Taiwan February trade outperforms on China, Hong Kong demand

Taiwan posted surprisingly strong February trade figures on Monday as firm exports to Hong Kong, China and Southeast Asia made up for typically slack demand from the United States in the first quarter.
Exports last month rose 34.6 percent from a year earlier to US $13.23 billion, the finance ministry said, easily topping January's US $11.8 billion and the median estimate of $12.5 billion from a Reuters poll of 10 economists.
February imports last month rose 56.4 percent from the same month in 2003 to $13.15 billion, the ministry said, far outpacing the $11.06 billion expected in the Reuters poll.
While the long Lunar New Year holiday had reduced the number of working days in February 2003 and inflated last month's year-on-year growth, the ministry predicted overall trade in the first quarter would surprise on the upside.
"The global economic rebound will help push export and import growth up in the first quarter beyond previously expected," Hsu Kuo-chung, the ministry's chief statistician, told reporters.
Exports in the first quarter are forecast to rise 19 to 20 percent from the year-earlier period, while imports are expected to rise 27 percent, said Hsu.
Combining January and February exports negates the seasonal variance due to the long Lunar New Year holiday, which fell in January this year but in February last year.
The combined exports in the first two months of 2004 came to $25 billion, up 26 percent from the same period in 2003 but down from $27.8 billion in November and December.
Taiwan exports are usually strong in the run-up to the Christmas shopping season, whereas they are typically weak in the first quarter as demand in key markets in Europe and the United States fades.
China and Hong Kong combined overtook the United States as the island's largest export market in 2001, but a significant portion of shipments to the mainland are re-exported to other countries like the United States.
Taiwan also reported firm growth in imports of raw materials and capital equipment, which point to strong exports in the coming months as manufacturers invest in more capital equipment and raw materials to ramp up production.