March 2024  
Global economic overview: US stability, Eurozone confidence dips, Japan raises rates, Taiwan sees mixed performance
TIER findings: manufacturing holds steady, service sector holds firm, construction slips
Observing recent international economic conditions, the US economy continues to show stability, with the Federal Reserve keeping interest rates unchanged and raising the 2024 economic growth forecast. Economic confidence in the Eurozone has slightly decreased, with the European Central Bank pausing interest rate hikes for the fourth consecutive time and revising down the 2024 economic growth outlook. Due to record-high wage increases in Japan and the depreciation of the yen, the Bank of Japan has raised interest rates for the first time in 17 years, ending its negative interest rate policy. Although China’s manufacturing PMI has slightly decreased, industrial added value and exports continue to grow, indicating clear signs of economic recovery. In Taiwan’s domestic manufacturing sector, influenced by the Lunar New Year holiday, manufacturing orders and exports in February significantly declined compared to the previous month, leading to a deterioration in manufacturers' views on the month’s economic performance. However, as global demand for consumer goods gradually picks up, manufacturers’ sales and inventories continue to improve, leading to a shift towards optimism regarding the future six-month economic outlook. In Taiwan’s service sector, apart from the hospitality industry benefiting from the Lunar New Year holiday, resulting in strong demand for dining and travel, other service industries also experienced reduced business days. Additionally, the peak in retail sales of consumer goods has passed, leading to a negative shift in the overall service industry’s perception of the month’s economic performance. As for Taiwan’s construction industry, the shortage of manpower and the upward trend in building material costs have impacted the initiation pace of new construction projects, resulting in a negative shift in the construction industry’s perception of the month's economic outlook. ...Read more
Taiwan ‘in middle’ of AI revolution: Nvidia CEO
Taiwan is in the center of the new artificial intelligence (AI) revolution, Nvidia Corp CEO Jensen Huang told a gathering with Taiwanese in Silicon Valley’s largest city, San Jose. Tainan-born Huang said it must be celebrated that “Taiwan is right in the middle” of a new industrial revolution in which “something new is being made, and made in a new way.” Huang recalled the manufacturing process of the RIVA 128 graphics processing unit, Nvidia’s first commercial success, describing it as the “most complicated chip at the time.” As Nvidia did not have the budget, he wrote a letter to Taiwan Semiconductor Manufacturing Co founder Morris Chang, who called him, beginning their nearly three decades of collaboration. Huang said he went to Taiwan, and Nvidia worked together with companies such as Asustek Computer Inc and Micro-Star International Co. “My job was very simple — create the technology and create the market,” he said. Thirty years later, Nvidia is still doing the same job of “creating the technology and creating the market,” and is still working with the “same partners,” he said, referring to those attending the banquet. Huang said he is certain there is no company in the world that is changing the world 30 years later with the most consequential potential technology in history, but still has the “same friends and same partners.” “I want to thank all of you. I love you guys,” he said. Huang also called himself “a very good ambassador of Taiwan,” because he understands the importance of Taiwan at the “center of this new computing revolution, this AI revolution.” “We must make sure we tell that story this time,” he said. “Go Taiwan” he said (Source: Taipei Times).

COST OF LIVING/Bank of Taiwan to raise deposit rates after surprise central bank hike (Source: Focus Taiwan).
VP-elect Hsiao visits European Parliament (Source: Taipei Times).
Taiwan Economic Research Monthly
The new world economic order cannot tolerate unfair policies
The world continues to evolve, causing constant changes, and as a result, economic orders are also in a state of flux. There have always been voices advocating for the establishment of a new world economic order due to dissatisfaction with the current order. After World War II, countries like the United States and scholars like Keynes aimed to create a better world economic order, leading to the establishment of various international institutions and systems, including the Bretton Woods System and the WTO, which have made significant contributions but also faced criticisms. In 1974, developing countries proposed the New International Economic Order (NIEO), hoping for special attention to be given to them under the new order. However, in the 1980s, the Washington Consensus and global liberalization became an irresistible trend, promoting the belief that liberalization could solve many problems and overshadowing other proposals. Yet, in recent years, the negative impacts of globalization and liberalization have become apparent, leading to the emergence of new proposals for order. This article aims to discuss the harm and complexity of unfair policies, highlighting that any proposed new world economic order will not be effective unless it addresses or reasonably regulates unfair policies among countries.
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