Economy Slackening

Economic forecasts for 2012 were downgraded slightly....

Taiwan’s economy is forecast to grow 3.85 percent in 2012, down 0.06 of a percentage point from last month, as data showed local tech companies pulling back on investment.

Semiconductor, display panel and dynamic random-access memory firms will slim down investments in the coming months owing to a significant drop off in export orders, an official from the Directorate-General of Budget, Accounting and Statistics said Feb. 22.

The background is the general economic weakness. With Europe mired in crisis, the US government in the grip of mind-blowing economic and foreign policy irrationality, and weakening demand from China, Taiwan is buffeted by forces beyond its control. Earlier this month reports said that exports had fallen for the first time in two years....

Taiwan said Tuesday that exports in January fell for the first time in more than two years due to weakening demand for the island's signature electronics and telecom products.

Shipments fell 16.8 percent year-on-year to $21.08 billion -- the first contraction since a 4.6 percent decline in October 2009 -- and dropped 12.0 percent from December, according to the finance ministry.

Exports of information and telecom products shed 26.7 percent from a year earlier while electronics fell 23.2 percent year-on-year, the ministry said in a statement.

Exports to the island's major markets, including China, the United States, and Japan, all shrank from last year, with the biggest decline of 25.9 percent in shipments to China and Hong Kong to $7.57 billion.

Economic growth the last quarter was less than 2%. Interestingly, AFAIK no one has claimed that Ma would have won bigger but for that; evidently the Taiwanese were above seeing the election in terms of transient economic change. Note the huge drop in China shipments, a sure sign of economic fall-off there. It would be too easy to argue that Ma has put all Taiwan's eggs in the China basket and now look what happened, or to take another shot at ECFA for not giving us a boost, but diversification of exports is a trick when major markets like the US and Europe are in the doldrums. The DGBAS had originally predicted Oct-Dec would see 3.69% growth but actual growth was only 1.90%.

In other news, foreign investment was a hair under $5 billion in 2011, a 30% rise. In 2006 and through the first nine months of 2007, under the isolationist, business-hating Chen Shui-bian, foreign investment was $24 billion.
____________________
Daily Links:

• The Economist had a blog column on Linsanity this week that garnered high praise from most who read it. Yet I also saw remarks from people who complained that Jeremy Lin had nothing to do with the Chinese sports system so the whole thing merely represents an excuse to hack on China in a way that highlights the superiority of the US. 
• John Feffer on the visit of heir apparent Xi to the US; yeah, they said that about Hu. 
• Bill Geertz finds the draft of the US China Economic and Security Commission report, which discussed the Sanya Initiative.
• Submarines: US floats idea of selling/leasing subs to Australia. Taipei to build its own electric subs.
• F-16 upgrades: battle of radars heats up
• Sebastian Veg writes on the recent election in historical perspective, proving for the one millionth time that Chinese Republican history cannot be used to understand Taiwan (good-bye, Japanese colonial period and its effects, we hardly knew ya'). Also, the people who left early at the rally in Banciao more likely did so because they wanted to get to the bus/metro before it shut down. Other people there said the rally was packed and no one around them left early. 
• DPP's acting Chairperson is Chen Chu. 

_______________________
[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.