TAIPEI (The China Post) — In response to the recent comments of Foxconn Chairman Terry Gou, who is a candidate in the Kuomintang (KMT) primary election, about the possibility of a financial tsunami, Financial Supervisory Chairman Wellington Koo said on June 3 ten Chinese words: “We must be cautious and pay close attention to this prospect, but we should not panic.” Koo added that unless there are statistics and data to back up the claim of a financial tsunami, the statements by Gou can be regarded as exaggerated. Koo also believes that because it is election season, Gou’s statements should be considered politically motivated, rather than as financial advice.
In recent months, the United States and China have mutually challenged each other. China held a press conference on the trade war during which they dared the United States to retaliate. Gou, while visiting the Nanmen market on June 2, said that the world economy would undergo drastic changes over the next few months, or even days, that will influence the manufacturing industry, impacting stock prices, exchange rates, and small to medium enterprises.
“If I was President Tsai Ing-wen, I would be sitting in the Presidential Office requesting to hold a national economic security report,” Gou said. According to the senior business leader, Taiwan cannot hide from this issue, because through his own experience talking to many small and medium enterprises, he found that these enterprises haven’t received any orders. He demanded that President Tsai Ing-wen take serious action and consideration into this issue, especially due to the recent economic forecasts that predict economic downfall. Gou warns that the economic downfall may occur in a short period of time, which will immensely impact domestic consumption, and lead to economic collapse.
Subsequently, Koo said that the current financial state is very different from the financial state during the 2008 financial crisis, partially because everyone then learned the painful lessons of a crisis. In addition, countries have also reformed their policies in the banking and insurance industry.
Of course, Koo believes that the financial industry has been improving and getting stronger, but does not want to assume that the current status of the economy is strong enough to cope with problems in the future. As such, the Financial Supervisory Commission will closely watch and monitor the situation.