Taiwan businesses see lift from govt vouchers

Greater China News
Published December 8, 2008
Singapore Business Times

NT$3,600 for all citizens to boost consumer spending

By JASON TAN
IN TAIPEI

FEELING the pinch from the current economic slump, businesses across all sectors in Taiwan are expecting a boom from the government's plan to issue shopping vouchers worth NT$3,600 (S$163) to all Taiwanese in a bid to revitalise the economy.

These vouchers could be used for everyday needs including shopping, taxi rides, grocery purchases, or at KTV parlours. From technology outfits, food and beverages operators, department stores to transport firms, everyone is hoping the windfall bonus will stimulate spending at a time when people are tightening their belts.

'It is a slowdown that none of us have experienced in the past,' said Scott Lin, president of Acer's Taiwan operations. 'Businesses are hit by and large.'

The Taiwan PC giant is finalising plans on how to draw consumers to spend their vouchers on its products. Possible promotions include combining two vouchers to buy an LCD monitor or four vouchers for a popular Aspire One mini-laptop, and enjoy a few hundred dollars' discount.

'Everyone is eyeing a slice of the multi-billion dollar pie of the voucher scheme and we won't be absent,' said Mr Lin.

Transport operators, including the bullet train and couch companies, are also mulling special rates and packages for commuters who use the vouchers.

Bee Cheng Hiang, Singapore's barbecued meat brand, is not missing out. It expects the voucher scheme to add to its business momentum, especially since they will be handed out in mid-January, in time for the Chinese New Year.

Purchasing barbecued meat products as gifts during the festival is common here and thus the slowdown will cast minimal impact, a company executive told BT.

Bucking the cautious investment trend, Bee Cheng Hiang is set to open at least five more outlets in Taiwan next year, up from the current 26, she added.

In a bid to boost sagging consumer spending, Taiwan announced a plan to offer NT$3,600 worth shopping vouchers to the population of 23 million, including newborns and naturalised foreign spouses. They must be used by the end of next September.

The scheme - which will cost the government NT$82.9 billion - is intended to boost Taiwan's GDP next year by 0.64 percentage points. Japan had adopted a similar move when it issued shopping vouchers to children and low-income senior citizens in 1999 as part of an economic recovery plan.

Taiwan's economy is expected to follow Japan, Singapore and Hong Kong into a recession this quarter, after shrinking in the three months through September.

Government statistics released on Nov 24 showed that the island's export orders fell for the first time in six years in October, as foreign customers cut purchases of electronic chips, laptops and phones from Taiwan.

In October, the unemployment rate rose for the fourth straight month to a five-year high of 4.37 per cent, with a total of 476,000 people losing their jobs as companies cut costs to survive the financial tsunami.