October 2023  
Subtle Indications of Revival in Terminal Demand Illuminate Prospects for a Rejuvenated External Demand
Resurgence of the TIER Manufacturing Composite Indicator Signals a Possible Renewed Economic Vigor
Observing the recent international economic situation, despite a gradual slowdown in global economic growth and continued contraction in manufacturing activities, the performance of major countries' manufacturing sectors has shown slight improvement. The US manufacturing Purchasing Managers’ Index (PMI) has been on the rise for three consecutive months. In Taiwan's manufacturing sector, several factors have contributed to this positive trend, including increased demand driven by new technology products, a stable outlook for traditional industries, and the impact of a lower base period. As a result, exports turned positive in September, and the year-on-year decline in the manufacturing production index narrowed compared to the previous month. However, the recovery in end-demand remains limited, and due to various global political and economic uncertainties, the manufacturing industry still holds a conservative outlook for the current month and the next six months. In Taiwan’s service industry, the peak season for summer vacations has passed, leading to relatively subdued performance in restaurants and tourism-related businesses. Additionally, the decrease in trading volume and stock prices on the Taiwan Stock Exchange in September has affected the performance of financial-related industries. As for the construction industry, while there has been a steady rebound in property market sentiment recently, frequent adjustments in housing policies introduce uncertainty, leading to a cautious outlook for the property market’s condition in the next six months. ...Read more
Taiwan to send TSMC founder Morris Chang to APEC summit for 7th time
Taiwan Semiconductor Manufacturing Co. (TSMC) founder Morris Chang will represent Taiwan at the annual Asia-Pacific Economic Cooperation (APEC) summit for the seventh time, the Presidential Office said on Oct. 21. The latest edition of the leaders' meeting will take place in San Francisco Nov. 15-17. Chang, 92, attended his first APEC summit in 2006 as the envoy for then-President Chen Shui-bian. He has since joined five other APEC summits on behalf of President Tsai Ing-wen. Chang has been able to maintain a high profile due to his background as the founder of the world’s largest contract manufacturer for semiconductors. At previous APEC summits, he was able to exchange views with world leaders and communicate Taiwan’s willingness and ability to contribute. The business pioneer has succeeded in raising his country’s international profile, and so he has been chosen to represent Taiwan once again. The United States was hosting the November summit under the theme of “Creating a Resilient and Sustainable Future for All.” Taiwan will continue to cooperate with other APEC members to promote food security, green transition, digital innovation, and women’s empowerment, according to the Presidential Office (Source: Taiwan News).

Taiwan, Canada complete negotiations on investment pact (Focus Taiwan).
Manufacturing output set to rise (Taipei Times).
Taiwan Economic Research Monthly
The causes of the mid-income trap and the current situation in China
Numerous nations face formidable challenges as they navigate their economies into the middle-income bracket, often struggling to sustain growth. This predicament is referred to as the “middle-income trap”. Recently, prominent economist Paul Krugman, along with others, has voiced concerns that China might be at risk of falling into this trap as well. It's essential to recognize that the path to economic development is rarely a seamless journey. Low-income countries frequently find it arduous to initiate development, while high-income nations sometimes grapple with sluggish growth or even economic stagnation and regression. However, it's vital to note that not all middle-income countries are destined to remain ensnared in this trap. The circumstances in each nation are distinctive, and various factors come into play. Rather than dwelling on the definition or existence of the trap, what holds more significance is comprehending these multifaceted factors and devising tailored strategies to surmount the specific challenges faced by each country.
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