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Economic Daily News: Worries underlying economic growth

Economic Daily News: Worries underlying economic growth

In March, Taiwan's exports decreased 8.9 percent from the same month last year to hit the lowest monthly level since July 2012. Decline was seen in both non-electronic and electronic products, and in four of Taiwan's major export markets: China, Southeast Asia, Europe and Japan. The situation reflects a structural problem that is weakening Taiwan's export momentum. In recent years, Chinese businesses have been actively developing their own brands and sourcing more of their needs domestically to replace imports. As a result, parts and components as a percentage of China's total imports dropped from a peak of 60 percent in the mid-1990s to 35 percent in 2012. Even Taiwanese businesses operating in China now prefer to purchase materials, parts, intermediates and machinery in China. With China having become Taiwan's competitor in international markets for non-electronic products, Taiwan's non-electronic exports have decreased for three years in a row. Taiwan's electronic exports have also slowed down this year due to weak demand for personal computers and mobile phones. Despite the unsatisfactory performance of the export sector, forecasts show that Taiwan's economy will likely maintain 3 percent growth this year, mainly thanks to low crude oil prices. At present, oil-related products such as minerals, chemicals and plastics account for 21 percent of Taiwan's exports and 39 percent of imports. Low oil prices are expected to help boost Taiwan's trade surplus. The government must not be complacent just because the economy can maintain 3 percent growth. It needs to work to resolve the structural problem threatening Taiwan's exports to restore the sector's momentum. (Editorial abstract -- April 14, 2015) (By Y.F. Low)


Updated : 2021-09-17 15:35 GMT+08:00