How is Taiwan doing? how much will USA’s economy affect Taiwan? I think Taiwanese they mostly save their money in the bank, doesn’t really get loan or use credit credit like other countries so I think Taiwan won’t get that bad? After Iceland I heard Pakistan might be next, also Dubai used some heavy leveraging so it might be in danger too.
From what I remember about Taiwan, the use of credit cards was rampant. I also remember frequently seeing people at the ATMs with multiple cards getting money off of them, presumably cash advances. Loans are very common too.
As for Dubai, the problem has more to do with property investments…i.e. they are building like mad and trying to sell property, but it is harder for people to get loans, mortgages, etc. from banks now, so they are worried about there being fewer potential buyers. But they are strict in the UAE about loans and the like. People are jailed for not paying back loans, and it doesn’t happen that frequently.
Taiwan reigned in the easy credit a couple years ago. In a tightly knit society like this it was apparent it was causing a lot of social problems, suicide among them. Banks also still require a significant down payment on property (something like 30% starting last year) so no big crazy loans to people who can’t afford them. The majority of expensive properties here seem to be bought by wealthy people as investments, and homes for children. The average family still buys a reasonably priced home, which outside Taipei is usually very reasonable.
In essence we didn’t have the big de-regulation of the financial industry, though the American Chamber of Commerce sure tried their best.
The problem here will be more an economic turndown because of the worldwide slowdown in the economy and the fact that our new government are astonishingly incompetent.
How dare you disparage the benevolent, honorable, and venereabl Mayor Ma. You are not Taiwanese! You have no rights!
I’d take Ma’s incompetence anyday compared to the corrupt disaster of the last 8 years. How many finance ministers did the DPP go through again? How many interior ministers?
Taiwan’s economy has been in the toilet for years so there’s no bubble to pop here. Wages have been stagnant for 10 years and an all time low of 28 years now. Unemployment figures hide the fact graduates study and study because they can’t get a decent job, the parents pay for this. There’s no wealth coming from younger generations, if you see a young person driving a car all the money is from the parents, bad.
Well, Ma is saying now that the solution is to promote spending. Duh! Have a look:
Personally, I’d love to help, I’ve always been a fan of shopping, but my purchase capacity has been diminished in view of my shrinking salary. Inflation has affected my current purchases, too, hence, I am in no shape to “engage in consumer spending”.
Yes, the last 8 years were largely a waste of space economically speaking, no major breakthroughs, for the island, a weak currency, several popping bubbles, and an incompetent DPP government hamstrung by KMT.
Can the next 8 be any worse?
Well, hopefully the financial system still had some brakes… otherwise it would be something like South Korea by now…
No, no, the real “tragedy” is here:
[quote]Terry Gou, Taiwan’s wealthiest man at one time, has seen shares of his Hon Hai Precision Industry group tumble by more than 50 percent in value in the current bear market. Hon Hai shares were quoted at NT$202 each at the end of last year. It was NT$90 last Friday.
One result: Gou’s fortune has been pared by at least NT$95 billion (US$3 billion).
How about the Formosa Plastics Group, … The loss topped NT$60 billion or close to US$2 billion.
Tsai Hung-tu, the heir to Tsai Wan-lin who Forbes ranked Taiwan’s richest man this year, presides over the Cathay Financial Holding Company. Cathay shares fell sharply, causing Tsai Hung-tu to incur a loss running to more than NT$54 billion (US$1.7 billion). His half brothers, Tsai Chen-yu and Tsai Chen-chiu, lost NT$4 billion between them. All told, the Tsai family’s loss amounted to NT$58 billion (US$1.8 billion).
Another Tsai family owns the Fubon Financial Holding Company. The founder of the group, Tsai Wan-tsai, is a sibling brother of Tsai Wan-lin. Fubon’s loss was estimated at NT$13.6 billion (US$400 million).
Chang Jung-fa, founder of the Evergreen group, has lost at least NT$4.3 billion (US$160 million), due chiefly to the tumbling of EVA Airways shares. Evergreen, the world’s largest container shipping company, also runs EVA Airways which lost heavily in the surge of oil prices.
Thomas Wu, chairman of the Taishin Financial Holding Company, has incurred NT$4 billion (US$125 million) in share losses.
Douglas Hsu, chairman of the Far Eastern group, saw his share holdings pared by NT$1.8 billion (US$510 million), while C.Y. Kao, head of the Uni-President group, suffered the smallest loss of NT$100 million.
Cher Wang, a daughter of Wang Yung-ching who runs HTC Corp., and her husband Wenchi Chen, who owns VIA Technologies lost altogether NT$17.7 billion (US$582 million).
Tsai Ming-chieh, board chairman and chief executive officer of the MediaTek Inc., shed his fortune by NT$11.3 billion (US$355 million).
Barry Lam, Quanta chairman, lost NT$6.3 billion (US$200 million).
Taiwan is looking better than a lot of places now. The pound has gone to shit, losing another 5 points against the TWD in just a week.
When the gods wish to punish us, they give us what we ask for.
[quote=“headhonchoII”]I’d take Ma’s incompetence anyday compared to the corrupt disaster of the last 8 years. How many finance ministers did the DPP go through again? How many interior ministers?
Taiwan’s economy has been in the toilet for years so there’s no bubble to pop here. Wages have been stagnant for 10 years and an all time low of 28 years now. Unemployment figures hide the fact graduates study and study because they can’t get a decent job, the parents pay for this. There’s no wealth coming from younger generations, if you see a young person driving a car all the money is from the parents, bad.[/quote]
Okay, so tell us how Ma is going to correct this, especially stagnant wages? I’ve heard your blather enough times. Come up with the goods or please stop this.
And remember you have to be honest. If you try to recycle discredited notions of deregulation and trickle down I am going to laugh very hard.
What would you do Muzha? What would be your plan of action if you were the leader of Taiwan?
(maybe Ma will read this column?)
We all love to hear the stories about how squeaky clean the KMT is and was. They are such heart warming stories of murder, imprisonment, and heroin trafficking.
Taiwan’s economy grew under Chen at an average of 2.8% during his first term despite the hangover from the Asian economic melt down, the tech stock bubble bursting, and recession in the US. It then grew by an average of 5.2% in his second term.
I doubt Ma’s administration will top that record.
[quote=“tommy525”]What would you do Muzha? What would be your plan of action if you were the leader of Taiwan?
(maybe Ma will read this column?)[/quote]
Tommy, you were a part of another thread where I anwer some of this. In fact, didn’t you ask the question?
In any case, it is unfair to turn this on me. HH thinks Ma will deliver so I ask how, and specifically regarding wages.
I have no problem people being highly critical of Chen as he deserves most of it. But these same people always turn off their criticial thinking skills with Ma, and simply place a blind partisan faith in him. Why? What has Ma done to deserve out trust?
He did very little for Taipei city, and in fact most of his accomplishments have come to nought, such as the gondola, the stadium, wireless Internet, the zoo mall, to say nothing of the two long standing night markets that his improvement efforts destroyed. He was also chairman of the KMT for several years and promised to bring in anti-corruption legislation as well as party rules against corruption, and again, accomplished pretty much zero.
As President he has presided over a massive loss in stock value, a food scandal, the rising likelihood of recession, the drop in the NT dollar, the Chinese tourism farce, and has not shown an ounce of leadership. His approval rating is about 20-30 percent. So how am I supposed to respond to someone who is repeating lines about Ma that were suspect in the spring, but now are patently ludicrous?
I look at other indicators to see how society is doing. I see people cutting corners in Taipei where they didn’t used to before: 3 to a scooter, riding with no helmets, giving out plastic bags or chopsticks with purchases…these are all either direct or indirect indicators of people’s attitudes toward the society or community they live in. Sub-prime and credit related or not, there is a slide going on.
Or people are simply responding to worldwide increases in gas and food prices and a likely recession around the corner by tightening their belts (as they do everywhere in the world). But if you have your eyes open you will notice that there are more cars on the road again after the price of gas dropped to the lowest level in about 3 or 4 years. What you offer above is no indication of a permanent slide.
Ma has assured us the fundamentals of our economy are strong and we will come out of this better than ever. Who are we to doubt this?
The one question I haven’t seen asked anywhere is how much did Taiwan lose in foreign reserves with the meltdown in the US. I’ve also not seen nor heard the figures for Japan, Korea, or China, which was said to have $500 billion in the subprime lending market alone.
Ma can’t nor is able to fix Taiwan. He’s not going to make it easier to start a business. The president has little if any influence in peoples’ lives with most things being decided and implemented at office level of the corresponding bureaucracy. People already have easy access to credit. With a declining birthrate and an aging population with easy access to low cost foreign labor, I can’t see things improving within the short term(1-5 years) for the average unskilled/semi-skilled Taiwanese worker. With additional fees, taxes and with holdings on each employee, I expect the unemployment situation to get worse.
Without some spending cuts in the Federal and county gov’t and relaxing of the rules/fees on starting a business, Taiwan will slowly choke off most domestic consumption and subsidize its international competitiveness till that becomes too expensive to keep up. You know sort of like Japan.
[quote=“Mucha Man”]What you offer above is no indication of a permanent slide. [quote]
What slide is permanent? Belt-tightening, recession, recovery, excessive spending; repeat as necessary…
My only observation was that when times are tough, it’s reflected in people’s attitudes towards simple social mores, like the number of passengers on a scooter, the streets not being cleaned as well as they once were, or more dogs running around in the lane behind my house. The powers that be have bigger fish to fry, like deciding how to keep the ship afloat and safeguarding their own personal wealth.
If there are more cars on the road, oil consumption will rise and we will be headed back to USD$100+ a barrel…big whoop! Just a sign to buy back into oil stocks again. Those who can afford to will still drive.
Personally, I wish the price of oil would remain high: I see more and more bicycles on the road and I like it!
I dunno, guys, maybe we are taking this issue a bit lightly. I have recently noticed an increase in the tell-tale signs of social decay. Drunkards in my neighborhoods’ streets -in all my years living there, I had seen maybe one or two homeless guys, but never noisy drunkards on the streets, several times, a week-. Drugged kids -still wearing their uniforms, totally out of it, even in the MRT, or smoking and drinking and making a mess in public parks -next to residential buildings. When I got here, groups of hei dao strolling openly were rare but still seen in the older neighborhoods. Now, they cruise the streets openly again, no matter time or place.