In August, Taiwan's exports and imports improved in line with rising demand in international markets. Taiwanese economic stimuli measures have also helped energize domestic production and consumption.
The Taiwanese import value in August was USD1.7 billion, dropping 32.3 percent YoY, against the 34-percent drop in July. Exports were valued at more than USD1.9 billion, dropping 24.6 percent YoY, similar to last year. According to the latest figures reported by the National Statistics Bureau of the Republic of China (Taiwan), its GDP in 2Q09 contracted 7.5 percent, decelerating from the contraction of more than 10 percent in 1Q09, the lowest contraction since from 4Q08. However, the Taiwanese economy posted growth of 20.69 percent annualized QoQ, so it could be said that the Taiwanese recession had bottomed out. Their National Statistics bureau projects that their 2009 GDP would contract 4 percent, so the government has prepared a stimulus budget of TWD858 billion – equivalent to 6 percent of their GDP – to spur the economy.
During the first-seven months of 2009 (7M09), trade value between Thailand and Taiwan contracted approximately 33 percent to a value of only USD3.617 billion. All top-ten trade items including raw materials and intermediate goods – e.g., electronics and electrical appliances –contracted. Nevertheless, it is noteworthy that integrated circuits computers, accessories and parts which captured more than 22 percent of the market value of Thai exports to Taiwan, experienced decelerating contractions due partly to better cross-strait relations between China and Taiwan at the end of last year. Also, China's new policy of promoting imports of electrical appliances and computers from Taiwan (exports of these products to China would increase) plus a boost from higher demand for computers in the global market would eventually spur exports from Thailand.
The outlook for trade between Thailand and Taiwan over the remainder of this year is expected to improve in line with the global economic recovery. In addition, their domestic economic stimuli will help spur domestic demand that should help compensate for sluggish exports affected by the global economic downturn beginning at the end of 2008. As a result, import demand in Taiwan will rise. It is expected that Thai export items to Taiwan such as computers, accessories and parts, integrated circuits, chemical products, machinery and parts, rubber and products, as well as sugar going to Taiwan will also improve. Moreover, Thai exporters should monitor the progress of theCross-Straits Economic Cooperation Framework Agreement (ECFA) to be signed in October. Although this agreement would benefit our exports of raw materials and intermediate goods to Taiwan in line with higher Taiwanese exports to China (thanks to the China's tariff reductions on Taiwanese products), the competition between our exports and Taiwanese products, such as plastic products, petrochemical products, machinery and textiles in the Chinese market would intensify.
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