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Volatile tariff policies disrupt global manufacturing procurement and production schedules
AI sector exports maintain robust performance amid traditional manufacturing slowdown |
Recent volatility in the Trump administration's tariff policies has intensified global financial market fluctuations. Tariff risks remain present, and if subsequent negotiations collapse, trade tensions may escalate again. Combined with frequent policy adjustments and uncertainty in the United States, business confidence has been undermined, and the global economic outlook remains pessimistic.
Domestically, despite strong demand for emerging technology applications and the U.S. temporary suspension of high reciprocal tariffs driving customers to front-load purchases, the information and electronics industry continued to perform strongly in April. However, traditional goods suffered from weaker demand compared to the previous month, overseas low-price competition, and declining international oil prices, which dragged down product prices and led related industry players to generally view the monthly economic conditions negatively. With the U.S. temporarily suspending reciprocal tariffs and reaching partial tariff reduction agreements with China, the manufacturing sector's outlook for the next six months has improved slightly compared to the previous month. ...Read more |
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| Tax surpluses better than forex reserves for sovereign wealth fund |
| For years, some have advocated establishing a sovereign wealth fund or national investment fund, but three obstacles must be addressed. First, many proponents aim to generate profits or enhance returns on foreign exchange reserves, but without higher objectives, these arguments lack persuasiveness. Second, there are doubts about management capabilities, potentially leading to favoritism or partisan conflicts. Third, advocates suggest allocating central bank foreign exchange reserves as funding, which risks misrepresenting the actual state of government and central bank assets and liabilities. The government or sovereign wealth fund should prioritize supporting public infrastructure and industrial development over merely increasing foreign exchange returns. However, sovereign wealth funds across countries have different purposes based on their backgrounds. Our foreign exchange reserves derive from trade surpluses, where foreign currency is sold to the central bank, and from foreign investors selling foreign currency to the central bank when investing in Taiwan stocks. Both methods involve purchasing foreign exchange with New Taiwan dollars and do not represent net assets that the central bank or government can freely use. Even if a sovereign wealth fund aims to support socially beneficial activities like public infrastructure and industrial development, government participation in high-tech and industrial investments and procurement areas, not well understood by the general public, can easily become targets for attacks from opposing political forces, damaging related individuals and industries. Therefore, sound institutional design is necessary, such as transparent participation by all political parties in investment decisions to avoid misunderstandings and smear campaigns. Issuing government bonds, borrowing foreign exchange, and allocating foreign reserves can all increase foreign investments while reducing foreign exchange reserves. However, borrowing foreign exchange may conceal government debt while overestimating central bank foreign exchange assets, and allocating foreign reserves can obscure government debt and responsibilities due to unclear accounting. Issuing government bonds is comparatively more honest and relatively sound from a monetary management perspective. Alternatively, tax surplus funds represent unexpected government assets that can be invested without negative consequences, making this approach preferable to issuing bonds. Rather than spending these windfalls to please voters or taking shortcuts by allocating foreign exchange reserves, investing unexpected gains presents an appropriate opportunity to accumulate wealth. |
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Taiwan Economic Research Monthly
Key Strategies for International Development of Taiwanese Startups |
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The GEM report indicates Taiwan's startup ecosystem faces a paradox of "strong environment, weak momentum" - excellent infrastructure and policy support contrasted with declining public entrepreneurial enthusiasm. Despite this weakening momentum, the global AI wave presents significant new opportunities for Taiwanese startups, which have demonstrated high sensitivity and commitment to AI applications as their central development focus. To truly overcome market limitations, startups must combine technological innovation with Taiwan's industrial foundation and supply chain advantages while strengthening international connections. Scientific research startups need improved market validation, corporate collaboration, and commercialization capabilities to align with industry needs effectively. From an internationalization perspective, Taiwanese startups continue to face significant challenges in local resource networks, regulatory understanding, and market demand alignment, creating a notable gap between "Think Global" and actual implementation. Early localization strategies and local partnerships are essential to overcome growth bottlenecks. Both international and corporate accelerators have become crucial enablers—the former connecting startups with overseas markets and capital networks, the latter driving expansion through supply chain resources and technical validation. Taiwan's startups now stand at a critical inflection point requiring both optimization of the entrepreneurial environment and deeper market-oriented thinking to build a globally connected startup ecosystem.
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