Wobbly Taiwan may hurt WA

Taiwan, one of WA’s most important export markets, is beginning to run into trouble.

Confidence in the president Chen Shui-bian has been severely dented. Share prices on the Taipei stock exchange have skidded by 35 per cent since he was inaugurated on May 20.

The economy, which survived the Asian crisis virtually unscathed, is starting to wobble.

The catalyst was the decision by president Chen’s Democratic Progressive Party to halt work on a partly built US$5.4 million nuclear power plant.

That provoked the resignation from the Cabinet of Premier Tang Fei, a member of the old guard Kuomintang, which still holds the majority in the often-stormy Legislative Assembly.

Tang warned that, if work did not continue, it would mean higher unemployment, an economic downturn, and energy shortages.

Tang is supported by many industry leaders. Taiwan already has three nuclear power facilities.

Pledging not to build any more was a main plank of president Chen’s election campaign, during which he cited the dangers of a catastrophic accident for the 22 million people of Taiwan, crammed into an area only two thirds the size of Tasmania.

The Government is clearly worried about the collapse in the stock market. It has mobilised billions of dollars from the four, large state-owned investment funds to carry out support buying.

Fear of policy paralysis is not the only problem affecting share prices.

Taiwan is the third largest IT equipment supplier in the world after the US and Japan.

The big slide in technology stocks on the US Nasdaq exchange amid tales of dwindling demand are creating worries for 2001, Taiwan’s economic growth slowed from almost eight per cent in the first quarter this year to 5.4 per cent in the second.

Taiwan is Australia’s sixth largest export market. It was worth US$4.6 billion in 1999, and WA accounts for the majority of that.

If the embargo on new nuclear power stations in Taiwan sticks, it would be very encouraging news for the North West Shelf.

A year ago, Woodside announced that the marketing vehicle ALNG had signed a memorandum of understanding with Tuntex Gas Corporation of Taiwan to supply up to four million tonnes a year of LNG commencing in 2003.

The MOU depends upon Tuntex being selected as the preferred supplier of gas to Taipower’s new power station in Northern Taiwan. The Government has plans for four new natural gas power plants. The national energy policy is to promote LNG for industrial use. Projections envisage imports rising from the current 4.4 million tonnes a year to 13 million tonnes in 2010 and 16 million tonnes in 2025.

A lot of that can come via the NWS, although price competitiveness is keen from the Middle East, Indonesia and Malaysia.

Nobody should be more pleased than West Australians to see Taiwan stabilise politically, and get back on the high growth tack in time for likely WTO membership next year.

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