June 2023  
European and American markets continue to be suppressed by inflation
Taiwan's manufacturing sector is in the doldrums, but the service sector is expanding
Observing the recent international economic situation, the manufacturing Purchasing Managers' Index (PMI) for the United States, Europe, and China has continued to fall into the contraction zone, indicating persistent weakness in consumer momentum in major global markets. Additionally, in June, the US Federal Reserve temporarily halted interest rate hikes due to a cooling in inflation, while the European Central Bank continued to tighten its monetary policy due to significant inflation pressures. On the other hand, the People’s Bank of China lowered its key policy interest rates to stimulate the economy. In the domestic manufacturing sector, although there has been a slight stabilization in demand for some information and communication products as well as certain traditional industries, leading to a slightly more optimistic view among most manufacturing firms compared to the previous month’s survey, overall end demand remains weak. Domestic exports and external sales continue to be sluggish, resulting in manufacturing firms maintaining a generally neutral outlook for both the current month and the next six months. The service industry has benefited from the rise in stock prices and the continuous widening of interest rate differentials domestically and internationally, leading to positive expectations for the current month's business performance in the financial sector. As for the construction industry, the test point for May once again turned downward, primarily due to a decline in the construction sector's business conditions and a conservative outlook for the real estate industry in the next six months. According to the survey directed by the Taiwan Economic Research Institute (TIER), after conducting model simulations, the Manufacturing Business Composite Indicator continued its downward trend in May. On the other hand, the Service Business Composite Indicator showed an upward trend, while the Construction Business Composite Indicator once again turned downward. ...Read more
Approved outbound investments soar almost 200% during January-May
The amount of outbound investments approved by Taiwan's government during the period of January-May surged nearly 200 percent from a year earlier due to planned large overseas investments by two major tech companies, according to the Investment Commission. Data compiled by the commission showed approved outbound investments in the first five months of this year rose 196.82 percent from a year earlier to US$8.32 billion after contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and electronics component supplier Yageo Corp. pledged large overseas investments. The commission said TSMC, the world's largest contract chipmaker, which is investing US$40 billion to build two advanced wafer fabs in the U.S. state of Arizona, secured approval to send US$3.5 billion to raise the capital size of its subsidiary TSMC Arizona Corp. Despite the increase in outbound investment amount, the number of approved projects fell 7.21 percent from a year earlier to 206, the commission said. In terms of inbound investment, during the five-month period, the commission approved 938 foreign direct investment (FDI) projects valued at US$4.27 billion, down 0.51 percent from a year earlier, with companies from Germany being the largest investor, pledging to invest US$958 million, ahead of the United States (US$577 million.) (Source: Focus Taiwan).

U.S. business group promises water to TSMC in Arizona (Source: Focus Taiwan).
Taipei, US to discuss added airport screening exemption (Source: Taipei Times).
Taiwan Economic Research Monthly
Boycotting Unfair Traders Doesn't Mean Killing Globalization
Since China has long been using unfair means, such as government implementation of huge subsidy policies and theft of foreign intellectual property rights to snatch the market shares; the United States and its allies have imposed a series of trade sanctions on China in the hope that China will give up these unfair means. But there are many people who don't understand the pros and cons and the rationale behind the sanctions. They just blindly accuse the United States of adopting protectionism; however, they are unwilling to accuse China of unfair means. In addition, many people believe that the actions of the United States and its allies will greatly increase the cost of goods and harm global efficiency. Some even say that globalization is dead, as if the world economy is going backwards. This article uses a simplified virtual figure as an example to explain the pros and cons of several actual possible situations, so as to help everyone understand the real truth and possible more appropriate practices. Virtual numerical examples cannot be used to prove any conclusions, but they allow us to think about various possibilities more clearly than texts, and it can also change some assumptions to be more in line with the reality or our imagination when necessary. In addition, using the method can help better understand the globalization of production and trade.
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