Taiwan's export woes ease with mainland orders
Updated: 2009-05-26 07:38
(HK Edition)
|
|||||||||
TAIPEI: Taiwan's export orders fell less than economists expected in April as increased orders from the mainland offset a decline in sales to the US.
Orders, an indication of shipments for the coming one to three months, fell 20.9 percent from a year earlier, a slight improvement over March's 24.29 percent retreat, the "Ministry of Economic Affairs" said in Taipei yesterday. The median estimate of seven economists surveyed by Bloomberg anticipated a 25.4 percent drop.
Taiwan's stock index has risen more than 46 percent this year founded on optimism over the mainland's fiscal stimulus and hope that closer cross-Straits relations would help ease the island's first recession since 2001. "Vice Premier" Paul Chiu said last week the economy will improve on a quarter-on-quarter basis throughout the rest of 2009.
"The near-term outlook for Taiwan's export sector is likely to improve modestly," Wang Qian, a Hong Kong-based economist at JPMorgan Chase & Co, wrote in a report. "The global capital-expenditure outlook has started to improve. The bounce in the mainland's domestic demand is also providing a trade lift to Taiwan."
Taiwan's economy contracted a record 10.24 percent last quarter as exports fell and businesses cut spending. It is hoped that the sharp decline may mark the nadir of the island's recession. The statistics bureau predicts the economy will return to growth by the final three months of this year.
Taiwan is starting to benefit from the mainland's 4 trillion-yuan ($586 billion) stimulus package that is helping to fuel the world's third-biggest economy. The mainland is Taiwan's largest export market.
Today's export-orders figures were released after the close of trading on the stock exchange. The Taiex index fell 0.04 percent to 6,734.46.
Taiwan's dollar traded near its strongest level in five months today on speculation improving relations with the mainland will help attract more overseas capital. The currency rose 0.1 percent to NT$32.655 against the dollar.
As Taiwan adopts a more open cross-Straits policy, the island's economy will benefit from the mainland's recovery, said Henry Lin, a foreign-exchange trader at Shin Kong Commercial Bank in Taipei.
Taiwan leader Ma Ying-jeou, during a speech marking his first anniversary in office last week, vowed to make economic ties with the mainland a priority. The two economies on April 26 signed agreements for increasing commercial flights, boosting financial cooperation and enhancing joint crime prevention efforts.
Export orders to the mainland and Hong Kong combined dropped 14.3 percent last month, compared with a 29.38 percent slump in March, yesterday's report showed.
Bloomberg
(HK Edition 05/26/2009 page2)