The Directorate General of Budget, Accounting and Statistics (DGBAS) said on Jan. 30 that Taiwan’s economy grew 3.51% last year, slightly above the government’s earlier forecast of 3.43%.

DGBAS said that the nation registered a real GDP growth of 3.17% during the last quarter of 2014, beating its own estimate in November of 2.83%. The DGBAS said that despite a series of food safety scandals and crisis in Taiwan during the fourth quarter last year, the domestic economy remained steady and continued to grow, which was the main reason to beat its own forecast last November.

Quoting its statistics, DGBAS said that during the period between October and December, Taiwan’s exports in electronics, machinery and base metal all increased, while outbound sales in gasoline/diesel and plastics/rubber products offset total exports.

The DGBAS said that after inflationary adjustment, real exports in merchandise and services during the fourth quarter last year showed the year-on-year growth of 5.57%, while merchandise and services imports grew 4.59% from the previous year. In the meantime, retail sales for the fourth quarter were boosted by a 4.31% year-on-year sales growth in the auto industry.

DGBAS said, however, the statistics showed that the food safety scandals during the last quarter for 2014 did hurt consumer sentiment to some extent. A positive factor, however, was the local government elections in late November, which boosted spending during the campaign period, the DGBAS said, which became a reason that retail revenue in Taiwan grew 3.08% year-on-year in the fourth quarter, and private consumption increased 2.33%.

DGBAS’ statistics also showed that fixed capital formation also increased, rising 2.19% from a year earlier. Capital equipment imports, however, showed a 1.74% plunge as a result of a higher comparison base in the same period of 2013.

As for the first three quarters of 2014, DGBAS said, Taiwan’s GDP grew 3.41%, 3.87% and 3.63%, respectively.

The DGBAS was scheduled to issue a preliminary report on the nation’s GDP growth for the whole of 2014 and an updated forecast for 2015 sometime in the upcoming February. In its most recent prediction last November, it forecast a 3.50% growth for 2015.

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The Taiwan Institute of Economic Research (TIER) raised its projection for Taiwan’s economic growth in 2015 on Jan. 26.

TIER, the Taipei-based private research organization, said that improving global economy and a better outlook on domestic consumption can be expected in Taiwan, due to plunging oil prices. TIER said that the nation’s GDP can be expected to grow 3.67% this year, up 0.19 percentage points over its previous forecast set in November.

“The revision is primarily because of the recent decline in international crude oil prices, which could help boost Taiwan’s domestic consumption growth to 2.71% this year, up 0.24 percentage points over TIER’s previous forecast in November,” said Gordon Sun (孫明德), director of TIER’s Macroeconomic Forecasting Center.

Although the nation’s economy as well as the global economy are and will continue to improve and be rebooted which will be led by a strong recovery in the U.S., Sun warned that there will still be uncertainties in Taiwan’s trade and export outlook over 2015 because of weak demand in Europe and China.

TIER’s new GDP estimate was slightly lower than the data from another local leading economic think tank, the Chung-Hua Institution for Economic Research. The institution forecast in December that Taiwan’s GDP will grow 3.5% in 2015, up from the 3.43% growth which was expected in 2014.

Academia Sinica, Taiwan’s top research institution, said in last December that the nation’s GDP growth could edge lower to 3.38% in 2015 from the 3.42% it expected for 2014, because of slowing economic growth in China, leading to weaker demand for Taiwanese exports and a potential drop in investment.

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Makalot to expand its business in Vietnam

Makalot Industrial Co (TPE: 1477), a Taiwanese diversified garment manufacturer for brand names and major clothing retailers, announced on Dec. 16 a three-year plan of an investment between US$10 million and US$15 million per year in Vietnam, where the company is planning to build new textile plants.

Frank Chou (周理平), chairman for Makalot, said during an investors’ conference that the company has its eye on the potential zero-tariff benefits brought by Vietnam’s free-trade talks with the EU and its involvement in the proposed Trans-Pacific Partnership.

“As of November, Vietnam has surpassed Indonesia to become Makalot’s largest production area, accounting for 32% of the company’s total capacity,” he said.

Indonesia accounted for 30% of the firm’s total capacity, while Cambodia accounted for 24% and China and The Philippines accounted for 6% each, Chou said.

Between January and last month, Makalot posted a revenue of US$615.4 million, up 15.9% from a year earlier. With full-year sales expected to top US$666 million, Chou said that its employees can be expecting an annual bonus of more than 12 months.

V Air to launch eight to 10 new routes next year

V Air, TransAsia Airways Group’s budget carrier, said that another eight to 10 new flights will be launched in 2015, while it launched its maiden flight from Taipei to Bangkok on Dec. 16.

In addition, V Air is also planning to launch a chartered flight service to Siem Reap in Cambodia since Jan. 6, and begin to operate its second regular route to Thailand on Jan. 7, which will fly from Taipei to Chiang Mai.

“Aside from our service network, we also plan to expand our fleet. We aim to have five aircraft covering eight to 10 routes by the end of next year,” said Vincent Lin (林明昇), chairman for V Air.

He said that flights to Northeast Asia, such as major cities in Japan and South Korea, are V Air’s next potential market, with the company seeking to launch flights to destinations in that area in the first half of 2015.

Lin said that the expansion plan is aimed at helping V Air reach economies of scale and allow the airline to break even and start generating profit in 2016.

Tencent to stream Sony Music artists in China

Tencent (HKG: 0700) signed an agreement with Sony Music Entertainment on Dec. 16 to exclusively manage online distribution of Sony’s music library in China.

The alliance came on the heels of Tencent’s announcing other distribution deals with Warner Music Group and HBO, as Tencent sought to build up its entertainment portfolio to compete with online rivals Alibaba (NYSE: BABA) and Baidu (NASDAQ: BIDU) in using entertainment as a hook to attract more than 600 million internet users in China.

Honda to recall more than half million vehicles in China due to air bag malfunction

Honda (TYO: 7267) said on Dec. 16 that it will recall 569,769 cars it sold in China due to potentially defective air bags that were made by Japan’s Takata Corp (TYO: 7312).

China’s General Administration of Quality Supervision, Inspection and Quarantine said in a statement that the damaged airbags could cause “shell fragments to fly” that may hurt passengers.

Almost 20 million vehicles have been recalled globally since 2008 due to defective Takata inflators, which have been linked to five deaths.

A Beijing-based Honda spokesman said that there had been no injuries or malfunctions reported in China so far.

Taiwan’s Academia Sinica raises GDP growth forecast to 3.42%

The Academia Sinica raised its GDP growth forecast for this year to 3.42% on Dec. 16, from the 3.31% estimated in July.

“The pace might decelerate to 3.38% next year, as China’s economic slowdown could dampen external demand and government spending is set to contract further from this year,” said Ray Chou (周雨田), a Academia Sinica research fellow.

China, however, may not see aggressive economic growth in the future because of an increasingly large base and continued economic reform, although it accounts for approximately 40% of Taiwan’s exports, Chou said.

“The trend, together with disappointing showings in Europe and Japan, is unfavorable for Taiwan’s export-reliant economy,” Chou said.

Uncertainty emerged last quarter and has become more evident this quarter, with GDP growth likely ebbing to 2.83%, weaker than the 3.64% expansion in the first three quarters of the year, the research institute’s semiannual report said.

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Taiwan’s 4G subscribers will exceed 10 million in 2015: IDC

Market researcher International Data Corp (IDC) said on Dec. 11 that the total amount of the 4G subscribers in Taiwan will top 10 million next year, as telecoms’ flat rates and strong sales of new smartphones, such as the iPhone 6.

IDC originally projected that there could be one million 4G users by the end of 2014 but the actual figures could hit 3.3 million.

“Over the past seven months, the uptake of 4G in Taiwan has been stunning. The growth has greatly surpassed our expectations,” said Andy Ye (葉振南), IDC analyst.

During the first year for 4G operations, Ye said, Taiwan’s 4G penetration rate surged to 11.2%, which was a faster adoption rate than Hong Kong’s 6.7% and Korea’s 2.3% in the early stages of 4G deployment.

The analyst also attributed Taiwan’s rapid uptake to telecoms offering flat rates for unlimited Internet access to grab market share. Also, sufficient and various mobile devices for the 4G system also gave a boost to the business, he said.

Taiwan is the first country in the world to deliver 4G services on the 700MHz bandwidth, he said.

More and more people use their handheld devices to shop online

Ruten.com, an auction website that was established by PC Home Online and eBay (NASDAQ: EBAY), said on Dec. 11 that its transaction volume increased by 15% year-on-year because of the increasing use of handheld devices.

“More than 75% of buyers browse our page by handheld devices and 45% of them make purchases through smartphones or tablets,” said Vicky Tseng (曾薰儀), chief operating officer for Ruten.

Quoting a recent survey, Tseng said that Ruten’s pageviews via mobile devices surged 87% from last quarter, while the number of unique visitors rose 77% quarterly.

Echoing Ruten’s remarks, International Data Corp (IDC) said that the growth in smartphone and tablet use in the Asia-Pacific region showed that an era of mobile commerce is emerging. The report said that China’s Singles’ Day sales on Nov. 11 saw more than 40% of all transactions completed on mobile devices. For 2015, more than 50% of consumer transactions will be carried out via handheld devices, the report said.

TRI raises Taiwan’s GDP growth forecast

The Taiwan Research Institute (TRI) raised its forecast for the nation’s 2014 GDP growth and expected the pace to gain modestly next year as the global economy enters an era of great moderation.

TRI, a Taipei-based think tank, elevated its projection for GDP growth to 3.36% this year, from 3.1% estimated in June.

Wu Tsai-yi (吳再益), president for TRI, said that U.S. economy’s recovering is favorable for Taiwan’s exports, which was also one of the reasons for the nation’s GDP growth.

Wu said that the GDP growth might rise to 3.43% next year. He said that Taiwan used to outperform the world economy in terms of GDP growth, but the gap has tapered off in recent years, as Taiwanese firms increasingly lose their competitive edge and the government fails to provide substantial assistance.

People’s Bank of China pushes banks to lend more

People’s Bank of China, the nation’s central bank, has increased the nation’s annual new loan target to US$1.62 trillion, from previous local media estimates for the figure.

An anonymous source said that Chinese banks have disbursed US$109.7 billion of loans between January and October so they will have to quicken their pace before the end of this year, if the central bank has indeed raised the target.

The amount of new loans issued by Chinese banks fell by more than a third in October.

Uncertainty for the future Hong Kong electoral reforms

The prospects for compromise over the future of Hong Kong’s electoral system remained unclear after the clearing of Occupy Central’s base camp from Admiralty district, with protesters and government officials’ demands still essentially at odds.

Officials signaled some willingness to negotiate on the makeup of the nominating committee that would vet candidates for chief executive in Hong Kong’s first election in 2017.  But both student protestors and pro-democracy lawmakers said that they will reject any proposal that requires candidates to be approved by a Beijing-controlled nominating committee.

Twelve Chinese IPOs unexpectedly approved

A total of 12 initial public offerings (IPOs) were unexpectedly approved by China’s securities regulator on Dec. 11.

The IPO approvals include budget carrier Spring Airline’s US$234 million listing, and medium-sized Chinese brokerage Guosen.

The regulator’s decision could dampen the surge in China’s stock markets, as the benchmark Shanghai Composite Index has spiked over 30% in the last two weeks amid speculation the central bank will further ease monetary policy.

Billions of dollars have flowed into the market, giving the regulator space to accelerate the pace of IPO approval without over-diluting valuations of existing shares.

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