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Tuesday, July 4, 2017

The Future of Investing in Green

Shih-Fang Lo and Julia Yang

Introduction

     There is a profit side and a responsible side to any business, and the two factors have to be balanced. With the threat of global warming and environmental deterioration, the government policy on environmental protection remains active from the last century worldwide.  Business will face more strict restrictions on energy uses and business process in the natural resources constrained society.  Governments’ environmental and energy policies are stimulating grand new industries, such as energy efficiency industry, new and renewable energy industry, and new services. The policy trends have not only created green new industry, but also brought growing green investment opportunity.  This article therefore aims to investigate what’s been happening in green finance and its prospect.

Green Finance Starts from Corporate Responsibility

     Recent financial scandals such as subprime mortgage crisis have emphasized the need for greater transparency and accountability.  A more humane, ethical, and transparent way of doing business is therefore broadly discussed. Take the term ‘corporate responsibility’ for example, the classical view from the shareholder approach is that the social responsibility of a business is to increase its profits and value for its owner.  However, the stakeholder approach points out that business is not only accountable to its shareholders, but should also consider stakeholder interests which may affect or may be affected by the operations or objectives of a business. It is gradually extended to ‘corporate sustainability’ defined as a business approach that creates long-term shareholder value by embracing opportunities and managing risk from three dimensions:  economic, environmental, and social dimensions. A sustainable company is one whose characteristics and actions are designed to lead to a ‘sustainable future state,’ such as value creation, environmental management, and human capital management, etc.

“New Southward” Is Another Political Slogan or Is a Comprehensive Strategy?

Jack Huang

     ASEAN Economic Community, also known as AEC, was officially announced by the end of 2015. Most people consider it as a milestone of regional integration in Southeast Asia and it seems that the prosperous growth in near decades between member states is foreseen. In this prediction, the foreign direct investments (FDI), in terms of net inflow, intra and extra ASEAN, are increasing and therefore stimulate economic growth in the region. Furthermore, the closely cooperation of AEC also aims at creating single market and production base, achieving free flow of goods and services, reducing burdens of labour and capital movement. In a long term, it may follow up the course of European Union and many expects even assert that ASEAN will become the third-largest economy in Asia, and the sixth in the world.

Suggestions of Improving Taiwan’s Economic Relations with the US and China

Darson Chiu

     As the world’s largest economy, the size of US economy is at US$ 19.38 trillion or 24.4% of the world’s GDP. China is the second largest economy in the world, and its GDP will be standing at US$ 12.36 trillion or 15.5% of the world economy. The US provides the biggest market demand for end products, whereas China has been the largest exporting country since the year of 2010. As the US and China jointly represent around 40% of the global economy as well as the major demand side and major supply side, a potential economic conflict between these two giants will certainly cause tremendous impacts on the global economy and its supply value chains.

     The economy of Taiwan standing at nearly US$ 535.54 billion in 2017 has been an export oriented economy and deeply integrated into the global supply value chain. From such a perspective, the negative impact on Taiwan will be inevitable, if a potential trade war between the US and China takes place.

Sunday, June 25, 2017

Outlook of Digital Economy and SME O2O


Dr. Chien-Fu Lin
 
       The following is Dr. Chien-Fu Lin’s presentation at the PECC 24th General Meeting, “Vision for an Asia-Pacific Partnership for the 21st Century”. He was invited to talk at the plenary session 3, “An Asia-pacific Agenda for the Digital/Internet Economy” on 15th may 2017.

Let me share with you the outlook of digital economy and Chinese Taipei’s APEC SME O2O initiative. Digital economy by definition refers to the economy supported and promoted by digital computing technologies. Therefore, applications of IoT, AI, FinTech, Cloud Computing, AR, VR, Big Data, Sharing Economy, and Blockchain are all part of digital economy.

I was invited to attend a new economic think-tanks conference in Beijing earlier this year. We discussed 3 major subjects, new economy, new governance, and new technologies, and we focused on the issue of online economy and future technologies. We concluded that the digital economy would be the way out for us to cope with the era of “new mediocre”, which means very slow and tepid economic growth.

Thursday, April 27, 2017

Asia-Pacific Cooperation in an Era of Rising Anti- Globalization



Eduardo Pedrosa

       Asia-Pacific economic cooperation is at a crossroads. From its roots in the mid 1960s it has been underpinned by a drive towards deeper economic integration. That intellectual foundation has been challenged by the failure of the TransPacific Partnership to come into force which has been interpreted as symptomatic of a discontent towards globalization evident in the 2016 US presidential and Brexit campaignl. It remains to be seen whether this is a transition phase or if it is in inflection point in the process with economies turning inwards and eschewing the benefits of deeper integration.

The latter would have seismic repercussions on economic policy throughout the world but especially the Asia-Pacific. Some may see recent events fatalistically but there is much the region can do to avoid a slide into tit-for-tat protectionism. Evidence of the ability of governments to keep momentum going was evident in March in Manila with the announcement of an attempt to restart the ASEAN-EU FTA2 negotiations. This initiative should trigger a deeper examination of where various economies stand with respect to how they benefit from the trading system. If successful, the deal would bring together Europe with its technologically advanced companies together with rapidly growing middle-income Southeast Asia. This is not to forget the very significant progress being made in Pacific South America with the Pacific Alliance or moreover, the progress being made with the Regional Comprehensive Economic Partnership agreement that would consolidate ASEAN's Plus One FTAs into a single accord.

 

1 See https://www.washingtonpost.com/business/economy/withdrawal-from-trans-pacific- partnership-shifts-us-role-in-world-economy/2017/01/23/05720df6-e1a6-11e6-a453- 19ec4b3d09ba_story.html?utm_term=.79c45a5dd97a for example.

2 See:  https://eeas.europa.eu/delegations/philippines/22452/eu-and-asean-gear-possible-re-launch-trade-talks_en
 

Trends in the Development of Global Carbon Markets Since the Adoption of the Paris Agreement, and the Implications for the Asia Pacific Region


Liou, Je-Liang and Julia Yang
  
 
With the signing of the Paris Agreement, global carbon markets can be expected to grow more rapidly
 
     Following the formal adoption of the Paris Agreement under the United Nations Framework Convention on Climate Change in late 2015, it can be anticipated that emissions trading schemes (ETS) with an emphasis on cost- effectiveness will come to play an ever more important role in the next stage of global planning to reduce greenhouse gas emissions.
     According to analysis published by the World Bank (2016), of the 162 Intended Nationally Determined Contributions (INDCs) that had been submitted as of May 1, 2016, 90 made reference to future plans for using ETS, carbon taxes or other policy tools to implement carbon pricing, with the aim of clarifying the cost of carbon dioxide emissions. Thirteen of the INDCs noted that it had either already been decided to use ETS, or that there were plans to do so. It can thus be seen that, besides the existing 17 ETSs, new ETSs will come into being in the future, and the scale of ETS coverage will expand. If the ETS proposed by China is included in the calculations then preliminary estimates would indicate that the existing and planned ETSs will come to account for around 20-25% of total global carbon dioxide emissions, making ETS the most widely used method for controlling greenhouse gas emissions, out of the various different policy tools that are available. On the basis of the above trends, it seems certain that, following the adoption of the Paris Agreement, ETS will emerge as one of the most important policy tools for greenhouse gas management, and that there will be rapid growth in the development of various types of carbon market deriving from ETS.
 

The Overview of Informal Sector in Thailand




Jack Huang


Informal economy has been recognized as an important issue widely among developing countries and the increasing size of informal sector, especially during the economic downturn in 2008 and 2010, has had huge impact to society and economic growth. The informal economy, also known as informal activity, underground economy, grey economy, etc., can be generally regarded as a job without formal registration and does not comply with labour regulation. In many studies, informal economy has related to many social issues due to the lack of necessary protection. The issues such as poverty trap, low productivity and unsustainability, have attracted more and more attention by both policymakers and private sector managers. Therefore, it is worth to examine the situations on the ground and the solutions that different authorities deal with the informality.

To the New Age: Global Value Chain and Circular Economy

 
Lin, Chih-Yi (Francine)

 
 I.  Global Value Chain and Taiwan's Manufacturing Industry Contribution

 
Taiwan has been participated deeply in global value chain since 1995. According to OECD/WTO TiVA Data, Taiwan's GVC participation Index was 49.45% in 1995, and increased to 70.99% in 2009 which was more than global average ratio of 48.5% in 2009 (Graph 1).

Graph l. GVC Participation Index in Taiwan


 
Source: OECD/WTO TiVA Data.
 
However, Taiwan's manufacturing industry has created less export added value since 1995, and also has created lower export added value that services industry has created. According to OECD/WTO TiVA Data, the VAX ratiol of Taiwan's manufacturing industry in 1995 was around 60%, and decreased to near 50% in 2009; in contrary, the VAX ratio of Taiwan's services industry in 1995 was around 80%, and increased lightly to near 90% in 2009 (Graph 2).