China Trade Hit Hard in January
Taiwan’s exports experienced a fifth consecutive decline in January as a result of a weakened global economy and factory shutdowns during the extended Lunar New Year holiday. The decline amounted to a 21.2% decrease in value year-on-year to $31.51 billion, according to the Ministry of Finance.
The decrease was slightly more significant than the expected 20% contraction as forecasted by a Reuters poll. The ministry cited weaker global demand post-festive season and fewer working days during the Lunar New Year as factors that impacted exports.
The electronics component exports saw a particularly sharp drop of 20.1% to $12.72 billion, the largest decrease in 11 years, with semiconductor exports down 18.3% YoY. Companies such as TSMC, a significant supplier to tech giants and automakers, and United Microelectronics Corp reported declining sales for January.
Exports to Taiwan’s largest trading partner, China, saw a substantial 33.5% decrease YoY to $10.44 billion, following a 16.4% drop in December. The finance ministry cited ongoing monetary policy tightening and other risks, including the war in Ukraine and China-U.S. trade tensions, as factors that will weigh on overall demand.
It predicts that February exports could drop 7-11% YoY and decline around 10% in the first quarter. January’s exports to the U.S. decreased by 14.5%, compared to a 2.6% decline in the previous month. Taiwan’s imports, seen as a leading indicator of re-exports, decreased 16.6% to $29.17 billion in January, which was better than the expected 18.2% decline and followed an 11.4% decrease in December.