Taiwan's exports in June rise 9 percent on China demand

Taiwan's exports rose faster than expected in June as manufacturers sent more parts to their factories in China to meet rising world demand for computer chips and mobile phones.

Exports climbed 9 percent from a year earlier to US$11.26 billion, matching the previous month's increase, which was the biggest in 15 months, according to a Ministry of Finance report yesterday.

Taiwan expects a rebound in exports, which fell for 13 months through March, to fuel a recovery from the nation's worst recession on record. Rising overseas demand will probably help the economy grow 2.55 percent this year, reversing last year's 1.91 percent decline, the Directorate General of Budget, Accounting and Statistics estimates.

"China's exports were strong in the first five months of the year, which creates demand for Taiwan's exports," said Pu Yonghao, an economist at Nomura International (Hong Kong) Ltd. "A lot of Taiwan's exports go through China on the way to their final destinations."

Companies such as mobile-phone maker Benq Corp (明基電通) and Premier Image Technology Corp (普立爾科技), a digital camera maker, are beating out rivals as they shift production to factories in China, allowing them to cut costs. That lifted orders for Taiwan's exports, which point to shipments in two to three months, a bigger-than-expected 14 percent in May.

China's exports surged 13 percent in the first five months of this year.

Imports to Taiwan rose 11.2 percent from a year earlier to US$9.61 billion, the biggest increase since November 2000. That suggests manufacturers are building up stocks to meet an expected increase in orders this quarter. Taiwan had a US$1.65 billion trade surplus last month, compared with a US$1.68 billion surplus a year earlier, the 's report showed.

Exports of computer chips and other electronics, which make up the biggest share of the total, rose 16 percent in June from a year earlier, the ministry's report showed.

Shipments of electrical products such as mobile-phone components climbed 39 percent, and sales of mobile phones and other telecommunications goods rose 0.8 percent. Sales to customers in the US fell 0.3 percent to US$2.4 billion. Exports to Japan fell 2 percent to US$1.1 billion, and exports to Europe declined 5.5 percent to US$1.4 billion.

Shipments to Hong Kong rose 20 percent to $2.7 billion, making it Taiwan's biggest export destination. Many goods headed for China pass through Hong Kong because of restrictions on trade between China and Taiwan.

The government expects exports to rise 3.4 percent this year after shrinking 17 percent last year. The economy grew 0.9 percent in the first quarter from a year earlier, snapping three quarters of declines, and the government expects 2.6 percent growth for the full year.