Taiwan Roars Ahead on Exports
Booming Economy Muffles the Concern Over Ties With Beijing
Bloomberg News
TAIPEI - For Ritek Inc. of Taiwan, filling Philips Electronics NV's next order is a much bigger worry than the political fireworks between Taipei and Beijing.
Sales at the maker of recordable compact disks are running at more than double the pace of last year and show no sign of letting up.
''Ritek will not be influenced by 'state-to-state' talks,'' said Gordon Yeh, the president of the company. ''Strong demand for our products will continue through next year.''
Mr. Yeh was referring to a comment made last month by President Lee
Teng-hui of Taiwan, who ignited a political spat with Beijing by saying China should deal with Taiwan on a ''state-to-state'' basis.
Companies such as Ritek are fueling a boom in exports that is propelling Taiwan's economic growth. China accounts for about 11 percent of the foreign trade of the island, but more shipments are headed to the booming U.S. economy and recovering Asian neighbors such as South Korea and Japan.
On Friday, the main statistics agency of Taiwan is expected to raise its forecast for 1999 gross domestic product for the third time this year as it unveils second-quarter figures.
Analysts predict the economy will expand 5.13 percent in the second
quarter, compared with a year earlier. That would be an increase from a gain of 4.3 percent in the first quarter and 3.7 percent in the fourth quarter, the slowest pace in eight years.
''Taiwan's economy is rebounding at a faster-than-expected rate on strong exports,'' said Chi Lo, senior international economist at HSBC Holdings PLC.
Taiwan is riding a wave of stronger demand for electronics, information technology and electrical appliances that is helping to offset lagging demand at home.
Exports, which account for about two-fifths of the total economic output of Taiwan, rose 5.5 percent in the first half, rebounding from a drop of 9.4 percent last year.
That rebound has helped Taiwan companies such as Taiwan Semiconductor Manufacturing Co., the largest maker in the world of computer chips to customer design, which sells more than 80 percent of its products outside Taiwan. Its sales surged in July to a third consecutive monthly record and were double the total in the year-earlier month.
Record sales from electronics exporters are helping numb investors to the heightened tensions with China.
The benchmark stock index of Taiwan is now 6.5 percent lower than it was July 9, the day of Mr. Lee's remark on the Taiwan-China relationship. But the index was down as much as 20 percent at one point.
''If I had just come in off a plane from Mars, I wouldn't have known there was a dispute with China,'' said Jim Walker, chief economist at Credit Lyonnais Securities (Asia) Ltd.
But faster-than-expected economic growth could push the Taiwan dollar
higher and erode profits of exporters who sell in U.S. dollars. The currency rose Thursday to a 17-month high, at 31.91 to the U.S. dollar.
Its rise has been fueled by a widening trade surplus and massive foreign capital inflows since a decision last week by Morgan Stanley Capital International Inc. to include Taiwan stocks at full weight in its widely followed indexes as of February.
|
