Taiwan’s Exports Drop for 10th Month on Global Slump
Taiwan’s exports fell for a 10th straight month in June, extending the longest run of declines since 2001, as global demand for electronics goods tumbled.
Exports dropped 30.4 percent from a year earlier, following a 31.4 percent decrease in May, the Ministry of Finance said in Taipei today. The median estimate of 13 economists surveyed was for a 30.8 percent decline. The island posted a trade surplus of $1.76 billion last month as imports slid 33.5 percent.
The global recession is hurting economies across the region, which is almost twice as reliant on exports as the rest of the world. Still, Taiwan’s stock index has climbed 46 percent this year on optimism a pickup in emerging nations will help stoke an economy that shrank a record 10.24 percent in the first quarter.
“Demand from emerging markets, not just China but also places like the Middle East and South Asia, is coming back,” said Frederic Neumann, an economist at HSBC Holdings Plc in Hong Kong. “This may help to revive Taiwan exports even if the decline from U.S. market lingers a little longer.”
Lin Lee-jen, director of the Finance Ministry’s statistics bureau, said today that he expects export and import growth will turn positive in November. The decline in overseas shipments in June was the smallest in four months.
Chip Industry
Taiwan Semiconductor Manufacturing Co., the world’s largest maker of custom chips, forecast second-quarter sales and profitability that exceeded analyst estimates, signaling rising demand in China is driving a recovery in the chip industry.
The company is a benchmark for the technology industry because it makes chips for everything from mobile phones to flat-screen televisions.
The figures were released after the close of trading on the stock exchange. The Taiex stock index rose 1 percent. Taiwan’s dollar was little changed at NT$32.985 against the U.S. currency.
The global financial crisis, which started with the collapse of the U.S. property market in 2007, has triggered some $1.47 trillion of writedowns and credit losses at financial institutions and sent the world economy into its first recession since World War II, according to data compiled by Bloomberg instant cash advance.
Signs of revival are now emerging in China and the U.S, Taiwan’s biggest export markets. China’s 4 trillion yuan ($585 billion) stimulus package is spurring domestic consumption. Chinese manufacturing expanded for a second month in April, and new loans more than tripled in the first quarter. An index of U.S. services industries improved for a third month in June.
Gradual Recovery
Taiwan’s exports in the first half of 2009 fell 34.2 percent from a year ago to $88.49 billion and imports dropped 42.3 percent to $72.96 billion, for a surplus of $15.53 billion, today’s report showed.
“Export declines have bottomed and we are in the recovery phase,” Neumann said. “The rebound will be very gradual.”
Shipments to Japan dropped 18.6 percent in June and those to China fell 35.8 percent from a year earlier, the ministry said. Exports to the U.S. declined 29 percent and sales to Europe fell 38.5 percent.
Chinese businesses plan to buy $2.2 billion worth of electronics goods from Taiwan over the coming year, Taiwan External Trade Development Council said on June 5.
Morris Chang, chairman of Taiwan Semiconductor, said last month it will take until 2012 for global chip industry revenue to recover to 2008 levels.
To revive the economy, Taiwan’s government plans stimulus spending of NT$858.5 billion ($26 billion) over four years on infrastructure works, tax cuts and consumer grants.
Central bank Governor Perng Fai-nan left borrowing costs unchanged last month, following seven cuts since September that have reduced the benchmark rate to a record 1.25 percent. Perng said on June 25 the pace of recovery is “relatively tepid.”
Exports of electronic products including semiconductors slid 17.3 percent last month after falling 18.6 percent in May, today’s report showed.
Filed under: business by Wolf