The nation’s export orders rose faster than economists expected last month, as slower Chinese economic growth and Europe’s debt crisis failed to dampen overseas demand.
Orders, an indication of shipments in the next one to three months, increased 22.48 percent from a year earlier after a 34.03 percent gain in May, the Ministry of Economic Affairs said in a report yesterday. The median estimate of 15 economists in a Bloomberg News survey was for a 21.7 percent gain.
GROWING DEMAND
PHOTO: MAURICE TSAI, BLOOMBERG
“External demand for Taiwan’s electronic products is growing as stores build inventory for August and September when schools reopen,” Hsu Kuo-an (徐國安), an economist at Capital Securities Corp (群益證券) said. “The economic recovery will continue to help support growth.”
Chinese demand for Taiwanese products, such as computer chips and televisions, helped to stoke a 13.3 percent expansion in the nation’s economy in the first quarter, the fastest pace in more than three decades.
Taiwan’s central bank raised borrowing costs unexpectedly on June 24 for the first time since 2008, increasing the discount rate on 10-day loans to 1.375 percent from a record-low 1.25 percent. It said the move reflected the nation’s economic recovery, including export gains.
NEW HIGHS
The value of export orders climbed to US$34.22 billion last month from US$33.73 billion in May, yesterday’s report showed. Orders may rise to a record US$400 billion this year, Huang Ji-Shih (黃吉實), head of the economic ministry’s statistics division, told a media briefing yesterday.
Orders for electronics rose 26.91 percent last month after a 32.75 percent increase in May, yesterday’s report showed. Demand for precision goods rose 25.21 percent.
CLOUDS AHEAD
Recent data have indicated a weaker US economic recovery and a slowdown in Chinese growth as Europe’s financial troubles continue, clouding the outlook for Asian exports.
The US economy grew at a 2.7 percent annual rate in the first quarter, less than an earlier estimate of 3 percent, according to US Commerce Department figures published last month.
Europe is stress testing its 91 largest banks this month to restore confidence following the region’s sovereign debt crisis.
China’s economic expansion eased to 10.3 percent in the second quarter from 11.9 percent in the first quarter, the country’s statistics bureau said last week, after the government moved to temper growth.
Export orders to China and Hong Kong combined rose 15.54 percent last month from a year earlier, after a 34.34 percent gain in May, the data showed. Orders from the US climbed 17.44 percent from a year earlier, after a 20.32 percent rise in May.
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Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day