Taiwan's exports to regain momentum in Q2
By Kathryn Chiu,The China Post
January 28, 2014, 12:10 am TWN
TAIPEI, Taiwan -- Despite a high likelihood that Taiwan's exports will regain momentum in the second quarter of this year, some local economists predict that Taiwan's exports will face tough challenges unless they can catch up with global trends.
MOF statistics showed that Taiwan posted a 1.9-percent year-on-year export decline in December. Overall, Taiwan's exports saw a marginal 0.7-percent annual increase in 2013. The growth rate was slightly higher than the government-projected 0.4-percent growth.
Moreover, 2013's total export amount of US$303.2 billion was the second highest in history, and the annual trade surplus of US$33.1 billion was at an all-time high.
Yeh Maan-tzwu, director-general of the MOF's Statistics Department, said the downward trend in exports may continue in January, but it is expected to reverse itself in the second quarter.
Yeh told the Economic Daily that capital goods imports posted a 10.1-percent annual growth in December and a 13.1-percent increase from November.
Furthermore, she said, machinery exports amounted to US$1.88 billion in December, the second highest monthly record, indicating that the global economy is on track for a steady recovery.
"All these are encouraging signs that our exports will become stronger in the second quarter," Yeh forecast.
However, Liang Kuo-yuan, president of the Yuanta-Polaris Research Institute, said Taiwan's lackluster export performance could partly be attributed to sluggish growth in the world economy.
He cautioned that the global economy is undergoing fundamental changes. "We cannot afford to ignore this phenomenon," Liang said.
Pressing Challenges From Japan, South Korea
Liang said that South Korea has performed much better than Taiwan in exports, mainly because it has outpaced Taiwan in industrial upgrading and adjustment of its economic structure.
Basically, he said, Taiwan has not been proceeding smoothly in industrial upgrading and the fostering of new industries.
"These setbacks could pose threats to our future economic development," Liang said.
China Times reported that Chu Hao-min, a National Chengchi University professor, said Taiwan faces another challenge that should not be ignored: competition from China.
"Taiwanese and Chinese companies used to be complementary, but some of them are competing with each other now," Chu said, adding that Chinese companies are eroding Taiwan's market share in some areas. "We need to face up squarely to these new challenges," he said.
Taiwan's exports edged up a mere 0.7 percent in 2013, while neighboring South Korea posted a 2.2-percent annual growth.
Gordon Sun, director of the Macroeconomic Forecasting Center at the Taiwan Institute of Economic Research, said he is worried about the sharp depreciation of the yen, which has made local industries victims, in particular machine tool manufacturers.
Taiwan faces pressing challenges from Japan and South Korea at a time when the country is eager to grasp a larger share of the export market, economists said.
The Japanese yen has depreciated against the U.S. dollar much more than the Taiwan dollar has against the greenback in the past year, which has made Taiwanese-made goods less competitive in the global market compared with their Japanese counterparts, economists said.
South Korea is gearing up to sign free trade agreements with its major trading partners in an attempt to win preferential tariff status to fend off competition from its rivals, they added.