American firms show confidence on Taiwan’s economy despite coronavirus
TAIPEI, NNA – Most American firms operating in Taiwan believe the industrialized island’s economy will grow this year despite a hit from the global coronavirus outbreak, a chamber of commerce survey shows.
The AmCham Taipei survey found that 59.9 percent of the 197 members surveyed felt confident in economic growth, the chamber announced at a news conference on Wednesday. That percentage is higher than the membership’s outlook for 2019 at 45.8 percent.
Nearly 71 percent of survey-takers expressed optimistic viewpoints about the island’s economic performance over the coming three years, also up over the results for 2019 at 53.6 percent.
Although the Covid-19 respiratory disease outbreak has set back American airlines and hotels with Taiwan presence, companies in other fields feel good about Taiwan’s product “innovation” and its role in the world semiconductor boom, chamber Chairman C.W. Chin said.
Taiwan’s government lowered its 2020 GDP growth forecast last month to 2.37 percent from the previous forecast of 2.72 percent.
Executives, however, expressed less confidence in their own companies’ profitability this year -- 77.7 percent instead of 80.5 percent in 2019. But 81.7 percent are confident in profits within three years.
The American chamber of commerce did its survey from Jan. 14 to Feb. 17, with guidance from University of Michigan’s Ford School of Public Policy. It sought responses from 391 voting chamber members.
“Our members are positive about Taiwan government’s quick reaction and measures adopted to counter the coronavirus disease,” Chin told the news conference. He said it’s unclear so far whether supply chain disruptions will addle manufacturers from Taiwan, China or the United States in the long term.
Chamber members who are confident in economic growth point to “substantial” investment returning to Taiwan from China, semiconductor industry strength and strong Taiwan-U.S. relations, Chin said.
Views on the Sino-U.S. trade dispute are mixed. Just shy of half say it has a positive effect on Taiwan, though three-quarters said it had impacted their own firms – in 10.8 percent of those cases to a “large extent.” Also nearly half said their companies didn’t redirect business away from China amid the dispute that broke out in early 2018.
As for the main growth opportunity for your company in Taiwan over the next one year, 29.9 percent of respondents expect to benefit a obtaining a larger share of an existing market in Taiwan, down from 35.8 percent in 2019.
Although 68.5 percent said they worried about whether Taiwan had enough of a power supply, the figure is down 18 percentage points from the AmCham Taipei survey finding last year. This decline is “thanks to a more explicit government policy,” Chin said.
The Taiwan government has decided to phase out nuclear energy by 2025 and replace it with renewable energy, a cause for the concern among American businesses.