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Taiwanese Exporters Tap Emerging Markets to Offset Slowdown

2012/01/30 | By Philip Liu

China and HK buy some 40% of Taiwan's total exports in first eight months

With U.S. and Europe still mired in the debt crisis, Taiwanese exporters have managed to offset such impact by building business in emerging markets, having shipped goods to the 10 ASEAN (Association of Southeast Asian Nations) members totaling US$34.2 billion in the first eight months this year, for a 23.7% year-on-year rise.

Shipments to the 13 Middle East nations leapt 27.8% to US$3.3 billion, that to the 11 Commonwealth of Independent Nations soared 45.6% to US$1.2 billion, and exports to Latin America rose 19% to US$4.6 billion.

But China remains the biggest export buyer for Taiwanese suppliers: In the first eight months, shipment of Taiwan-made goods to China rose 12% to US$57.6 billion, accounting for 27.7% of Taiwan's total exports, or as much as 40.5% after taking into account Hong Kong.

Many Taiwan-made products now enter China at much lower tariffs, due to being prioritized for duty-reduction as part of the cross-Taiwan Strait Economic Cooperation Framework Agreement (ECFA), which took effect on Jan. 1, 2011.

ECFA Helps
With the ECFA reinforcing competitiveness of Taiwan-made goods in China, Taiwanese exporters are doubling efforts to tap the huge potential of China as it transforms from the world's factory into a sought-after market.

The Taiwan External Trade Development Council (TAITRA), the semi-official trade promoter, organizes many activities to help local suppliers penetrate the China market. Wang Chih-kang, TAITRA chairman, says TAITRA organized the first Taiwan-made product exhibition in September 2009 and has held 12 such events to date, helping numerous Taiwanese firms find local agents in China.

The Nanjing Taiwan Product Exhibition, one of many TAITRA has held in major Chinese cities, was held in mid-September and attracted over 350,000 visitors over four days, with spot orders reaching US$820 million, and over three quarters of the exhibitors finding local agents or sales channels.

A similar exhibition was held in Beijing early November, with two hundred Taiwanese exhibitors taking part across 520 booths.

Tapping Emerging Markets
TAITRA is also helping Taiwanese exporters tap other emerging markets, including Southeast Asia, Southern Asia, the Near East, Eastern Europe, Latin America, and Africa, with several countries prioritized for marketing effort, such as Indonesia, Vietnam, India, Brazil, Russia, and South Africa.

The Taiwan Industrial Show 2011, for instance, was held in Chennai, India in late August. A total of 172 companies exhibited across 262 booths, displaying mainly four categories of items: electronics, machinery, auto parts, and others. This was the fifth edition of the show organized by TAITRA jointly with a number of industrial associations in Taiwan.

Wu Wen-ya, vice TAITRA chairman, led a trade promotion delegation with representatives from 72 companies to Jakarta and Hanoi in early October, which drew 1,550 buyers to the trade consulting sessions and one-on-one meetings with Taiwanese suppliers, resulting in US$57 million in orders.

Inviting Buyers
In addition to promotions overseas, TAITRA has also invited foreign buyers to Taiwan on procurement missions.

In July, Jiang Yaoping, China's vice minister of commerce, led a delegation to Taiwan and signed procurement agreements totaling US$2.4 billion.

In late September, TAITRA invited a delegation of 14 Turkish buyers to Taiwan, which met with local suppliers and placed US$12 million in orders.

With developed markets becoming saturated and dotted with formidable rivals, Taiwanese exporters are increasingly aware of the importance of emerging markets for future development. Trying to evade stiff competition in the tablet PC segment, ASUS, a leading notebook PC maker in Taiwan, is focusing on emerging markets as Indonesia and Brazil for its netbook PC, Eee PC. ASUS estimates its share of the Indonesian notebook PC market to hit 20% by the end of 2011, up from 4-5% in 2010. Also targeting the Indian PC market, ASUS aims to boost its share of that market to 15% in two years, up from less than 5%, for which it plans to increase directly-owned stores there to over 100 by the end of 2012, up from seven.

Emerging Markets Drive Growth
Robust shipments to emerging markets have enabled Taiwan to rack up steady growth in exports in the first eight months of 2011, which rose 15.7% to US$208 billion.

During the first eight months of 2011, shipment to China rose 12% to US$57.6 billion, with the leading category of electrical machinery and home appliances rising 18% to US$17 billion, followed by optical products and precision equipment with US$11.6 billion, down 7.5%; organic chemicals with US$6.3 billion, up 21.2%; plastics with US$5.7 billion, up 13.5%; machinery with US$5.5 billion, up 22.8%; copper products with US$1.5 billion, up 12.5%; and iron and steel with US$1.3 billion, down 1.9%.

Shipment to Vietnam rose 27% to US$6.2 billion, with that of mineral fuels increasing 40% to US$1.5 million, the largest item, followed by plastic products with US$596 million, up 33%; machinery with US$456 million, up 16%;; man-made filaments with US$380 million, up 30%; knitted or crocheted fabrics with US$300 million, up 35%.

A major portion of Taiwan-made goods shipped to Vietnam is due to demands related to vigorous Taiwanese investments in the country, which picked up again in 2010 to offset soaring labor costs in China, following stagnation 2008-2009 amid the global financial tsunami. Over 2,000 Taiwanese firms have invested US$20 billion in Vietnam.

Taiwan's export to India rose 40% to US$3.2 billion, with that of electrical machinery soaring 58.4% to US$561 million, the largest item, followed by natural or cultured pearls and precious stones with US$498 million, up 205.8%; machinery with US$471 million, up 21.6%; plastics with US$403 million, down 2%; organic chemicals with US$395 million, up 32.6%; and iron and steel with US$135 million, up 18.5%.

Growing numbers of Taiwanese firms are targeting the Indian market, whose 1.1 billion population, half of whom aged under 25, has rising purchasing power following years of rapid economic development.

Taiwan's shipment to Brazil rose 29% to US$1.6 billion, with that of machinery inching up 5% to US$276 million, the largest item, followed by mineral fuels with US$271 million, soaring 220%; electrical machinery and home appliances with US$256 million, down 10%; plastics with US$218 million, up 45.8%; man-made filament with US$108.6 million, up 29%; iron and steel with US$88 million, down 14%.

Shipment to Mexico inched up 0.3% to US$1 billion, with that of electric machinery and home appliances dropping 27% to US$290 million, the largest item, followed by iron and steel with US$122 million, up 55%; machinery with US$115 million, up 40%; auto parts with US$60 million, up 10%; plastics with US$58.7 million, up 11%; iron and steel with US$58 million, up 43%; man-made filaments with US$56.7 million, up 16.7%.

Shipment to Russia leapt 47% to US$1 billion, with that of electric machinery and home appliances advancing 21.1% to US$341 million, the largest item, followed by machinery with US$204 million, up 78%; plastics with US$88 million, up 52%; optical products with 80 million, up 580%; articles of iron and steel with US$49 million, up 65%; iron and steel with US$45 million, down 13%; and tools, implements, and cutlery with US$44 million, up 95%.

Exports to Saudi Arabia soared 70.5% to US$1.1 billion, with that of mineral fuel skyrocketing 213% to US$395 million, the largest item, followed vehicles and auto parts with US$244.7 million, up 255%; plastics with US$92 million, up 11%; iron and steel with US$89 million, up 7.5%; machinery with US$78.5 million, up 6.5%; electric machinery and home appliances with US$54 million, up 10%.

Shipment to Turkey rose 12.8% to US$1.1 billion, with that of machinery advancing 38% to US$287 million, the largest item, followed by electric machinery and home appliances with US$192 million, down 30%; plastics with US$146.8 million, up 79.5%; iron and steel with US$145 million, up 19.6%; organic chemicals with US$41 million, up 109%; and auto parts with US$32.6 million, up 31%.

Exports to Poland dipped 3.5% to US$540 million, with that of electric machinery and home appliances dropping 28% to US$209 million, the largest item, followed by machinery with US$70 million, down 14.5%; articles of iron and steel with US$49 million, up 61.5%; iron and steel with US$39 million, up 94%; auto parts with US$36.4 million, up 24.6%.

Taiwanese Exports to Major Emerging Markets, Jan.-August 2011

Unit: US$1

Countries

Ranking

Export figures

Share (%)

CHINA

1

57,584,488,413

27.680

HONG KONG

2

26,628,246,043

12.800

VIET NAM

7

6,185,814,772

2.973

MALAYSIA

9

4,652,058,526

2.236

PHILIPPINES

10

4,598,651,452

2.211

THAILAND

11

4,298,540,974

2.066

INDONESIA

12

3,293,194,236

1.583

INDIA

13

3,168,883,050

1.523

BRAZIL

19

1,618,337,575

0.778

SAUDI ARABIA

21

1,160,030,457

0.558

TURKEY

22

1,100,667,489

0.529

UNITED ARAB EMIRATES

23

1,047,048,426

0.503

RUSSIA

24

1,013,282,426

0.487

MEXICO

25

1,001,761,939

0.482

SOUTH AFRICA

26

931,749,025

0.448

BANGLADESH

29

690,338,641

0.332

IRAN(ISLAMIC REPUBLIC OF)

30

637,963,449

0.307

POLAND

31

540,485,666

0.260

Source: Customs

Taiwan's Export to China

Unit: US$1

Items 2010/01-2010/082011/01-2011/08Ranking Change(%)

Total51,426,758,86057,584,488,413---11.974

Chapter 85 electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles

14,406,776,814

17,015,804,400

1

18.110

Chapter 90 optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof

12,553,463,235

11,613,420,737

2

-7.488

Chapter 29 organic chemicals

5,198,436,027

6,301,133,925

3

21.212

Chapter 39 plastics and articles thereof

5,008,821,853

5,684,657,636

4

13.493

Chapter 84 nuclear reactors, boilers machinery and mechanical appliances; parts thereof

4,502,604,430

5,527,719,704

5

22.767

Chapter 74 copper and articles thereof

1,360,267,647

1,530,614,609

6

12.523

Chapter 72 iron and steel

1,288,947,126

1,264,186,548

7

-1.921

Chapter 54 man-made filaments

657,990,580

786,866,264

8

19.586

Chapter 27 mineral fuels, mineral oils and products of their distilation; bituminous substances; mineral waxes

633,481,679

758,913,161

9

19.800

Chapter 38 miscellaneous chemical products

629,583,703

722,112,177

10

14.697

Chapter 70 glass and glassware

295,166,868

502,859,125

11

70.364

Chapter 28 inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes

240,760,289

481,824,151

12

100.126

Chapter 32 tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks

373,734,068

429,137,316

13

14.824

Chapter 40 rubber and articles thereof

261,412,204

328,778,015

14

25.770

Chapter 73 articles of iron or steel

289,144,019

320,366,026

15

10.798

Chapter 87 vehicles other than railway or tramway rolling-stock, and parts and accessories thereof

222,473,310

308,706,620

16

38.761

Source: Bureau of Foreign Trade, Ministry of Economic Affairs

Taiwan's Export to Vietnam

Unit: US$1

Items2010/01-2010/082011/01-2011/08Ranking Change (%)

Total4,865,513,4706,185,814,772---27.136

Chapter 27 mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes

1,050,413,387

1,476,289,116

1

40.544

Chapter 39 plastics and articles thereof

447,405,621

596,351,081

2

33.291

Chapter 72 iron and steel

379,854,788

459,072,272

3

20.855

Chapter 84 nuclear reactors, boilers machinery and mechanical appliances; parts thereof

393,280,976

456,146,730

4

15.985

Chapter 54 man-made filaments

293,433,997

380,428,462

5

29.647

Chapter 60 knitted or crocheted fabrics

222,520,877

300,609,745

6

35.093

Chapter 29 organic chemicals

198,202,288

283,234,008

7

42.901

Chapter 55 man-made staple fibres

146,603,695

191,865,843

8

30.874

Chapter 85 electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles

226,525,041

188,145,271

9

-16.943

Chapter 59 impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use

144,979,585

170,350,159

10

17.499

Chapter 41 raw hides and skins (other than fur skins) and leather

130,835,893

127,180,137

11

-2.794

Chapter 76 aluminium and articles thereof

90,159,941

112,992,966

12

25.325

Chapter 87 vehicles other than railway or tramwayrolling-stock, and parts and accessories thereof

87,688,760

107,612,118

13

22.721

Taiwan's Export to India

Unit: US$1

Items 2010/01-2010/082011/01-2011/08changeChange (%)

Total2,262,745,3623,168,883,050---40.046

Chapter 85 electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles

353,795,923

560,516,587

1

58.429

Chapter 71 natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metals, and articles thereof; imitation jewelry; coin

142,058,386

498,393,476

2

250.837

Chapter 84 nuclear reactors, boilers machinery and mechanical appliances; parts thereof

387,714,816

471,308,263

3

21.561

Chapter 39 plastics and articles thereof

411,927,419

403,292,592

4

-2.096

Chapter 29 organic chemicals

297,499,949

394,589,543

5

32.635

Chapter 72 iron and steel

113,997,144

135,078,307

6

18.493

Chapter 27 mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes

74,601,833

101,504,246

7

36.061

Chapter 40 rubber and articles thereof

49,255,065

92,775,242

8

88.357

Chapter 59 impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use

59,445,798

82,368,764

9

38.561

Chapter 32 tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks

47,894,051

55,296,499

10

15.45

Source: Bureau of Foreign Trade

Taiwan's Export to Brazil

Unit: US$1

Items 2010/01-2010/082011/01-2011/08rankingchange(%)

Total1,252,983,2201,618,337,575---29.159

Chapter 84 nuclear reactors, boilers machinery and mechanical appliances; parts thereof

263,132,378

276,854,491

1

5.215

Chapter 27 mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes

84,720,183

271,058,121

2

219.945

Chapter 85 electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles

284,966,130

255,819,813

3

-10.228

Chapter 39 plastics and articles thereof

149,608,228

218,183,701

4

45.837

Chapter 54 man-made filaments

83,959,129

108,614,684

5

29.366

Chapter 72 iron and steel

103,036,653

88,247,511

6

-14.353

Chapter 90 optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof

16,040,488

74,664,969

7

365.478

Chapter 73 articles of iron or steel

56,034,930

64,298,071

8

14.746

Chapter 40 rubber and articles thereof

41,960,503

46,439,646

9

10.675

Chapter 87 vehicles other than railway or tramway rolling-stock, and parts and accessories thereof

22,359,638

35,804,742

10

60.131

Chapter 29 organic chemicals

20,796,750

28,179,439

11

35.499

Chapter 82 tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal

15,938,793

17,319,156

12

8.660

Source: Bureau of Foreign Trade