Chen Cabinet Must Seize the Economic Opportunity

Chen Cabinet Must Seize the Economic Opportunity
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
October 23, 2012

Summary: This week the CEPD will announce its September economic indices. Analysts expect an end to the current run of ten blue lights, the second longest in history. Yellow-blue lights suggest that the economy is about to turn the corner. The global economic recovery has begun. Premier Sean Chen and his cabinet members must use the opportunity to revive the economy.

Full Text below:

This week the CEPD will announce its September economic indices. Analysts expect an end to the current run of ten blue lights, the second longest in history. Yellow-blue lights suggest that the economy is about to turn the corner. The global economic recovery has begun. Premier Sean Chen and his cabinet members must use the opportunity to revive the economy.

Economic indicators for September announced this month suggest an upturn. For example, exports and export orders are bouncing back after six consecutive months of recession. Exports have established new monthly highs. Export oriented industrial production has increased for the past three months. Yesterday's announcement shows the unemployment rate retreating slightly from its seasonal peak. Therefore, as long as financial and consumption indicators do not deteriorate significantly, the indices show a move toward blue lights. Prosperity should be just around the corner. President Ma wanted Premier Chen to produce "tangible" economic improvements within a month. The improved economic indicators from September suggest that the Chen cabinet has squeaked by.

Tangible economic indicators are not always tangible to the general public. To be tangible to the general public, the domestic economy must show clear improvement. All we can say is that the latest index established a bottom. After all, it was only a one month period. One usually looks at three month periods. Will the numbers hold? Or will the bottom fall out? That depends on whether Sean Chen and his team can rise to the occasion and seize the opportunity. They have accumulated eight months of governing experience. They have learned to become effective. They have been decisive in their policy making. They have demonstrated excellent timing.

Consider time and tide factor number one. The cabinet is starting from a low base point. This should give the executive branches' policies time to take effect. The economic indicators have resulted in ten blue lights in a row. Last November we entered a bust period. Hopefully the real economy can maintain current levels during the fourth quarter. Hopefully the deterioration will not spread. Various indicators continue to show growth. They instill confidence in the economy. These indicators are stable. This enables the executive branch to launch its "Exports Proliferation Plan," its "economic momentum promotion plan," and other major policies plans. These indicators have made the claims that we are entering a blue light period more convincing.

Consider time and tide factor number two. Housing market and stock market policy have already accounted for short term dips. These two major markets now offer opportunities for long term gains. The luxury tax, intended to improve the housing market, has been in effect for almost a year and a half. It has discouraged speculative trading. The true market value reporting system for real estate transactions was initiated in October. It has reduced uncertainty. Increasing transparency has facilitated transactions. Supply and demand in the housing market is expected to become more stable.

The stock market is a window on the economy. The economy is poor as a result of international financial shocks and economic fundamentals. It has also been impacted by the PSL tax policy. Both prices and volume have been inhibited. It has also been impacted by the capital gains tax to be levied next year. Policies must be given time to take effect. Investors and funds who had misgivings will then return to the Taiwan stock market, unless they have given up altogether. Therefore the executive branch must seize the opportunity to boost the economy. They must help Taiwan stocks attract investors.

Consider time and tide factor number three. The global economic recovery has begun. This will pave the way for the administration's economic policies. Since the beginning of the year, the performance of four major economies, including the U.S., Mainland China, the Eurozone, and Japan, have been hobbled. Another dip in the global economy could result in new lows. But recent data shows that, the U.S. unemployment rate dropped significantly. Consumer spending has begun to increase. The housing market has also picked up. The Eurozone debt crisis has yet to be resolved. But at least there has been no further deterioration. One issue is the most talked about. Last week Mainland China reported a third-quarter economic growth rate of 7.4%. This was the lowest it has been in seven quarters. But it was in line with expectations. This has greatly reduced concerns that the Mainland economy will experience a hard landing. It is hard to say that the global economy is on the road to recovery. But Taiwan's exports are aleady feeling the warmth. The Chen cabinet has been hobbled by the international situation since it took office. Now however, its hands and feet have been freed. Now it can focus on domestic economic issues.

Leaders emerge in times of crisis. It would be unrealistic to expect the Chen cabinet to immediately offer a comprehensive policy proposal. Sean Chen has introduced quite a few policies during his eight months in office. They include the cross-Strait currency clearing mechanism, a fourth wave of Mainland investments in Taiwan, a cross-Strait service industry agreement, and plans for a free trade economic zone. Hopefully these policies will be implemented as planned. They can inspire confidence and exert a real impact on economic growth.

Sean Chen is seen as a financial wizard. Leaders emerge in times of crisis. We hope he can lead the economy out of the fog.

陳內閣須掌握經濟轉折的契機
【聯合報╱社論】
2012.10.23

經建會本周將公布九月景氣對策信號，預期將會終結歷來第二長的十藍燈，亮出代表景氣進入轉折期的黃藍燈，值此全球經濟復甦氛圍重現的大環境下，行政院長陳?及財經閣員可要好好把握重振經濟的契機。

本月以來揭曉的多項九月經濟指標，都出現了好轉的訊息，例如已連續六個月衰退的出口及外銷訂單都止跌回升，出口更一舉寫下歷年單月新高，與出口連動的工業生產則已連三月增產；還有昨天公布的失業率，也從季節性高峰略為回降。因此，只要金融活動與消費指標沒有明顯惡化，指引景氣動向的對策信號走出藍燈區，應是指日可待。如果經濟指標可以當做馬總統要求陳揆一個月拿出「有感」績效的標準之一，那麼，九月經濟指標動起來，陳內閣應可算是勉強達標了。

可是，大家心知肚明，經濟指標「有感」，不代表民眾「有感」，要讓民眾對施政「有感」，國內經濟必須真正好起來。由此說來，這一個月的績效只能說打了一個底，畢竟只有一個月的數字，一般至少要觀察三個月；至於這是一個牢固不破的實底，還是不堪一擊的虛底，那就要看陳?團隊能否掌握「時勢造英雄」的經濟轉折點，將就任八個多月以來累積的施政經驗、教訓及成效，以明快的政策、精準的節奏一一展現了。

「時勢」之一，同期比較的低基期效應，將為行政部門爭取政策發酵需要的時間。景氣燈號既已連十藍，表示去年十一月起即進入景氣萎縮期，因而只要第四季實體經濟保持近月的水準、不再擴大惡化，各項指標就可望持續呈現「成長」的格局，撐住起碼的經濟信心。這段指標安定期將可讓行政部門之前推出的「出口龍騰計畫」及「經濟動能推升方案」等重大政策效益，變得比藍燈期有說服力。

「時勢」之二，房市及股市的政策調整「短空」效應將過高峰，兩大市場「長多」契機可期。為健全房市而實施的奢侈稅已實施快一年半，其抑制投機性交易的效果逐步顯現，加以房產交易實價登錄制也已於十月啟動，新制的不確定性降低，而日趨透明化的房價資訊則有利於促進交易，房市供需可望在實質需求驅動下步向穩定。

至於被視為經濟櫥窗的股市，在國際金融局勢震盪及經濟基本面欠佳下，又須額外承受證所稅開徵的政策影響，價量同受抑制，如今證所稅已確定明年開徵，經過時間及政策沉澱，曾有疑懼的投資人及資金可望重回台股，除非已經完全棄守。因此，行政部門此時更要用力提振經濟，為台股增添吸引投資的元素。

「時勢」之三，全球經濟復甦氛圍重現，為經濟政策的施展鋪平道路。自年初以來，美國、中國大陸、歐元區及日本等四大經濟體的表現一直步履蹣跚，全球經濟再次探底的風險隱隱作祟，但新近數據顯示，美國失業率大幅下降、消費者支出開始增加，房市也回暖；歐元區債務危機未除，但至少未再惡化；最受關注的是，中國大陸上周公布第三季經濟成長率為百分之七點四，雖是七季以來最低，但符合預期，因而大大降低了大陸經濟將硬著陸的疑慮。儘管尚難斷言全球經濟就此步上復甦的康莊大道，但已讓台灣出口感受到溫暖，也讓就任以來困於「國際局勢」的陳內閣，得以騰出手腳，更專注於治理國內經濟課題。

然而，即使期待時勢可以造英雄，我們也不會不切實際地期待陳內閣能立即端出政策牛肉大餐；實際上，陳?就任八個多月來運籌經營的重大興利政策不少，例如兩岸貨幣清算機制上路、第四波開放陸資來台投資、兩岸簽署服務業貿易協議及公布自由經濟示範區計畫等，這些政策若都能如期如質推出，其信心激勵及實質效應即足以為經濟點起成長之火。

因此，被視為財經才子的陳?也有機會「英雄造時勢」，引領台灣經濟走出迷霧。