Sunday, July 10, 2016

The Economy slumps as tourism rises

Eva and I beat the heat the other day with a midday soak in a local creek

The Transportation Minister said Taiwan posted fewer tourists from China in June...
Transportation Minister Ho Chen Tan (賀陳旦) said Thursday that the number of Chinese tourists visiting Taiwan in June posted a bigger year-on-year drop than in May, although the country received more foreign travelers in the two-month period compared with the same period of last year.
The June numbers are not yet publicly available. Last week the Taiwan Affairs Office of China said that it had not handed down orders to reduce tourists to Taiwan....
It has been widely rumored that Beijing would prohibit Mainland tourists from visiting Taiwan starting July 20. When asked about the rumors, Zhang Zhijung (張志軍), director of the Mainland’s Taiwan Affairs Office (TAO), stated that such rumors were groundless, adding that “The decline in the number of Mainland tourists visiting Taiwan is probably owing to the current ‘atmospherics’ across the Taiwan Strait. Mainland people choose their travel destination on their own. The TAO will not interfere in their choice of travel destinations.”

Zhang stressed that the Mainland side had never set a quota to restrict the number of Mainland tourists visiting Taiwan, adding that it was Taiwan that unilaterally set quotas.
The June stats are not out yet. It is good news for the nation both economically and politically that Chinese tourist numbers are falling off and other more desirable tourist numbers are rising.

Tourism is a tiny part of the economy. What about exports? Lately the media has been on about falling exports. What are the numbers? Total export value and growth rate (year on year, I believe)(source). When the papers report "17th straight month" of falling exports, they are using year on year numbers. As you can see, exports are downtrending but fluctuating.

25,093,167,522  +3.308
19,846,524,741   -6.729
25,257,614,142  -8.94
23,482,016,800  -11.702
25,625,558,387  -3.859
23,054,269,944  -13.958
23,517,096,287  -12.05
23,894,495,087  -14.882
22,528,258,864  -14.682
23,923,758,897  -11.003
22,113,120,107  -16.988
22,047,978,975  -13.903
22,191,177,910  -11.565
17,755,023,168  -10.538
22,720,429,087  -10.045
22,243,697,684  -5.273

The Bureau of Foreign Trade says we're looking grim, with less trade than last year, and 2015 already lower than 2014. Ma's tying of our economy to China was an economic disaster for the island -- eight wasted years. What a shame.

What is masking the falling exports? Rising trade surpluses. Our trade surplus exhibited yuge growth in 2015...

2014 39,669,895,225
2015 51,768,356,740's down a little year on year, but it was $16 billion in Q1, which augers well for the rest of the year.

Economic growth will be crappy this year. Back in February expectations peaked at 1.47%, now they are down around 1%. TIER has more complete numbers here. But a key point for politics...
The salary on average in April stood at NT$ 43,560 or 0.73% less compared with the averaged salary in March this year.
...salaries continue to stagnate as inflation continues to drive up prices. That will hurt Tsai Ing-wen's approval ratings.
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Anonymous said...

Maybe Tsai will have be progressive enough to raise the minimum wage and help raise other wages to balance otu the higher prices.

Bakarrik Azeri said...

Judging by Tsai's behaviour thus far, I think we can reasonably ascertain that the "progression" must be measured in cm. Claiming anti-drug policy as being the one thing she could fix if she was president for a day, ignoring the dinosaur-aged comments of many from her own party and putting her foot in at the worst possible time via an unnecessary Facebook post regarding the SCS, yesterday. Of course, one could argue that these are necessary conservative steps to take in the first short months of her term, so I'll measure my degree of skepticism.

B.BarNavi said...

What do you see as the solution to this? Stimulus of industry, service and/or manufacturing? Everyone and their mother knows that tourism is a risky business, but in what other baskets has the government put its eggs into?

Michael Turton said...

It's a good question.

Movement into agbiotech, biomedical and biotech fields and similar industries. Some of that is already happening.

stimulation of new gear-demanding tourism modes, such as trekking, scuba diving, and surfing, that the government has long looked down its nose at.

solarizing every building in the nation.


Iengthirith22 said...

Taiwan is a place with such amazing potential! There are so many things Taiwan could do...

Putting solar panels on rooftops.
Wind turbines in windy Pingtung county.
Undersea turbines off the east coast.
Regulations on supermarkets to stop them selling food people don't need at discount prices (thus preventing food waste).
Strictly dedicated cycling routes in cities.
Bitcoin mining.
Higher capital gains taxes.
Using pig farm waste as biofuel.
Nationalization of taxis to stop Uber.
State ownership of irrigation canals.
Regulation of shop front signs so they don't fall off in a typhoon.

That's just to start I'm sure there are many taleneted people with even more ideas!