(Bloomberg) — China’s economy is showing clear signs of a slowdown that will have an inevitable spillover to the region, according to Taiwan’s top emissary to the US.
“There are some alarming indications and we are impacted,” Hsiao Bi-Khim told Bloomberg News, citing a drop in Taiwan’s exports to China. “Despite all the political and strategic tension, we are interested in prosperity for the people on both sides of the strait.”
The slowdown has sharpened Taiwan’s focus on reducing its vulnerability to the world’s No. 2 economy, with businesses actively considering ways to diversify their operations, Hsiao said in an interview at Bloomberg’s Washington bureau.
“Given the risk of over-dependence on any economy, friendly or not, it is important to ensure that we are less vulnerable,” she said on Friday. “We have been working to diversify our global assets and global presence.”
Fraying relations
President Joe Biden last month called China a “ticking time bomb,” citing a number of economic problems the Communist Party is facing. “That’s not good because when bad folks have problems, they do bad things,” he said.
Still, Biden on Sunday said China’s recent downturn may diminish any inclination by Beijing to invade Taiwan, adding that the country’s economic troubles have left his Chinese counterpart with “his hands full.”
Read more: Biden Doubts China Able to Invade Taiwan Amid Economic Woes
Asked whether she is worried a slowing economy could push Chinese President Xi Jinping to move on Taiwan, either militarily or through an economic blockade, Hsiao said leaders in Taipei are carefully considering all possible scenarios, including the “worst case scenario.” China claims sovereignty over the island.
Still, “any signs of coercion or military aggression is not good for business,” she said. “That’s our understanding. We certainly hope that that is also the understanding of the leaders in Beijing.”
China is Taiwan’s largest trading partner, accounting for 25.2% of total trade and 21.6% of Taiwan’s imports in 2021, according to the Commerce Department’s International Trade Administration. The US comes in second, accounting for 12.6% of Taiwan’s total trade and 10.2% of imports.
Chip exporter
Taiwanese companies will consider market calculations more than political ones, Hsiao said. “Companies are thinking about how to position assets in a way that best protects their company interests,” she said.
Read more: Taiwan Determined to Remain ‘Indispensable’ Source of Best Chips
Taiwan is home to the world’s leading chipmakers and has faced a prolonged dip in demand for its technological goods — including its key product, semiconductors.
However, a year-long slump in Taiwan’s exports eased in August as rising global demand for artificial intelligence-related technologies hinted at a more positive outlook.
China’s slump
China has fallen short of expectations for a stronger recovery post-covid. A real estate slump and trade downturn have prompted Wall Street analysts to downgrade their growth forecasts, though they still match an official government target of around 5% for the year.
The government in Beijing has in recent weeks rolled out a slew of incremental measures to revive business confidence and help the property market, though they have so far avoided any large-scale fiscal stimulus amid concerns over the high debt-levels in the economy.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
