Domestic consumption is key to recovery: scholars
In response to official government forecasts of lower economic growth and gross domestic product for Taiwan yesterday, local scholars urged the increase of domestic consumption to avoid further economic downturn.
After the Directorate General of Budget, Accounting and Statistics (DGBAS, ) released statistics indicating slowing economic growth into the next fiscal year, Chiou Jiunn-Rong ( ) a professor of economics National
at Central University argued that the country needed to shift its exportoriented production structure. Seventy percent of Taiwan’s economic growth is dependent on the export market, he said. Chiou also added that last year’s outlook was unexpectedly rosy due to the release of the Apple iPhone 6.
Concurring with Chiou’s assessment, Yang Chia-yen ( ) an analyst at Squarex ( ) stated that Taiwan would likely feel sideeffects from the bursting of China’s economic bubble, citing recent drastic drops to its stock markets and a move by its government to lower the value of the yuan. Yang added that moving the island away from its reliance on exports also meant reducing the weight put on the information technology industry.
According to Yang, Taiwan needs to move away from an economic battle of attrition that pushes down costs and limits the profitability of many of its industries. Once an economy is trapped in “the winner’s curse” it will continue to lose its economic competitiveness if it cannot adapt to new circumstances.
Scholars and labor activists critical of current government economic policies have recently pointed to economic growth stagnation, as well as policies that have kept the island’s wage levels low as critical issues tied to future growing economic and social inequality and potential instability. The Ministry of Labor, however, refused to budge on the issue of wage increases citing disappointing trade figures.