Exports rise fast in July

Taiwan's exports climbed in July at the fastest pace in 21 months, lifted by surging shipments to Asian countries including China.

Exports rose 14.9 percent from a year earlier to US$11.15 billion, following a 9 percent gain in June, the Ministry of Finance said yesterday.

Export growth "is being driven by assembly work in China and supported by outsourcing demand from American, European and Japanese technology companies," said Damian Gilhawley, senior economist at KGI Securities Co (中信證券). "That should help offset the murky outlook and weak investment momentum in the US."

Taiwan manufacturers such as mobile-phone maker BenQ Corp (明基電通) and Quanta Computer Inc (廣達電腦) are moving factories to China as investment curbs are eased, allowing them to cut costs and gain access to the world's biggest consumer market.

Exports to China more than doubled last month from a year earlier, surging to US$855.3 million from US$396.3 million, the ministry said. Shipments to Hong Kong rose about 23 percent to US$2.6 billion, making it Taiwan's biggest export destination.

Many goods headed for China go via Hong Kong because of restrictions on trade between China and Taiwan. From January to July, exports to Hong Kong amounted to US$17.41 billion, comprising 23.7 percent of the total exports in the seven months.

Exports to the US lagged those gains, rising 10.1 percent to US$2.5 billion. Sales to Japan rose 3.2 percent, and shipments to Europe fell 0.8 percent.

Imports increased 15.8 percent year-on-year in July to US$10.63 billion, the largest increase in 20 months, it said. That narrowed the trade surplus to US$520 million dollars in the month from US$524.2 million a year earlier.

For the first seven months of the year, Taiwan's exports edged up 1.1 percent year-on-year to US$73.48 billion while imports eased 3.3 percent to US$63.45 billion, with the trade surplus soaring 41.9 percent year-on-year to US$10.03 billion, the ministry said.

"The double-digit increases in both July exports and imports conform to our earlier expectations. The trend is likely to continue in the coming two months thanks to a relatively low comparative base last year," the ministry statistics department director Hsu Kuo-chung (許國忠) said.

However, the momentum was likely to fade thereafter, with only single-digit growth expected for fourth quarter exports and imports, he said.