Taiwan’s economy lost steam again last month after exports shrank 4.4 percent month-on-month to US$35.3 billion, data released on Wednesday by the Ministry of Finance showed. That brought the nation’s exports up just 2.3 percent during the first seven months to US$175.74 billion from a year ago.
Ministry of Finance officials attributed the sluggish annual growth to China’s economic woes caused by overcapacity and a rise in wages. Exports to China, including Hong Kong, only climbed 3.1 percent year-on-year in the period from January to last month following a 0.9 percent annual decline last month.
Exports to the US and Europe also dropped at an annual rate of 1.1 percent and 6.9 percent respectively during the same period as sagging private consumption curtailed demand for smartphones and other communication devices made by Taiwanese firms.
The weakness in the New Taiwan dollar has lent some support to exports. The NT dollar depreciated 3.41 percent against the US dollar to NT$30.120 during the seven-month period.
Taiwan’s anemic export growth is likely to pave the way for the Director-General of Budget, Accounting and Statistics (DGBAS) on Friday to cut its GDP annual growth forecast from the its previous estimate of 2.4 percent annual growth this year.
The agency expected exports to expand nearly 3 percent year-on-year to US$309.7 billion this year.
As exports will still be the biggest driver of GDP, representing the equivalent of about 68 percent of the country’s economic output this year based on the
DGBAS’ projection, the government should help firms to export to new growth areas beyond China.
The ASEAN region could have the potential to prop up Taiwan’s exports and thereby its GDP growth, while economic growth in Taiwan’s major export destinations, including China, the US and Europe, is staggering. This is because the US Federal Reserve is widely expected to start scaling back its bond purchasing program, or quantitative easing policy, next month, which will slow US GDP growth this year.
Taiwan’s exports to six emerging countries, including Malaysia and five other ASEAN members, showed robust growth as reflected by an annual growth of 7.3 percent in exports to US$33.45 billion in the seven-month period ending on July 31.
That makes ASEAN countries Taiwan’s second-biggest export destination, surpassing the US, Europe and Japan.
In fact, ASEAN seized the No. 2 position in 2007, when exports to those countries grew at an annual rate of 16.7 percent, outpacing China’s 12.6 percent expansion based on the statistics compiled by the Ministry of Finance.
However, progress in joining the ASEAN bloc has long been stalled, with no recent updates from the government. Instead, it is taking a different approach by pushing for a new round of negotiations of the Economic Cooperation Framework Agreement with China, to further open up Taiwan’s service sector, even though the early benefits brought by the agreement fell short of expectations.
Although liberalization is a better way to boost trade and economy, some rules must be followed. Those rules include the old saying: “Do not put all your eggs in one basket.” Taiwan’s government should be looking for markets other than China, especially when that country’s growth is waning.
The Donald Trump administration’s approach to China broadly, and to cross-Strait relations in particular, remains a conundrum. The 2025 US National Security Strategy prioritized the defense of Taiwan in a way that surprised some observers of the Trump administration: “Deterring a conflict over Taiwan, ideally by preserving military overmatch, is a priority.” Two months later, Taiwan went entirely unmentioned in the US National Defense Strategy, as did military overmatch vis-a-vis China, giving renewed cause for concern. How to interpret these varying statements remains an open question. In both documents, the Indo-Pacific is listed as a second priority behind homeland defense and
Every analyst watching Iran’s succession crisis is asking who would replace supreme leader Ayatollah Ali Khamenei. Yet, the real question is whether China has learned enough from the Persian Gulf to survive a war over Taiwan. Beijing purchases roughly 90 percent of Iran’s exported crude — some 1.61 million barrels per day last year — and holds a US$400 billion, 25-year cooperation agreement binding it to Tehran’s stability. However, this is not simply the story of a patron protecting an investment. China has spent years engineering a sanctions-evasion architecture that was never really about Iran — it was about Taiwan. The
For Taiwan, the ongoing US and Israeli strikes on Iranian targets are a warning signal: When a major power stretches the boundaries of self-defense, smaller states feel the tremors first. Taiwan’s security rests on two pillars: US deterrence and the credibility of international law. The first deters coercion from China. The second legitimizes Taiwan’s place in the international community. One is material. The other is moral. Both are indispensable. Under the UN Charter, force is lawful only in response to an armed attack or with UN Security Council authorization. Even pre-emptive self-defense — long debated — requires a demonstrably imminent
Since being re-elected, US President Donald Trump has consistently taken concrete action to counter China and to safeguard the interests of the US and other democratic nations. The attacks on Iran, the earlier capture of deposed of Venezuelan president Nicolas Maduro and efforts to remove Chinese influence from the Panama Canal all demonstrate that, as tensions with Beijing intensify, Washington has adopted a hardline stance aimed at weakening its power. Iran and Venezuela are important allies and major oil suppliers of China, and the US has effectively decapitated both. The US has continuously strengthened its military presence in the Philippines. Japanese Prime
RSS