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Taiwan warns on China-US trade frictions as exports tick down
[TAIPEI] Taiwan's exports, a key gauge of global demand for gadgets, fell slightly for a second month in April and the government said the second quarter would be tough due to the coronavirus pandemic and renewed concerns over US-China trade friction.
Exports dropped 1.3 per cent from a year earlier to stand at US$25.24 billion in April, the finance ministry said. A Reuters poll had forecast an annual drop of 1 per cent.
In March, Taiwan's exports slipped 0.6 per cent, but they have risen 2.4 per cent on the year so far in 2020.
The ministry said strong demand for telecommuting amid the coronavirus outbreak and advanced chips was offset by weakening global consumption for products from textiles to minerals.
Taiwan, whose largest trading partner is China, warned of "limited" growth prospects for the island's exports in the first half, adding that lingering concerns over US-China trade could add to the uncertainty.
Taiwan's May exports were expected to range from a decline of 4 per cent to 6 per cent on the year, Beatrice Tsai, head of the ministry's department of statistics, told reporters.
She said it would be "difficult" for exports to maintain growth in the second quarter and the ministry will need to "significantly" trim its earlier forecast of a yearly growth of 2.5 per cent for the period due to gloomy global economic outlook.
While Taiwan has so far prevented a rapid spread of the disease without a total lockdown, the government has repeatedly warned of an uncertain trade outlook and is rolling out an economic stimulus package worth T$1.05 trillion (S$49.61 billion).
It has also pledged to lure manufacturers to move production home from China, saying returning investment to Taiwan from China would reach over T$320 billion this year and give a boost to its economy.
Last month, Taiwan downgraded its growth forecast for this year to between 1.3 per cent and 1.8 per cent, from 2.37 per cent in February.
In neighbouring China, exports unexpectedly rose in April for the first time this year as factories raced to make up for lost sales due to the coronavirus pandemic, but a big fall in imports signalled more trouble ahead as the global economy sinks into recession.