May 2022  
Turmoil in global supply chains caused by Russia-Ukraine war and China’s COVID lockdown hindering recovery of world demand
TIER’s manufacturing composite indicator dropping due to higher costs and fewer orders
The turmoil and possible disruptions in global supply chains are taking place for the time being. The supply chains chaos did cause the commodity prices to soar unceasingly due to two main reasons. The first one would be the ongoing Russia-Ukraine war, as both Russia and Ukraine are important countries of producing and exporting raw commodities. The war has had hampering the processes and fueling worldwide inflation. The second one would be China’s “zero COVID measures” that have forced the “world factory” to shut down and prop up the inflation further in short supply. In response, major central banks in the world especially the US federal reserve (Fed) began to tighten their monetary operations, which could add more uncertainties to the markets. As a result, the manufacturing and construction composite indicators issued by the Taiwan Institute of Economic Research (TIER) both declined in April 2022; however, the service composite indicator went up slightly. Taiwan’s economic performance in external markets has so far still remained rather good. Taiwan’s exports in April 2022 increased significantly by 18.79% compared with the same month of 2021, the consecutive fourteen-month in double digit growth, as a result of a strong market demand for Taiwan’s ICT parts and components and other quality merchandises. Regarding imports, Taiwan’s imports in April 2022 increased by 26.73% compared with imports in April of 2021, also the consecutive fourteen-month in double digit growth. Taiwan’s exports and imports from January till the end of April 2022 gave a trade surplus as at US$ 20.66 billion or increase by 2.54% year-on-year due to solid performance in external markets as well as the base effect. ...Read more
Biden launches new Indo-Pacific trade initiative
US President Joe Biden launched a new Indo-Pacific trade initiative in Tokyo, with 13 nations including India and Japan signing up on May 23rd 2022. Biden formally unveiled the Indo-Pacific Economic Framework for Prosperity (IPEF) on his second day in Japan, where he is also holding talks with Japanese Prime Minister Fumio Kishida. “This framework is a commitment to working with our close friends and partners in the region on challenges that matter most to ensuring economic competitiveness in the 21st century,” Biden said. The program foresees integrating partners through agreed standards in four main areas: the digital economy, supply chains, clean energy infrastructure and anti-corruption measures. Taiwan has pointedly not been brought into the initial lineup — despite being an important link in supply chains for semiconductors. US National Security Adviser Jake Sullivan said that nevertheless the US is “looking to deepen our economic partnership with Taiwan, including on high-technology issues, including on semiconductors and supply chains.” (Source: Taipei Times).

President Tsai touts golden decade for Taiwan technology industry (Source: Focus Taiwan).
Industrial production up year-on-year for 27th straight month (Source: Focus Taiwan).
Taiwan Economic Research Monthly
New strategies for international economic cooperation
In principle, international cooperation is a complementary relationship, but in the era of global liberalization, such a complementarity is not a relationship between two countries, but rather a relationship between countries and the world. Of course, there are some complementary products manufactured by and between these two countries, but there are often more products that are likely to compete with one another. Countries are always striving to grab the world markets with lower costs and relevant methods, and they are also seeking the cheapest sources of supply. Finally, these countries mutually trade with one another with rather like complementary products. And the situation is often the result of competing interests rather than prior cooperation or moral arrangements. Therefore, liberalization requires less planning or strategies, which can be said to be contrary to liberalization.
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