Taoyuan Nights

The year-on-year figures are flattening out, month-by-month. Instead of ‘50% down year-on-year’ as was the case in January, Taiwan’s exports are now only appearing to be only 20-30% down in recent months, which would point towards a shallower drop in GDP of only 10-15% rather than the gob-smacking 30%+ drop I referred to in earlier posts. All I can say is ‘thank heavens for that!’…

This seems to be partly a result of big stimulus spending by China, who unlike the USA are actually in a good position to increase public spending without accumulating unprecedented levels of debt.

Meanwhile, some of the larger tech companies are seeing an improvement; TSMC has had some big orders placed, and has now removed the policy of forcing some staff to go on unpaid leave for several days each month.

Nonetheless I still ask myself, what happens next? What happens after the stimulus money of each country has been spent? There are still a lot of people in Taiwan with a lot of debt, in a world that now favours having a lot of cash. There are a lot of businesses operating in sectors that involve discretionary purchases, and are not very profitable either.

But at least the future is only looking greyish-black, compared with the jet black of a few months ago.

The big question in my mind is the extent to which Taiwan will sell itself to China, in exchange for temporary financial security…

“He who would trade liberty for some temporary security, deserves neither liberty nor security” (Benjamin Franklin).

UPDATE: The Wall Street Journal reports that unemployment in Taiwan just jumped for a tenth month in a row. It’s now at a record 5.75%. Unemployment is one of these things that drives feedback loops. Less spending in shops; more defaulting on home loans; less people to bail out their family members…