By Stephanie Chao ,The China Post
TAIPEI, Taiwan — The National Stabilization Fund is still in place to assist Taiwan’s stock markets through the recent turmoil in the global equity markets, Finance Minister Chang Sheng-ford (張盛和) said on Thursday at the weekly Cabinet meeting, with the central bank reassuring the public that an economic crisis is unlikely to sweep through Taiwan.
The latest global setbacks, including a claim by North Korea that it had tested a hydrogen bomb and the ceasing of trading in the mainland Chinese markets after a sharp tumble, are being blamed for the Taiwan Stock Exchange taking a 138.33-point plunge and closing at 7,852.06 points on Thursday. But Chang reassured the public that the rescue fund has continued to be in place.
The rescue fund’s effects are telling as Taiwan’s shares made a brief comeback after tumbling over 100 points on Jan. 6, Chang pointed out.
“While current fund numbers are not convenient to disclose, the Finance Ministry will continue to keep a close eye on Taiwan’s markets,” Chang said. He also stated that up until now, only a “portion” of the funds totaling NT$500 billion have been used. “There is still a large portion of the funds yet to be employed.”
After the Chinese markets stopped trading when stocks tumbled 7 percent half an hour after they opened on Thursday, Taiwan’s stock markets met the threshold for the initial entrance of the rescue fund as a newly installed mechanism to limit volatility, Chang stated.
Addressing other volatile global events such as plunging oil prices and shattered diplomatic relations between Saudi Arabia and Iran, Chang said that Taiwan’s current mission is to continue with its efforts to stabilize basic economic factors.
This year’s economic outlook will look a lot more positive than last year, Chang stated, citing forecasts from foreign analysts.
However, Chang remained reserved regarding Taiwan’s current economic forecast. “(Taiwan’s economy) looks to have hit rock bottom now,” he said, yet was unsure whether the outlook would turn around for the better.
In related news, Governor Perng Fai-nan (彭淮南) of the central bank also stated that Taiwan will not face an “economic crisis,” addressing concerns around foreign and domestic stock market setbacks.
Perng described the general fundamentals of Taiwan’s economy as “healthy” and cited the New Taiwan dollar’s stable exchange rates as the main reason for it.
Baseless Claims on ‘black-box’ Goods Pact
The Cabinet rebuffed accusations of “black-box” operations regarding the recent preparatory meeting with mainland China on the cross-strait trade in goods pact, stating that necessary legislative procedures must be and have always been upheld. Cabinet spokesman Sun Lih-chyun (孫立群) stated that discussions “have been ongoing.”
Reports are to be made prior and after the discussions, and will undergo legislative examination, Sun said. The preparatory talks in Beijing, led by representatives from the Ministry of Economic Affairs, will mainly revolve around “small-range areas” of the pact, Deputy Economics Minister Shen Jong-chin ( 沈榮津) said.
He addressed three key points to achieve during this round of talks, including improving the current understanding between both sides, gaining a consensus on decreased taxes for agricultural and industrial products as well as quickening efforts on pact negotiations, especially after the China-South Korea Free Trade Agreement, in order to meet industry expectations.