Amid the global economic downturn, Taiwan’s export-dependent economy is suffering, with exports sinking a record 41.9 percent year-on-year last month while imports took a historic dive of 44.6 percent, the Ministry of Finance said yesterday.
The bleak showing prompted the central bank to cut key interest rates by 50 basis points for the sixth time in four months to help stem the decline and boost consumption.
“Outbound shipments contracted 41.9 percent, or US$9.84 billion, to US$13.64 billion in December from a year ago, while imports shrank 44.6 percent, or US$9.48 billion to US$11.78 billion,” Lin Lee-jen (林麗貞), head of the ministry’s statistics department, told a press conference yesterday afternoon.
While both declines marked the biggest in history, the nation managed to retain a trade surplus of US$1.86 billion, the ministry’s report showed.
Lin attributed the drab exports to withering world demand for Taiwanese electronic and optical products. Sales of semiconductors and electronic products dropped 43.4 percent to US$2.49 billion last month, while liquid-crystal-display panels and mineral products fell 69.2 percent and 61.6 percent, respectively, the report said.
“The ministry is shocked at the magnitude of declines,” Lin said.
Shipments to China including Hong Kong, Taiwan’s largest trade partner, plunged 54 percent, or US$5.2 billion, to US$4.42 billion, the report said. Exports to the US slumped 23.5 percent to US$2.18 billion while shipments to Europe and Japan tumbled 29.5 percent and 21.9 percent respectively, the report said.
Shipments to ASEAN countries plummeted 46 percent to US$1.94 billion, the report said. Kevin Hsiao (蕭正義), director of UBS Wealth Management Research in Taiwan, said the nation’s economy was in worse shape than expected.
“The figures about China and ASEAN countries pose particular worries as they carry increasing weight in Taiwan’s foreign trade,” Hsiao said by telephone.
He warned of tough times ahead as the first quarter is considered an off season, when exports may post bigger drops.
Altogether, exports gained 3.6 percent last year, the lowest since 2002, while imports advanced 8.2 percent, leaving a surplus of US$14.83 billion, down 45.9 percent from the previous year, the report showed.
The central bank, seeking to reverse the trend, announced another rate cut in an unscheduled news conference 30 minutes later.
Central bank Governor Perng Fai-nan (彭淮南) said the bank’s board had lowered the discount rate, the rate on accommodations with collateral and the rate on accommodations without collateral to 1.5 percent, 1.875 percent and 3.75 percent respectively, starting today.
Perng attributed the rate cut to flagging exports that contracted for four straight months with the decline increasingly widening.
“Hopefully, the rate cut will help boost exports and consumer spending,” he said.
To that end, the central bank has lowered rates by 2.125 percentage points since September. Even so, Perng said the nation would not have zero-interest rates as capital requires funds to operate.
Tony Phoo (符銘財), an economist at Standard Chartered Bank, said the central bank would continue to ease monetary policy and lower the discount rate to 1 percent in the first half of this year.
The central bank yesterday again called on lenders to ease credit for cash-strapped companies and threatened to deny disobedient banks that tighten credit of the right to purchase certificate of deposits from the central bank as a way to relieve their excess liquidity.
NETWORK-MAPPING PROJECT: The database contains 170 detailed files of Taiwanese politicians and about 23 million records of household registration data in Taiwan China has developed a network-mapping project targeting political figures and parties in Taiwan to monitor public opinion during elections and to craft tailored influence campaigns aimed at dividing Taiwanese society, according to documents leaked by Chinese technology firm GoLaxy (中科天璣). The documents, collected by Taipei-based Doublethink Lab, showed a database was specifically created to gather detailed information on Taiwanese political figures, including their political affiliations, job histories, birthplaces, residences, education, religion and a brief biography about them. Several notable Taiwanese politicians are in the database, including President William Lai (賴清德), former president Tsai Ing-wen (蔡英文), Minister of Foreign Affairs Lin Chia-lung (林佳龍),
RECOGNITION: Former Fijian prime minister Mahendra Chaudhry said that Taiwan’s New Southbound Policy serves as a stabilizing force in the Indo-Pacific region Taiwan can lead the unification of the Chinese people, Nobel Peace Prize laureate and former Polish president Lech Walesa said in Taipei yesterday, adding that as the world order is changing, peaceful discussion would find good solutions, and that the use of force and coercion would always fail. Walesa made the remarks during his keynote address at a luncheon of the Yushan Forum in Taipei, titled “Indo-Pacific Partnership Prospects: Taiwan’s Values, Technology and Resilience,” organized by the Taiwan-Asia Exchange Foundation with the Ministry of Foreign Affairs. Walesa said that he had been at the forefront of a big peaceful revolution and “if
North Korea tested nuclear-capable rocket launchers, state media reported yesterday, a day after Seoul detected the launch of about 10 ballistic missiles. The test comes after South Korean and US forces launched their springtime military drills, due to run until Thursday. North Korean leader Kim Jong-un on Saturday oversaw the testing of the multiple rocket launcher system (MRLS), the Korean Central News Agency (KCNA) said. The test involved 12 600mm-caliber ultra-precision multiple rocket launchers and two artillery companies, it said. Kim said the drill gave Pyongyang’s enemies, within the 420km striking range, a sense of “uneasiness” and “a deep understanding
North Korea yesterday fired about 10 ballistic missiles to the sea toward Japan, the South Korean Joint Chiefs of Staff (JCS) said, days after Pyongyang warned of “terrible consequences” over ongoing South Korea-US military drills. Pyongyang recently dashed hopes of a diplomatic thaw with Seoul, Washington’s security ally, describing its latest peace efforts as a “clumsy, deceptive farce.” Seoul’s military detected “around 10 ballistic missiles launched from the Sunan area in North Korea toward the East Sea [Sea of Japan] at around 1:20pm,” JCS said in a statement, referring to South Korea’s name for the body of water. The missiles
RSS