Taiwanese Exporters Tap Emerging Markets to Offset Slowdown
2012/01/30 | By Philip LiuChina 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