Taiwan’s exports to Chinese mainland, Hong Kong fall 9.2 per cent in October amid weak demand
- Taiwan’s exports totalled US$39.93 billion in October, down by 0.5 per cent year on year, but up 6 per cent on September
- Orders from Taiwan’s biggest buyer, mainland China and Hong Kong, reached US$14.72 billion last month, down 9.2 per cent year on year
Exports from global hi-tech hardware centre Taiwan to its largest trade partner – mainland China and Hong Kong – fell by 9.2 per cent in October on weakening sales to the massive consumer market and to Chinese factories that ship finished goods overseas.
Taiwanese exporters shipped just US$14.72 billion worth of goods last month to the two territories, the Ministry of Finance in Taipei said, from a total export value of US$39.93 billion from shipments worldwide.
“It’s a reflection of slow-growing demand,” said Tony Phoo, a Taipei-based economist with Standard Chartered Bank. “Despite all of the effort to diversify away from China, China still remains the world’s largest producer. It produces not only for the global economy, but for its own economy as well.”
Mainland China, which bought 28.21 per cent of Taiwan’s total exports last year, is cooling economically, with consumption having slowed under Beijing’s zero-Covid controls and because of increases in prices of staples such as pork.
A global economic slowdown, meanwhile, threatens to undercut exports from the so-called world’s factory, meaning less need for hi-tech components of the type supplied by Taiwan.
By category, Taiwan’s exports of optical equipment to the mainland and Hong Kong dropped by 52.6 per cent in October, its finance ministry said. The category covers lenses and other components of electronic devices. Shipments of information, communication and audiovisual goods lost 22.7 per cent, while metals fell by 42.7 per cent, the ministry said.
Taiwan’s exports to mainland China had declined by 13.3 per cent in September to US$15.17 billion, and by 9.9 per cent in August.
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Relatively weak October data from Taiwan was all but expected as mainland China reports that its imports are “plummeting”, said Alicia Garcia-Herrero, Asia-Pacific chief economist with Natixis Corporate & Investment Banking in Hong Kong.
“For Taiwan, it’s even worse as the [information and communications technology] cycle is really weak,” she said. “In other words, really not surprising data.”
Taiwan’s overall exports totalled US$39.93 billion in October, down by 0.5 per cent year on year, but up 6 per cent on September after beating market expectations for a decline of around 6 per cent.
Exports to the Association of Southeast Asian Nations, Taiwan’s No 2 shipment destination, rose 11 per cent in October. And the value of shipments to Japan jumped 18.7 per cent.
Worldwide exports of electronic components, the largest by value, rose 15.9 per cent to US$16.9 billion last month, the ministry said. Petrochemicals, basic metals, chemicals and optical gear logged some of the biggest year-on-year falls in percentage terms.
“A trend of slipping end-consumer demand had spread, while inventory adjustments continued along the supply chain,” the ministry said in a statement.
Taiwan’s overall exports had declined in September for the first time in more than two years with a 5.3 per cent drop to US$37.53 billion. High global inflation and monetary-policy tightening in the world’s major export markets have chilled consumer sentiment in many of Taiwan’s export markets.
Export data from October 2021 – the basis for comparison of Tuesday’s figures – was relatively high, as the pandemic had raised demand then for PCs, phones and other gear used for remote working.
