULL  STORY]

Taiwan’s working conditions better than US, Japan and Korea

DGBAS reveals the number of employees in Taiwan who work longer than 50 hours per week greatly reduced in 2017 and 2018

Taiwan News
Date: 2019/07/16
By: George Liao, Taiwan News, Staff Writer

TAIPEI (Taiwan News) – Taiwan’s working conditions have continued to improve and in terms of

(Max Pixel photo)

hours worked are now better than the United States, Japan, and South Korea, according to the Directorate-General of Budget, Accounting and Statistics (DGBAS), the United Daily reported on Tuesday (July 16).

DGBAS said that since January 2016, legal working hours have reduced from an average of 84 hours every two weeks, to 40 hours per week. The agency added that on Dec. 21 the same year, Labor Standards Act (LSA) was further revised to reinforce “the two days off per week” policy, which has reduced the percentage of workers who work longer than the legal limit, United Daily reported.

DGBAS statistics show the number of employees in Taiwan who worked longer than 50 hours per week was greatly reduced in 2017 and 2018. The percentage for both years stood at 5.9, which was the lowest since 2008, according to the news outlet.

Taiwan’s 5.9 percent of workers working long hours in 2017 was slightly higher than the median of the Organization for Economic Co-operation and Development (OECD) member countries in the same year, which stood at 5.5 percent. Taiwan ranked 22nd among the 41 OECD member countries in terms of the percentage of longer working-hour workers.    [FULL  STORY]

Amended factory law to boost investment by up to NT$2 trillion: MOEA

Focus Taiwan
Date: 2019/07/16
By: Liao Yu-yang and Frances Huang

CNA file photo

Taipei, July 16 (CNA) The newly amended Factory Management Act is expected to create up to NT$2 trillion (US$64.52 billion) in investment over the next 10 years, the Ministry of Economic Affairs (MOEA) said Tuesday.

At the end of June, the Legislative Yuan passed an amendment to the Factory Management Act, which aims to promote industrial development and strengthen factory management in Taiwan, and the new law is expected to encourage currently unlicensed low pollution factories to become legal.

The MOEA said the ministry plans to come up with complementary rules to the amended law on how these low pollution factories can become legal in September at the earliest.

Under the amended law, unlicensed low pollution factories have to apply to the MOEA within two years and submit a proposal to improve pollution and strengthen safety in three years to change their status from illegal to special factories.    [FULL  STORY]