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TAIWAN ECONOMIC REPORT FOR NOVEMBER, 1993
Rate of Exchange: 40 New Taiwan Dollars = L1
Economic Overview
et on
62015
89.5-19/12
Jan to Nov Trade Surplus: US$7.5 billion, down 16 per cent year on year
Jan to Nov average CPI increase: 2.79 per cent
2. Exports for the month were again very strong at almost 7.5 billion US dollars, although this was a 0.2 per cent decline from November last year. Exports to China via Hong Kong have continued to grow, albeit slower than last year, while exports to the United States and Europe are falling and imports from these two areas increasing. Taiwan's reliance on managed trade with China for maintenance of an overall trade surplus looks increasingly precarious, giving the government a major headache. A survey of private sector business during the month indicated that the economic stimulus plan has so far had a negligible effect on improving the domestic investment climate.
Political highlights
3. Results of important elections for county chiefs and certain city mayors were bittersweet for both the major parties. The ruling KMT held its ground in terms of seats won, but its share of the vote was the lowest ever. The Democratic Progressive Party lost one seat, but its vote share reached a record high. Pundits had (wrongly) predicted another severe drubbing for the beleagured KMT, but the outcome was in fact a major psychological fillip. Ageing President Lee Teng-hui is now expected to push ahead with constitutional reforms, and to call, and run in,
in, a direct presidential election in 1994, while his popularity is at a peak.
Trade
4. The United States submitted a tariff reduction list to the Taiwanese government, requesting that Taiwan maintain import duties on more than 8,000 items at or below Gatt-stipulated levels. Reductions in duty were sought on 2,785 items, with top priority attached to 699 items.
items. These were included
included in a
a 1988 action plan under which Taiwan agreed to cut duties in order to reduce its bilateral trade surplus, but which it has not strictly carried out. The US is seeking a maximum duty of 20 per cent on agricultural products, and 10 per cent on industrial products, and it asked Taiwan to respond to the 699-item list within a week. Taiwan claimed that its farm sector and manufacturing industry would suffer serious damage if all the US demands were met immediately. It told the US that it was
was willing to discuss tariffs in the first quarter of 1994, before the next meeting of the Gatt working party on Taiwanese accession.
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