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US-EU rate cuts ahead: trade war risks may weaken economic resilience
Post-peak season slump: business outlook softens amid weak demand momentum |
Global manufacturing recovery remains weak, however, as the US and European central banks enter into rate-cutting cycles, this should help boost consumption and investment momentum. Furthermore, while China has recently introduced various economic support policies that should boost financial market confidence in the short term, the effectiveness of these stimulus measures remains to be seen.
In Taiwan's domestic manufacturing sector, global market demand momentum remains weak, and coupled with the impact of low-priced imported steel products and overseas chemical production capacity, affecting traditional industries' export and production performance in September, leading to a worsened outlook for the current month. However, as major countries' monetary policies shift from tight to loose, this will help stimulate overseas demand, leading manufacturers to have a more optimistic outlook for the next six months compared to last month's survey. In the service sector, the peak consumption periods of summer vacation and Ghost Festival have ended, leading the accommodation and food service activities to a worsened outlook for the current month. ...Read more |
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| Revenue allocation is not an effective method to encourage local investment |
| The price mechanism is a fundamental economic principle, where price changes affect supply and demand. Consequently, many policy proposals advocate using price controls or financial incentives to influence behavior. Some suggest allocating business-related tax revenues to local governments through the Act Governing the Allocation of Government Revenues and Expenditures to encourage investment attraction. However, effectiveness depends on impact magnitude and price elasticity. A simplified analysis shows this approach's limitations. Due to short terms, local officials benefit minimally from tax allocation incentives - often less than 1% of central government expenditure. This creates inefficient resource allocation, with central government costs far exceeding local benefits. The revenue allocation system has three key issues that could increase regional inequity and distort investment attraction methods. Direct incentives for targeted investment projects would be preferable for more effective investment attraction. Moreover, while encouraging competition can drive progress, it doesn't necessarily promote optimal competitive practices. Taiwan's counties and cities have not yet achieved an appropriate scale for effective competition. The Act's primary purpose is to ensure sufficient local funding. Direct methods would be more efficient for effective investment incentives than waiting for tax revenue generation. In conclusion, a more targeted and direct approach to investment incentives would be more effective than broad revenue allocation mechanisms. The focus should remain on providing adequate resources for local governments' basic responsibilities, using separate, targeted approaches for investment attraction. (For more, please see the current monthly journal) |
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Taiwan Economic Research Monthly
Major Trends in the Pet Economy and Industry Development |
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Pets have evolved from household guardians to cherished family members. Despite economic challenges during the COVID-19 pandemic, the pet industry maintained 5% growth. In 2023, Taiwan’s pet dog and cat population reached 2.79 million, with continued growth expected. Responding to increased focus on pet health and growing pet food demand, the Ministry of Agriculture proposed the "Pet Food Management Act" in 2024. This legislation will regulate pet food production, sale, import, and export, making our country the third globally to enact specialized pet food laws. It aims to establish a safety framework, reduce health risks, and protect consumer rights. Drawing from developed nations' experiences, meeting the five freedoms of animal welfare while ensuring sustainable industry growth is crucial. This month's featured articles analyze current pet ownership trends, consumption patterns, and market demands, focusing on the pet food sector. It explores international practices, including policies and management strategies. Additionally, we analyze veterinary hospital management challenges, referencing case studies from Japan, the U.S., and other countries to provide insights into diverse operational models for pet hospitals.
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