Taiwan Exports Fall at Slower Pace on Chinese Demand
Taiwan’s exports fell at a slower pace in April as Chinese demand for electronic products provided some relief for the recession-stricken economy.
Overseas shipments slid 34.3 percent from a year earlier, following a 35.7 percent drop in March, the Ministry of Finance said in Taipei today. The median estimate of eight economists surveyed was for a 28.3 percent decline. The island posted a trade surplus of $2.14 billion as imports slumped 41.2 percent.
Exports, which account for about 70 percent of the economy, may resume growing later this year as China implements stimulus measures and U.S. consumers increase spending. Taiwan Semiconductor Manufacturing Co., the world’s largest custom- chipmaker, last week forecast second-quarter revenue that beat analysts’ estimates on optimism Chinese sales will pick up.
“The worst of the export declines are over, but we’re likely to still see year-on-year declines until at least the third quarter,” said Tony Phoo, an economist at Standard Chartered Plc in Taipei. “It’s too early to say the economy is already in a recovery.”
Signs of a revival are emerging in China and the U.S., Taiwan’s biggest overseas markets.
China’s 4 trillion yuan ($585 billion) stimulus package is spurring domestic consumption and supporting the region’s exports. Manufacturing expanded for a second month in April, and new loans more than tripled in the first quarter.
U.S. Consumers
In the U.S., consumer confidence rose to a seven-month high in April, buoyed by record-low mortgage rates, cheaper gasoline and surging stock prices even as unemployment rose.
Shipments to China slid 34.6 percent from a year earlier, less than March’s 44.4 percent decrease, the ministry said. Exports to the U.S. declined 33.7 percent, compared with a slump of 22.2 percent in the previous month. Sales to Europe fell 37 percent after they dropped 36.6 percent in March.
“The worst of the export slump is over,” Lin Lee-jen, director of the Finance Ministry’s statistics bureau, said at a news briefing in Taipei credit report. “We expect the decline in exports to continue to ease.”
Lin said she expects improving ties with mainland China will also help exports. Relations between China and Taiwan have warmed since President Ma Ying-jeou took office last May, abandoning his predecessor’s pro-independence stance.
South Korea, Japan
Exports are beginning to improve elsewhere in Asia. South Korea’s shipments rose 9.3 percent last month from March, according to Bloomberg calculations based on their value. Japan’s exports increased in March from February, the first month-on-month gain since May 2008.
Taiwan Semiconductor said last week that sales this quarter would total NT$71 billion ($2.1 billion) to NT$74 billion, compared with analysts’ estimates for NT$52.4 billion.
Hon Hai Precision Industry Co., which makes iPhones for Apple Inc., and AU Optronics Co. increased factory workers in Taiwan and in mainland China in March to fill orders.
Exports of electronic products including semiconductors slid 21.3 percent last month after falling 33.6 percent in March, today’s report showed.
Overall shipments abroad slid 36 percent in the first four months of 2009 compared with the same period a year earlier. The value of exports fell to $14.85 billion last month from a year ago, and imports declined to $12.71 billion.
The figures were released after the close of trading on the stock exchange. The Taiex stock index climbed 0.1 percent, taking this year’s increase to 43 percent. Taiwan’s dollar rose 0.1 percent against the U.S. currency.
Taiwan’s policy makers are trying to spur an economy that shrank a record 8.36 percent in the fourth quarter of 2008.
The central bank cut its interest rate to a record-low 1.25 percent in February. The government plans stimulus spending of NT$858.5 billion over four years on infrastructure works, tax cuts and consumer grants.