| Prime News | | ![]() | ![]() | College-Graduate Jobless Rate Highest Among All Categories
Taipei, Oct. 23, 2007 (CENS)--The number of college graduates in Taiwan has surged in recent years thanks to the government's policy encouraging extensive establishment of universities, but many college graduates have difficulties finding proper jobs, as unemployment rate of college graduates hit 4.45% in the first three quarters this year, surpassing that of vocational-high graduates for the first time, which stood at 4.43% during the period, according to the Directorate General of Budget, Accounting and Statistics (DGBAS), under the Executive Yuan.
The DGBAS reported yesterday (Oct. 22) that the number of unemployed college or higher-degree graduates in September reached 116,000, representing unemployment rate of 4.97%, much higher than the overall employment rate of 3.99% and the highest among all education categories.
With the overall unemployed population amounting to 429,000 in September, one out of every four unemployed ones was college graduates. Number of unemployed college graduates in September was 1,000 higher than the August level, compared with decrease of 13,000 in the number of overall unemployed population, the latter reflecting a seasonal phenomenon, as more new school graduates had found jobs then.
In addition to popularity of college education, Huang Chien-chung, deputy director of the fourth bureau of the DGBAS, also attributed the high unemployment rate for college graduates to "frictional unemployment," or voluntary unemployment, often of temporary nature, among young people quitting their jobs in search of more satisfactory ones, which leads to high turnover.
Huang noted that "frictional unemployment" accounted for 77% of the unemployment among college graduates in September, with the remaining 23% belonging to structural factor, or lack of adequate skills on the part of college graduates, and the factor of business cycle.
Huang also pointed to some improvement in the job market, as the unemployment rate for the first nine months this year, at 3.92%, was the lowest for the period over the past seven years.
Total labor force reached 10.739 million in September, with the average labor participation rate standing at 58.24% in the first nine months, a 10-year high.
Average regular pay for the Jan.-August period was NT$36,650, a seven-year high, 1.75% higher than a year earlier.
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| | ![]() | | | Gov't to Subsidize Purchase of Low-Cost PCs for Underprivileged Children
Taipei, Oct. 23, 2007 (CENS)--In a continuing effort for bridging digital divide, the Executive Yuan (the Cabinet) plans to spend NT$4 billion in the next four years, subsidizing purchase of low-cost PCs for children of low-income and aboriginal families and fostering digital business opportunities for small and medium enterprises.
The plan envisions subsidizing purchase of 24,000 low-cost PCs, at cost of NT$240 million, for the children in the four-year period, in addition to provision of three-year warranty and subsidies for two-year free Internet access.
The plan is expected to trigger scrambling among domestic PC vendors for the business opportunity, especially at a time when many of them are rushing to rolls out low-cost PCs, in order to cash in on the huge business opportunities in the world market, opened up by the US$100 PC initiative of the United Nations. ASUS, for instance, just launched a low-cost model, Eee PC, with much fanfare.
The plan is part of the "Plan for Creating Digital Opportunities," expected to be finalized by the Executive Yuan tomorrow (Oct. 24), succeeding the on-going "Bridging Digital Divide" plan, which will expire by the end of this year. The plan for digital opportunities will begin to be executed from next year and last four years.
The new plan also calls for establishment of 100 model digital-opportunity centers, combining the existing digital-opportunity centers with industries and culture, in order to create business opportunities for small and medium enterprises.
To further bridge digital divide for small and medium enterprises, it envisions spending of NT$800 million for assisting 150,000 small and medium enterprises in carrying out wireless Internet marketing, with the aim of realizing online business opportunities worth NT$12 billion.
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| | ![]() | | | Taiwan Workers Put In Second-longest Days Globally
Taipei, Oct. 23, 2007 (CENS)--Of the 20 major nations worldwide, Taiwan workers put in the second-longest days with an average of 2,170 working hours yearly, or 8.3 hours daily, per worker, only behind South Korea, according to the 2006 international labor force index compiled by the Council of Labor Affairs (CLA) under the Executive Yuan (Cabinet).
The CLA's index survey in 2006 looked at such nations as Japan, South Korea, Singapore, New Zealand, Australia, the U.S., Canada, France, Mexico, Austria, the Netherlands, Italy, United Kingdom, and Germany.
CLA said the overall labor participation rate in 2006 was too low if compared to that of the rest of the worlds' 20 major nations. Taiwan's labor participation rate for male has been declining over the past several years. In terms of male labor participation rate, Taiwan ranked 14th of the 20 nations. In respect of female labor participation rate, Taiwan ranked 15th, despite its growing trend with an expected 50% in 2008.
Taiwan saw average labor participation rate stand at 1.2% in the period of 1996 and 2006, ranking 11th among the 20 major nations, higher than Japan (-0.2%) and equivalent to that of the U.S. and South Korea, but lower than Ireland (3.5%), Singapore (2.7%).
Lin Lee-jen, director of CLA's Department of Statistics, noted the world's male labor participation rate has been on the wane over the past several years because of the impact of aging population. She said the declining male labor participation rate is not a good thing for national competitiveness if the laborers retreating from the labor market are not aging people.
Despite the long working hours, Taiwan saw unemployment rate stand at 3.9% in 2006, ranking the third lowest among the 20 nations and lower than that of the highly industrialized nations.
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| | ![]() | | | TITAS 2007 to Open Tomorrow for 3-day Run at TWTC
Taipei, Oct. 23, 2007 (CENS)--Thanks to the strong support of the Bureau of Foreign Trade under the Ministry of Economic Affairs, the 2007 Taipei Innovative Textile Application Show (TITAS 2007) will open tomorrow for a three-day run at the Hall I of the Taipei World Trade Center.
The TITAS 2007 features an exhibition concept of F4+1: from Fibers to Fabrics for Fashion plus Functions + Full Package Services to cater to the needs of the international sourcing trends in the trade fair.
The TTF said the TITAS 2007 will concentrate on key manufacturers in midstream and upstream textile industries in Asia with emphasis on innovative fibers, yarns, fabrics, and trimmings to provide an ideal platform for exploring high value-added textiles.
The three-day show, co-organized by the Taiwan Textile Federation (TTF) and the Taiwan External Trade Development Council (TAITRA), will follow its previous theme by concentrating on fashion and functionality. This year's show will add the area of OEM/ODM (original equipment/design manufacturer) apparel, further stressing the 'total solution' service ability of Taiwan's textile manufacturers.
TTF said the OEM/ODM apparel highlights the segmentation of domestic textile manufacturers and foreign suppliers. In this way, domestic textile manufacturers play a role as the global market resource integrator and supplier.
The organizers of the TITAS 2007 have invited leading producers of fiber, yarn, and fabric to display advanced products made from innovative materials such as bamboo charcoal, corn, soybeans and metal, as well as high-tech functional products including water-vapor permeable, quick drying, ultra-violate protection, heat-accumulating textiles and high-fashion textiles.
The TITAS 2007 will have 350 exhibitors occupying 550 booths, up 19% and 12% respectively, from the previous year. Major domestic participants include Formosa Chemical & Fibre Corporation, Formosa Taffeta Co., Far Eastern Textile Ltd., Lealea Enterprise Co., Li Peng Enterprise Co., New Wide Enterprise Co., Chain Yarn Co., Maxtek Go-Go Co., and Taiwan Paiho Co.
A total of 38 foreign firms from nine nations/areas, including mainland China, Hong Kong, South Korea, Indonesia, Vietnam, the U.S., United Kingdom, Holland and Italy, will display their latest products at the show.
Justin Huang, secretary general of the TTF, said a total of 100 VIP buyers from abroad have registered to visit the TITAS 2007, compared to 70-strong last year. These VIP buyers represent such world-famed brands as Cimarron, Frupo Nupcial Novissima, ITURRI, Weichert Agencies, Vives Vidal-Vivesa, Oberalp Spa (Salewa), Miroglio-Vestebene Spa, San Valeriano Spa, Cipollaro Srl, Sparco Spa, L-Fashion Group Oy, Roots Canada, Cabel's, Exofficio, etc.
Huang predicted the TITAS 2007 will bring in US$30 million in business opportunities, double from last year's US$15 million.
In apparel to the textile show, the 23rd IAF World Apparel Convention with over 300 participants will be held Oct. 25 at the Taipei International Convention Center.
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| | ![]() | | | Two Taiwanese LED Consortiums Founded to Boost LED Lighting Applications
Taipei, Oct. 23, 2007 (CENS)--A total number of 15 Taiwanese LED-lighting manufacturers have separately joined two LED consortiums organized by the government-backed Industrial Technology Research Institute (ITRI) to develop industrial standards and automobile applications for the new light source.
The manufacturers include Epistar Corp., Everlight Electronics Co., Ltd., Bright LED Electronics Corp., Kenmos Technology Co., Ltd., Forcecon Technology Co., Ltd., and China Electrical Manufacturing Co., Ltd.
The two organizations will spend approximately NT$600 million (US$18 million at US$1:NT$33) over next two years drawing up industrial standards for the lamps and developing LED automobile lamps.
ITRI organizes the two consortiums as requested by the Industrial Development Bureau (IDB) under the Ministry of Economic Affairs (MOEA). IDB officials pointed out that the alliance for working on industrial standards and quality will spend NT$390 million (US$11 million) while the alliance for developing LED automobile lamps will bankroll NT$190 million (US$5.7 million) on their work. The government, they said, will subsidize the standard-setting alliance and the auto-lamp alliance NT$89 million (US$2.6 million) and NT$62 million (US$1.8 million), respectively.
The standard-setting organization is led by lamp maker China Electrical, accompanied by other six manufacturers including Epistar, I-Chiun Precision Industry Co., Ltd., Alliance Optotek Corp., Lite-On Technology Corp., and Lustrous International Technology Co., Ltd.
Kenmos is consigned to lead the auto-lamp organization in cooperation with other seven members including HAITEC of the Yulon Motor Group, Bright LED, Everlight, Formosa Epitaxy Inc., and Tyntek Corp., and Forcecon.
IDB officials stressed that the auto-lamp alliance aims to develop LED auto lamps and their specifications. Its first achievement will be built in Yulon's new types of cars. ITRI estimated LED will very likely replace all traditional light sources in car lamps but the source in headlamps soon. It estimated the annual demand for auto-lamp LEDs at 3 billion units in 2010 as long as 10 million out of 60 million new cars shipped worldwide are installed with the new light source.
The LED standard-setting organization will focus on developing efficacy standards for in-door LED lamps and LED streetlamps. So far, there is no such standard worldwide for LED lamps.
IDB officials estimated Taiwanese LED manufacturers could catch up with international heavyweights in technological advance in one to two years considering that Taiwanese manufacturers have narrowed their technological gap with those big players in recent years.
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| | ![]() | | | UMC, Elpida Cross License Advantageous Chip-Making Processes
Taipei, Oct. 23, 2007 (CENS)--United Microelectronics Corp. (UMC) and Elpida Memory Inc. yesterday co-announced a cross-licensing agreement, with UMC pledging to open its patented low-k cooper process to Elpida in return for Elpida's SOC dynamic random access memory (DRAM) technology.
The cross-licensing agreement came after UMC Chairman Jackson Hu announced not long ago that his company "is interested in foraying into memory-chip segment."
For Elpida, UMC's low-k cooper process will help it enter sub-45-nanometer DRAM manufacturing. Industry watchers pointed out that the leading-edge process is unnecessary for current DRAM productions.
Another beneficiary from the cross-licensing agreement is PowerChip Semiconductor Corp. (PSC), Elpida's long-term strategic partner in Taiwan. Industry watchers pointed out that Elpida will open the technology it acquires from UMC to PSC.
Industry watchers pointed out that UMC and Taiwan Semiconductor Manufacturing Co. are two of the few chipmakers that own low-k cooper process technology. They added that the technology will help Elpida speed up its nanometer programs by allowing it to deeply shrink circuit geometry.
UMC executives pointed out that their company will use Elpida's DRAM technology as part of its solution for SOC chips. They added Elpida is currently a world leading DRAM supplier and their company will offer customers embedded solutions comprising Elpida's technology.
TSMC is also aggressively developing embedded DRAM technology and has reportedly advanced to 65-nm grade technology.
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| | ![]() | | | Quanta to Suffer Shipment Decrease in Q4
Taipei, Oct. 23, 2007 (CENS)--Quanta Computer Inc., the largest notebook PC contract maker in Taiwan, is expected to be the only company among local major counterparts to suffer quarterly shipment decrease in the fourth quarter due to big customer Dell transferred its order to another supplier (Wistron Corp.), according to industry sources.
The sources reported that Citigroup Global Markets Inc. forecast that Quanta would suffer a 5% quarterly shipment decrease in the fourth quarter, compared with major local counterparts Inventec Corp. (up 46%), Wistron Corp. (12%), Compal Electronics Inc. (up 10%) etc.
Citigroup Global forecast that in the fourth quarter the global notebook PC market would enjoy a shipment growth of 6.2% from the previous quarter, but the rate would be much lower than the average quarterly growth of 22% in the past six years. Kirk Yang, chief analyst for hardware and components in the technology research division of Citigroup Global Markets Asia said that the battery supply would still be tight in the fourth quarter.
Major notebook PC contract makers attributed the relatively-weak growth momentum in the fourth quarter to the stronger-than-expected demand in the first half. In the third quarter, they said, the quarterly shipment growth rate was 25%, compared with 22% in 2006 same period and 19% in 2005.
Quanta also enjoyed lucrative results in the first three quarters. The company shipped 8.8 million notebook PCs in the third quarter, up 19% quarterly and 91% from a year earlier. The company said that its fourth-quarter shipment is expected to decrease by 10% from previous quarter due to the relative-high bases for comparison in previous season. The expected decrease is under control, Quanta said, and meets the company's expectations.
Industry insider said that Quanta is benefited by the hot sales of a popular Dell consumer notebook PC model, so its fourth-quarter shipment decrease would be lower than originally expected.
Compal hit the record shipment volume in September with over two million units, and the firm is expected to continue to set new records in October and November (with monthly shipments between 2.3 million to 2.4 million).
According to Citigroup Global, the global notebook PC shipment is expected to reach 135 million units in 2008, up 26% from this year, and several markets, including mainland China and India, are expected to enjoy high growth rates between 18% and 20%.
Quanta is expected to maintain its world's No. 1 position in notebook PC contract production in 2008 with a market share of 35% to 40%, with number-two Compal taking some 25% to 30% of the global shipments.
Quanta lost some orders from major customers Acer and Dell (which were transferred to Comapl), though it has won new orders from Toshiba of Japan.
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| | ![]() | | | Epistar Becomes UPEC's Sole High-power LED Supplier
Taipei, Oct. 23, 2007 (CENS)--Epistar Corp. recently became the sole supplier of high-power LEDs to UPEC Electronics Corp., a major backlight module supplier to many big international LCD TV brands.
Epistar began big-batch shipments in the third quarter, and the company's monthly high-power LED shipment volume in the fourth quarter is expected to outstrip 10 million units. In addition, Epistar also won orders for high-power LEDs used in street lamps.
UPEC is currently the largest high-power LED company in Taiwan and owns many patents in high-power TV backlight modules, making it the only supplier of the latest ambilight backlight modules to global TV brands. Epistar is taking a leading position in upstream epitaxy technology, making it a major supplier of R, G, B LED dices. The price of each high-power LED dice is over 10-folds that of a general small counterpart.
Vicent Hsiao, UPEC chairman, pointed out that each LCD TV set needs two to four backlight modules, each of which uses four to six white-light LEDs. Each white-light LED consists three RGB LED dices, he added, so each backlight module adopts 12 to 18 high-power LEDs. As the market responses are quite strong, he added, UPEC plans to double its high-power LED capacity and also require Epistar to double its high-power LED dice capacity simultaneously.
Lee Biing-jye, chairman of Epistar, pointed out that the biggest draw for LEDs is that such product would continue to create new application markets in the coming 10 to 20 years, while in the short term the LCD TV backlight module would be one of its major applications. He added that currently the global monthly capacity of high-level high-power LEDs is about three billion units, but only the demand from LCD TVs would be about 9 billion units if the global LCD TV sales volume reaches 50 million units.
Though the costs of LED backlight modules are still high, yet the mercury-free and image quality-enhancing solution are attracting more and more TV makers. At present, Lee said, LED backlight modules are adopted by mainly 42-inch and -over LCD TV models, but a major Japanese brand has decided to push a comprehensive range of LED-backlight LCD TV model mixture next year to test the market.
Lee added that the Japanese firm is scheduled to push about 200,000 LED-backlight LCD TVs in the first stage, which would generate a demand for 200 million to 300 million high-power LEDs.
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| | ![]() | | | Taiwan's Derivative Financial Deals Hit Record NT$10.18 Trillion in August
Taipei, Oct. 23, 2007 (CENS)—The derivative financial deals recorded by banks in Taiwan hit a record high of NT$10.1845 trillion (US$308.62 billion at US$1 = NT$33) in August of this year, up 14.45% or NT$1.282 trillion (US$388.48 billion) from a month earlier, according to the statistics released by central bank here.
Insiders said that the U.S. sub-prime mortgage storm and the lowering of interest rates by U.S. Fed were the main reasons for the large fluctuation of interest rates in the market that helped boost the rising demand for derivative financial deals in August, particularly for the interest rate-related items such as financial futures and foreign currency interest rate swaps.
In August the trading of financial futures shot up by NT$228.6 billion (US$6.93 billion) in long position and US$462 billion (US$14 billion) in short position; and the interest rate swaps (IRS) sharply increased by NT$272.2 billion (US$8.25 billion). In the same month the trading value of financial futures and IRS totaled NT$3.21 trillion (US$97.27 billion) for a whopping growth of 44.65% from the previous month.
Sun Chuan-yu, deputy director general of the central bank's Banking Exam. Dept., indicated that it is natural for the rise of derivative financial deals as more and more dealers jump into the market and the risk in the market might on the contrary stimulate banks to improve their financial products so long as the risk stays at an acceptable level.
Other hectic derivative financial deals in August included interest rate contracts with trading value of NT$3.2 trillion (US$96.96 billion) and foreign exchange contracts NT$6.4 trillion (US$193.93 billion). Of the forex contracts, those involving foreign currencies took a lion's share of 65% for a monthly growth of 18.79%; while those involving local currency accounted for 34%.
During the month the top five banks engaging in such deals were in descending order Chinatrust Commercial Bank, Citibank, Bank SinoPac, Hongkong & Shanghai Banking Corp., and Deutsche Bank, which together accounted for 41.17% of the total transactions. Among them Chinatrust boasted a share of 13.18%, far ahead of the others.
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| | ![]() | | | Oil Price Hike May Lower CHIER's Forecast on Taiwan's Economic Growth to 4.02%
Taipei, Oct. 23, 2007 (CENS)—Chung-Hua Institution for Economic Research (CHIER), a major economic think tank in Taiwan, predicted that Taiwan's economic growth might lower to 4.02% for 2008 and the annual rise of consumer price index (CPI) rise to 3.78%, if West Texas Intermediate (WTI) oil price soar to US$78.28 per barrel.
Based on the average WTI price of US$74 per barrel in September of this year, CHIER estimated that the corresponding price for 2008 would be US$71.17. If so, CHIER forecast that Taiwan's economic growth would stand at 4.41% and CPI up by 1.98%. However, if the WTI price balloons to US$78.28 for the year, then CHIER would adjust downwardly its forecast on the island's economic growth by 0.39 of a percentage point and upwardly the rise of CPI by 1.8 percentage points.
In the second quarter of this year, Taiwan witnessed a sharp investment increase in semiconductor and LCD panel industries. Seeing the upward trend, CHIER predicted that Taiwan's private investment might post an annual rise of 5.82% for 2007, a new high in three years; while the annual growth of private spending might stand at 2.8%. As for the economic growth rate for the full year, CHIER said, the percentage would be 4.55%, up 0.29 of a percentage point from its earlier prediction.
Recently oil prices soared to US$90 per barrel in the international market due mainly to the growing tense relation between Turkey and Iraq. Insiders believed that the international oil prices would keep going up in the fourth quarter of the year. Goldman Sachs predicted that the international oil price might reach US$85 per barrel by the end of this year and Merrill Lynch set the price at US$80. However, the U.S. Energy Information Administration (EIA) expected the corresponding price to be US$76.83.
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| | ![]() | | | SHARP to Expand Capacity for Thin-film Solar Cells
Taipei, Oct. 23, 2007 (CENS)--The Japan-based SHARP Corporation, the world's largest supplier of solar cells, is to heavily expand its production capacity of thin-film models by more than ten folds to 200MW from 15MW, according to company sources.
Coincidentally, Taiwan's makers of this kind, including Nexpower Technology Corp., Tatung Group's Green Energy Technology Inc., and Taiwan's largest Motech Industries Inc., have moved to develop thin-film solar cells at the moment.
Thus, it is believed that SHARP, which has decided to venture into the production of thin-film solar cells by its existing advantages of ample resources, will threaten Taiwanese makers in the market. However, SHARP's venture means that there have been quite a few makers being optimistic about the prospect of the sector. Furthermore, a serve shortage of polycrystalline silicon has also driven them to develop new models.
Accordingly, SHARP is to pour more than JPY10 billion into setting up new production lines for thin-film solar cells in its plant in Japan, planning to boost capacity of the products to 200MW from existing 15MW next year. At present, SHARP is the largest supplier of solar cells in the world, with capacity of 700MW.
Meanwhile, Taiwanese makers in the sector are also underway to plan capacity expansion for the thin-film models, with Sunwell Technology Corp., a joint venture between NexPower and CMC Magnetics Corp., getting off to the earliest start to mass produce the products in next March.
On the other hand, Green Energy has spent NT$2 billion on buying manufacturing equipment from the U.S.-based Applied Materials Inc., to turn out 8.5-generation thin-film solar cells, the largest models in sizes, as soon as in the fourth quarter of next year.
Insiders in the sector noted that SHARP's move to expand production capacity of thin-film models may cause a severe shortage of polycrystalline silicon, major raw material for conventional solar cells. In fact, compared with a conventional model, a thin-film model uses only 1% the material, which may offset the shortage for solar cell makers. Once makers succeed in improving efficiency of thin-film models, the products are expected to become the mainstream models in the sector.
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| | ![]() | | | Feei Cherng to Supply Passive Components for Quanta's Big PC Order
Taipei, Oct. 23, 2007 (CENS)--The Taiwan-based Feei Cherng Enterprise Co., Ltd., a supplier of passive components, is reportedly to supply solid capacitors and multilayer ceramic capacitors (MLCCs) for Quanta Computer Inc.'s big order from HP for 10 million notebook PCs, according to industry sources.
With such large shipment of passive components to Quanta for assembling NB PCs, Feei Cherng is expected to boost its sales and profits in the second quarter of next year.
The sources said that HP hopes Japanese makers of high-end passive components to supply required parts for its big order for notebook PCs. However, in addition to Feei Cherng, Honey Hope Honesty Enterprise Co., Ltd., a franchised supplier of MLCCs from Japan's Taiyo Yuden, is also expected to benefit from HP's big order.
Also, Yageo Corporation and Walsin Technology Corporation, both leading suppliers of chip resistors, are very likely to drive up their profits for next year, thanks to HP's big order.
Institutional investors noted that Feei Cherng has already joined ASUSTeK Computer Inc.'s supply chain, supplying metal-oxide-semiconductor field-effect transistor (MOSFET) for use in the latter's Eee PC, and has sound relationship with Quanta and HP, making itself most likely to supply MLCCs and solid capacitors for 10 million units of notebook PCs ordered by HP.
Despite not having confirmed such orders, Feei Cherng has actively expanded production capacity of solid capacitors. This enables the company to further take on more new clients of notebook PCs, and therefore help it to boost sales for next year significantly.
Feei Cherng scored pretax profits of NT$108 million for the first half of this year, with a gross profit rate of 21%; however, offsetting a loss of about NT$74 million posted by its subsidiary lowered the company's net profits to NT$1.09 per share for the period.
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| | ![]() | | | Financial Institutions Eye Taiwan's Expanding Senior Market
With Taiwan quickly developing into an aged society, domestic financial institutions have set their sights on the expanding senior-citizen market.
The ratio of senior citizens--those aged over 65--in Taiwan's overall population broke the 7% mark in 1993, making Taiwan an aging society according to the United Nations' definition. The ratio is expected to top 10% this year; in 10 years it is expected to exceed 14%, the UN threshold for an aged society.
This means that Taiwan will transform itself from an aging into an aged society in only 24 years, an exceptionally quick pace compared with other countries; the transformation took 125 years for France, 80 years for Sweden, and 65 years for the U.S. This phenomenon is attributed to a plunging birth rate and an extended life expectancy.
How to maintain a decent livelihood has become a major issue facing Taiwan's senior citizens, especially in view of the declining willingness and ability of the young to support their aged parents caused by changing concepts and increasing economic pressure.
In fact, economic self-reliance on the part of senior citizens has become a trend worldwide. A study shows that on the global average, senior citizens have to depend on themselves for 42.5% of their living expenses. Another 28.5% is provided by their children, 28.4% by government subsidies, and 0.8% from other sources.
In Taiwan the situation has been aggravated by the trend toward early retirement. The average retirement age has dropped to 54.9 (despite the compulsory retirement age being 65) due to the prevalence of corporate mergers and personnel downsizing.
To tap the expanding aged market, local financial institutions have rolled out various financial products tailored for senior citizens. Some life insurance firms, for instance, offer policies that allow the insured to collect part of their insurance payments before they die to cover hospitalization bills.
Some banks are offering wealth-management products custom-designed for senior citizens. To avoid disputes, however, they are required by the regulator to take extraordinary steps to assure that senior clients fully understand the risks associated with those products, as well as the potential risks to their principal retirement funds.
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| | ![]() | | | Government Encourages Middle East Investment
Taiwan's government is engaged in a long-term effort to divert the island's investment from mainland China to other destinations, and is now focusing the attention of this effort on the Middle East. This is the latest tact taken by the ruling Democratic Progressive Party (DPP), which deplores ballooning cross-strait investment which, it believes, undermines the island's economy.
Vice Primer Chiu Yi-jen recently directed the Ministry of Foreign Affairs (MOFA) and related economic agencies to map out strategies for Middle East investment by domestic companies. In response, five tasks have been mapped out to enhance commercial activities with target nations in that region, including the encouragement of mutual investment, cooperation in petrochemical industry projects, and the winning of infrastructure and other public projects.
To reinforce friendship with Arab nations, the government is planning to adopt a policy of "energy diplomacy" and has instructed the MOFA to lay more emphasis on enhancing relations with oil-rich countries in the Middle East.
A couple of years ago, the government even clandestinely sent official representatives to Libya to discuss the possibility of jointly exploring oil resources. In April of this year, the government directed the CPC Corp. Taiwan to sign a contract with its counterpart in Libya to jointly develop oil wells there, and both sides are optimistic about the results.
To comply with the government's policy, the Taiwan External Trade Development Council (TRITRA), a government-backed trade promotion organization, has organized more than 10 trade promotion missions to the Middle East this year. In addition, the island's construction, electrical machinery, and petrochemical industry associations have also organized trips to the Middle East to assess investment environments there.
The government notes that the oil-rich nations of the Middle East, including Saudi Arabia, Kuwait, and the United Arab Emirates, are actively upgrading their infrastructures to improve their living environments and are planning to build more airports, harbors, highways, mass rapid transit systems, railroads, and bridges. They are also actively promoting their tourism industries and have worked hard to construct more luxurious hotels, high-class amusement parks, and skyscrapers. These developments mean good business opportunities for Taiwan's investors.
Taiwan's leading construction firms, including the Continental Engineering Corp., CTIC Corp., and Kung Sing Engineering Corp., are planning to push their operations in the Middle East and take advantage of these opportunities.
Chinese Petroleum has recently formed a team charged with pinpointing investment targets in the Middle East, and is considering the formation of joint ventures for the production of synthetic fibers in Saudi Arabia and Dubai. The company is also eyeing the possibility of establishing petrochemical industrial parks or industrial processing zones there as well.
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