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Economic Daily News: Factors affecting Taiwan's exports

2014/04/25 13:13

Taiwan's export orders rose 5.9 percent in March, a sign that the country's economy has begun to recover as the global economy improves.

Government data indicates that information and communications products, which are mainly manufactured overseas, were the main contributors to the export growth. However, orders from China and the United States -- two of Taiwan's largest export markets -- remain weak.

The continued growth momentum of Taiwan's exports will depend on the economic situation in the two countries.

The U.S. Federal Reserve stated in March that the benchmark federal-funds rate will remain close to zero for a "considerable time" after its bond-buying program ends. The statement has sparked expectations of possible interest rate hikes, which are likely to heighten the risk of volatility in the financial market.

Upbeat about the economic situation, market analysts have predicted that the earnings per share of the 500 leading companies on the Standard & Poor's 500 Index will increase 7.7 -11.4 percent this year. Based on past experience, however, high earnings growth is usually seen in the early stages of an economic recovery and tends to fade after a while.

China's economic growth, meanwhile, has slowed down amid a transformation of the country's industrial structure, and the economic data in the first quarter of this year was mostly unsatisfactory.

Taiwan should not be overly optimistic about its export situation this year in light of the uncertainties involved. (Editorial abstract -- April 25, 2014)

(By Y.F. Low)ENDITEM/pc