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Regional warfare ebbs and flows, world economy charts course through heavy mist
Tariffs and geopolitical conflicts drive domestic manufacturers toward a conservative economic outlook |
Recently, Israel and Iran have officially entered into warfare, with U.S. military intervention in the Israel-Iran conflict. The escalating situation threatens to trigger a new wave of supply chain disruptions and further elevate the risk of oil price increases. Meanwhile, although the U.S. government has taken action to ease tariff tensions to stabilize the overall economic and financial environment, the direction of its trade policy remains unclear, and uncertainty remains high.
On the domestic front, while demand from AI, high-performance computing, and cloud industries remains robust, foundry and assembly and testing sectors experienced slightly declining revenues in May due to elevated base periods caused by downstream customers' earlier inventory pull-ins. Additionally, the significant appreciation of the New Taiwan Dollar in May made revenue fluctuations more pronounced for export-oriented industries. At the same time, demand for certain traditional products continues to be weak and is affected by competitive pressure from overseas peers offering lower prices, causing manufacturers to adopt a more conservative outlook on the current month's economic conditions compared to the previous month's survey. Looking ahead, the escalation of the Israel-Iran conflict has raised concerns about energy, shipping, and economic stability, and with unclear progress in trade negotiations between various countries and the United States, global economic uncertainty remains substantial, leading manufacturers to adopt a wait-and-see attitude toward economic conditions in the next six months. ...Read more |
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| The Three Kingdoms Strategy in the Trump Era |
| President Trump's high tariff pressures and negotiations have disrupted the global economy. Many believe the world economy will likely be divided into three circles: the United States, China, and the non-US, non-China circle. The difference lies in the different global orders they expect, stemming from different mindsets and the purposes of leading countries. President Trump, leading the American circle, believes that the United States has been too generous to foreign countries and has suffered from unfair competition, causing its economic foundation to decline. Therefore, he wants countries to make large adjustments or compensation to restore America to an equal position so that America can be great again. This idea will likely continue in some form for some time. Today's China has inherited the imperial thinking of many dynasties that ruled the Central Plains for thousands of years. This psychology, combined with communist centralized authoritarian politics, makes many Chinese people believe that using the government's unfair policies and China's monopolistic power from its huge market to compete for world markets, and even misappropriating foreign intellectual property rights, are China's rightful privileges. Although President Xi Jinping has spoken about multilateralism and fairness, China has rarely truly changed its unfair behaviors. Countries outside of China and the United States do not have sufficient power to confront these two circles. However, the purposes and ideologies among these countries are not entirely similar, so they are unlikely to combine into a unified bloc. These three circles represent three different policy objectives and ideological approaches to international relations. If the non-US, non-China circle can maintain the free and open nature as hoped, in this circle about half the size of the previous global economy, Taiwanese companies can still have sufficient space to operate in their traditional manner. However, they now need to pay more attention to cooperating with various countries' emphasis on security and resilience objectives, and must be mindful of possible interference from the United States and China. Taiwan and other countries need not panic due to the establishment and confrontation of the American and Chinese circles. |
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Taiwan Economic Research Monthly
Global Lessons for Taiwan's Innovation and Entrepreneurship Rainforest Ecosystem |
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Startup enterprises have consistently been pioneers of technological innovation and economic transformation throughout each revolutionary period. Particularly during the Fourth Industrial Revolution (2010 to present), startups have emerged as the core driving force in cutting-edge fields such as artificial intelligence (AI), the Internet of Things, and biotechnology. In 2012, former U.S. President Obama signed the Jumpstart Our Business Startups (JOBS) Act, propelling startup policy to the center of global industrial policy. In 2016, Taiwan's government, in collaboration with relevant ministries, launched the "Asia Silicon Valley Development Plan," featuring dual pillars of Internet of Things development and innovation-entrepreneurship ecosystem construction, thereby inaugurating a new chapter in digital transformation and entrepreneurship. After nearly a decade of cultivation, Taiwan's startup ecosystem has transformed from a barren desert into a thriving rainforest. Looking ahead, how the government can effectively leverage abundant innovation resources and promote diverse collaboration has become a critical issue. This month's featured articles examine countries with outstanding performance and distinctive characteristics in global startup ecosystems, focusing on innovative policy measures across four key dimensions: funding dynamics, talent development, market expansion, and tax incentives. These serve as benchmarks for deepening Taiwan's startup rainforest ecosystem, empowering Taiwan's startup enterprises to shine brilliantly on the global startup stage.
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