Insights on the Economic Impacts of COVID-19 from the East Asian Perspective

MIN ZHOU: So I'm going to start.

MIN ZHOU: Good evening, and good morning from Asia.

MIN ZHOU: Welcome to this webinar, �Insights on the Economic Impacts of COVID-19 from the East Asian Perspective.�

MIN ZHOU: This webinar is jointly hosted by the Asia Pacific Center and the Center for Korean Studies at UCLA. The event is part of the series of International Institute's events on COVID-19 which can be viewed on the Institute's website at www.international.ucla.edu.

MIN ZHOU: My name is Min Zhou. I'm Professor of Sociology and Asian American Studies the Walter and Shirley Wang Endowed Chair in US-China Relations and Communications, and Director of the Asia Pacific Center.

MIN ZHOU: The UCLA Asia Pacific Center promotes greater knowledge and understanding of Asia and the Pacific region on campus and in the community through innovative research, teaching, public programs,

MIN ZHOU: and international collaboration. We focus on inter-Asian and trans-Pacific connections from historical, contemporary, and comparative perspectives

MIN ZHOU: and encourage interdisciplinary work on cross-border and supranational issues on language and culture, politics, economy and society,

MIN ZHOU: and sustainability in the ongoing processes of globalization. Our center runs the Program on Central Asia, the Taiwan Studies Program,

MIN ZHOU: and the Hong Kong Studies Program. We are also an academic partner of the Global Chinese Philanthropy Initiative.

MIN ZHOU: Today's seminar will be recorded and will be made available on our centers� websites afterwards. So please use your Q&A function on the bottom of your screen to submit your questions,

MIN ZHOU: and during the Q&A time after the speakers� presentations, I will select your questions for our speakers.

MIN ZHOU: As the world combats COVID-19 and the US is experiencing resurgent spread of the coronavirus,

MIN ZHOU: countries in East Asia, including South Korea and Taiwan, seem to have succeeded in flattening the curve and in addressing the economic downturn caused by the pandemic.

MIN ZHOU: Today we are delighted to host two distinguished scholars of economics from South Korea and Taiwan to analyze the economic impacts of COVID-19 from the East Asian perspective.

MIN ZHOU: Our guest speakers are Professor Biung-Ghi Ju of Seoul National University and Professor Chu-Chia Lin of National Chengchi University.

MIN ZHOU: Now I would like to turn it over to my counterpart, Professor Namhee Lee, Director of the Center for Korean Studies, who will introduce her center and our first speaker, Professor Ju. Professor Lee, please.

NAMHEE LEE: Thank you Min. My name is Namhee Lee. I am the director of UCLA�s Center for Korean Studies and also associate professor of Korean history in the Department of

NAMHEE LEE: Asian Languages and Cultures. The Center for Korean Studies promotes Korean studies programming in a variety of ways from funding

NAMHEE LEE: for dissertation research and advanced academic Korean language training to sponsoring and supporting undergrad and graduate exchange programs with universities in South Korea.

NAMHEE LEE: We also provide consultation and speakers for various educational organizations in the Los Angeles area on a variety of missions from pedagogical methods and strategies for teaching Korean language to history and culture.

NAMHEE LEE: And we also strive to engage with both UCLA community and the public at large with issues related to the Koreas and beyond by organizing Lecture Series, symposia, film screenings, cultural events.

NAMHEE LEE: And today's event that we are co-hosting with Asia Pacific Center is an example of such outreach effort.

NAMHEE LEE: It is my pleasure to introduce our first speaker, Dr. Biung-Ghi Ju. Dr. Ju is a professor in the Department of Economics at Seoul National University.

NAMHEE LEE: He is also the director of the Center for Distributive Justice in the Institute of Economic Research at the same university.

NAMHEE LEE: Before joining SNU he took a faculty position in Korea University and also at the University of Kansas.

NAMHEE LEE: He earned his PhD in economics from University of Rochester in New York in 2001. His research and teaching interests are social choice and voting,

NAMHEE LEE: theory of fear allocation, distributive justice, and mechanism design. He has also served as editor of Journal of Institutional and Theoretical Economics and president of the Korean Association of Applied Economics. Professor Ju, please go ahead.

Biung Ghi Ju: Thank you for your introduction, Professor Lee.

Biung Ghi Ju: It is my great pleasure to have an opportunity to

Biung Ghi Ju: speak here.

Biung Ghi Ju: Let me share my slides.

Biung Ghi Ju: Do you see my slides?

MIN ZHOU: Yes.

Biung Ghi Ju: So this is a graph I

Biung Ghi Ju: made using data from local newspaper info.

Biung Ghi Ju: This graph shows you

Biung Ghi Ju: the current status of the

Biung Ghi Ju: pandemic.

Biung Ghi Ju: So now it's six months after the first confirmed cases. Now 200 different countries around the world affected; more than 10 million people infected and about 500,000 people died.

Biung Ghi Ju: The spread still continues globally at an increasing rate which is quite remarkable. And many medical experts predict the second wave of the spread and prolongation of the pandemic for more than a year.

Biung Ghi Ju: Korea experienced COVID-19 spread relatively at an early stage

Biung Ghi Ju: and recorded 248 confirmed cases, as you see here,

Biung Ghi Ju: for one million population. 248 confirmed cases per million

Biung Ghi Ju: as of June 28 which is less than 1/10 of

Biung Ghi Ju: the same number in the US and Europe

Biung Ghi Ju: and the [inaudible] rate of

Biung Ghi Ju: confirmed cases was 2.2% in Korea also lower than most developed countries in Europe

Biung Ghi Ju: and North America.

Biung Ghi Ju: I have to talk about economic impacts of the pandemic.

Biung Ghi Ju: Recently the IMF has published

Biung Ghi Ju: an updated outlook for the global economy,

Biung Ghi Ju: and according to the update the global economy will have a growth rate in 2020 which is around -4.9%,

Biung Ghi Ju: and the forecast for economic growth in developed countries is -8.0%.

Biung Ghi Ju: This is the biggest

Biung Ghi Ju: shock since the Great Depression in the 1930s.

Biung Ghi Ju: And therefore overcoming economic crisis with effective policy measures is as important as preventing the spread of the disease.

Biung Ghi Ju: So this is the IMF recent update [inaudible]

Biung Ghi Ju: And the economic crisis

Biung Ghi Ju: caused by the current COVID-19 pandemic

Biung Ghi Ju: is very different from

Biung Ghi Ju: previous economic crises we experienced recently, such as

Biung Ghi Ju: the global financial crisis or the oil shock in the 1970s.

Biung Ghi Ju: The main difference is in that the current crisis can develop into a

Biung Ghi Ju: triple crisis combining a demand crisis, supply crisis, and financial crisis.

Biung Ghi Ju: The impact of economic contraction

Biung Ghi Ju: between [inaudible] measures in major countries

Biung Ghi Ju: is already quite substantial. The OECD forecasts that one month of [inaudible] measures will reduce annual growth rate by 2 percentage points.

Biung Ghi Ju: So already considering the [inaudible] measures up until now, the economic growth rate will go down by 4 to 6 percentage points. The longer the [inaudible], the greater the disease, but the greater the disease then the growth rate [inaudible].

Biung Ghi Ju:

Biung Ghi Ju:

Biung Ghi Ju: This contraction of economic activity and the [inaudible]

Biung Ghi Ju: create disruption in the complex global supply chain. Korean automakers have already experienced production shutdowns between the supply chain prices in China, Eastern Europe, and also [inaudible].

Biung Ghi Ju: The demand crisis and supply crisis can lead to financial crisis,

Biung Ghi Ju: increasing the financial pressure of many companies, increasing instability of the

Biung Ghi Ju: global financial market. So the government, the public sector, and the people of the whole world must gather their wisdom to actively prepare for the triple crisis. The Korean economy in particular is highly dependent upon the global value chain,

Biung Ghi Ju: and so currently one of [inaudible] triple crisis is preparing effective countermeasures

Biung Ghi Ju: against the economic crisis is very important in Korea.

Biung Ghi Ju: This is a

Biung Ghi Ju: graph showing growth projections by countries.

Biung Ghi Ju: As you can see, the growth reduction Korea is relatively

Biung Ghi Ju: quite lower than other countries and

Biung Ghi Ju: in the case of the US

Biung Ghi Ju: the growth reduction this year is going to be quite larger than ever before, and even

Biung Ghi Ju: larger growth reduction is expected in other

Biung Ghi Ju: European countries.

Biung Ghi Ju: You can see from... this is the GDP forecast by OECD which is

Biung Ghi Ju: pretty much the same as the IMF forecast.

Biung Ghi Ju: You can see here

Biung Ghi Ju: the growth reduction by COVID-19

Biung Ghi Ju: shock is highly [inaudible]

Biung Ghi Ju: total cases per 1 million population, so reduction in the

Biung Ghi Ju: growth rate is negatively correlated with

Biung Ghi Ju: the performance of the prevention of COVID-19 threat. [inaudible] performance measured by infected population per million [inaudible]. It�s highly [inaudible] correlated, reduction in the growth rate. Korea is here, and there are other [inaudible] Asian countries, Germany, Italy, [inaudible]. The outlook for the totality of the global economy is not bright either compared to...

NAMHEE LEE: Professor Ju, I'm sorry to interrupt, but could you bring the volume up a little bit of your microphone, we are having hard... it's very difficult to hear you.

NAMHEE LEE: Oh, sorry.

Biung Ghi Ju: Oh, I'm sorry. I'm sorry. I think I switched... can you hear me better?

NAMHEE LEE: Yes, much better, thank you.

Biung Ghi Ju: Oh, that's great. Okay, sorry.

Biung Ghi Ju: So,

Biung Ghi Ju: the reduction in the...

Biung Ghi Ju: as I said, the reduction in the growth rate is closely related to the performance of the prevention of COVID-19 spread, as I explained earlier. The outlook for the recovery of the global economy is not bright either compared to the 2008 financial crisis.

Biung Ghi Ju: The recovery may be delayed. There are some reasons for that. The first reason is the

Biung Ghi Ju: Chinese economy. The share of the Chinese economy in the global society is at least three times greater than during the global financial crisis about 10 years ago. While the Chinese economy grew much faster than

Biung Ghi Ju: now, around 9%, during the global financial crisis,

Biung Ghi Ju: in the current crisis the Chinese economy is expected to grow at most 1% annually, according to IMF projection.

Biung Ghi Ju: And even lower, -2%, according to the OECD projection. So that's one reason... so the Chinese economy, which is quite big,

Biung Ghi Ju: but will grow very strong. And the second reason is another big economy, US economy. The growth rate reduction in the US economy is at least three times higher now than the global financial crisis. So that's another reason which will make recovery

Biung Ghi Ju: more difficult.

Biung Ghi Ju: And after if the second wave comes, the recovery will be even more delayed.

Biung Ghi Ju: And let me talk about fiscal measures

Biung Ghi Ju: of many countries against COVID-19 and how these current fiscal measures so far will affect

Biung Ghi Ju: fiscal balance this year and next year, etc.

Biung Ghi Ju: So in the case of the US and Europe,

Biung Ghi Ju: governmental disaster response through fiscal measures

Biung Ghi Ju: was faster, bigger, and bolder in size and content compared with Korea, and I believe that a similar comparison may apply to Japan. I'm not sure about Taiwan, but

Biung Ghi Ju: I believe Taiwan seems to be much better in terms of political response as well as disaster control. So in the case of Korea, we have a very inefficient political process. We were successful in terms of

Biung Ghi Ju: responding to controlling the disease spread, but we have a really inefficient political process. We lack

Biung Ghi Ju: a good tradition of managing political conflict among parties and

Biung Ghi Ju: this delayed

Biung Ghi Ju: implementation of the fiscal measures.

Biung Ghi Ju: Compared to other developed countries, the Korean government has very high fiscal soundness, which needs to be actively utilized in the crisis of

Biung Ghi Ju: the 100-year cycle as it is now. The role of our government finance is expected to play a very important role in overcoming the current crisis in Korea. I'm sure that the same applies to the US and other countries.

Biung Ghi Ju: So fiscal balance projection by IMF, according to it, fiscal deficit will increase in average by 18.7% of GDP globally as a result of

Biung Ghi Ju: the expansionary fiscal measures. So this is a greater deficit than the global financial crisis. The projected impact on fiscal balance of Korea is,

Biung Ghi Ju: compared with other countries, among the lowest. You can see here how fiscal measures affected the overall fiscal balances of different countries. So Korea is here,

Biung Ghi Ju: and

Biung Ghi Ju: I'm sorry I don't have data about Taiwan on the fiscal measures but

Biung Ghi Ju: the US is here

Biung Ghi Ju: and other European countries are here. So there is a negative correlation between the effect on overall fiscal balance and total cases per 1 million population. So the more cases per 1 million population, the more severe impact on fiscal balance.

Biung Ghi Ju: So let me talk about

Biung Ghi Ju: some suggestions I would like to make for the Korean economy and the global society. I

Biung Ghi Ju: think I�m a little bit over the time.

Biung Ghi Ju: So the Korean economy has some strong points and weaknesses. So we have to emphasize our strengths, but we have to complement our weaknesses. The strength is our disease control and the advantage of recovery of domestic economy.

Biung Ghi Ju: And also positive outlook for major industry sectors such as semiconductor, battery, 5G telecommunication equipment, and internet and cultural contents.

Biung Ghi Ju: And the weakness is our high dependency on export and import and relatively small and weak domestic market base and too much concentration of foreign companies for materials and parts and equipment suppliers.

Biung Ghi Ju: So we need to use the recovery of the domestic economy to reduce the impact of the crisis.

Biung Ghi Ju: And the current crisis, I believe, is a great opportunity to strengthen the domestic market base and the competitiveness of the domestic economy.

Biung Ghi Ju: And we do need to diversify suppliers of materials and parts and equipment for our main major industries, and we need some strategies for improving competitiveness of the domestic suppliers.

Biung Ghi Ju: And we need to strengthen the competitiveness of the following industries which

Biung Ghi Ju: grew very fast in the midst of the COVID-19 pandemic and I believe that these industries will continue to grow after the pandemic. And we need, you know, the Korean economy is really notorious in terms of

Biung Ghi Ju: the industrial ecosystem. We have very productive

Biung Ghi Ju: big companies, but we don't have enough small- and mid-sized enterprises, which have competitive and high productivity. So we need to transfer our economy

Biung Ghi Ju: to build up more productive and competitive SMEs than now. And in order to achieve this purpose, we need to normalize

Biung Ghi Ju: public monitoring system which monitors abnormal market behavior disrupting competitive market order and fair trade. In particular, as you might well know, we have very notorious

Biung Ghi Ju: practices by

Biung Ghi Ju: large business conglomerates known as �chaebol�

Biung Ghi Ju: in their contracts with their SME partners. We need to have some substantial market reform.

Biung Ghi Ju: And also, this is a great opportunity for reforming underdeveloped and insufficient welfare systems in Korea and social safety nets in Korea. And I think the current crisis is a good opportunity of reaching social consensus.

Biung Ghi Ju: And I believe that the current pandemic, the resulting shutdown of global capitalism, can be an opportunity for mankind to find a new normal for a sustainable

Biung Ghi Ju: global economy. Within a short period of time in human history, we have developed a world economy that is led by developed countries and expands and reproduces the indiscriminate consumption of global resources. And I think the current crisis is a very good test for

Biung Ghi Ju: how good our current global institution is. I think we have to take this opportunity to improve our institutions. We hope that we can transform from

Biung Ghi Ju: global capitalism of

Biung Ghi Ju: exhaustive growth sustained by irresponsible expansion of the market, exhaustion of global resources and energy, environmental exploitation, and we need to transform this to a new global capitalism of innovative contraction where accountability and sustainability are respected.

Biung Ghi Ju: And if you can find a good way,

Biung Ghi Ju: this is...

Biung Ghi Ju: this is going to be a good opportunity to overcome another great challenge to human society, the climate crisis. So, thank you for

Biung Ghi Ju: listening. I think I spent too much time. Sorry.

MIN ZHOU: Thank you very much, Professor Ju.

MIN ZHOU: Thank you very much, Professor Ju. Now please save your questions typed up in the Q&A. And we�ll have our second speaker first and then we'll open it up.

MIN ZHOU: And now I'm pleased to introduce our next speaker, Dr. Chu-chia Steve Lin. Dr. Lin is a full professor at the Department of Economics, National Chengchi University.

MIN ZHOU: Professor Lin was the former chairperson at the Department of Economics and served as the president of the Chinese Society of Housing Study.

MIN ZHOU: Professor Lin�s main areas of research are cross-strait economic relations and housing economics. He has published numerous books on economic relations across the Taiwan Strait.

MIN ZHOU: And numerous academic papers in prestigious international journals. Professor Lin was appointed

MIN ZHOU: as the Deputy Minister of the Mainland Affairs Council of Taiwan from October 2012 to January 2016.

MIN ZHOU: He was in charge of economic relations across the Taiwan Strait, including the trade in service agreement, trade in goods agreement,

MIN ZHOU: and the agreement of dispute settlement across the Taiwan Strait. Professor Lin was appointed again as Minister of National Development Council in 2016. Professor Lin, please go ahead.

Chu-chia Lin: Thank you. Thank you for such a kind

Chu-chia Lin: introduction. It is my great pleasure today to have this opportunity to

Chu-chia Lin: talk about COVID-19 and its impacts on Taiwan�s economy. Let me share my slides. Can you see now?

MIN ZHOU: Yes. Good.

Chu-chia Lin: Let me show you

Chu-chia Lin: some facts about COVID-19 in Taiwan. I think Korea controls the COVID-19 very well in some sense, however, compared to Taiwan our situation is probably much better.

Chu-chia Lin: Total number of confirmed cases only 447 cases till yesterday and

Chu-chia Lin: only

Chu-chia Lin: local case is only 55. And total number of deaths is only 7. And the last domestic case, confirmed case, is on April 11. So actually during the past 80 days, we don't have any more cases now. So the situation Taiwan is much better now.

Chu-chia Lin: Our government deal with COVID-19...

Chu-chia Lin: actually, the end of last year,

Chu-chia Lin: Taiwan government sent two doctors to Wuhan

Chu-chia Lin: and try to find out what happened over there, because we already heard something happened.

Chu-chia Lin: But the decision is not very clear. So when they come back and they warn our government and, you know, we should be very careful about what happened.

Chu-chia Lin: And then gradually we heard

Chu-chia Lin: there�s more and more cases happen in Wuhan. So actually, in January 20 we set up the Central Epidemic Control Center (CECC) and then next day we have the first confirmed case. In

Chu-chia Lin: February 14 even by then

Chu-chia Lin: we had only 18 cases but we found most of those cases are from China, Hong Kong, and Macao.

Chu-chia Lin: So we immediately prohibited citizens from China, Hong Kong, and Macao

Chu-chia Lin: to come to Taiwan and brought them out.

Chu-chia Lin: And then I think around March 10 suddenly we found other cases from the United States and Europe and so on. So since March 18 we forbid

Chu-chia Lin: foreign tourists to come to Taiwan.

Chu-chia Lin: Foreign business still could come to Taiwan. They have to

Chu-chia Lin: in-house quarantine for 14 days. So after that,

Chu-chia Lin: foreign businessmen come to Taiwan very slow.

Chu-chia Lin: And on March 22,

Chu-chia Lin: we even

Chu-chia Lin: forbid foreigners to transfer through Taipei. So it means that we block out almost everybody. Only Taiwanese citizens allowed to come back to Taiwan.

Chu-chia Lin: So,

Chu-chia Lin: why Taiwan successfully deal with

Chu-chia Lin: COVID-19? I think, I think we got our lesson from SARS in 2003. That time we had

Chu-chia Lin: more than 50 deaths with 400 and

Chu-chia Lin: some cases it�s very serious... at that time.

Chu-chia Lin: So after SARS we set up more than 150 SOPs

Chu-chia Lin: just,

Chu-chia Lin: you know,

Chu-chia Lin: for the future, if we're facing some potential pandemic outbreak.

Another

Chu-chia Lin: important reason is that we have a very successful mask policy.

Chu-chia Lin: As soon as February 6 our government controlled national production and national distribution of the mask policy and we made sure that every citizen could get two masks per week by real-name system.

Chu-chia Lin: So that means everybody can get masks if they need.

Chu-chia Lin: The third reason is that we have very successful detail epidemic investigation on every confirmed case because our cases number is very low, 447 cases. So for every cases we investigate in every detail

Chu-chia Lin: how this person get infected and how many persons he contacted with.

Chu-chia Lin: So we try to investigate every detail, so we can figure out one by one.

Chu-chia Lin: I think another important reason is that we have a very successful cooperation from the public, even by the

Chu-chia Lin: mask policy and in-house quarantine and so on.

Chu-chia Lin: Our citizens obey our government�s requirements, so that really helps to control

Chu-chia Lin: the potential contagious.

Chu-chia Lin: Now about COVID-19�s impact on economy. Actually, we know that the whole situation is no good and IMF or World Bank estimated that GDP may drop by 4% in Taiwan.

Chu-chia Lin: But the truth is that according to our government estimation, the GDP growth rate...

Chu-chia Lin: We see that probably it would be 1.67% which still would get a positive growth rate. Actually in the first quarter of this year, we have 1.59%. Second quarter will be 0.50%.

Chu-chia Lin: And then the third quarter and fourth quarter, because the domestic consumption will quickly pick up so the total estimate [for all of 2020] is 1.67. Probably will be a little

Chu-chia Lin: optimistic but from my point of view, I think at least 1.0% of GDP growth should not be too difficult. Okay, you can see our consumption rate dropped.

Chu-chia Lin: This year is only 0.24%, it's not too bad. Export rate dropped by about 3% but still compared to other countries it�s good and our government is trying to pump in a lot of public investment,

Chu-chia Lin: public enterprise investment, so

Chu-chia Lin: overall speaking, I think we could still hold a positive growth rate at least by 1% for Taiwan this year.

Chu-chia Lin: For the foreign sectors, our export to US, to EU, and ASEAN countries is dropping.

Chu-chia Lin: However, our export to China

Chu-chia Lin: is increasing and China market counted about 40% of our total export. Since China market now is relatively better than US and Europe, so our export to China actually growing very quickly and many on ICT products and parts and semi-products.

Chu-chia Lin: For example,

Chu-chia Lin: in this slide you can see that our foreign older in March, April, May still have positive growth rate and our export to

Chu-chia Lin: US... dropped a little bit. The most important part is export to the,

Chu-chia Lin: to the

Chu-chia Lin: [inaudible] exporting growth rate is still,

Chu-chia Lin: you see, April and May is double digits.

Chu-chia Lin: China [inaudible] about 40% of our total exports so it helps our total exports a lot.

Chu-chia Lin: And I am quite [inaudible]

Chu-chia Lin: I know in US

Chu-chia Lin: the unemployment situation is very serious but in Taiwan

Chu-chia Lin: we are still in good shape. in January our unemployment rate is about 3.64%. Now it�s increasing a little bit

Chu-chia Lin: until May we reach to 4.07% and since summer is coming we are going to have a lot of

Chu-chia Lin: graduating students, not going to participate in the market since the market is not that good

Chu-chia Lin: this year. So probably I guess until, say, July

Chu-chia Lin: or October, our [unemployment rate] will

Chu-chia Lin: reach to 4.5%.

Chu-chia Lin: It�s worse than the beginning of this year

Chu-chia Lin: but compared to other countries. I think the situation is not that bad. And inflation rate has become negative too, because the economy cannot slow. So [inaudible] we have a little deflation, but the situation, again,

Chu-chia Lin: is not that serious.

Chu-chia Lin: Now COVID impact is not that serious on our economy. The first one is that

Chu-chia Lin: our domestic market because the

Chu-chia Lin: pandemic situation is not that serious so we don't lockdown much in our market. For example, all schools are open as usual.

Chu-chia Lin: And Chinese Professional Baseball League, we opened on April 11 which probably the only professional

Chu-chia Lin: baseball at that time.

Chu-chia Lin: Even though in the beginning there�s no audience but now it�s partially opened.

Chu-chia Lin: Our tourist industry, restaurants, movie theaters, and so on are in trouble. But it's only a small part of local consumption and it's expected coming back soon. Actually

Chu-chia Lin: the past few days, starting of the summer vacation, we now have lots of students, now they go travels in domestic market. So it is going to help our economy.

Chu-chia Lin: The third one is bilateral trade across the Taiwan strait is

Chu-chia Lin: still in a good shape. So our exports is still okay.

Chu-chia Lin: The final one I�d like to mention about is FDI inflow.

Chu-chia Lin: Between the war between China and the US...

Chu-chia Lin: You know we have a lot of investment, Taiwan businesses in mainland China because of the war between China and US. So last year we already see lots of Taiwanese firms move back from

Chu-chia Lin: China back to Taiwan.

Chu-chia Lin: The total investment you see is about

Chu-chia Lin: 30 billion US dollars, quite a lot. And this year,

Chu-chia Lin: after the

Chu-chia Lin: COVID-19,

Chu-chia Lin: The trend will go on

Chu-chia Lin: even more, so this year we will expect more FDI inflow from China back to Taiwan. It�s going to have

[inaudible] too.

Chu-chia Lin: About the subsidy of the Taiwan government,

Chu-chia Lin: we do have some subsidizing

Chu-chia Lin: for low-income people and for some unemployed workers.

Chu-chia Lin: But because the situation is not serious, so our government subsidy, the amount or the size is relatively slow compared to other countries. For example, our total government subsidy is only about 5.4 billion. It's only about 0.8% of our total GDP.

Chu-chia Lin: And for the SOE bank, they're going to loan to private firms. It's about 33 billion US dollars. It's about 5% of our total GDP, since our government subsidy is not that much. So we don't have government financial problem. I think

Chu-chia Lin: government finance situation is very solid, we have no problems just spending more money for our government.

Chu-chia Lin: Now, what will be the next?

Chu-chia Lin: The first question we would like to ask is, when will Taiwan reopen to the world? I think

Chu-chia Lin: it will be very late.

Chu-chia Lin: Taiwan might be one of the last countries

Chu-chia Lin: which reopen to the world since we control the COVID-19 so well that every confirm case will be seen as a very serious

Chu-chia Lin: challenge. So our government will be very hesitant to reopen to the world. So probably before the end of this year, we probably will not

Chu-chia Lin: open. One possibility is that we may consider about so-called travel bubbles with other countries which control the COVID-19 well such as like New Zealand and Vietnam and so on, but so far we haven't opened yet.

Chu-chia Lin: And one more thing I�d like to mention is China might be the last one to open for Taiwan,

Chu-chia Lin: because both for statistical reasons and for political reasons.

Chu-chia Lin: What about the future impact on Taiwan�s economy?

Chu-chia Lin: I think the most damaged industry will be international hotels and international tourists because we are hesitant to reopen to the world, so foreign tourists and foreign businessmen are very rare in Taiwan.

Chu-chia Lin: So international hotels and the international tourist industry now are in deep trouble.

Chu-chia Lin: However, our local economy will bounce back very soon. Now

Chu-chia Lin: summer is coming, so everybody now is traveling inside Taiwan. So it is going to help our domestic consumption. The future performance of

Chu-chia Lin: international trade is

Chu-chia Lin: [inaudible].

Chu-chia Lin: What is depends on the situation in the US and EU, which we have very huge uncertainty, but for the trade with China, the situation will be better.

Chu-chia Lin: Another part is the shift of supply chain. I just mentioned that we already see a lot of Taiwanese businessmen ship their production back from China to Taiwan. So I think the situation will continue for a while after COVID-19.

Chu-chia Lin: Overall the COVID-19 has some kind of damage on the economy of Taiwan a little bit, but I think that the situation is manageable for Taiwan. I think our situation is really okay. I think I will stop my talk here. Thank you.

MIN ZHOU: Thank you very much, Professor Lin and thank you both Professor Ju and Professor Lin for your insightful talk, I myself learned so much about it.

MIN ZHOU: Okay, so our time is up. Namhee, Professor Lee.

MIN ZHOU: I'll pass it on to you.

NAMHEE LEE: Thank you, Professors Ju and Lin for your very informative and illuminating presentations and for having gotten up so early in the morning to participate in this webinar and to those of you who have joined us today and have

NAMHEE LEE: given us very excellent questions, and I'm so sorry that we cannot accommodate all of your questions.

NAMHEE LEE: Again, this webinar was co-hosted by the Asia Pacific Center and the Center for Korean Studies at UCLA. And as mentioned before, we invite you to subscribe to

NAMHEE LEE: our centers� email lists to learn more about our future events as they are announced and this webinar will be available on video on our centers� websites.

NAMHEE LEE: We also would like to thank our friends of Asia Pacific Center and Center for Korean Studies and all participants for a great discussion. Good evening, and please stay healthy and thank you again.

MIN ZHOU: Thank you very much. Thank you.

Chu-chia Lin: Thank you. Thank you for you.

Biung Ghi Ju: Thank you for having me. Yeah.

MIN ZHOU: Thank you.