TAIPEI (TVBS News) — Taiwan's Economic Affairs Minister Kung Ming-hsin (龔明鑫) has rejected claims that the New Taiwan dollar is undervalued by 55% against the U.S. dollar. His statement Thursday (Nov. 20) directly countered The Economist magazine's recent report labeling the situation a "Taiwan disease" that allegedly suppresses wages and domestic consumption.
The controversy stems from an analysis published in The Economist on Nov. 13, which has triggered strong responses from multiple government agencies. The report claims that Taiwan's currency undervaluation creates "alarming strains," despite the island's economic achievements, a characterization that officials strongly dispute.
"We are not sick," Minister Kung declared, pointing to Taiwan's economic growth since the 2018 U.S.-China trade war. He attributed Taiwan's success to the return of businesses, surging digital demand post-pandemic, and growth in the semiconductor industry, rather than currency manipulation. These factors, he insisted, are unrelated to exchange rates.
Taiwan's Central Bank has increased transparency by shifting foreign exchange intervention reporting from a biannual to a quarterly schedule in response to the controversy. Officials emphasized that multiple factors influence exchange rates beyond trade balances. They noted that the U.S. Treasury has never requested appreciation of the New Taiwan dollar, despite growing trade surpluses.
