Identifier
Created
Classification
Origin
09AITTAIPEI271
2009-03-12 03:51:00
UNCLASSIFIED
American Institute Taiwan, Taipei
Cable title:
Taiwan's February Trade Figures Show Continued Weakness in
how-toR 120351Z MAR 09 FM AIT TAIPEI TO SECSTATE WASHDC 1101 DEPT OF TREASURY WASHDC INFO DEPT OF COMMERCE WASHDC AMEMBASSY BANGKOK AMEMBASSY BEIJING AMEMBASSY SEOUL AMEMBASSY SINGAPORE AMEMBASSY TOKYO AMEMBASSY MANILA AMEMBASSY JAKARTA AMEMBASSY KUALA LUMPUR AMEMBASSY HANOI AMEMBASSY CANBERRA AMEMBASSY WELLINGTON AMCONSUL HONG KONG AMCONSUL SHANGHAI AMCONSUL GUANGZHOU
UNCLAS AIT TAIPEI 000271
STATE PLEASE PASS USTR
STATE FOR EAP/RSP/TC, EAP/EP
USTR FOR ALTBACH AND STRATFORD
USDOC FOR 3132/USFCS/OIO/EAP
TREASURY FOR OASIA/WINSHIP AND PISA
TREASURY ALSO PASS TO FEDERAL RESERVE/BOARD OF
GOVERNORS, SAN FRANCISCO FRB/TERESA CURRAN, AND NEW YORK FRB MARI
BOLIS
E.O. 12958: N/A
TAGS: EINV EFIN ECON PGOV PREL SENV ELAB EPET SENV TW
SUBJECT: Taiwan's February Trade Figures Show Continued Weakness in
Exports
SUMMARY AND INTRODUCTION
------------------------
UNCLAS AIT TAIPEI 000271
STATE PLEASE PASS USTR
STATE FOR EAP/RSP/TC, EAP/EP
USTR FOR ALTBACH AND STRATFORD
USDOC FOR 3132/USFCS/OIO/EAP
TREASURY FOR OASIA/WINSHIP AND PISA
TREASURY ALSO PASS TO FEDERAL RESERVE/BOARD OF
GOVERNORS, SAN FRANCISCO FRB/TERESA CURRAN, AND NEW YORK FRB MARI
BOLIS
E.O. 12958: N/A
TAGS: EINV EFIN ECON PGOV PREL SENV ELAB EPET SENV TW
SUBJECT: Taiwan's February Trade Figures Show Continued Weakness in
Exports
SUMMARY AND INTRODUCTION
--------------
1. (U) Taiwan exports again took a tumble in the first two months of
2009. Although the decline in February (28.6% y-o-y) was
substantially less than the 44.1% drop in January, this is largely
due to the fact that the week long Lunar New Year holiday fell in
January 2009 rather than in February as in 2008. Exports have not
hit bottom. END SUMMARY AND INTRODUCTION.
True Picture
--------------
2. (U) To iron out the holiday factor, it may be best to look at the
combined numbers for January and February. Taiwan's exports in
these two months totaled US$25 billion, down 37% y-o-y compared to a
contraction of 25% in the fourth quarter (Q4) of last year. Imports
in January-February were US$20 billion, down 45.6%, which is nearly
double the contraction of 23% in Q4 last year.
Falls in Shipments from Taiwan to Developed Markets
-------------- --------------
3. (U) Weak demand for Taiwan products from major developed
economies caused direct shipments from Taiwan to these markets to
fall. In the first two months of this year, shipments to the United
States dropped 26% to US$3.8 billion, to the EU 33% to US$3.0
billion, and to Japan 14% to US$2.2 billion.
4. (U) Shipments to Taiwan's offshore export bases plunged even
more. Shipments to China (including Hong Kong) fell 44% to US$8.7
billion. Shipments to ASEAN dropped 45% to US$3.4 billion. Most of
these exports are likely intermediate goods eventually re-exported
to other markets.
Fewer Investment Cuts in Capital Goods Imports
--------------
5. (U) Taiwan manufacturers report hefty inventory and low capacity
utilization rates. These rates have fallen below 50% for the DRAM
and flat panel industries. Reduction in capital expenditure
contributed to a 40% cut in capital goods imports to US$3.2 billion
in the first two months of this year. Imports of raw materials and
intermediate goods also dropped 50% to US$8.1 billion. The cause
for the drop was steady declines in energy, metal, and grain prices.
Taiwan's imports from Saudi Arabia in January-February, for
example, plunged by half.
COMMENT
--------------
6. (U) As world growth falters, Taiwan export-reliant economy
continues to suffer. The export picture remains bleak, and
prospects for a turnaround are dim until it brightens. END
COMMENT.
YOUNG
STATE PLEASE PASS USTR
STATE FOR EAP/RSP/TC, EAP/EP
USTR FOR ALTBACH AND STRATFORD
USDOC FOR 3132/USFCS/OIO/EAP
TREASURY FOR OASIA/WINSHIP AND PISA
TREASURY ALSO PASS TO FEDERAL RESERVE/BOARD OF
GOVERNORS, SAN FRANCISCO FRB/TERESA CURRAN, AND NEW YORK FRB MARI
BOLIS
E.O. 12958: N/A
TAGS: EINV EFIN ECON PGOV PREL SENV ELAB EPET SENV TW
SUBJECT: Taiwan's February Trade Figures Show Continued Weakness in
Exports
SUMMARY AND INTRODUCTION
--------------
1. (U) Taiwan exports again took a tumble in the first two months of
2009. Although the decline in February (28.6% y-o-y) was
substantially less than the 44.1% drop in January, this is largely
due to the fact that the week long Lunar New Year holiday fell in
January 2009 rather than in February as in 2008. Exports have not
hit bottom. END SUMMARY AND INTRODUCTION.
True Picture
--------------
2. (U) To iron out the holiday factor, it may be best to look at the
combined numbers for January and February. Taiwan's exports in
these two months totaled US$25 billion, down 37% y-o-y compared to a
contraction of 25% in the fourth quarter (Q4) of last year. Imports
in January-February were US$20 billion, down 45.6%, which is nearly
double the contraction of 23% in Q4 last year.
Falls in Shipments from Taiwan to Developed Markets
-------------- --------------
3. (U) Weak demand for Taiwan products from major developed
economies caused direct shipments from Taiwan to these markets to
fall. In the first two months of this year, shipments to the United
States dropped 26% to US$3.8 billion, to the EU 33% to US$3.0
billion, and to Japan 14% to US$2.2 billion.
4. (U) Shipments to Taiwan's offshore export bases plunged even
more. Shipments to China (including Hong Kong) fell 44% to US$8.7
billion. Shipments to ASEAN dropped 45% to US$3.4 billion. Most of
these exports are likely intermediate goods eventually re-exported
to other markets.
Fewer Investment Cuts in Capital Goods Imports
--------------
5. (U) Taiwan manufacturers report hefty inventory and low capacity
utilization rates. These rates have fallen below 50% for the DRAM
and flat panel industries. Reduction in capital expenditure
contributed to a 40% cut in capital goods imports to US$3.2 billion
in the first two months of this year. Imports of raw materials and
intermediate goods also dropped 50% to US$8.1 billion. The cause
for the drop was steady declines in energy, metal, and grain prices.
Taiwan's imports from Saudi Arabia in January-February, for
example, plunged by half.
COMMENT
--------------
6. (U) As world growth falters, Taiwan export-reliant economy
continues to suffer. The export picture remains bleak, and
prospects for a turnaround are dim until it brightens. END
COMMENT.
YOUNG