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Russia-Ukraine war and China’s “zero COVID” policy jointly make global economy further uncertain
TIER forecast remains unchanged: Taiwan’s 2022 annual GDP growth rate will stand at 4.10% |
| The Russia-Ukraine war has showed no sign of leading to truce so far. The geopolitical conflict has caused serious impacts on the world economy, as both Russia and Ukraine are both important countries of producing and exporting raw commodities. In addition, China’s “zero COVID” policy aiming to cope with its recent outbreak has added further uncertainty to the global economic recovery. The manufacturing and construction composite indicators issued by the Taiwan Institute of Economic Research (TIER) both declined in March 2022; however, the service composite indicator went up. Despite the worsening external conditions, Taiwan’s export engine has remained strong and solid. TIER conducted its GDP forecast for the second time on 25th April predicting Taiwan’s economy this year will grow by 4.10%, same as its previous forecast conducted earlier this year. Taiwan’s economic performance in external markets has so far still remained quite good. Taiwan’s exports in March 2022 increased significantly by 21.27% compared with the same month of 2021, the consecutive thirteen-month in double digit growth, as a result of a strong market demand for ICT parts and components and other merchandises. Regarding imports, Taiwan’s imports in March 2022 increased by 20.28% compared with imports in February of 2021, also the consecutive thirteen-month in double digit growth. Taiwan’s exports and imports from January till the end of March 2022 gave a trade surplus as at US$ 15.50 billion or increase by 9.96% year-on-year due to base effect. As the export order have continued such momentum, it is also expected that Taiwan’s exports will maintain strong in at least the first half of 2022. ...Read more |
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| Export orders beat forecast, rise 16.2% |
| Export orders of the first quarter of 2022 expanded at a faster-than-expected 16.2 percent annually to US$173.13 billion, the best first-quarter performance ever, aided by improving key component supplies and robust demand for chips used in 5G devices, servers and emerging technologies, Taiwan’s Ministry of Economic Affairs said on 20th April. Demand for information and communications technology (ICT) and electronics products were much higher than its expectations, and only a fraction of local manufacturers felt the pinch of China’s stringent “zero COVID-19” policy, the ministry said. That was evident in continued growth in export orders from China, including Hong Kong, which rose 11.4 percent annually to US$43.76 billion. However, the situation remains dynamic as China imposes lockdowns in more cities and the pace of work resumption at factories remains uneven. It expects export orders to slide 9.1 to 11.5 percent on a monthly basis to between US$55.5 billion and US$57 billion this month. That would represent an annual growth rate of 1 to 3.8 percent, the ministry added. Another unfavorable factor is the Russia-Ukraine war, which has driven commodity prices higher and stoked fears of inflation worldwide. That could result in a global economic slowdown and subsequently depresses demand for goods made by Taiwanese manufacturers (Source: Taipei Times).. |
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Taiwan Economic Research Monthly
For Taiwan to enter the digital economy era, it must lead the industry to innovate in an all-round way |
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The economic development of Taiwan for the past 30 years has been closely related to grasping the opportunity of electronic technology model and establishing an internationally competitive industrial chain through R&D innovation. However, in the digital economy era, “data” has become a new key investment, and “software” will be like the industrial age as important as machinery and equipment. Therefore, whether various vertical industries and software service providers can jointly grasp this new wave of digital network technology, accumulate data and develop software for innovation, should be an important key issue in the transformation and upgrading of various departments and industries in Taiwan at this stage. In the digital economy era centered on the development of data and software, the innovation of many emerging technologies in the previous industrial era, the model of producing specific technologies through R&D investment, is no longer fully applicable. In order to enter the digital economy era, the innovation required by various vertical industries requires not only continuous investment in technology research and development, but also data and software to change the operating model.
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