Taiwan Jobless Rate a Record 5.2 Percent Last Year (Update2)
By Koh Chin Ling
01/22 05:29
Taipei, Jan. 22 (Bloomberg) -- Taiwan's unemployment rate rose to a record last year, with manufacturers opting to build factories in China rather than at home.
The jobless rate rose to 5.2 percent from 4.6 percent the previous year, according to the Directorate-General of Budget, Accounting and Statistics. That was in line with a government forecast.
Taiwan companies such as Compal Electronics Inc. and Taiwan Semiconductor Manufacturing Co. are expanding in China, where wages are lower, after the island's government eased restrictions on mainland investment. As local companies invest more in China, fewer new jobs are created in Taiwan, sapping consumer confidence and threatening to slow the local economy's growth.
``China's impact on jobs has become a fixed trend in Taiwan,'' said Joanne Yang, an economist at Yuanta Core Pacific Securities Co. ``In the past two years, especially with the entry of Taiwan into the World Trade Organization, deflationary concerns have gradually increased, so we may find it hard to return to the economic growth rates of 6 percent or 7 percent in the past.''
The government predicts economic growth will pick up to 3.4 percent from an estimated 3.3 percent last year.
Compal Electronics Inc., the world's second-largest maker of notebook computers, said last month it plans to make 70 percent of its laptops in China this year, up from 50 percent in 2002. The shift will improve per-unit gross margins, or sales minus costs of production, by about 2 percentage points, it said.
Taiwan Semiconductor Manufacturing Co., the world's biggest supplier of made-to-order computer chips, today received preliminary government approval to become the first Taiwan chipmaker to open a factory in China.
Government Spending
As corporate investment eases in Taiwan, the government is hoping to take up the slack. President Chen Shui-bian's administration said it plans to increase public works spending by NT$70 billion ($2 billion) this year in an effort to provide work for 75,000 people and lower the jobless rate to 4.5 percent.
Chen Jin-cherng, deputy director of the Bureau of Census at the Directorate-General of Budget, Accounting & Statistics did not comment on the government's targets, saying only he expects the unemployment rate will fall below 5 percent this year.
The seasonally adjusted jobless rate was 5.14 percent in December, little changed from November's five-month high of 5.16 percent and down from a record 5.4 percent a year ago. The number of people out of work fell to 505,000, from 522,000 in November.
The number of people who lost their jobs because of business closures and job cuts rose to 246,000 in December from 243,000 in November, the government said.
Without adjusting for seasonal changes, the jobless rate was 5 percent in December, compared with 5.2 percent in November. |
