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US-China leaders signal warming ties, yet core trade issues remain unresolved
Taiwan's traditional industries struggle as China's overcapacity efforts yield little result |
The Trump-Xi meeting brought temporary relief to US-China relations, with export controls and tariff measures suspended for one year. This not only provides time for bilateral negotiations and supply chain adjustments but also helps alleviate short-term pressure on global economic momentum.
Domestically, strong demand for emerging technology applications, coupled with new consumer electronics products, drove exceptional export performance in information and communication products in October. However, traditional industries, including chemicals, steel, and metal products, remained weak, leading to a notable decline in manufacturers' optimism compared to the previous month. In the services sector, department store anniversary sales and extended holidays boosted foot traffic and dining and tourism demand, prompting retail and hospitality operators to view current conditions more favorably.
In construction, public works projects progressed smoothly in October, while reduced private residential construction volume kept the sector broadly stable. Looking ahead, the fourth quarter will enter the peak period for public works completion, with major projects scheduled to finish by the end of 2025. Combined with significantly increased public infrastructure budgets for 2026 and continued high-tech facility investments, momentum is expected to strengthen, and conditions should improve. For real estate, October saw the six major municipalities' transfer volume rise 5.7% month-over-month, driven by relaxed New Youth Housing loan terms, extended holding periods for upgraders, and stock market gains. While transaction volumes recovered modestly, overall levels remain subdued. Over the next six months, central bank credit controls and high property prices are likely to maintain this low-volume pattern until seller sentiment shifts. ...Read more |
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| AI Dreams: Beautiful Aspirations and Hopeful Pursuits |
| The ability to dream drives cultural, scientific, and economic progress throughout history, but not all dreams come true. Taiwan is the world's leading producer of AI hardware, and many AI industry leaders and major companies maintain close ties with Taiwan. This strong foundation gives us good reason to pursue AI opportunities—but we must focus on realistic and achievable goals to avoid exhausting our limited resources. Two critical conditions determine whether economic dreams succeed: first, whether the technology and products actually work in practice; second, whether our nation has real competitive advantages in these specific areas. Both require careful professional analysis. Some oversimplified narratives rely on catchy slogans: "Whoever controls AI controls the world," "computing power equals national power," "electricity equals computing power," or "nuclear power will deliver AI supremacy and global dominance." The phrase "AI is an electricity monster" represents fear-mongering. Don't assume that developing nuclear power or cheap electricity alone will somehow secure AI leadership. Such simplistic slogans can easily mislead our technology and economic development policies in the wrong direction. More realistically, new technologies typically favor early movers while creating disadvantages for those who fall behind. However, most major technologies involve clusters of related innovations and industries emerging across multiple firms and nations, not single breakthroughs monopolized by one player. AI will likely follow this familiar pattern. Like our semiconductor manufacturing, which depends on many international partners, AI and computing power involve even broader and more complex ecosystems requiring extensive global collaboration. AI represents a vital direction for future economic development. Taiwan possesses strong capabilities to play an important role and benefit significantly from this transformation. Nations will naturally cooperate and compete based on their comparative strengths. Our best strategic approach is identifying specific areas where Taiwan holds genuine competitive advantages, not unrealistically dreaming of leading every single AI domain. |
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Taiwan Economic Research Monthly
Asia-Pacific Economic Cooperation Driven by the Dual Axes of "Digital × Sustainability" |
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Propelled by technological breakthroughs and sustainable development, the Asia-Pacific is entering a new phase of governance and cooperation. This feature examines seven dimensions—digital, energy, services, finance, healthcare, gender, and labor—mapping dual-track transformation pathways. It begins with APEC's Internet and Digital Economy Roadmap (AIDER), which advances digital cooperation through infrastructure, cross-border data flows, and trust mechanisms. In energy, the focus is renewable energy doubling, efficiency gains, and hydrogen cooperation, balancing energy security with low-carbon transition. The APEC Services Competitiveness Roadmap (ASCR) and regulatory reforms address barriers in digital services trade, emphasizing transparency and openness. Finance highlights parallel digital innovation and sustainability, promoting inclusion, infrastructure, green investment, carbon markets, and climate resilience tools. AI diagnostics, telemedicine, and facility decarbonization enhance healthcare resilience. Women face persistent gaps in labor participation, compensation, and digital skills; bridging the digital divide and expanding childcare and elder care infrastructure are essential for converting empowerment into sustainable economic participation. AI adoption alleviates labor shortages from aging populations but raises privacy, bias, and rights challenges, requiring governance based on inclusion, fairness, and accountability. Across these themes, digital and sustainability issues intertwine as dual engines shaping Asia-Pacific cooperation, demonstrating APEC's diverse, forward-thinking approach to global challenges.
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