Country Report Taiwan October 2009

Summary

The president, Ma Ying-jeou of the ruling Kuomintang, has a strong mandate to govern, as the party also controls the Legislative Yuan (parliament). However, support for the president has fallen in recent months.
The previous president, Chen Shui-bian, who was a member of the main opposition Democratic Progressive Party (DPP) during his time in office, has been sent to prison. This is unlikely to do lasting damage to the DPP.
In the second half of 2010 the authorities will start to roll back the emergency economic policy measures introduced in late 2008 and 2009, although they will do so only cautiously.
On September 24th the Central Bank of China (Taiwan's central bank) left the discount rate unchanged. It is unlikely to raise policy rates until there are definite signs of a sustained economic recovery, probably around mid-2010.
Taiwan's economy will grow by an annual average of 4.1% in 2010-11, thanks partly to an improvement in the performance of the US and other OECD economies, which will support Taiwan's export sector.

The corruption trial of Mr Chen, Taiwan's president from 2000 to 2008, ended in September with his conviction and sentencing to life in prison. However, the behaviour of the judiciary in the case has been called into question.
Widespread criticism of the government's handling of relief efforts prompted the resignation of the prime minister, Liu Chao-shiuan, in September and a reshuffle of the cabinet.
Mr Ma is pressing forward with a bilateral trade agreement with mainland China, which he hopes to sign before the end of 2009. However, the speed with which he is seeking to close the deal has been criticized.
In September the cabinet approved a budget for rebuilding in the wake of Typhoon Morakot. The extra spending will add to an already large fiscal deficit.
Taiwan's Business Indicators index rose from 98.2 points in July to 100 points in August, reinforcing the impression that the island's economy is on the road to recovery.
The consumer price index rose by 1.8% month on month in August. There were sharp rises in the prices of fruit and vegetables in the wake of Typhoon Morakot.

Source: Country Report

This report covers the following industry codes:
SIC Code: 37
NAICS Code: 336