Tuesday, May 28, 2013

Taiwan to Unveil Economic Stimulus Plan by May 31 to Spur Growth

Taiwan plans to announce stimulus measures this week to boost the economy after lowering its forecast for expansion in 2013 as the global recovery falters.


Premier Jiang Yi-huah is reviewing proposals from ministries for aiding growth before an announcement due by May 31, Cabinet spokeswoman Cheng Li-wun said by phone today.

Taiwan’s statistics bureau last week lowered its forecast for gross domestic product growth this year to 2.4 percent from 3.59 percent.

President Ma Ying-jeou has sought closer trade and investment ties with China to aid expansion, and the two sides will sign a service-trade agreement in the “near future,” Wang Yu-chi, Minister of Taiwan’s Mainland Affairs Council, said in a briefing in Taipei today.

“The economic stimulus plan will include various measures, including for the stock market and domestic consumption,” Cheng said, without giving details.

The Taiwan dollar closed 0.2 percent higher at NT$29.971 against its U.S. counterpart. It has slipped almost 3 percent this year. China claims Taiwan as a province, and they have been ruled separately since 1949, when the Kuomintang government fled to the island following defeat in the Chinese civil war.

The two sides have signed 18 agreements since Ma took office in 2008, including an Economic Cooperation Framework Agreement in June 2010.

Chinese banks will be allowed to take up to 10 percent in Taiwanese listed financial holding companies, hold 15 percent in unlisted financial holding companies and a maximum of 20 percent in banks when the service-trade agreement takes effect, Wang said.

Accelerate Talks

The service-trade pact is also expected to accelerate goods-trade talks between the two sides, which may be completed at year-end, Cho Shih-chao, deputy minister at the Ministry of Economic Affairs, said today.

The stimulus plan may include steering life-insurance company funds to public construction projects, Taipei-based Commercial Times reported today, citing unnamed officials. The government may also provide cash incentives to vehicle owners who trade in old cars for new ones, the paper said May 13.

bloomberg.com

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