Talk of the Day -- Taiwan's trade dependence on China falling
Exports to China and Hong Kong accounted for 38.1 percent of Taiwan's overall outbound shipments in the first half of this year, the lowest since 2005, according to statistics released by the Ministry of Finance (MOF) earlier this week.
The ratio, which indicates a country's trade dependence on a market, may hit an eight-year low for 2012 as a whole as Taiwan's export prospects for the second half of the year remain bleak, trade officials forecast.
The officials attributed the decline in trade dependence in part to China's industrial restructuring efforts in recent years in which it hopes to replace old economy businesses with industries of the future.
Such a drive, popularly called "vacating the cage for new birds," has dealt a blow to export-oriented Taiwanese companies in China's coastal regions, consequently hurting Taiwan's exports to the mainland, the officials said.
Worse still, the officials said slackening global demand is also testing the sustainability of the business model of China-based companies importing raw materials or semi-finished products for processing and then exporting finished goods to Europe, the United States and Japan.
According to China's latest customs data, two-way trade across the Taiwan Strait posted a 5.2 percent decrease in the first half of this year as compared with the year-earlier level.