Recession fears ease in Taiwan

On the up? Better exports could spell revival for Taiwan

Taiwan is edging back from the recession triggered by the global downturn, as export and manufacturing figures show a gradual recovery from the gloom.

But the island's performance is still well below where it was a year ago, and it still faces a long haul back to anything like the breakneck growth it experienced during the 1990s.

Exports have been Taiwan's lifeblood, and orders for exports in December improved markedly on the 11% decline seen in November over the previous year, and was better than many had feared.

For 2001 as a whole, export orders dropped 11.5%, again showing that the decline was capped in December, the Ministry of Economic Affairs said on Tuesday.

The year before saw double-digit growth.

On the way back

"Things are improving... from double-digit declines to single digits," said Daniel Chen, chief economist at the Industrial Bank of Taiwan.

"In addition to an improving external environment, domestic consumption will expand with a rising stock market and recovery in the property market."

But the $11.44bn figure was still 8.11% down on December 2000.

Industrial output, too, was creeping back while continuing to be much lower than a year ago.

In December, output was down 6.14% from December 2000, an improvement both on November's 6.49% fall and the 7.53% seen in 2001 as a whole.

The figures emerged a day after Taiwan's president, Chen Shui-Bian, appointed a new Cabinet intended to strengthen economic policy.

Across the Strait

The downturn - which saw Taiwan enter recession in the July-to-September quarter last year - has also hit overseas investment which, at $4.39bn, was 13.5% lower last year than in 2000.

December's figure was, at $260m, little more than half that seen in November.

But money is still flowing from Taiwan to the People's Republic of China.

Although the larger mainland neighbour sees Taiwan as a rebel province, this has not stopped Taiwanese companies from exploiting the cheaper costs available from mainland manufacturing.

China-bound investment was, at $2.78bn, up 6.79% in 2001 on the year before.

Even so, the upsurge in electronics manufacture in China has eased off, with paper, machinery and chemicals investments sharply rising.