But Taiwan still has its boosters. Because small and medium enterprises form the backbone of the economy, he argues, Taiwan is more resilient than its neighbors. Others are even more optimistic.
Danger signs remain.
Concerns about the island's lingering banking problems, which are mainly linked to rash property-related lending, have kept the stock market weak. Lee wanted it cut to boost the market. When Siew bowed to his boss's wishes, oppositionists called a no-confidence vote in the legislature, which the PM won. The worry is that like in Japan loan losses could lead to weaker consumption, a production slowdown and ultimately, economic contraction. Banks have tightened up credit, putting the screws on many smaller enterprises.