Posted on 07/07/2013 8:05:30 PM PDT by TexGrill
Taiwan’s key economic indicators moved sideways along the bottom of an L-shaped line in the first half of the year and may fail to pick up significantly if exports to China continue to fall in the second half, UBS Securities Asia said in a recent report.
The nation’s growth momentum neither picked up nor deteriorated in the second quarter as a result of two opposing forces — a resilient US and a surprisingly weak China — driving external demand for Taiwan’s exports, the Swiss financial services provider said.
“We see a downside to our prediction of 3 percent growth for Taiwan this year if Chinese growth fails to stabilize in the second half,” USB economist Silvia Liu said.
China accounts for 40 percent of Taiwanese exports, which have a value equivalent to 70 percent of nominal GDP.
Headline exports remained lackluster in May at US$26.34 billion, expanding by a mere 0.9 percent compared with the same period last year, the Ministry of Finance said in a report. The ministry is slated to release last month’s data today.
Taiwan’s exports to the US are stabilizing, driven by a stronger US economy and increased US demand for communication products after the release of a new smartphone by HTC Corp (宏達電), the world’s No. 5 smartphone brand.
For the first five months of the year, the US was the destination for 10.6 percent of Taiwanese exports, while Europe accounted for 9 percent, according to ministry data.
A recovering US and — to a lesser degree — continued stabilization in Europe in the form of no renewed deterioration should put a floor under external demand, UBS said.
(Excerpt) Read more at taipeitimes.com ...
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