l  Global economic growth decelerates in 2005, 2006 after 2004 peak, but remains robust n  US growth leads industrialized nations, but debt accumulation presents risks n  Euro area softer in 2006, domestic demand brings rebound in 2006 n  Japan declines sharply in 2005 in part from IT inventories, 2006 upturn due to improving fundamentals, Asia linkage n  Brazil: Political uncertainties impede growth n  Russia: High confidence in manufacturing, service sector, but capacity bottlenecks n  India: Strong manufacturing, service sectors; investment trends slightly downward n  China: Investment-fueled growth, but overcapacity risk l  Total worldwide ICT spending growth follows economic pattern in 2005, 2006 n  IT hardware: sharpest growth decline of all segments due to slow point in PC replacement cycle, virtualization, handset erosion n  Software: slight, steady rise from systems reaching end of depreciation cycles, SOA demand n  Communications: Wireless data networking the driver, but weak carrier revenues will depress procurement n  Services: Driven by stronger business confidence, outsourcing l  Recent RMB revaluation minor, but opens the door to further adjustments; at 5% and beyond, will have a predominantly detrimental effect on Taiwanese industry; higher rates of appreciation, or currency speculation, pose downside risks for global economy l  ASEAN-China free trade agreement promises to create world largest free trade zone by 2010; one-third of global population, US$1.2 trillion in trade value; will draw increasing industry, market activity to Asia