Trade-dependent Taiwan produced solid export figures for the start of 2017 that showed a sharp narrowing of its surplus with the United States from a year earlier.
In February, exports jumped 27.7% from a year earlier, their fastest pace in six years.
That was due in large part to a low base a year earlier, but the figures signalled continuing good demand for the island’s technology gadgets.
Data for January and February tends to be analysed together for a better reading on how a year is starting, because of distortions from the timing of Taiwan’s long Lunar New Year holiday.
This year the holiday began in late January, and last year it started in February.
Total exports rose a solid 16.2% for the January-February period from a year earlier, with their performance swinging from a contraction in early 2016 when Taiwan was emerging from a technical recession.
Imports in January-February were nearly 23% higher than a year earlier.
The value of February exports was $22.66bn, compared with January’s $23.74bn, finance ministry data showed yesterday.
“Today’s strong numbers imply that this round of trade recovery will last for a while,” said Claire Huang, economist with Societe Generale, adding that Taiwan’s export outlook for the first half looks good.
Exports of electronic components were up 18.9% for the first two months of the year from the same period a year earlier, gaining nearly 30% in February alone.
Shipments of information, telecommunication and audio goods were also up by strong double-digit per cents, the data showed. The outlook for Taiwan exports is helped by expectations there will be a new iPhone this year, and many of its components will be made on the island.
In February, the annual growth pace of exports to major trading partners China and the United States more than doubled from January.
Taiwanese government officials have been focused on the island’s trade with the United States out of concern President Donald Trump could direct punitive trade policies against the export-driven island if Washington thinks the Taiwan dollar is being manipulated.
The Taiwan dollar has strengthened more than 4% against the US dollar in 2017, making it one of the best performing Asian currencies this year, in part as the island’s central bank has reduced its intervention.
In the past week, Taiwan authorities have gone to unusual lengths to analyse trade data to show Taiwan’s trade surplus with its second largest export destination was shrinking.
At a briefing on the February trade data, finance ministry official Beatrice Tsai said. “Companies have globalised for a long time so they should have ways to hedge against forex effects.”
Taiwan’s trade surplus for the first two months of 2017 with the United States was $137mn, less than one-fifth of the $756mn surplus in January-February 2016.
A truck is reflected in a rain puddle at Keelung port. In February, Taiwan’s exports jumped 27.7% from a year earlier, their fastest pace in six years.
