Do­mes­tic con­sump­tion is key to re­cov­ery: scholars

The China Post - - LOCAL -

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.

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