The nation’s exports last month likely began to grow temporarily, boosted by a low base in February last year, Australia and New Zealand Banking Group Ltd (ANZ) said yesterday.
The bank estimated that exports expanded 3.8 percent year on year, reversing three straight months of contraction linked to trade tensions between the US and China.
However, Fitch Ratings Ltd on Thursday said that a slowdown in Chinese demand is to blame, as economies reliant on China took a bigger hit than others in the region.
ANZ said that it believes Taiwan’s imports grew 10.9 percent last month, marginally improving the trade balance from the level recorded in January.
Chemicals and basic metal export headwinds would continue and stall for technology sectors, the bank said.
“Overall trade prospects remain subdued for this year, especially with global electronics demand settling at a lower level,” ANZ said.
The anticipated slowdown in exports reflects a combination of weaker global trade, shipment front-loading ahead of the levying of higher tariffs on Chinese imports by the US and a maturing tech cycle, it said.
Fitch said that weakening domestic demand in China drove the global slowdown, while most research institutes pinned the blame on US-China trade tensions.
Some Asian economies slowed more than the region’s average in the second half of last year, Fitch said, adding that Chinese imports turned negative at the end of last year, despite rising import prices.
Intra-Asian trade flows are less likely to have been affected by tariff exchanges between the US and China, it said.
The US and eurozone also saw their export growth to China fall faster than their total exports, it added.
Germany in particular has been hit hard by declining auto sales in China, although the eurozone’s exports have also been affected by declining sales in the UK and Turkey, Fitch said.
Trade flows have probably been distorted by tariff measures, including possible front-loading of shipments to avoid tariff hikes and the subsequent retribution, Fitch said.
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