Good Economic News -- Growth Skyrockets on China growth and trade recovery

Businessweek has the skinny:

Taiwan’s economy grew at the fastest pace in more than 30 years last quarter on surging sales of computer chips and display panels to China, as it heals ideological wounds with its neighbor in favor of trade ties.

Taiwan, Singapore and Japan all reported yesterday that growth accelerated in the first quarter, boosted by a rebound in global trade. In Taiwan, which outpaced China’s 11.9 percent expansion, policy makers are weighing the risk of raising interest rates from a record low against fallout from the debt crisis sparked by Greece, after April export orders from Europe fell 11 percent from the previous month.

“Taiwan benefited a lot from a rebound in the Chinese economy,” said Tony Phoo, an economist at Standard Chartered Plc in Taipei. “The economy is still prone to external uncertainty, with the Greek crisis already feeding into the export data.”

The statistics bureau yesterday raised its 2010 GDP growth projection to 6.14 percent from 4.72 percent, and its annual inflation forecast to 1.4 percent from 1.27 percent. The Central Bank of the Republic of China (Taiwan) has kept its benchmark interest rate at 1.25 percent since March last year to help extract the island from its deepest recession on record.

.....

The planned trade accord with China has attracted overseas investors, spurring Taiwan’s dollar in April to its biggest monthly advance since September. The currency reached NT$31.269 per U.S. dollar on April 27, the strongest since August 2008.

The Taiwan dollar dropped 0.1 percent to NT$32.140 against its U.S. counterpart as of 11:48 a.m. today, according to Taipei Forex Inc. The island’s benchmark Taiex stock index fell 2.3 percent to 7,255.67, poised for its lowest close since Feb. 8.

“Investors are losing confidence,” said Robyn Hsu, who helps manage $3 billion at Capital Investment Trust Corp. in Taipei. “Taiwan’s gross domestic product growth will slow through the year despite a very stunning first-quarter figure yesterday. Falling commodity and gold prices suggest investors are retreating even from relatively safe markets.”

Lessee..... according to one of those investor rating thingies, Taiwan has the eighth most competitive economy in the world. Hookay.

Whatever you might think of our actual competitiveness, our current investments in and trade with China, the result of policies of the Lee Teng-hui and Chen Shui-bian administration, have growth skyrocketing on China's growth, and growing world trade. Tell me again why we need ECFA? So we're not marginalized "like North Korea" as Regional Administrator Ma informs us?

Apparently it is possible to achieve solid growth without ECFA.

ECFA isn't a panacea for marginalization. What it really is, is just another status quo policy that will enable Taiwan to continue doing what it is doing now without having to move forward with progressive, future oriented policies. Ma talks a lot about the future, but the truth is that most of the KMT's policies are status quo policies. The China-oriented policies of the KMT are largely status quo, from bringing Chinese students into Taiwan to save our low-end universities -- many of them run by families or firms with old connections to the KMT -- and forego the need to upgrade the university system. Chinese tourists mean that the tourist infrastructure won't need to be upgraded to international levels, new markets cultivated and developed, and new languages and mores learned. We can just expand whatever tourist infrastructure we have now to galactic scale. ECFA is simply going to pickle the current economy in the brine of faux globalization.

What do we really need? Example: I attended a presentation by a former Taiwan teacher now with a publishing company overseas. He began his presentation by noting that last year, 200,000 students in South Korea took the TOEFL... but not for college. No, they were trying to gain entry into Korea's English High Schools. How many English High Schools does Taiwan currently plan to implement?

Why do I ask such stupid questions?
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Daily Links:

• Klaus with a great post on foreign laborers here.
• Rebiya Kadeer with piece in Huffington Post.
• China inks massive cement deal with South Africa. It's a good thing the US is spending hundreds of billion to make Afghanistan safe for Chinese expansion instead of wasting all that money investing in our domestic economic infrastructure, converting our economy away from fossil fuels, or building our foreign trade portfolio.
• January piece on Chinese cyberattacks on US oil firms. Time for some serious action, Washington.
• China targets photocopiers in Tibet.
• Craig Ferguson with some excellent pics of the ECFA sit in.
• BBC's Cindy Sui with a great long piece on ECFA, including -- incredibly for a major media article -- a good look at the pro-Taiwan side and correct poll information. Fabulous.
  

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