Taiwan's economy beset by hidden worries

According to the statistics released by the relevant departments in Taiwan, the economic growth rate in Taiwan in 2004 will approach 6 per cent, the highest ever in recent years. Does the number justify if Taiwan's economy has been on track? The actual situation can be found by analyzing the statistics: Taiwan's economy does not seem as optimistic as originally expected.

There have been several warning signals in the development of Taiwan's economy, which worried the economic circles on the island. Firstly the cost-and-gain ratio of Taiwan's stock market only remained 11.7 times by the end of October, shrinking by half from that at the beginning of this year. Secondly the profitability of listed enterprises cannot be matched with high investment from investors. Due to this foreign investment is on the decline continuously.

In light of this situation, Standard & Poor's, a firm recognized for its global leadership in providing rating and financial information services around the world, degraded the outlook of Taiwan's economy from stability to being negative, signaling the world has no longer had a good prospect on the future development of Taiwan's economy.

From June 1998 to present, Standard & Poor's evaluation on Taiwan's economy changed from bad to worse, regardless of either the evaluation or outlook. It is learned Standard & Poor's previous change of the evaluation and outlook on Taiwan was mainly focused on the deteriorating situation of the economy on the island. Although there has been a relatively large increase in Taiwan's economy this time, Standard & Poor's still degraded Taiwan's economy outlook as negative, in consideration of the escalating tension between Taiwan and the mainland triggered by Taiwan's independence and the worsening fiscal situation on the island.

The public opinion on the island shows that the Taiwan authorities' repeated separatist practices of "Taiwan Independence" have severe impact on relations across the straits and the straits peace. Meanwhile, the turbulence of political situation on the island and the severe losses suffered in internal strife resulted in the lack of a sound inner and outer environment for Taiwan's economy. Therefore people cannot be optimistic about the future development of Taiwan's economy. Some economic media on the island comments bluntly that the chief culprit should be the "disoriented" Taiwan authorities if the island's economy could not produce fruitful results.

For those Taiwanese people longing for peace, stability and development, they cannot find any signs of Taiwan authorities' disorientation. The latest edition of Business Week in Taiwan carries an article saying that although the economic growth rate was quite considerable, actually it was influenced by the revival of global economy. Looking towards next year, it seems that the global economy will unlikely maintain the good momentum. Without the external support, once falling into continuous political struggle and the ideological shifting sand, Taiwan's economy will probably degrade for the second time.

By People's Daily Online