Taiwan’s Export Orders Rose for Eighth Month in May on Demand From China

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Taiwan’s export orders rose for an eighth consecutive month in May as Europe’s debt crisis failed to damp demand for the island’s computers and television screens.

Orders, an indication of shipments in the next one to three months, advanced 34.03 percent from a year earlier, after a 35.15 percent gain in April, the Ministry of Economic Affairs said in Taipei today. The median of 13 estimates in a Bloomberg News survey was for a 37.9 percent rise.

Growing demand for Taiwan’s products in China spurred a 13.3 percent expansion of the economy last quarter, the biggest gain in more than 30 years, and helped Taiwan Semiconductor Manufacturing Co. post record monthly sales in May. President Ma Ying-jeou is aiming to sign a trade accord with China at the end of this month that will cut tariffs on Taiwanese products.

“Asia’s exporters are benefiting from China’s strong appetite for household appliances, computers and mobile phones,” Lucas Lee, an economist at Mega Securities Co. in Taipei, said ahead of the release. “However, concerns about Europe’s debt problem will begin to affect sentiment and slow overall external growth in the second half.”

The European Union last month announced a 750 billion-euro ($934 billion) rescue package to shore up the finances of the region’s weakest economies amid concern governments will struggle to tackle their budget deficits.

Interest Rates

Taiwan may this week join central banks in Asia including Indonesia and South Korea in keeping borrowing costs unchanged as it gauges the fallout from Europe’s debt crisis, Lee said.

Taiwan Semiconductor, the world’s biggest custom-chip maker, said June 10 its unconsolidated sales surged 38.3 percent to NT$33.8 billion in May. Chairman Morris Chang last week raised his forecast on the growth of global chip-industry sales to “nearly 30 percent” this year, compared with an April estimate of 22 percent.

Today’s figures were released after the close of trading on the stock exchange. The Taiex index rose 1.9 percent to 7,635.56, its highest level since May 14. The Taiwan dollar advanced 1.4 percent to NT$31.741 versus the U.S. dollar as of 2:54 p.m. local time, according to Taipei Forex Inc.

The value of export orders dropped to $33.73 billion last month from $33.96 billion in April, today’s report showed.

Export orders from China and Hong Kong combined increased 34.34 percent last month, after a 40.7 percent gain in April. Orders from the U.S. climbed 20.32 percent from a year earlier, after a 23.58 percent rise in April.

Initial Agreement

Taiwan and China reached an initial agreement on tariff reductions for a total of 750 items after a third round of talks in Beijing on June 13 on the so-called Economic Cooperation Framework Agreement.

President Ma has been pushing for an accord to bolster export-dependent Taiwan’s economy after a Chinese trade agreement with the Association of Southeast Asian Nations began this year. Ma, who took office in May 2008, is also seeking better relations with the island’s biggest trading partner and No. 1 investment destination.

Orders for electronics rose 32.75 percent last month after a 33.22 percent increase in April, today’s report showed. Demand for information technology and communications products climbed 39.25 percent in May after increasing 35.96 percent a month earlier.

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Tags: Bloomberg News, Budget Deficits, Central Banks, China, Chip Industry, Chip Maker, Debt Crisis, Debt Problem, Economic Affairs, Economic Cooperation Framework Agreement, European Union, Export Orders, Fallout, Hong Kong, Household Appliances, Last Quarter, Lucas Lee, Ma Ying Jeou, People's Republic of China, Republic of China, South Korea, Taiwan, Taiwan Semiconductor Manufacturing, Taiwan Semiconductor Manufacturing Co, Television Screens, Trade Accord, Wikipedia

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