2013 Boao Forum:Just economics?

l  The 2013 Boao Forum for Asia (BFA) was held during April 6-8 in Hainan Province, China, with over 2,000 top political and business leaders attending. Since he is now out of government, Taiwan’s former Vice President Vincent Siew--as the honorary chairman of the Cross-Strait Common Market Foundation--led a delegation to this annual conference on regional economic and strategic affairs, as he had always done before becoming the vice president in May 2008.

l  Siew also held a separate meeting with Chinese President Xi Jinping on the sidelines, during which he proposed that China and Taiwan should “strengthen their cooperation to jointly face new challenges in the global economy.” Xi, on the other hand, reiterated that as long as “China and Taiwan are one family,” Beijing would look after Taiwan’s interests and opportunities, including the possibility of joining regional economic and trade organizations.

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The next China-Taiwan summit

l  It is now official that China's Association for Relations Across the Taiwan Strait (ARATS) and Taiwan's Straits Exchange Foundation (SEF) will discuss the issue of setting up reciprocal liaison offices on the other side in the next round of institutional dialogue, likely by June. It will be the first cross-Strait summit since China completed its once-in-a decade power transition.

l Besides continuing with post-ECFA negotiations on, among other things, cross-Strait commodity trade, the establishment of liaison offices will be put on the agenda and considered a priority topic. Both sides appear motivated to conclude negotiations and have the offices operational, hopefully by yearend.

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China’s policy toward Taiwan remains largely unchanged, for now

l  At his inaugural press conference following this year’s National People’s Congress (NPC) and Political Consultative Conference (PCC), Chinese Premier Li Keqiang reiterated that China's new leadership remained “committed to the pledges made by its predecessor” and will “continue to take Taiwan people's welfare and interest into consideration.”

l  Moreover, by emphasizing that “both the mainland and Taiwan belong to one China,” there was no indication that China’s fifth-generation leaders would demonstrate more flexibility on its long-held position toward Taiwan, particularly the “one China” principle.

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Taiwan’s CPI continues the upward trend

l  After four straight months of decline near the end of 2012, consumer confidence in Taiwan rose in March for the third consecutive month, which reflected growing optimism over a rebounding economy.

l  The latest consumer confidence index (CCI)—compiled by the Research Center for Taiwan Economic Development at National Central University (NCU)—increased 0.77 points to 76.01 in March, from 75.24 recorded in February.

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Waiting for signs of a sustained recovery

l  Recent economic news and key data were, at best, mixed. Though Taiwan's export orders in February 2013 were down 14.5 percent annually to just US$29 billion—which was the lowest in two years—Taiwan's export orders rose 1.1 percent year-on-year in the first two months to a record US$66.1 billion. The 9-day Lunar New Year (LNY) holiday was considered a factor for the higher demand of Taiwanese products, particularly in China.

l  On the other hand, Taiwan's unemployment rate in February went up slightly to 4.24 percent, which translated to an increase of just 0.08 percentage points from a month earlier. The slight rise in February’s unemployment partly reflected an increase in the number of people who quit their jobs in search of better opportunities and also for those who were out of work because their temporary contracts had expired.

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