Taiwan exports contract for fifth straight month, tumbling 21 per cent in January amid weak demand in China, US
- Exporters on the Asian island shipped US$31.51 billion worth of goods last month, down a steep 21.2 per cent over January last year
- Shipments to mainland China and Hong Kong fell 33.5 per cent, while exports to the US dropped by 14.5 per cent in the first month of 2023
Taiwan, a global manufacturing hub for consumer electronics, logged a fifth straight month of declining exports on Tuesday as consumers from mainland China to the United States spent less during a rocky start to the year.
Elsewhere, Europe and the United States have been racked by inflation and fears of an economic slowdown, undermining demand.
“The January export decay is continual momentum from December because the global economy may continue to decline in the first quarter of 2023,” said Hu Jin-li, a professor with the Institute of Business and Management at National Yang Ming Chiao Tung University in Taipei.
He pointed to sagging demand for electronics as well as weakness in “traditional” exports such as plastics, rubber and chemicals.
Shipments to mainland China and Hong Kong fell by 33.5 per cent to US$10.44 billion year on year in January, ministry data showed. Hong Kong and the mainland make up Taiwan’s biggest export market. Exports to the US from Taiwan dropped by 14.5 per cent in January.
A 10-day Lunar New Year holiday in Taiwan accentuated January’s fall in export value, the ministry said. Last month’s figures were compared to exports in January 2022, when Taiwanese took less time off.
Shipments of parts for electronics lost 20.1 per cent last month compared to a year earlier. Exports of integrated circuits, a subset of those components, tumbled by 18.3 per cent, while information and audiovisual goods shed 10.4 per cent.
Technology makes up around 30 per cent of Taiwan’s gross domestic product (GDP), which the government forecasts to be US$785 billion this year.
The self-ruled island supplies 60 per cent of the world’s semiconductors, including the most advanced. Smartphones and notebook PCs sold to end users worldwide are often made in Taiwan as well.
Other economic data over the past month points to a tough outlook for Taiwan.
GDP declined by 0.86 per cent in the October-to-December quarter versus the same period of 2021, its first quarterly setback in more than six years.
But some economists expect a turning point in 2023.
The Conference Board research group forecasts US economic growth of 0.2 per cent this year and 1.7 per cent in 2024.
Mainland China’s “swift abandonment” of its Covid-19 controls over the past two months offers an “upside” to Taiwan’s exports later in the year, Moody’s Analytics economist Katrina Ell said.
“This will help supply chains continue to normalise as China remains a critical global manufacturing hub,” Ell said. “We also expect China’s domestic demand to enjoy a sustained revival by mid-2023, which bodes well for shipments to the mainland.”