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Talk of the Day -- July exports fall short of expectations

2013/08/08 20:52:05

Taiwan's exports usually post strong growth in July, but that was not the case this year. A rare monthly decline in exports was recorded in July and the annual export growth rate for the month was also lower than expected.

While government officials have said it is too early to be pessimistic about the country's export prospects for the second half of this year, but think tank scholars said the worse-than-expected July export figures were a wake-up call for the government.

Even though exports rose 1.6 percent year-on-year, the growth rate fell far short of expectations, said Liang Kuo-yuan, director of Polaris Research Institute.

"The government should be cautious in projecting our country's economic performance for the second half of the year," Liang said.

He attributed the lackluster export figures in July mainly to a slowdown in China's GDP growth amid its economic restructuring.

"As China is Taiwan's largest export market, its sluggish growth would a definitely take toll on our export momentum," Liang said.

Taiwan recorded a rare 0.9 percent annual decline in exports to China and Hong Kong in July, according to customs statistics.

Another factor that affected exports in July was the 7.7 percent drop in the export of information and communication technology (ITC) products, Liang said.

"These two factors could affect our export growth momentum in the second half of the year," he cautioned.

The following are excerpts from local media coverage of Taiwan's foreign trade records in July and economic outlook for H2:

Economic Daily News:

Taiwan's exports totaled US$25.3 billion in July, down 4.4 percent from the previous month but up 1.6 percent year-on-year.

The annual growth rate was far lower than the 8.6 percent annual increase recorded in June.

Yeh Man-chu, director of the Ministry of Finance's Department of Statistics, shared Liang's view that July's unimpressive export figures were due mainly to the negative growth in shipments to China and Hong Kong.

While Yeh said Wednesday she is optimistic about Taiwan's economic outlook for H2, she acknowledged that the country cannot afford to ignore a decline in shipments to China and Hong Kong, which usually account for around 40 percent of Taiwan's overall exports.

In July, exports to other major markets, including the United States, Japan, Europe and Southeast Asia, grew at annual rates of between 1.2 percent and 8.6 percent.

In terms of products, only mineral exports managed to score a 20.4 percent growth, while other products posted modest growth or fell below the year-earlier levels.

A slowdown in demand for personal computer and LCD panels, coupled with Taiwan's failure to establish full supply chains in the tablet and smartphone sectors, led to a 7.7 percent drop in ICT exports in July.

Accumulated exports for the first seven months amounted to US$175.74 billion, up 2.3 percent year-on-year, according to government statistics. (Aug. 8, 2013).

Commercial Times:

Taiwan imported US$22.09 billion worth of goods in July, marking a 4.9 percent monthly decline and a 7.6 percent drop year-on-year.

Capital goods imports posted the steepest annual decline of 17.9 percent among all the categories.

It was also the largest negative growth rate in 14 months, according Ministry of Finance data.

The Bureau of Foreign Trade (BOFT) said Wednesday that Taiwan's imports from the United States and Japan shrank 19.1 percent and 16.1 percent, respectively.

As those two countries are Taiwan's main sources of raw materials and production equipment, the figures could be a bad omen for Taiwan's export growth, BOFT officials said. (Aug. 8, 2013)

(By Sofia Wu)
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