Thu, Aug 08, 2019 - Page 12 News List

Exports shrink amid global slowdown

GEOPOLITICAL FACTORS:An official said the US-China trade dispute and tensions between Tokyo and Seoul would limit the benefits of the tech products’ high season

By Crystal Hsu  /  Staff reporter

The nation’s exports last month contracted 0.5 percent to US$28.2 billion, as electronics shipments picked up, but non-technology products remained a drag amid a global slowdown, the Ministry of Finance said yesterday.

“Exports for the rest of this year might stabilize, but a stalemate in US-China trade talks would limit the benefits of the high season for tech products,” Department of Statistics Director-General Beatrice Tsai (蔡美娜) told a media briefing.

Tsai’s guarded optimism came after technology heavyweight Taiwan Semiconductor Manufacturing Co (台積電) last month gave positive guidance at an investors’ conference, saying that business would improve quarter by quarter.

Semiconductor shipments rose 5.9 percent to US$8.44 billion from a year earlier, outperforming a 1.8 percent growth for overall electronics exports, the mainstay of Taiwan’s trade-focused economy, the ministry said in a report.

Exports of information and communications technology products soared 25.7 percent to US$3.69 billion, as firms relocating their production back to Taiwan continued to benefit year-on-year comparisons and the front-loading effect also came into play, Tsai said.

She said that some clients of Taiwanese manufacturers have strategically built inventory to avoid possible tariff hikes, as an extra 10 percent tariff on US$300 billion of Chinese goods — including smartphones, notebooks, garments and machinery — is scheduled to take effect on Sept. 1.

Tsai said that she failed to see a recovery in demand for DRAM chips as a result of a trade dispute between South Korea and Japan.

“Order transfers are not evident if there are any... Soft demand continued to weigh on the market for memory chips,” Tsai said, adding that Japan has a virtual monopoly on three materials used in high-tech devices.

The ongoing slowdown hit old economy sectors harder, as shipments of chemical, plastic and base metal products continued to post double-digit declines without signs of stabilization in sight, she said.

Shipments to all major trading destinations weakened, except for the US, which reported a 21.7 percent increase to US$4.07 billion, a record for July, the report said.

Imports shrank 5.4 percent to US$24.64 billion, as local companies bought less agricultural raw materials and capital expenditure dropped, the report said.

That yielded a trade surplus of US$3.57 billion, a 54.6 percent increase from the same period last year, it added.

Exports might have a similar lackluster performance this month, as the market for high-end smartphones has become increasingly saturated, despite the planned launches of next-generation devices next month, Tsai said.

In the first seven months of the year, exports contracted 3 percent to US$186.43 billion, while imports fell 0.8 percent to US$162.92 billion, the ministry said.

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