In October, Taiwan’s exports to China and Hong Kong fell 9.2 percent from a year earlier, the lowest in nearly 20 months, the Ministry of Finance (MOF) said on Nov. 8.
Beatrice Tsai, head of the MOF Department of Statistics, said the figures are indicative of China’s economic slowdown.
Meanwhile, Taiwan’s trade volume from January to October – a 10-month period – fell 17.4 percent from a year earlier, to $43.67 billion. Compared to the same month last year, Taiwan’s trade surplus in October fell 50 percent, to $2.99 billion.
As the largest consumers of Taiwan’s products, China and Hong Kong buy about 40 percent of Taiwan’s exports, thus having a significant impact on the island’s economy.
Tsai said the economic slowdown and the decline in export activity are “high estimates, inflation, and global inflation,” according to Taiwan’s Central News Agency (CNA).
He added that China’s economic slowdown had led to an increase in demand for electronic equipment and a shift in global supply chain.
However, in October, the islands’ exports to the other four major markets show growth, with Japan posting the highest increase of 18.7%, up to $3.14 billion. Exports to members of the Association of Southeast Asian Nations (ASEAN) rose 11 percent, to $6.69 billion, while the US and European markets rose, respectively, by 3.1 percent and 1.5 percent from the previous year, to $6.41 billion and $ 3.81 billion in October.
Financial Prospects on the Line
According to the MOF, changes such as global inflation, rising interest rates, the ongoing war in Russia-Ukraine, COVID-19, and the US-China trade war may continue to increase concerns about the future of the global economy and affect Taiwan’s exports. . in the fourth part.
In an interview with The Epoch Times on Nov. 11, Wu Dachrahn, director of the National Central University’s Taiwan Economic Development Research Center, said that manufacturing and ordering have begun to move to Taiwan, Vietnam, and India since the beginning of the US-China relationship. trade war in 2018. And higher tariffs on Chinese-made goods offered by the United States benefited the countries mentioned above.
Wu said Beijing’s prevention and control policies for COVID-19 were the main reason for the decline in production and consumption, which also affected the online relationship between Taiwan and China.
He said that most of Taiwan’s exports to China are components, of which more than 50 percent are optoelectronic components that will be assembled to final products in China, and then sent to Western countries. And amid China’s repeated blockades, China’s demand for Taiwanese goods has declined.
Wu also predicted that the spending power of US households will decline significantly after the fourth quarter due to rising prices and the US Federal Reserve’s interest rate hike starting in March. In addition, China’s export activity will also weaken as US imports decline.
In August 2020, US Secretary of State Pompeo announced the “Clean Network Program” to prevent Beijing’s interference in telecommunications and the Internet. Through this program, the US State Department began to seek a “Clean Path” for all 5G traffic entering and leaving US diplomatic offices.
The 5G Clean Route is an end-to-end communication system that does not use transmission, control, computing, or storage equipment from untrusted IT vendors, such as Huawei and ZTE, which are required to comply with Beijing’s guidelines.
Kao Jen-Shan, a professor of business administration at Yuan Ze University in Taiwan, told The Epoch Times on Nov. 11 that since the implementation of the Clean Network program, most Chinese-made mobile devices or electronic equipment related to communication will not be imported. United States.
He said that the move helped China to weaken the production and export of electricity in China, thus reducing the demand for Taiwan’s parts in China.