| Prime News | | ![]() | ![]() | Shin Kong Approved to Set Up a Chinese Joint Venture
Taipei, Oct. 19, 2007 (CENS)--Shin Kong Life Insurance has been approved by the Chinese regulator for setting up a joint-venture life insurance firm with Hainan Airlines in China, becoming the second Taiwanese insurance firm allowed to tap the huge Chinese market, after Cathay Life Insurance.
China Insurance Regulatory Commission, under the State Council, posted the approval at its website on Oct. 17, giving the two partners one-year preparation period for setting up the 50:50 joint venture.
The joint venture, with registered capital of 800 million yuan, will be headquartered in Beijing and is expected to become operational in the second quarter of 2008, at the earliest.
The joint venture will be fruit of years-long effort of Shin Kong, Taiwan's second largest life insurance firm, in extending its reach to the Chinese market. Shin Kong established its Beijing representative's office back in 2001 and was already qualified to set up a joint-venture firm four years ago. Following extensive search, Shin Kong finally cemented a partnership agreement with Hainan Airlines and tendered its application for the joint venture in March this year.
Shin Kong harbors high hope for its Chinese business, encouraged as it is by the fast development of Cathay Life in that market over the past several years. Cathay set up a joint-venture life insurance firm along with China Eastern Airlines in Shanghai in 2005, which has set up branches in Jiangsu province, Zhejiang province, Fujian province, and Beijing over the past two and a half years.
Other Taiwanese insurance firms are also endeavoring to join the bandwagon, including Taiwan Life Insurance, China Life Insurance, Fubon Insurance, Cathay Century Insurance, and Mingtai Fire and Marine Insurance, all of which having obtained approval of the Financial Supervisory Commission (FSC) to invest in China.
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| | ![]() | | | Frank Hsieh Proposes Liberal China-Related Economic Platform
Taipei, Oct. 19, 2007 (CENS)--In the first publication of his economic platform, Frank Hsieh, ruling DPP (Democratic Progressive Party) presidential nominee, put forward a rather liberal China-related economic policy yesterday (Oct. 18), supporting Chinese investments in the domestic bourse and direct cross-Taiwan Strait transportation link, in addition to permitting Chinese white-collar immigrants.
During a speech sponsored by EMBA student association of National Taiwan University, he noted, however, that certain restrictions are necessary for Chinese investments in the fields of national defense and hi-tech, daily-necessity products, Taiwan's proprietary technologies, and agricultural technologies, adding that the government can emulate the U.S. practice in regulating Chinese white-collar immigrants.
Hsieh Chih-wei, spokesman of the Executive Yuan (the Cabinet), though, admitted that it is impossible for the government to allow Chinese investments in the domestic bourse at the current stage.
In his speech, Frank Hsieh also conditionally supported proposal of the business community urging the government to raise the 40% ceiling of book value on investments by listed firms in China, saying that such investments should be made with own capitals rather than loans from Taiwanese banks.
He referred to his achievement in initiating direct cross-Strait chartered flights during his premier tenure, saying that such an arrangement is more feasible, capable of bypassing the controversy over the positioning of the transportation link, a deadlock blocking regular direct flights, as what has been proposed by Ma Yin-jeou, the opposition KMT's presidential nominee.
He tried to further differentiate his standing from that of Ma Yin-jeou, saying that in contrast to the over-emphasis on economic development on the part of Ma, he stresses equal attention on both liberalization and sovereignty in his China policy, as well as an economic policy balancing the considerations of economic growth, social justice, and sustainable environment, aimed to augment the "well-being index" of local people.
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| | ![]() | | | Taiwan Cement to Become One of Top-three Cement Producers in Eastern China
Taipei, Oct. 19, 2007 (CENS)--Taiwan Cement Corporation, one of Taiwan's leading producers of cement, will see annual production capacity reach 20 million metric tons earlier than expected as its Hong Kong listed subsidiary—Taiwan Cement International Co. will soon merge with China Hsin Cement Hong Kong Ltd.
A market analyst noted Taiwan Cement would become one of the top-three cement producers in eastern China region, in addition to mainland China's Conch Group and China Construction Materials Co. The top-three firms will compete one another for the consumption amount of 200 million metric tons of cement in eastern China region.
At present, Taiwan Cement's mainland production base is located in southern China while Chia Hsin's in eastern China. Taiwan Cement said it would take advantage of the clinkers produced by Chia Hsin's Jingyang plant to fill in its production in Fujian province. In the foreseeable future, both Taiwan Cement and Chia Hsin will have a combined production capacity of 30 million metric tons per year.
Besides the merger between the Hong Kong subsidiaries of Taiwan Cement and Chia Hsin Cement, in August China Construction Materials has also announced it would acquire nine cement plants in Zhejiang province, making its annual production capacity reach over 15 million metric tons in that province.
Conch Group, mainland's largest cement producer, currently has production bases spreading over Jiangsu, Zhejiang and Guangdong provinces with annual production capacity amount to 50 million metric tons. The group said it will have a 40% market share in the eastern China cement market by the end of this year.
According to an estimate made by a professional cement website, the annual consumption amount in Shanghai municipality total 25 million metric tons. Other major cities, including Nanjing, Suzhou, Wuxi and Hangzhou, have an annual consumption amount of 10 million metric tons combined.
The average consumption of cement in Shanghai municipality and Zhejiang province currently reaches 2,000 kilograms per people per year.
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| | ![]() | | | Taigang Machinery Shuts Down With Debts in Mainland China
Taipei, Oct. 19, 2007 (CENS)--Taigan Machinery (Suzhou) Co., one of Taiwanese firms operated in Taichang City of Jiangsu Province, has recently shut down with outstanding debts.
Taigan is the first medium and small Taiwanese enterprise who borrowed from mainland China's state-run China Development Bank.
Last year, the mainland government went public an interim measure to offer loans to Taiwanese-invested firms operating in the mainland, with China Development Bank and Huaxia Banking Corp. as major lenders.
In September last year, Taigan signed a contract with China Development Bank to acquire five-year 30 million renminbi loans. In addition to he loans offered by China Development Bank, Taigan has also obtained 90 million loans from mainland's Agricultural Bank of China.
After taking over Taigan, Taichang City Government found the financially troubled firm saddled under debts totaling 30 million renminbi.
A high-ranking official of Taichang City Government said Taigan also has debt problem with satellite suppliers. Taigan's cadres from Taiwan couldn't get paid for half a year.
Taigan got the loans from banks with Taichang City Government served as guarantor. Accordingly, the Taichang City Government should be responsible for the debts left by Taigan.
An executive of China Development Bank in charge of lending to Taigan noted in the future, his company will take stricter measures to lend loans to Taiwanese firms.
Founded in Taichang in 1995, Taigan specializes in the development and production of packaging machines (adhesive tape machinery, OPP tape slitter rewinders, score cut slitter rewinders, core loaders, mini doctor rewinding machines, core cutting machines), adhesive tape coating machines (soft film coating machinery, sealing tape coaters, hot melt coating equipment), packaging slitting machinery (duplex center and surface slitter rewinders), gravure printing presses, inspection rewinders, paper tube makng machinery, slitters & twisters, dry & wet laminators, kraft paper & PE tape machines, PVC tape machinery, and gluing machines.
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| | ![]() | | | Analysts Forecast Upbeat Outlook for MediaTek
Taipei, Oct. 19, 2007 (CENS)--BNP Paribas Taiwan recently forecast MediaTek Inc., currently Taiwan's No.1 fabless house by revenue, to snatch 17% of global market of chips for cellphones throughout this year, soaring from last year's 7%, and to challenge Qualcomm, TI and Marvell in mainland Chinese 3G market.
The securities firm's analysts based the optimistic forecast on MediaTek's fatter-than-expected earnings for last quarter and 5-10% growth estimate for the company's fourth-quarter revenue.
They pointed out that MediaTek has emerged as a paramount rival to Qualcomm, TI and Marvell in mainland Chinese market of 3G handset chips after acquiring Analog Devices Inc.'s (ADI's) cellphone-chip business.
ADI, Spreadtrum Communications, Inc., COMMIT Inc., and T3G Technology Corp. are currently the four major suppliers of chips for mainland China-spearheaded TD-SCDMA phones. ADI has worked with Datang Telecom Technology Co. on TD-SCDMA chips.
It is understood that ADI's wireless chips are favorite for the mainland's local handset suppliers including Huawei Technologies Co., ZTE Corp., and TCL.
The mainland's industry watchers estimated that 20-50 million TD-SCDMA handsets would be sold in the mainland next year. They noted that the mainland's consumption of cell phones approaches 80 million systems a year and at least half of the mainland consumers will very likely trade their current phones for TD-SCDMA phones next year. Overall next year, the mainland is estimated to consume 140 million mobile phones of various standards.
Taiwanese market-research organization Topology forecast the mainland market for TD-SCDMA handsets to reach 16 million systems in 2008 and grow seven folds to over 80 million systems in 2010.
Some industry watchers estimated the mainland's shipments of licensed handsets would likely increase 30% throughout this year under government inspirations.
Merrill Lynch's analysts pointed out that MediaTek landed considerable orders from non-China markets last quarter. Orders from these markets accounted for 25% of Mediatek's revenue last quarter, up from 10-15% in the previous quarter. MediaTek, they added, has pumped its chips to Indian telecom carriers and service providers in some Middle East countries through OEM and ODM handset suppliers in the mainland.
They are upbeat about MediaTek's sales in the mainland's GPS handset market. Currently, Amoi is the major supplier of GPS-phone chips in the mainland. MediaTek is expected to become another major supplier thanks to its competitive pricing and good integration capability.
The mainland's GPS-phone market is projected to grow to 17 million systems in 2011 from this year's estimated 1.5 million systems, posting a annual compound growth rate of 80%.
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| | ![]() | | | Chunghwa Tops Earnings of Taiwanese Telecom Industry
Taipei, Oct. 19, 2007 (CENS)--All of the top three Taiwanese telecom carriers chalked up lucrative earnings throughout the first nine months this year, with No.1 player Chunghwa Telecom Co., Ltd. leading the performance.
Chunghwa netted NT$3.56 per share after tax, representing it earned NT$140 million (US$4.2 million at US$1:NT$33) each day in the first nine months. Taiwan Mobile Corp. cleaned up NT$2.84 per share in net income while Far EasTone Telecom Co., Ltd. made NT$2.3.
Throughout the first nine months, the company raked in total revenue of NT$139.9 billion (US$4.2 billion), rising 1.8% from the same period of last year and attaining 76.8% of goal for this year. The company ascribed the considerable revenue accomplishment rate mostly to the 1.5% increase in its cellular service and the 5.8% growth of its data communications service.
Its after-tax income for the Jan.-Sept. period was NT$37.8 billion (US$1.1 billion), making up 77.4% of its annual goal and surpassing its expectations.
In September alone, Chunghwa had revenue of NT$15.9 billion (US$483 million), inching up 0.1% from a month earlier and gaining 1.8% year over year. In the meantime, its after-tax profit was NT$3.7 billion (US$112 million), or NT$0.35 per share.
Chunghwa's executives pointed out that the company's broadband-connection customers continued growing in terms of number to 4.22 million as of the end of September. Of the total, users of speedy connection services faster than eight megabit per second exceeded 1.1 million while its 3G mobile service subscribers approached two million.
Taiwan Mobile had consolidated revenue of NT$48.78 billion (US$1.4 billion) and after-tax net earnings of NT$11.7 billion (US$355 million) for the first nine months this year.
In September, the company had net earnings of NT$1.2 billion (US$39 million) on revenue of NT$5.9 billion (US$179 million). By earnings per share, its after-tax profit reached NT$0.35 and before-tax earnings NT$0.47.
Far EasTone had revenue of NT$47.7 billion (US$1.4 billion and before-tax net income of NT$11.2 billion (US$339 million) on consolidated basis for the first nine months. Last month alone, its revenue was 5.2 billion (US$158 million) and pre-tax earnings was NT$1.1 billion (US$34 million) o consolidated basis. The company now has 1.3 million 3G-service subscribers.
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| | ![]() | | | AsRock Reports Worse-than-expected Motherboard Shipments
Taipei, Oct. 19, 2007 (CENS)--AsRock Inc., a subsidiary of the world's largest computer motherboard maker Asustek Computer Inc. of Taiwan, reported worse-than-expected operation results in the first nine months, according to industry sources.
Established over five years ago to focus on the lower-price motherboard market with the AsRock brand, AsRock shipped less than five million motherboards in the first nine months, still a long distance from its original annual shipment goal of 12 million units.
In the past five years, all of AsRock's earnings per share (EPS) outstripped NT$20 (US$0.61 at US$1: NT$33), making it a profit-making machine to parented Asustek. AsRock made some changes in operation strategies this year so as to prepare for the initial public offering (IPO) in early November, but triggering major rivals' fierce competitions.
AsRock shipped 10.4 million motherboards last year, slightly down from about 11 million in 2006, and the shipment decrease continued in the first nine months including even the peak-month September (only about 500,000 boards).
The company registered revenue of NT$710 million (US$21.52 million) in September, down 55% from a year earlier. Some institutional investors said that the notebook PC has been showing a clear sign to replace desktop counterpart, so AsRock is expected to ship only about seven million motherboards this year, down about 30% from last year.
AsRock's parented firm Asustek delivered 5.02 million motherboards in September, down 5% from the same period of last year and down about 10% from previous month. The world's leading motherboard supplier admitted that the sluggish demand from desktop PC market, sliding ordered volume from ODM (original design manufacturing) customers, and relative-weak sales in sales channels pulled down its shipments.
Asustek stressed that the mature motherboard market is inevitable, so the company has been actively developing its notebook PC business in recent years. Asustek said that its revenue and profits would not be affected by the down-turning motherboard shipments and are expected to hit record highs this year.
Some market analysts pointed out that AsRock has been focusing on the low-priced desktop PC motherboard market, with its people concentrating mainly on emerging markets such as mainland China, Latin America, etc. In mainland China, however, they added, the market development trend is different as many people in the increasingly mobile nation directly buy notebook PCs as their first computer rather than desktop models.
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| | ![]() | | | TFT-LCD Over-supply Expected for Q1, but May Turn Short in Q2, 2008: Displaybank
Taipei, Oct. 19, 2007 (CENS)--The global supply of large-sized thin film transistor-liquid crystal display (TFT-LCD) panels is expected to exceed demand to some extent in the first quarter of next year, but will be short starting the second quarter, according to Displaybank of South Korea, a display market research institute.
Displaybank and Industrial Economics & Knowledge Center (IEK) of local Industrial Technology Research Institute (ITRI) yesterday co-organized the "1st FPD Conference of Displaybank and IEK in Taiwan" covering accurate market analysis and its forecasts of global display markets by Displaybank and IEK market researchers as well as their perspectives and strategies in the major displays by global leaders of each displays and related markets.
In its latest report forecasting demand and supply of large-size LCDs for 2008, Displaybank pointed out that demand for large-sized LCD panels is predicted to grow in terms of volume by roughly 18% from 2007 to 2008, with LCD monitors to comprise about 200 million units, followed by notebook PC applications at 130 million units, and LCD TV applications at 160 million units.
According to the Korean research company, the overall demand for LCD panels is expected to reach 51 million square meters in this year and 65 million square meters in 2008, resulting in a growth of 28%. This growth means that the average screen size is being larger riding on the quantitative upward trend in large-size LCD applications.
Regarding to LCD TV, Displaybank said that demand for 40-inch and larger LCD TVs would enjoy the highest growth rate to reach 20 million units in 2007 and 32 million units in 2008 (accounting for 30% of the total). This trend gives a hint that one-third of LCD TV demands will be taken by the 40-inch and larger categories in 2008.
In addition, according to the firm's quarterly supply/demand forecasts, there will be a 9.1% TFT-LCD panel supply surplus in the first quarter next year and 3.2% in the second quarters of 2008. The overall panel supply is expected to face a shortage from in the third quarter (-4.2%) and fourth quarter (13.3%) next year.
Displaybank said that panel suppliers' capacities seem to be enough now, but in real there has been an insufficient capacity due to the production mixture of information technology (IT) and TV products. So, Displaybank predicted that the panel supply could still be tight or even short in the second quarter of 2008.
The research institute also added that the panel prices would continue to climb from April this year when demand for IT products became bullish through October, accompanied by an outlook highlighting that potential demand for IT products would further advance to March 2008.
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| | ![]() | | | Kaohsiung Science Park to Draw Solar-Energy Plants to Move in
Taipei, Oct. 19, 2007 (CENS)--The Kaohsiung Science Park (KSP), a newly completed branch of the Southern Taiwan Science Park (STSP), seemed lagging behind in attracting enterprises to move in, so the government is helping to encourage the emerging solar energy plants to relocate to the park.
Currently the enterprises expressing interest to move into the park include two solar cell producers-- DelSolar Co. and E-Ton Solar, and a leading medical equipment company turning out materials used for repairing bones. Besides, a U.S. firm--Intra Vantage Inc., generating dental materials, also showed interest in running in the park.
KSP is designed as a special manufacturing zone for those involving in the manufacture of precision machines, energy-saving products and biotech items.
Insiders indicated that the government spent about NT$24.5 billion (US$742.42 million at US$1 = NT$33) to develop the park and so far some 48 enterprises have already moved into it for an occupation rate of about 40%. Among the existing tenants, 19 are precision machinery manufacturers and the remaining are biotech and optoelectronic companies. If including the enterprises that have already signed the letters of intent, then the occupation rate of KSP would soar to 72%.
Industrial Development Bureau (IDB) under the Ministry of Economic Affairs noted that available land lot in KSP now is only 12 hectares, so the park should introduce in small- or medium-sized solar-energy or light emitting diode (LED) plants instead of the large-sized liquid crystal display (LCD) panel ones.
IDB hoped to bring more solar energy producers into KSP in the future and form a cluster of manufacturers for solar energy industry in southern Taiwan.
((JL)) (GE) | |
| | ![]() | | | FSC Plans to Further Ease Restrictions on OBUs
Taipei, Oct. 19, 2007 (CENS)--To help domestic financial institutions to expand in Greater China, the Cabinet-level Financial Supervisory Commission (FSC) is planning to further relax estrictions on the businesses operated by Taiwan's offshore banking units (OBUs).
FSC is reportedly to raise the ceiling of unsecured credits offered by OBUs to Taiwanese enterprises in China to more than the existing 10% of the net assets. The proposal is said to have already been accepted by the central bank here and pending for the approval of Mainland Affairs Council.
FSC statistics showed that in the first seven months of this year Taiwan's domestic banks raked in pretax profits totaling NT$47.625 billion (US$1.44 billion at US$1 = NT$33), a sharp rise of 66% from the corresponding figure of last year.
Of the total profits, designated domestic banking units (DBUs) accounted for NT$22.23 billion (US$673.64 million) and OBUs NT$18.086 billion (US$548.06 million), up NT$2.121 billion (US$64.27 million) or 13.3% from last year's corresponding NT$15.965 billion (US$483.79 million).
In the same period, the profits gained from overseas operations took a share of NT$7.31 billion (US$221.52 million).
FSC is going to reinforce the functions of Taiwan's OBUs, hoping to make the units become major fund-raising sources among overseas Taiwanese enterprises.
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| | ![]() | | | Acer Eyes Better Profit Performance for 2nd Half of This Year
Taipei, Oct. 19, 2007 (CENS)--After acquiring U.S.'s fourth-largest PC brand Gateway and becoming third-largest brand in the world, the Taiwan-based Acer Inc. is very likely to further push up its profits in the second half of this year, according to industry sources.
Acer is expected to report shining profit performance for the third quarter, maintaining its quarterly net earnings at NT$2 billion, for a profit rate of 2.2%.
Acer announced that it has completed acquiring Gateway, which has been delisted from the New York Stock Exchange. This makes Acer, with four own brands acer, Packard Bell, Gateway and eMachines, become the world's third-largest PC brand. Besides, institutional investors noted that the success of the acquisition will rest with how Acer will boost its market shares and profits through proper branding strategies in the future.
Acer spent US$710 million, or US$1.9 per share, on the acquisition, and its annual sales is expected to exceed US$15 billion in 2008, with shipment of 20 million units of PCs. This also helps Acer to maintain its leading position in the European market and expand market shares in the U.S.
Acer reported combined revenue of NT$193.033 billion for the first half of this year, up 23.9% from a year earlier, with net operating income of NT$3.909 billion. During the same period, the firm's total net earnings hit NT$7.645 billion, or NT$3.23 per share, higher than NT$3.09 posted a year earlier.
In the second quarter alone, Acer posted combined revenue of NT$93.52 billion, up 28.4% from a year earlier, with net operating income of NT$1.961 billion, growing by 29.4% from a year earlier and translating into a profit rate of 2.1%. The brand scored net profits of NT$1.983 billion, or NT$0.76 per share, in the quarter.
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| | ![]() | | | Data Systems to Merge With Whitesun's Subsidiary As No. 1 ERP Firm in Asia
Taipei, Oct. 19, 2007 (CENS)--The Taiwan-based Data Systems Consulting Co., Ltd. will merge with a subsidiary of Whitesun Equity Partner, a private equity investment company, in a bid to attract more foreign investors and become the largest company of enterprise resource planning (ERP) in the Asia-Pacific area, according to company sources. This is also Taiwan's first acquisition on ERP companies.
Data Systems noted that over past two years, the large-sized international supplier of software, Oracle, for example, has spent about US$20 billion carrying out a series of acquisitions to absorb technologies and resources.
To stay competitive, Data Systems decided to be merged into Whitesun's subsidiary, so as to solicit more foreign investors to invest in R&D.
Whitesun's subsidiary has obtained 59.85% controlling stakes, or 79.67 million shares, of Data Systems as of Oct. 5, since starting to buy the shares on July 20. The buyout is scheduled to be completed in 2008.
Accordingly, major shareholders of the subsidiary include such globally famous institutional investors as New Style and Lehman Brothers Holdings Inc. New Style is to pour NT$6 billion in the buyout, and 30% of which will belong to Data Systems's existing members of the board in the future.
Data Systems noted that big international ERP companies, which have dominated the large-sized enterprise market, have also turned to explore business of small- and medium-sized enterprises in recent years, but failed to reap profits smoothly.
On the other hand, Taiwan's ERP companies have transformed their core-business operations, because the Taiwanese market for ERP is not big enough for them to afford considerable R&D costs. In contrast, Data Systems has built its name in the Taiwanese market, according to the company.
In the mean time, Data Systems and China's Digital China Co., Ltd. have set up a joint venture, namely Digital China Management Systems Ltd., to explore the Chinese market for ERP in the manufacturing sector. The joint venture has commanded a 24% share of the market at the moment.
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| | ![]() | | | Taiwan Plans to Redefine Poverty-line to Help More Low-Income Households
Perhaps in contrast to its other titles reflecting economic prosperity, including boasting one of the highest cellphone usages and highest per-unit-area distribution of convenience stores such as 7-11, Taiwan, by the end of June 2007, set a new record in its own right—registering some 87,000 households populated by 210,000 people that meet the official standards for low-income families, with both figures being the highest of their kinds ever recorded, according to the statistics released by the Department of Social Affairs under the Ministry of the Interior (MOI).
Among such low-income households, 76% registered incomes lower than the official poverty standard, and 2% of whom had zero income. Every year the Cabinet-level Directorate General of Budget, Accounting & Statistics (DGBAS) calculates average per capita monthly spending of the local residents, and those who spend less than 60% of the average, or families whose total assets render them as living below the official poverty line, all of whom being categorized as "low-income households."
The poverty-line is contingent on the average per-capita monthly income of the island's households calculated by DGBAS a year before. This year the average per-capita monthly income or loosely speaking poverty-line in Taipei City is NT$14,881 (US$450.9 at US$1 = NT$33) and that in Kaohsiung City is NT$10,708 (US$327.5), both being higher than the corresponding figure of NT$9,509 (US$288) for the overall average islandwide.
To cope with the worsening poverty, the MOI has decided to revise the social security law by lowering the poverty-line—raising its threshold to 65% of the average individual spending from the existing 60%. Specifically, a person is considered living below the poverty line if he or she spends less than 60% of the average per-capita monthly income, but the more generous law raises the standard to 65%, hence helping the increasing number of households living below the poverty-line. Ratifying the law will see Taiwan recognize more people living below the poverty-line, incurring an outlay of an additional NT$8 billion (US$242.4 million) in social welfare.
Today the government's budget for social welfare mainly subsidizes low-income people, paying medical insurance premiums, pensions for elders, and tuition for youngsters.
Although the government is aggressively improving the lives of the poor; however, the national coffer can hardly keep up due to rapid draining of capital in recent years. To counter, the government has been raising funds by floating government bonds.
As a result, the government has accumulated outstanding loans with terms above one year totaling NT$4.1953 trillion (US$127.13 billion) by the end of 2006, which shoulders each of the some 23 million Taiwan citizens with an average debt of NT$182,000 (US$5,515).
Besides, Taiwan households have seen their own debt-loads rise as well. The statistics released by DGBAS showed that each of Taiwan's households owed an average NT$1.55 million (US$46,969) at the end of 2005, the highest ever recorded, with housing and credit card loans being the major debts.
The convenience of cash and credit cards has caused more and more cardholders in Taiwan in recent years to resort to such cards for personal spending. At the end of 1997 Taiwan's outstanding revolving credit extended to cardholders totaled NT$80.9 billion (US$2.45 billion), with such figure soaring to over NT$460 billion (US$13.9 billion) at the end of 2005. In the same period, the cash advances withdrew by cardholders jumped to NT$210 billion (US$6.36 billion) from NT$38 billion (US$1.15 billion).
In 2005 the record-low interest rates for housing loans led to a house-purchasing spree and the housing loans therefore rose sharply to NT$480 billion (US$14.54 billion) for the year, not to mention the ballooning card loans. As a result, the average household debt rose by NT$100,000 (US$3,03) from a year earlier to a record high of NT$1.55 million (US$46,969).
Nevertheless, in the same year the average assets owned by each household grew to NT$9.79 million (US$296,666), with the equity of each household totaling NT$8.24 million (US$249,696) after deducting debts. DGBAS officials said that the increasing household assets were mainly due to rising real estate prices and profits gained from private investments in overseas funds. (JL, September 2007)
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