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# Taiwan Semiconductor Manufacturing Company Limited Message Board

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• McMEM McMEM Nov 12, 2002 10:35 PM Flag

## PROC/ROC =6.8X

There are two parts to the equation. The other part is that the ROC economy imploded during the last 3 years.

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• There are two parts to the equation. The other part is that the ROC economy imploded during the last 3 years.
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But, 3 years is not long enough for you to get a double. Actually, I have already taken the slowdown of Taiwan into account. So, let's imagine the following best-case scenario:

1. suppose mainland China has a growth rate of GDP higher than Taiwan by 7% to 1%, or a gap of 6%; (which is not the real case though)
2. and, suppose this kind of gap maintains for not just 3 years, but 12 years (which is not the real case again)

then, what do you get?

Well, in this hypothetical case, PROC's GDP ratio (relative to the GDP of ROC) will double.

Apparently, ROC's GDP growth rate is not falling behind that of PROC by a margin of 6%, and not for 12 years long. So, even if I give mainland China the best case, the GDP ratio between the two would at best see a double from 2.3 to 4.6. Since in reality, Taiwan's slowdown took place roughly only after 2000, and, before 2000, mainland China's lead in growth rate averages about 3% (not even 6%) over Taiwan (that is, 7% to 4%), so, I don't even guess that a double to 4.6x is likely, not to mention your number 6.8x.

My own (preliminary) estimate is about 3.6x to 3.8x though.

A best way to solve this problem is to get official statistics of GDP of 2001 (expressed in the same currency unit, USD\$) from the two sides. Right now, I can't find online access to these data yet. I am sorry for this. lol.....

• 2 Replies to get_a_clue99
• The data were published in Sing Tao Daily several days ago, and I believe that the # are watered but not too far off. Dividing RMB\$10KB by 1.3B Chinese yields RMB 7692 per capita per year, or 640 per month. Assuming 5 persons per family with 2 working members, that demands RMB 1600 per month average income per worker. I believe that the entry level workers earn around \$1500RMB (certainly more than 1000RMB) at Canton. So the 10T RMB is not outrageous.

Assuming an exchange ratio of 8RMB to \$1 and 22M Chinese at ROC, the GDP ratio becomes 7.1, 6.3, 5.7, 5.2, 4.7, 4.4, 4.1, and 3.8 for \$8K to \$15K per capita income.

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