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Taiwan Infrastructure Report Q4 2009Product Type: Market Research ReportPublished by: Business Monitor International Published: September 2009 Product Code: R302-8015 Description With Taiwan’s export-focused economy reeling from a collapse in global demand the authorities areinvesting heavily in infrastructure projects as a way of boosting consumption. In July 2009, the Councilfor Economic Planning and Development has approved TWD313.2bn (US$9.6bn) for major public worksprojects, which will create an estimated 167,000 jobs. The funding will predominately be used toconstruct transport infrastructure such as roads and railways. However, BMI does not believe that thebenefits of this investment will kick in until 2010 at the earliest. As a result in our Q409 TaiwanInfrastructure Report, we are maintaining our forecast of a 15.33% y-o-y contraction in the realconstruction industry value in 2009, to reach a nominal value of TWD228bn (US$6.95bn).Meanwhile, in July 2009, as reported by the Taiwan Economic News, the Taiwanese cabinet announced abudget of TWD42bn (US$1.28bn) for six emerging industries for 2010. The industries in question aregreen energy, tourism, healthcare, biotechnology, creative culture and agriculture. Green energy willreceive the largest tranche of TWD9.471bn (US$288.8mn). This funding will be used for 181 subprojectsdivided into a further seven segments - wind-power, solar energy, LED lighting, hydrogen-basedenergy, biofuel, electric vehicles and energy resource information. Solar energy will get the lion’s shareof investment with 50 projects receiving a total of TWD4.192bn (US$127.8mn). Taiwan is keen to develop its renewable energy sector, and in May 2009 Taiwan Power Co. (Taipower)said that it will build the country’s largest solar power plant. The state utility said the proposed facilitywould begin commercial operation at the end of 2010. The company's announcement came after Ministerof Economic Affairs Yiin Chii-ming said the government planned to implement several measures to helpreduce power consumption and carbon dioxide emissions in the nation. Apart from Taipower, stateownedoil refiner CPC said it was also interested in diversifying into the solar photovoltaic industry.Meanwhile, in July 2009 Taiwan inaugurated two more direct flight routes to China, a signal of closereconomic and political ties between the countries. Of the new routes, the first links Taiwan with theChinese province of Guangdong while the other runs between Taiwan and Northern China. Taiwan onlybegan direct charter flights to China in July 2009, due to a thawing in the political tensions. Consideringthe potential for air travel between the two countries, both for passengers and freight, BMI believes thatimproving bilateral relations could result in an expansion in airport infrastructure in Taiwan. China andTaiwan ended their 50-year trade ban in 2000. Taiwan is now keen to agree a cross-Straight trade accordwith China which could add up to 1.7% to the island nations GDP. Table of Contents
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