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Softening labor market and easing price pressure prompt rate cut, but further tightening still possible
Navigating global instability: Taiwan’s economy maintains steady course |
Economic performance in the U.S., Europe, and Japan slightly outpaced the previous quarter in Q2 2024, with the exception of China. As U.S. inflation continues to decline and the labor market cools gradually, conditions are becoming more favorable for the Fed to consider interest rate reductions. However, disparities in industrial performance remain evident, with the global manufacturing sector experiencing an uneven recovery.
In the domestic manufacturing sector, July saw growth in orders, production, and exports compared to the previous month, reflecting the gradual expansion of the global economy. Manufacturers' perceptions of the current economic outlook showed a slight improvement over the previous month's survey. Nevertheless, concerns persist due to pricing pressures stemming from Chinese overproduction and uncertainties surrounding the U.S. presidential election, leading manufacturers to maintain constant views for the next six months.
The service sector faced challenges despite the peak summer season. Domestic tourism failed to show significant growth, and typhoon disruptions impacted retail operations, affecting sales performance. Retailers and the accommodation and food service sector expressed divergent views on the current economic situation. However, the retail sector maintains an optimistic outlook for the coming six months.
In the construction industry, despite increased demand for public works and construction, the sector's performance remained flat in July. ...Read more |
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| Fiscal Revenue Distribution Should Be Primarily Based on Local Governments' Fundamental Needs |
| The Act Governing the Allocation of Government Revenues and Expenditures, unrevised since 1999, remains contentious. This complex legislation, involving central-local and inter-local fiscal distribution, lacks consensus. This article proposes considerations and methods for smoother adjustments to foster rational agreement in discussions or amendments.
The law's evident flaws include insufficient local funding and inequitable distribution. Some areas lack funds, while others misallocate resources. Reassessing appropriate total allocations and fair distribution methods is crucial.
Examining foreign practices offers an alternative approach, though careful analysis is required due to varying national circumstances. Japan's method, which determines fund allocation based on detailed basic needs, is particularly noteworthy. Their system utilizes data such as road length and area, river length, school student and staff numbers, and agricultural workforce to estimate local government expenditure requirements. This approach, which doesn't rely on population, tax revenue, or local political hierarchy data, ensures greater fairness.
In conclusion, fiscal allocation should prioritize demand-side factors, with central government supplementing local basic financial needs. Additional funds for local autonomy should increase gradually, based on improved local management and capabilities, rather than abruptly.(For more, please see the current monthly journal) |
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Taiwan Economic Research Monthly
New Trends in Digital Technology Application and Regulatory Oversight |
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In the digital era, work and life are inseparable from digital technology applications. Promoting digital tech use, enhancing national digital competitiveness, and creating new value while implementing necessary regulations and oversight to mitigate risks are crucial issues. To ensure citizens benefit from digital progress, many countries prioritize rural internet infrastructure to bridge the digital divide. However, the true value of digital technology lies in its application. Japan, facing an aging population and low birth rate challenges like Taiwan, leverages digital solutions for regional revitalization, addressing rural social issues through innovative technologies. The internet's boundless reach has spawned new business models. With the rise of global online platforms like Google, Microsoft, Meta, TikTok, and Snapchat, digital platform regulation has become a hot topic. This month's featured articles delve into telecommunications markets, digital applications, and internet governance. Topics include 5G's impact on the economy and industry, telecom market competition policies, rural digital applications, net neutrality policies, digital platform oversight, and regulatory strategies for generative AI.
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