Taiwan’s 2020 export orders hit record high, future looks bright
The shipments have increased by a strong demand for the island’s technology products as telecommuting took hold around the world during strict lockdowns
Taiwan’s export orders rebounded sharply in 2020 hiting a record high, boosted by strong demand for the island’s technology products as telecommuting took hold around the world during strict lockdowns to contain the COVID-19 pandemic.
New smartphone launches by brands such as Apple, which rolled out a new iphone, fuelled demand especially in the second half of the year.
Export orders, a bellwether of global technology demand, surged 38.3% from a year earlier to $60.55 billion in December, the highest on record, Ministry of Economic Affairs data showed on Wednesday, far exceeding the 27% rise projected in a Reuters poll.
In November, export orders leapt 29.7% from a year earlier to $57.78 billion.
December’s jump was the strongest yearly growth in nearly 11 years, when orders rose 43.7% in March 2010.
For all of 2020, export orders rose to an annual record of $533.66 billion, up 10.1% compared with the previous year.
December orders were boosted by strong demand for technology products during the work-from-home trend amid the pandemic, including smartphones, as well as a recovery in products from plastics to machinery, the ministry said.
Taiwanese companies such as Foxconn and Taiwan Semiconductor Manufacturing Co (TSMC) are key suppliers to Apple, which in September launched its next-generation iphone 12.
Taiwan usually sees strong electronics orders in the third and fourth quarters, when vendors launch new smartphone models ahead of holiday demand.
The ministry said growth in the first quarter might be “curbed” by low seasonal demand and uncertainties from the Sino-us trade dispute and the pandemic, but strong technology demand and a recovering global economy should support the growth momentum beyond that.
The ministry expects export orders to rise between 44.5% and 48.7% in January, though that is off a low base as the long Lunar New Year holiday fell in January last year.
US orders in December jumped 40.5% from a year earlier, compared with a 30.6% rise in November, while orders from China were up 54.3% versus a 23.3% gain the previous month.
European orders rose 35% while those from Japan were up 31.2%.
Meanwhile, Taiwan is under no illusions it can quickly sign a long hoped for free trade deal with the United States but feels when the time is right “success will flow naturally”, the island’s chief trade negotiator said on Friday.
Taiwan has long sought a bilateral trade deal with the United States, the Chinese-claimed island’s most important international backer and supplier of arms.
Last year, the government lited a ban on the import of pork containing a leanness-enhancing additive, ractopamine, removing a major stumbling block to an agreement with Washington.
But President Joe Biden has only just assumed office, and his nominee for treasury secretary,
Janet Yellen, told lawmakers this week they would prioritise domestic investment in workers and infrastructure before embarking on any new free trade agreements.
Minister without porfolio John Deng, who leads trade talks, told Reuters Taiwan’s government well knew that for the United States to sign free trade agreements with anyone was a major issue, especially with a new government in office.
“We absolutely understand US politics and we do not have any unrealistic fantasies,” he said, speaking in his office near the presidential office. “The new government has its priorities and of course we need to understand that.”
But Deng said he was confident a deal would happen eventually, pointing to the pork decision and support for an agreement among US lawmakers.
“We have always thought that this a matter of ‘when conditions are right, success will flow naturally’.” Trade-dependent Taiwan is also angling to join the revamped version of the Trans-pacific Partnership, the 11-country Comprehensive and Progressive Agreement for Trans-pacific Partnership (CPTPP), signed in 2018, without the United States.
“This is a very high priority project for us. But we also understand this involves lots of other countries, 11 of them, so we’re not willing to set a timetable or a target,” Deng said.
While Taiwan is a member of the World Trade Organisation (WTO), many countries are wary of signing trade deals with the tech-powerhouse fearing objections from China, though Taiwan does have free trade deals with Singapore and New Zealand.
President Tsai Ing-wen told Britain’s newly appointed de facto ambassador in Taipei this week she hoped they could begin talks on a free trade or bilateral investment agreement.
Britain has been looking for such deals since leaving the European Union.
Separately, Taiwan on Tuesday cancelled a major festival during the upcoming Lunar New Year holiday as the island reported four locally transmited cases of COVID-19, the biggest daily rise in local infections in nearly 11 months.
Taiwan, which has kept the pandemic well under control thanks to early and effective prevention methods, has been unnerved by new domestic transmissions, first in December and now in a hospital in the northern city of Taoyuan.
It has reported 868 cases, the majority of which were imported, including seven deaths, with 102 in hospital being treated.
The Taiwan Lantern Festival, an annual celebration to mark the end of the upcoming Lunar New Year in mid-february, will be cancelled this year because of COVID-19, the Ministry of Transportation and Communications said, citing the recent local infection cases.
“This is a tough decision, but pandemicprevention is our top priority,” Transportation Minister Lin Chia-lung told reporters.
The festival, which features oversized lanterns and fireworks displays, atracts hundreds of thousands of visitors every year and has become a major selling point for the government to atract tourists from overseas.