Wednesday, February 23, 2011

Behind the Trade Numbers

l  Despite a rapidly appreciating currency, Taiwan's exports in January rose 16.6 percent from a year earlier to US$25.35 billion because of robust demand for electronics products from China.

l  On the other hand, imports in January also rose 21.9 percent from a year earlier to US$23.47 billion, causing the country's trade surplus for the first month of the year to shrink 24.3 percent year-on-year to just US$1.88 billion.

l  As many expected, China, including Hong Kong, was the largest buyer of Taiwan-made goods in January since retail stores on the mainland were stocking up for the Chinese New Year (CNY) holiday. Its US$10.22 in purchases was 7.l percent higher year-on-year and accounted for 40.3 percent of Taiwan's total exports.

l  With the deepening of cross-Strait economic ties following the ECFA, the proportion of Taiwanese goods exported to China will likely increase and stay above 40 percent in the foreseeable future. In the island’s highly partisan environment, however, many have perceived this development as a warning that Taiwan has become too dependent on China economically.

l  In addition, this will likely fuel domestic political debates on “putting all the eggs in one basket,” making the island's economy vulnerable to changes—particularly non-economic ones—in China’s massive domestic market.


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