Ex­ports con­trac­tion to im­prove in July: min­is­ter

The China Post - - TAIWAN BUSINESS - BY ENRU LIN

In ad­vance of its of­fi­cial re­lease of cus­toms data, the Min­istry of Fi­nance said yesterday that Tai­wan’s neg­a­tive growth in ex­ports should see a slight im­prove­ment in July.

The Min­istry of Fi­nance ( ) is sched­uled to re­lease its cus­toms data for last month on Fri­day.

Fi­nance Min­is­ter Chang Sheng­ford ( ) in­di­cated yesterday that July fig­ures are likely to re­veal neg­a­tive growth in ex­ports, mark­ing the six con­sec­u­tive month of de­cline.

But July’s ex­port per­for­mance should see some im­prove­ment from the pre­ced­ing month, ac­cord­ing to the min­is­ter, who was speak­ing on the side­lines of a fo­rum in Taipei.

“The con­trac­tion will have mod­er­ated slightly,” he said.

In June, Tai­wan’s ex­ports plunged 13.9 per­cent from a year ear­lier, the big­gest fall in a sin­gle month over the last six years.

“The sit­u­a­tion (with out­go­ing sales) should ease in the sec­ond half of the year — that is typ­i­cally the peak sea­son for ex­ports,” he said.

For Bourse, the Worst

Is Past: Chang

Chang said that Tai­wan’s poor quar­terly eco­nomic data have al­ready hit the lo­cal bourse and that its worst ef­fects have passed.

Last week the gov­ern­ment

re- ported a mea­ger gain of only 0.64 per­cent in gross do­mes­tic prod­uct (GDP) in the sec­ond quar­ter, send­ing Tai­wan shares on a tum­ble the fol­low­ing trad­ing day.

“There is an im­pact on the bourse from Q2 data and we have al­ready seen it — the stock mar­ket typ­i­cally re­acts early,” Chang said. “I be­lieve the worst is over.”

60% of Weak Growth Due to Oil

The Fi­nance Min­is­ter said that Tai­wan’s dis­ap­point­ing eco­nomic growth data in Q2 is due to two fac­tors: the fall­ing price of in­ter­na­tional crude oil and weak global de­mand for Tai­wan’s elec­tron­ics.

He said that 60 per­cent of the plunge can be at­trib­uted to the de­clin­ing price of in­ter­na­tional crude oil, which hurt Tai­wan’s mar­ket pric­ing power and the ex­port per­for­mance of min­eral prod­ucts.

“The sec­ond fac­tor is in elec­tron­ics — ex­ports of elec­tron­ics have fallen by about 10 per­cent. This is also a cause for con­cern,” Chang said.

Com­pet­i­tive­ness Gen­er­ally Sta­ble, but Not in Elec­tron­ics

Chang said that Tai­wan’s over­all com­pet­i­tive­ness has re­mained fairly sta­ble in most sec­tors be­sides elec­tron­ics.

“With Taiex, we do need to re­gain the con­fi­dence of in­di­vid­ual in­vestors,” Chang said.

“We need to em­pha­size to ev­ery­one that 60 per­cent of (the rea­son for weak Q2 growth) is a de­cline in oil prices and not a de­cline in Tai­wan’s over­all com­pet­i­tive­ness — though the elec­tron­ics sec­tor in par­tic­u­lar has be­come less com­pet­i­tive.”

The min­is­ter said that the Ex­ec­u­tive Yuan has taken mea­sures to up­grade Tai­wan’s elec­tron­ics sec­tor, which is be­com­ing in­creas­ingly threat­ened by the emerg­ing sup­ply chain in China’s tech sec­tor.

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