Taiwan needs to diversify its trade away from China, Minister of Finance Su Jain-rong (蘇建榮) said, citing uncertainties created by China’s “zero COVID-19” policy, and rising geopolitical tensions between Washington and Beijing.
The recent US technology curbs imposed on China have “increased the uncertainty of the market,” Su said in an interview on Friday, after the APEC finance ministers’ meetings in Bangkok.
He added that one of Taiwan’s goals is to “try to diversify our trade partners, our trade market, so that we are not going to put all our eggs in one basket.”
Photo: EPA-EFE
Taiwan’s trade has been pressured this year by waning demand from China and around the world, which has weighed on the export-dependent economy. Overseas shipments contracted last month for the first time since 2020, while export orders declined for the third time this year.
Officials have largely attributed the drop-off to China as COVID-19 restrictions and a property slump are depressing consumer and business confidence there.
Escalating US-China tensions have further clouded Taiwan’s outlook and rattled the global semiconductor industry. After the US announced tighter controls over chip exports to China this month, shares in Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) fell the most in 28 years. TSMC makes chips for major companies that rely on the Chinese market for much of their business, while also taking in about 10 percent of its own revenue from China-based customers.
Su said he had not talked formally last week with US Deputy Secretary of the Treasury Wally Adeyemo, but said he thinks both sides are looking at the US-China relationship.
“The United States is concerned about the supply chains of advanced chips,” he added.
Taiwan’s exports to China and Hong Kong have declined over the past couple of years due to COVID-19 restrictions and US-China disputes, slipping below 40 percent of Taiwan’s total exports, the minister said.
Su said Taiwanese businesses have already started relocating factories from China to Southeast Asia — not so much in the semiconductor industry, but in machinery and other labor-intensive sectors.
Vietnam and Thailand are targets, he added.
Taiwan has been looking to diminish its dependence on China in the past few years, and has explored ways to bolster trade and investment with Southeast Asia, India, Australia and New Zealand.
Taipei last year asked to join one of the Asia-Pacific’s biggest working trade deals, although its application is still pending.
The minister also said Taiwan is looking “very carefully” at how to manage financial stability, as the New Taiwan dollar has weakened this year and as the benchmark TAIEX has tumbled nearly 30 percent so far this year.
The TAIEX closed up 0.29 percent yesterday after gaining as much as 1.6 percent earlier, the first gain in four days, after short-selling curbs were implemented.
Global funds have pulled a net US$47 billion from local equities this year, putting Taiwan on track for its biggest annual outflow in more than two decades.
The US Federal Reserve’s interest rate hikes cause “a lot of problems for financial markets around the world, not just Taiwan,” Su said.
Another issue is the increasing costs of imports — as Taiwan brings in a lot of its raw materials from abroad, imported inflation is another risk, he said.
Should the Fed continue raising rates, the “Taiwanese dollar and financial stability may be affected significantly,” Su said. “It’s not easy to handle it, but we have to face it.”
After several years flying high as Asia’s best Nvidia Corp proxy, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is increasingly vying with other artificial intelligence (AI) stocks for investor attention. Stock traders are chasing a wider array of beneficiaries as mainstream usage of AI creates demand for hardware beyond the most-advanced chips TSMC makes for Nvidia. Subthemes from the deepening memory crunch to advances in robotics are also luring bids. At the same time, investment caps on single stocks are pushing funds to diversify, while retail investors long familiar with TSMC through its US depositary receipts are being offered a broader set of
UNDER MICROSCOPE: Taiwan detained three people who allegedly conspired to buy servers in Taiwan and export them using fraudulent documentation, prosecutors said Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Saturday urged Super Micro Computer Inc to tighten up on compliance after Taiwan detained three people this week for allegedly making fraudulent declarations about artificial intelligence (AI) servers made by its US partner. The development marked the nation’s first crackdown on semiconductor smuggling, which grew after the US slapped restrictions on exports of high-end chips such as Nvidia AI accelerators to China. Nvidia is “rigorous” in explaining regulations to all of its partners, Huang told reporters after arriving in Taipei. “Ultimately Super Micro has to run their own company,” he said in response to
TECH RELIANCE: Growth is increasingly reflecting an unequal K-shaped distribution, where technology sectors outperform and other industries struggle, an expert said Standard Chartered Bank has significantly raised its forecast for Taiwan’s economic growth to 9.5 percent this year, up from 7.6 percent previously, citing surging artificial intelligence (AI) demand driving exports, semiconductor production and investment. The upgrade reflects a sustained AI supercycle that continues to fuel demand for advanced chips and technology infrastructure, which form the backbone of Taiwan’s exports, the bank said in a report this week. “We raise our 2026 growth forecast to reflect a much stronger-than-expected first-quarter GDP figure,” Standard Chartered senior economist for greater China and Asia Tommy Wu (胡東安) said in the report. Driven largely by a 35.3 percent
Two of Taiwan’s international carriers, Starlux Airlines Co (星宇航空) and EVA Airways Corp (長榮航空), have retained the five-star airline rating awarded by international airline review organization Skytrax. Starlux was awarded the distinction for a second consecutive year, while EVA Air received it for the 11th straight year, Skytrax said in statements released yesterday and on Thursday last week, respectively. The five-star rating is considered one of the airline industry's highest honors and is awarded following professional audits of airline product and frontline service standards, Skytrax said. The ratings are based on in-depth assessments using unified global quality standards rather than customer review scores
RSS