Challenge 2013: Enhance Competitiveness at Structural Level

Challenge 2013: Enhance Competitiveness at Structural Level
China Times editorial (Taipei, Taiwan, ROC)
A Translation
January 3, 2012

Summary: This year's forecast is for over 3% growth. This is much higher than last year's 1.13%. Although better than last year, it is nowhere near a "perceptible improvement." The most serious challenge for our industries and government is not the growth rate. It is the need to revamp our industrial structure and to upgrade our economic competitiveness. This is the real problem industry and government must tackle this year.

Full Text below:

Taiwan's economy over the past year has been a roller coaster ride. Sudden peaks were followed by equally sudden valleys. It was a thrill a minute. We were optimistic at the beginning of the year. Predictions were that our economic growth rate would lead the Four Asian Tigers. But the numbers suddenly plummeted. setting off ten blue warning lights in a row. We could no longer be sure even of maintaining a 1% growth rate. Newly re-elected President Ma and the public had high hopes for the new cabinet's economic advisors. But public approval plummeted along with the growth rate. The good news is that the economy is on the mend and expected to climb back out of its hole. The bad news is that risks remain. Especially the problem of Taiwan's economic structure, which remains unsolved.

Last year the global economy was turbulent. One disaster followed another. The initial forecasts from all quarters were that the economy would bottom out in the first quarter, then bounce back. The global economy would recover in the second half of the year. But the European debt crisis intensified. Europe fell into recession. The UK and italy experienced negative growth. France experienced zero growth. Even Germany experienced less than one percent growth. Over the last two to three quarters, the European Union experienced negative growth. This is the definition of a recession. The United States threw money at the problem with quantitative easing. But the unemployment rate hovered at about 9%. It dropped to under 8% toward the end of the year. The recovery however, remained weak.

Even more surprising was the Chinese mainland's economic slowdown. The U.S. and European economies slowed. This led to fewer exports than expected. This in turn led to small and medium enterprises on the Chinese mainland closing down. They closed down to avoid becoming part of the asset bubble. For many years this emerging economy maintained double-digit growth rates. During the first quarter of last year however, this growth slowed. During the second-quarter economic growth fell below 8%, to a mere 7.6%. It fell to record lows in the aftermath of the financial tsunami. The Mainland government was compelled to put "steady growth" economic policy first. Several other prosperous emerging economies, including India and Brazil, experienced minimal growth following the financial tsunami.

The environment is hostile. The economic performance of the Four Asian Tigers, including Taiwan, is far from ideal. Export growth rates were negative in the second half of the year. The economic growth rate was supposed to be 4% to 5%, It has been gradually revised down to between 1% and 2%. Taiwan's export growth rate fell first, before the other Asian Tigers. That is undeniable. The amount of Its decline was also greater than for the other Asian Tigers'. These cold, hard facts tell us something. Taiwan's economic decline last year was attributable partly to macro conditions. But it was also the result of internal problems. These include a decline in industrial competitiveness.

This year the global economy is expected to bounce back. The U.S. unemployment rate has fallen to 7.7%, the lowest over the past four years. Economic growth was also better than expected. Mainland China's Purchasing Managers Index has rebounded. Export figures increased. The major think tanks' economic forecasts for this year are higher than they were for last year. This shows that a rebound has begun. But we cannot ignore potential risks. Crises are still ongoing. The first hurdle is the U.S. fiscal cliff. The Democratic and Republican parties have reached an agreement. They will tax the rich. But the deficit reduction mechanism will not kick in for two months. The wrangling between the two parties is expected to continue. Economic and financial markets will remain shakey.

The second hurdle is the European debt crisis. It remains insoluble. Greece is no longer the problem. But the Spanish economy has yet to improve. Italy is finally out of intensive care. But Prime Minister Mario Monti, responsible for rescuing the economy, has resigned. The leadership will be replaced. Much risk remains. The third hurdle is international political risk. The Middle East has long been a powderkeg. Changes in the Mid East situation could impact the price of oil. This could impact the economy. A Japanese rightist regime has come to power. How will it interact with Japan's neighbors, especially the Chinese Mainland? Will another unpredictable conflict such as last year's Diaoyutai incident erupt? Will the conflict impact the two nations' economy, trade, and investments? These are external economic risks we must face this year.

But these risks beyond our control. We on Taiwan should attempt to reverse the decline in our competitiveness. Last year data showed that Taiwan's economic and industrial structure has three problems. The first is exports highly dependent upon the technology industry. The economy is in bad shape. People have been forced to tighten their belts. The first thing they cut back on is luxury technology products. When last year's global recession ended, South Korea's exports were doing better than Taiwan's. One important reason was its automobile exports, petrochemical, shipbuilding, and diversified technological structure.

The second problem is that even in technology products, Taiwan's competitiveness has declined. HTC's market share has fallen. Exports have decreased. This immediately affected Taiwan's export figures. Domestic DRAM is dead. LCD, LED, solar energy, and other industries all face fierce competition. If the economy improves this year, manufacturers can breathe a sigh of relief. But they must address their technology, branding, and competitiveness issues. Otherwise when the boom ends, they will find themselves eliminated. The third problem is that Taiwan has yet to enter the "post-PC era." Taiwan's technology industry and its industry as a whole, have yet to reposition themselves. This problem has plagued domestic industry for the past several years. It will continue to haunt Taiwan during the coming year.

This year's forecast is for over 3% growth. This is much higher than last year's 1.13%. But the number is based on last year's lower baseline. Therefore, this year's economic recovery remains moderate. Although better than last year, it is nowhere near a "perceptible improvement." The most serious challenge for our industries and government is not the growth rate. It is the need to revamp our industrial structure and to upgrade our economic competitiveness. This is the real problem industry and government must tackle this year.
   
中時電子報 新聞
中國時報 　2013.01.03
社論－展望2013系列之二/經濟篇 調整結構拚競爭力 才是最嚴峻挑戰
本報訊

    　過去一年的台灣經濟，有如乘坐雲霄飛車，忽高忽低、驚險萬分。從年初的樂觀、經濟成長率可居四小龍之首的預測值，直線下墜到景氣燈號連十藍、「保一」能否的驚恐；甫連任的馬總統與社會寄望極高的財經內閣，民意支持度正如成長率一樣的直落低點。展望今年，喜的是景氣終究是否極泰來，可望由谷底攀升；憂的是風險仍在，特別是台灣經濟結構的問題仍無法解決。

    　去年全球經濟可謂亂流不斷、衰事層出，原本各界預測都是景氣在第一季落底、反轉向上，下半年全球經濟就可嘗到甜頭；但歐債危機白熱化，讓歐洲墜入衰退，英、義經濟出現負成長，法國零成長，德國也只有不到一％的微幅成長，歐盟去年二、三季經濟都是負成長，這已是定義上的進入衰退。美國雖然以量化寬鬆不斷撒錢，但失業率一直在九％左右，到年底前才降到八％以下，復甦火苗微弱。

    　更大的意外是大陸經濟也走緩。受到歐美經濟遲緩、導致出口不如預期下，大陸內部中小企業的倒閉問題，打房以避免資產泡沫化的緊縮力道，讓這個連續多年維持二位數成長率的新興經濟體，去年第一季就開始放緩腳步，第二季經濟成長跌破八％，只有七．六％，創海嘯之後的低點。大陸政府不得不把「穩增長」再提到經濟政策之首。其它幾個在海嘯後虎虎生威的新興經濟體─包括印度、巴西等，都落入海嘯後最低成長的窘境。

    　在如此惡劣的大環境下，包括台灣在內的四小龍，經濟表現當然不甚理想，下半年各經濟體的出口成長率紛紛跌入負值，經濟成長率也由原先預估的四到五％，逐步下修到一到二％。但不能否認的是，台灣出口成長率的下跌，先於其它小龍，跌幅也高於它國。這個殘酷的數據告訴我們，台灣去年經濟走低，除了大環境因素外，更有著本身產業、企業競爭力下滑的成分在內。

    　因此，縱然展望今年，全球經濟可望走出谷底，如美國失業率降到七．七％，是近四年最低數值，經濟成長亦優於預期；大陸採購經理人指數回升、出口數值上揚；各大智庫對今年的經濟預測值都較去年高，這些都顯示景氣春意已現。但也不能忽略潛藏的風險與危機仍不少，第一道關卡就是美國的財政懸崖風險，儘管民主、共和兩黨及時達成富人加稅協議，但減赤機制將晚兩個月啟動，可以預期，兩黨之間的角力仍將繼續，經濟與金融市場依然存在變數。

    　第二道關卡則是歐債危機仍是難解、無解；希臘固然已不是問題核心，但西班牙經濟仍未見好轉，好不容易才從加護病房搶救回來的義大利，則因負責整頓經濟的總理蒙蒂去職，政局將更替，未來仍有不少的風險。第三道關卡則是國際政治的風險，除了「傳統」地緣政治風險所在的中東局勢，如出現變局即可能衝擊油價、進而打擊經濟外，日本右派政權上台，與鄰國─特別是大陸之間的互動如何、是否引發如去年釣魚台事件般不可預知的衝突？是否又因此衝擊彼此的經濟、貿易、投資？這些都是今年我們必須面對的外在經濟風險。

    　但撇開這些非操之在我的風險，台灣更應力求掌握、控管者，當屬本身競爭力下滑的問題。去年的數據看出，台灣經濟與產業結構有三大問題，第一是出口高度依賴科技產業，景氣差、民眾要節衣縮食者，第一個砍的就是有奢侈品性質的科技產品；去年全球衰退聲中，南韓出口表現較台灣佳，重要原因就是其出口是由汽車、石化、造船加上科技等多元結構組成。

    　第二個問題是即使以科技產品看，競爭力也衰退，宏達電的市占率腰斬、出口變少，立刻反映在台灣出口數字的下降上；更別提國內DRAM已死，LCD、LED、太陽能等產業紛陷苦戰。今年景氣好轉，固然廠商可喘一口氣，但如不能在技術、品牌及競爭力下功夫，景氣再反轉時，又將陷入淘汰行列中。第三個問題則是台灣尚未在「後PC時代」，為台灣的科技產業，乃至整個國家的產業，找到一個因應與定位。這個問題，過去幾年困擾著國內業者，看來，未來一年仍將持續困擾著台灣。

    　今年經濟成長預測應在三％以上，遠高於去年的一．一三％；但這個數字是建立在去年較低的基礎上，因此今年的景氣復甦仍屬和緩，雖較去年佳，但距離「明顯有感」恐怕仍有些距離。而對台灣產業及政府而言，最嚴峻的挑戰，恐怕不在於計較成長率多少，而是產業結構的調整與競爭力的提升，這才是業者與政府今年更該投注心力解決的問題。