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U.S. manufacturing recovery stabilizes, yet tariff headwinds persist
Semiconductor and AI momentum steadies; manufacturers hold neutral outlook |
Examining recent international economic conditions, manufacturing activity has shown signs of recovery in the United States and Japan, with confidence indicators in the euro area also improving in tandem. However, China's manufacturing activity slipped back into contraction territory, suggesting that while global manufacturing momentum has partially recovered, a broad-based revival has yet to materialize.
On the domestic manufacturing front, sustained growth in demand for AI and high-performance computing continued to drive overall manufacturing expansion, with the chemical and steel industries also seeing improved confidence on the back of stronger exports. That said, softer end-market demand in computers and audiovisual electronics tempered semiconductor-sector growth, causing the share of electronic and machinery firms holding an optimistic view of current business conditions to edge down from the previous month. The services sector benefited from a strong equity market performance in January, boosting sentiment among finance-related firms, while stable freight rates and recovering demand in container and bulk shipping further underpinned confidence in the transportation and warehousing sector.
In the construction sector, January activity was broadly flat as new earthwork material regulations took effect and certain projects were deferred. However, as government mitigation measures are progressively released, major public infrastructure projects advance, and AI-driven demand for technology facility construction continues, the sector's outlook for the next six months is expected to turn toward growth. By contrast, the real estate market remains subdued, with transaction volumes still weak amid ongoing credit controls, mortgage rates above 2%, and a persistent price expectation gap between buyers and sellers. Such conditions are likely to persist in the near term.
According to survey results and model calculations, ...Read more |
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| Economic Research Should Avoid Imprecise Terms Like "Taiwan Disease" |
| The Economist recently observed and critiqued Taiwan's economy, labeling current challenges as "Taiwan Disease"—a term many domestically have echoed. However, this nomenclature is fundamentally inappropriate and risks misleading both public understanding and policy formulation. The issues in Taiwan and the Netherlands stem from a dominant industry achieving high competitiveness and market share, driving export surpluses. The difference: currency appreciation is called "Dutch Disease," while non-appreciation is labeled "Taiwan Disease." If both appreciation and non-appreciation constitute "diseases," the fundamental problem lies neither in currency movements but rather in a shared underlying cause—more accurately termed industrial development imbalance. Multi-symptom economic problems rarely yield sufficient cases to establish a disease label with standard treatment protocols. Disease labels prove scarce because national economies across time periods are rarely identical—similar situations occur infrequently. Unlike medicine, which accumulates numerous cases to define specific disease conditions and broadly applicable treatments, economics lacks this empirical basis. Moreover, scientifically inadequate labels cause policymakers to overlook alternative etiologies and adopt potentially inappropriate policies. The Economist's proposal to appreciate the New Taiwan Dollar based on the Big Mac Index—a metric long recognized as flawed—exemplifies arbitrary and absurd reasoning. Characterizing Taiwan's entire economic challenges as a single "disease" ignores critical factors, preventing genuine problem-solving. Housing prices, for instance, likely reflect supply-demand dynamics rather than solely trade surpluses or tax structures. The vague "Taiwan Disease" label attracts disparate policy proposals: blaming weak currency for cultural-creative industry underperformance versus Korea, criticizing central bank foreign exchange intervention, advocating exchange rates reflect "fundamentals" without defining them, proposing tax incentives for entrepreneurship, strengthening China cooperation, or halting pension reforms—suggestions ranging from imprecise to irrelevant. Rigorous economic research neither casually assigns disease labels nor utilizes ambiguous diagnoses for policy prescriptions. |
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Taiwan Economic Research Monthly
Taiwan's Regional Revitalization 3.0: Realizing Sustainability, Public Benefit, and Local Co-Prosperity |
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Taiwan's regional revitalization policy enters its "3.0 era," focusing on sustainability, public benefit, and local co-prosperity. Drawing on Japan's regional revitalization, Chiho Sosei, strategic shift, domestic big data insights, and corporate ESG innovations, this review examines regional revitalization as a national strategic framework.
Japan's "Chiho Sosei 2.0" shifted from reversing demographic decline to accepting population reduction, elevating local development to national economic strategy through industrial clusters. Taiwan's big data shows non-metropolitan areas receiving government support experience slower population outflows, confirming that policy investment enhances local attractiveness. Building on this, Taiwan's 3.0 policy strengthens cross-sector collaboration and directs corporate ESG resources locally.
As Taiwan transitions to ESG evaluation in 2026, companies evolved from donations to partnership models, creating shared value with local teams through core competencies. This public-private collaboration reduces subsidy dependence while enabling market-oriented transformation.
Grassroots resilience building remains essential. Taiwan's 130 Youth Empowerment Stations are becoming regional resilience nodes for rapid crisis response. The Regional Revitalization Youth Incentive Program cultivates local talents, expanding cross-sector support networks.
Regional revitalization now transcends subsidies, integrating innovative governance, public-private partnerships, and social resilience. Sustainable balanced development requires robust government frameworks, sustained corporate commitment, and youth-driven local connections—creating prosperity rooted in our own land.
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