Thursday, October 30, 2008

Nervous in Taiwan

The trip home has begun. The flight back from Taipei left at 6:15 this morning, which meant a very unwelcome alarm at 3:00 a.m. to get up and get ready for the ride to the airport. Despite the early hour, Cathay Pacific was great for the short hop back to Hong Kong--they actually served breakfast for a 75-minute flight. However, I'm dreading the next leg from Hong Kong to Newark aboard the veal pen with wings that is Continental Airlines. I would have probably been more comfortable checking myself aboard in a cat carrier than trying to squeeze into economy section.


Two questions that came up repeatedly with the Taiwanese economists were the election and the U.S. economy. The Taiwanese are just stunned that a black man may soon be elected President of the U.S. They are only slightly less stunned that such a lightly-qualified politician rose so fast. I'm not sure that my explanations about the host of other unpalatable choices among the Democrats and the erratic campaign by the Republican were all that convincing. They are clearly excited for us.

The other question about the depth of problems in the U.S. economy conveyed more concern. Taiwan and the other countries of Asia are heavily dependent on exports. With the U.S. economy now turning down (today's initial GDP reading for the third quarter showed a 0.3 percent drop), the Taiwanese are seeing their exports drop and their own economy stall. The official unemployment rate in Taiwan has climbed to 4.3 percent, a four-year high. The rate may sound enviable to U.S. ears, but the Taiwanese rate masks a tremendous amount of marginal and under-employment. Because of its high national savings rate, Taiwan is well-positioned to weather the coming economic storm. However, they would prefer that the storm passed them by.


Continental is calling the flight.