The Sueddeutsche Zeitung is one of Germany's most respected daily papers. Unfortunately, their business/financial section isn't particularly good. However, today they outdid themselves with an article about Taiwan's economy (it's published only in the print edition, not online, so I can't link to it): Not only did it read like an intern had quickly assembled some snippets from the internet, it also contained an amazing number of factual errors. Let's see:
- Statement: Taiwan's GDP dropped 8 % in 2008
Sorry, but according to official numbers, Taiwan's GDP grew by 0.1 %. The author presumably got confused by the Q4 data release, because Q4 GDP was lower than Q3 GDP by 8 % on an annualised basis (which equals a 2 % drop from Q3 to Q4).
- Statement: Taiwan's GDP growth in 1965-80 averaged 29 % p.a.
That claim sounded so unbelievable that I actually bothered to look up the historical figures: The average growth rate during those years was roughly 10 %. Record growth got close to 14 % in some years. Never ever did the Taiwanese economy grow anywhere close to 29 % in a single year, let alone in 15 consecutive years.
- Statement: Taiwan's stock market will climb 20 % from now until year-end, and will be among the world's best performance stock-markets
Wow! I wonder if the journalist has already bought Taiwanese stocks? (But then, he's only quoting something a JP Morgan analyst has apparently written somewhere else)
- Statement: The Taiwan dollar has appreciated significantly against the US$
Certainly not true: The NT$ ended the year 2008 down 1 % against the US$, and has dropped another 3 % since then (as of yesterday).
Or maybe the author meant some other currencies? (though the US$ was specifically mentioned) Well, in case he meant RMB or Yen, that isn't true either. In particular, the NT$ depreciated quite sharply against the Yen in 2008.
- Statement: One of the reasons why the NT$ is appreciating is the upcoming stock-market rally.
So let me get this straight: The author argues that the Taiwanese economy is in really big trouble. The appreciating currency is making these troubles even worse than they anyway are (never mind that the currency has actually depreciated against the US$, not appreciated). But there's nothing that can be done about it, because a stock-market boom will come and this expectation of course pushes the currency up (which unfortunately prices Taiwanese exports out of the market, thus destroying the profitability of Taiwanese exporters, but so what, stock markets will boom anyway!). Convincing, huh?
- Statement: Taiwan will have to decouple from its unhealthy dependence on exports to the US by looking for new export markets in Asia
In 2007, a mere 12.8 % of Taiwan's exports went to the US. Far more than half of all exports went to Asian countries. True, a signficant part of Taiwan's exports to China consists of components for stuff that is subsequently re-exported to the US. Still, it is a fact that Taiwan isn't exporting a lot directly to the US, and in any case, exports to Asian countries have recently dropped a lot more sharply than exports to the US.
OK, I lost interest in dissecting the article even further. Only one question remains: How come newspaper companies are still puzzled as to why readership numbers are down?
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