Taiwan seen increasingly relying on Chinese market for exports
2004-12-22 / Agence France-Presse /
Taiwan's dependence on the Chinese market for exports could hit a record this year, highlighting the need to diversify the island's export markets if it is to scale down potential risks, an official said yesterday.
"Given strong exports to China in the first 11 months, the full-year figure could break the record" in terms of value or market dependence, said the official from the Council for Economic Planning and Development. "It is important for Taiwanese companies to diversify markets and there is a need for the government to upgrade industries."
In the first 11 months of 2004, Taiwan's exports to China, including Hong Kong, amounted to US$58.57 billion, accounting for 36.8 percent of its total exports in the period, the Council said.
The total for 2003 was US$49.8 billion, accounting for 34.5 percent of the island's total exports. China is Taiwan's largest export market.
Taiwanese products that are heavily dependent on the Chinese market are polyethylene, polyvinyl chloride and flat-rolled stainless steel, among others, according to a Council research report.
In the eight months to August this year, 81 percent of Taiwan's PE exports went to China, while 87.7 percent of PVC and 70.48 percent of flat-rolled stainless steel also went to the mainland.
During the period January 1999 to August 2004, polyethylene, printed circuit boards and semiconductors topped the list of items which became most dependent on the Chinese market, the report said, citing increasing demand from China.
However, the CEPD warned that China's demand for petrochemicals may slow down as the mainland expands its own capacity.
Many Taiwanese firms have invested in printed circuit board operations in China, reducing the demand for imports.
Among China's total imports in 1997, Taiwanese products accounted for 11.6 percent. The figure rose to 12.9 percent in 2002, stood at 12 percent in 2003, and 11.6 percent for the ten months to October this year.
The trend shows that Taiwanese firms are facing fierce competition from South Korean and Chinese counterparts in the mainland market, the report said.
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