New Year's Economic Prospects Call for Cautious Optimism

New Year's Economic Prospects Call for Cautious Optimism
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
February 16, 2011

Tomorrow is the Lantern Festival. The New Year has begun, and is bringing people warmer weather and renewed hope.

Last year's economic growth was double-digit. The black clouds of the financial tsunami dissipated. ECFA, which dragged on forever, finally went from paper to reality. The early harvest list of 579 exports will gradually reduce tariffs, beginning this year. More long-awaited benefits are still to come. So much good news, all at the same time. We should be able to look forward to a good year.

But despite these positive omens, we must not take economic prosperity for granted. But must take things one step at a time. Long term indicators could turn negative. If that happens, not just Taiwan, but the entire world will feel the impact. When might it take effect? It could happen this year. It could happen in the first half.

In September 2008, the financial tsunami struck. With the US at the helm, governments the world over attempted to minimize its impact and to ensure an early recovery. They adopted all sorts of unorthodox monetary and fiscal policies. But they went too far. They severely distorted the global economy. For two years imbalances worsened. Bubbles appeared in developing countries. Their economies overheated. Developed countries experienced capital loss. They hoped to revive their economies, but lacked the ability. The result was one half of the world bloomed, while the other half withered. Fire and ice coexisted, side by side, in an abnormal structure. More and more urgent measures became necessary to turn things around, and set the global economy back on the road to normality.

Here lies one of the keys. the U.S. Federal Reserve was the first to suddenly drop interest rates to zero. This was a serious offense against the laws of the marketplace. When will the Fed stop engaging in such heavy-handed interventions, and allow interest rates to return to normal? The U.S. Government is selfish. It obstinately adheres to a ridiculous interest rate policy and refuses to make concessions. With quantitative easing in the second quarter, it added fuel to the fire. As a result, developing countries fear that interest rates rises will encourage carry trades. Hot money will become even more rampant. Bubbles will burst, currencies will be revalued, and export competitiveness will be lost, They have no choice but to follow suit, to sit back and watch as real interest rates plummet, or even turn negative. How long can such distortions be maintained?

In the second half of last year, the United States began bleeding capital. The economy is still recovering. Apart from unemployment, the indicators have significantly improved. If this trend continues, the Federal Reserve's zero interest rate policy will become less and less justifiable. The Fed is likely to suddenly declare an interest rate increase during the first half. Once the United States lets go, developing countries will be relieved. They will rally in response. Disaster looms. The global interest rate structure will return to normal. It may even increase due to inflationary pressure. By then, much of the hot money will rapidly return to the United States. Fire and ice will suddenly collide. Fueled by U.S. funds, they will be unleashed. Hot money in developing countries will unexpectedly depart. Interest rates will increase. This will lead to the bursting of one bubble after another. Taiwan has been the target of hot money over the past two years. The central bank has wracked its brains attempting to block hot money. But it has been powerless. When the hot money leaves and the bubble bursts, the negative impact will not be far behind. If the bubble bursts too hard and too fast, it will lead to the worrisome "double dip." That is not something to be taken lightly.

Another important factor is Mainland China. Mainland policy, combined with a sudden jump in salaries, could close the doors of the world's factory. In recent years, Taiwan's economic growth has been dependent upon the surplus from Mainland processing zones. If this situation changes, the impact on Taiwan's economy would be great indeed.

If the world's factory closes, the initial brunt would be borne by the Mainland economy. The impact would be massive. The outlook for the Mainland economy would not be optimistic. Not only would it lose exports. Imports would be unsustainable too. This year Taiwan anticipates a huge increase in the number of Mainland tourists. Strong domestic demand and expansion on the Mainland would lead to exports to Taiwan. If these expectations come up short, if they decrease instead of increase, they will deal a nasty blow to Taiwan. Unfulfilled expectations are particularly hard to bear.

Such developments are likely this year. We must face the facts. We must prepare for a rainy day. We must begin as soon as possible. These growth engines, these pillars of the economy, may be suddenly shaken. We must ensure that Taiwan's economy does not collapse. After all, if the world's factory closes its doors, Southeast Asia will surely replace it. The global economy will emerge from the twisted wreckage. Prosperity will return. ECFA, in particular, has thrown open the doors to freedom and liberalization. Taiwan now faces a new era, undreamed of in six decades. But only as long as we are not attached to appearances, only as long as we are willing to confront the future, The Republic of China Centennial will be an important beginning. It will be the starting point for a new era of prosperity.

新年經濟新局 要樂觀也應審慎
【聯合報╱社論】
2011.02.16 02:56 am

明天是元宵，新年的序幕拉開，為人們帶來新的氣象與新的憧憬。

去年的經濟成長率在兩位數上下，將金融海嘯的陰霾一掃而光，而擾攘甚久的ＥＣＦＡ終於從紙面走上現實，早收清單的五七九項出口品今年開始逐步降低關稅，更將帶來期盼已久的實質利益。這麼多好消息一時並至，應可期盼醞釀出一個好年頭。

然而，儘管有這些好兆頭加持，今年的經濟情勢卻不容掉以輕心，反而必須步步為營，因為若干影響深遠的重要因素顯得撲朔迷離，一旦發作，不止台灣，整個世界經濟都難免顛簸震盪；而發威的時間，很可能不出今年，甚至上半年即見分曉。

二○○八年九月金融海嘯爆發以來，以美國為首的全球各國政府為求減輕災難，早日復甦，紛紛採取各種非典型的貨幣與財政政策以應變；結果過猶不及，全球經濟結構受到嚴重扭曲。因而兩年於茲，失衡狀況愈演愈烈，新興國家泡沫滋長、景氣過熱，先進國家則資金流失，欲振乏力，形成一個半榮半枯、冰炭共存的畸形結構，愈來愈迫切需要以霹靂手段扭轉乾坤，重置全球經濟於正常穩健的大道之上。

此中關鍵之一，就是率先將利率遽降至零的美國聯準會，何時可停止此嚴重違反市場規律的強力干預，讓利率水準逐漸回歸正常。由於美國政府為一己之私，膠柱鼓瑟，堅守此一荒謬利率政策而毫不讓步，甚至以二次量化寬鬆政策（ＱＥ２）火上加油；於是，新興國家唯恐單獨升息將助長利差交易，使熱錢更猖獗，鼓脹泡沫並推升幣值損及出口競爭力，只好勉力跟隨，坐視本國實質利率向下沉淪，乃至成為負值。但如此扭曲的狀態，豈能持久？

從去年下半年開始，美國在資金流失的情況下，經濟依然走向復甦之路，除失業率外，各項指標皆明顯改善；若此趨勢繼續發展，則聯準會堅守零利率的政策即逐步失去說服力，極可能在今年上半年毅然宣布升息。一旦美國放手，新興國家將如釋重負，群起響應，則不旋踵之間，全球利率結構將幡然歸正，甚至在逐漸加深的通膨壓力之下，逐步走高；屆時，無數追求利差的熱錢會加速向美國回流，冰炭兩個半球會猛然碰撞，美國在資金的助長下，如虎添翼，而新興國家則因為熱錢驟去、利率走揚，而使棘手的泡沫接踵破滅。台灣正是熱錢兩年來攻擊的重點，央行近來殫精竭慮勉力阻擋，仍力不從心；因而屆時熱錢之流失與泡沫之破滅，其衝擊恐怕也不落人後。而泡沫過大又破滅過快，正是常為人憂心的所謂「二次衰退」，豈可掉以輕心？

另一項重要因素，則是中國大陸在政策引導與薪資驟升的夾擊之下，世界工廠正拉下大門；最近幾年，台灣經濟成長率基本上靠在對岸這些加工基地的出超支撐，倘若情勢丕變，其對台灣經濟的衝擊將無比巨大。

不過，世界工廠如果關門，首當其衝的乃是大陸經濟；在其巨大衝擊之下，大陸景氣恐難樂觀，不但失去出口支撐，進口也難以為繼。然而，今年台灣最期待的正是陸客大量增加、大陸內需擴張大力向台灣進口；如果這兩項期待落空，甚至不增反減，則當前面兩項因素重擊台灣時，落空的期望會格外沉重。

面對這幾項極有可能在今年發生的衝擊，我們必須認清真相，未雨綢繆；不但要預先做好可能的防備，而且儘速籌謀對策，俾在這些成長引擎、景氣支柱忽然動搖時，可以有力地支撐台灣經濟不墜。畢竟，對岸的世界工廠拉下大門，必定會在東南亞一帶重新開張；而全球經濟結構自扭曲畸形的陷阱脫出，自會重新走上繁榮興盛的大道，尤其ＥＣＦＡ猛然打開自由開放的大門，台灣正面對六十年來不敢奢想的新紀元；只要我們不耽迷於表相，而能眾志成城迎向未來，民國一百年會是一個重要的開端，亦應是昂揚向上的起點。