Trade
Exports focus on Asian markets, heavy industry.
5. Overall, exports for the first three quarters grew a mere 4. 5 per cent year on year to 63 billion US dollars. Imports were up 8 per cent to 57.5 billion, slashing Taiwan's surplus by 22 per cent to 5.7 billion. The prime source of the island's trade surplus is shifting rapidly away from the United States and Europe and towards Hong Kong/China. January-September exports to the US fell 1 per cent, while imports were up 9 per cent, cutting Taiwan's bilateral surplus by almost 20 per cent to 5.1 billion dollars. Exports to Europe in the period were down 8 per cent, and imports up 11 per cent, creating a deficit of 750 million; the first time Taiwan has run up a deficit with Europe in 20 years. If this trend continues, there is a danger that Taiwanese interest in investing in Europe might also decline.
6. Exports to Hong Kong, a large proportion of which go on to China, grew 23 per cent, while imports have dropped 6 per cent, padding Taiwan's surplus with the colony by 27 per cent to 12.4 billion so far, which was more than double Taiwan's overall trade surplus. Taiwan's deficit with Japan, meanwhile, just goes on growing, up 12 per cent in the period to 10.4 billion dollars, with Taiwan's exports flat, and imports up nearly 7 per cent, despite the hefty depreciation in the NT dollar against the yen. This merely shows how hopelessly hooked on Japanese capital goods and, to an increasing degree, on
consumer goods, Taiwan has become.
Trade with China
7. Indirect exports to China, which mostly go via Hong Kong, grew 25 per cent to 5.6 billion dollars, while imports dropped by nearly 3 per cent to 800 million, according to Hong Kong government figures. Taiwan's surplus thus ballooned to 4.8 billion compared to 3.6 billion in the same period last year. An indication of Taiwan's growing dependency on China is that exports to China accounted for nearly 9 per cent of all Taiwan': S exports, up from 7.4 per cent a year ago, while imports were a negligible share of its total imports. Exports were predominantly manmade fibres and fabrics (30 per cent), machinery and equipment (14 per cent), electrical/electronic parts and components (11 per cent) and plastic raw materials (12 per
(12 per cent).
cent). The biggest increase was seen in motorcycles (up 162 per cent), symbolising Taiwan's growing attention to the Chinese domestic market, as opposed to exporting to China for re-export. Taipei continues to limit the number of import items from China, most of them being low-tech agricultural and industrial raw materials, and semi- finished products.
Product Structure of Exports and Imports
8. Compared to the same period of 1992, the share of heavy industrial products in exports has risen from 47.5
risen from 47.5 per cent to
2