Taiwan's gov't publishes stimulus plans

Rte 130 west of Sanyi city. We climbed up from Sanyi past the museum, reaching the top at 450m. Lovely views, and a great descent that ends in a rush through lovely farmland. Recommended.

WSJ column has a discussion of it:

“We barely see any dishes that look appetizing on the table…it was just so hard to find something exciting,” said one senior trader, criticizing the plan for offering no immediate measures to address investors’ frustrations.

Trade-reliant Taiwan has watched exports decline for six straight months as the island’s main trading partners – China, the U.S. and Japan – have all battled slower-than-expected growth. Continuing trouble in Europe, combined with stagnant domestic consumption and investment, have only added to the pain.

Taiwan’s economy shrank unexpectedly in the second quarter this year as GDP declined 0.16% year-on-year — the first contraction the island has seen since third quarter of 2009.

During the press conference announcing the stimulus package, Premier Sean Chen, widely seen as an economic whiz, said Taiwan would not follow the footsteps of its competitors, such as South Korea and China, who have either cut taxes or slashed key interest rates to revive their own economies.

Instead, the former chairman of the Taiwan Stock Exchange and the Financial Supervisory Commission said, the government would consider other medium-term measures. Among them: easing restrictions on foreign laborers and white-collar professionals as well as providing more sweeteners for China-based Taiwanese operators to return to Taiwan.

Taiwan’s government, which has run a deficit budget since 2009, doesn’t have much room to cut taxes or hand out cash to boost domestic demand. Even so, the plan disappointed those who expected the government to go for more moderate actions, such as delaying scheduled hikes in fuel and electricity prices or issuing consumer vouchers as the government did during 2008 financial crisis.

The real and correct goal of the plan is to address the investment environment in the hope that it will stimulate growth. Meanwhile the US Fed's announcement of another slurry of funds sent the Taiwan dollar to huge gains. Global funds are also net purchasers of Taiwan's stocks, buying $1.5 billion more than they have sold this year -- the TAIEX might even reach 8,000 this year, or 2000 points below where it peaked during the Chen Administration.

WSJ's MarketWatch has other information. The government is also considering sweeteners for investment from China -- good luck with that one. It is also considering FTAs with other nations. As I've noted in the past, negotiations with Singapore and New Zealand for FTAs are ongoing, but Philippines, Indonesia, and India were also mentioned as possible FTA targets. Will China let Taiwan have such pacts? TIFA talks with the US seem to be restarting, and Premier Chen said that the FTA work will be aimed at joining the US led TransPacific Partnership....
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Daily Links:

• Times of India says Taiwan is good travel destination
• EU Panel Discussion on Taiwan's future
• New AIT director Christopher Marut arrives in Taiwan
• Taiwan sends two ships to the Senkakus. You know, at some point, the humoring of this farcical behavior will probably stop and Taiwan will find itself punished. 
• John F Copper argues Senkakus belong to China
• Coral reef diversity falling
• US Taiwan analyst Richard Bush, weirdly, says that the DPP should embrace the ROC because it would be better able to defend Taiwan's core interests. That would be comical if the issue were not so serious. Which "core interests" would be better off if the DPP embraced an ROC identity (never mind that the ROC identity is a one-party state run by the KMT)? Lessee... keeping China at distance? Nope. Deepening democracy? Nope. Retaining its industries and industrial edge? Nope. Maintaining good relations with neighboring powers? Nope. Maintaining good relations with the US? Nope. Developing a distinctive Taiwan identity that is marketable from a tourism and business standpoint? Nope. Reducing gangsterism and corruption in local government? Nope. Probably the only "core interest" that might be served by adopting a pro-China identity is that it might smooth some aspects of the relationship with China. American analysts are still stuck in 1950s solutions: if only we could persuade Taiwan to sell itself to China, we can solve the "Taiwan problem." Heh. Just wait 'til ya'll have to solve the "Okinawa Problem." You'll be yearning for the good old days of the Taiwan problem.....UPDATE: Heard that Bush says this is out of context and unnuanced. Good! 

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