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Taiwan lowers growth forecast in face of rival China
[TAIPEI] Taiwan lowered its growth forecast on Friday blaming increased competition from China in the tech industry, as the island's stagnant economy stokes public frustration.
Gross domestic product was predicted to grow 3.28 per cent in 2015, the statistics bureau said, 0.5 per cent lower than its previous forecast.
"Looking forward, the prolonged sluggish growth in global economy and strong competition from abroad, especially from mainland China in (the) IT industry may limit Taiwan's export momentum," the Directorate General of Budget, Accounting and Statistics in a statement.
Traditionally an export-driven technology hub, Taiwan has benefited from Apple's new iPhone6, launched last year - a number of leading Taiwanese firms such as Foxconn and TSMC are reportedly among Apple's suppliers.
But China has been pushing to grow its own tech industry with the development of domestic smartphone brands and homegrown hardware, including chips.
"The constant development by China to be self-sufficient intensified competition against factories in Taiwan, resulting in slower growth in demand of mobile devices," the statistics bureau said.
Taiwan's predicted annual growth rate for 2015 was lower than last year, when GDP rose 3.77 per cent overall.
The bureau also revised down the growth figure for the first quarter of 2015 to 3.37 per cent compared to the same quarter in 2014 - it had been estimated at 3.46 per cent.
It comes at a time when economic stagnation and a lack of job and housing opportunities for younger generations are putting pressure on the ruling Kuomintang (KMT) party ahead of presidential elections in January 2016.
However, the first quarter rise was a reflection of some gains from exports of goods and services, the statement said, as well as "moderate growth of private consumption and investment".
Taiwan's economy was buoyed last year by a steady recovery in developed countries as well as record-high exports and rising domestic consumption.
But growth then slowed in the three months to December due to lower-than-expected overseas demand for goods and weaker domestic spending.