The government’s latest foreign trade data show that the trade surplus continued to rise last month — reaching US$3.17 billion from US$2.14 billion in April. The figures were also up US$950 million, or 42.6 percent, from April last year.
In the first five months of this year, the cumulative trade surplus amounted to US$13.77 billion, according to Ministry of Finance figures released last week. That figure was more than twice the US$6.53 billion surplus registered a year earlier.
A trade surplus is the difference between a country’s exports and imports when the value of exports is greater. Ordinarily, a large trade surplus is a blessing and helps to maintain confidence in the economy. In terms of the value of GDP, an expanding trade surplus also bodes well.
But not this time.
A closer check at the latest trade data reveals that the sizable trade surplus Taiwan registered came about because the decline in the nation’s imports was much larger than that for exports amid the global slowdown.
Last month, for example, exports fell 31.4 percent year-on-year to US$16.17 billion, while imports posted a 39.1 percent decline to US$13.01 billion. Between January and last month, exports and imports were still much lower than a year ago in the wake of the recession, with exports falling 35.1 percent to US$71.54 billion and imports crashing by 44.3 percent to US$57.77 billion.
No wonder, then, that citing the surplus has become a convenient ruse among government officials hoping to avoid accountability for subdued export activity. The economy may have bottomed out, but a recovery could be a long time coming because recent indicators of employment, domestic consumption and corporate investment remain dull.
The latest trade data offer insights into the dimming prospects for corporate investment. According to the ministry’s figures, imports of capital equipment contracted by 44.2 percent year-on-year to US$8.4 billion in the first five months, while imports of agricultural and industrial raw materials shrank by 46.8 percent to US$43.5 billion over the same period.
This indicates that local firms are still troubled by the sharp downturn in business fundamentals. Most importantly, these firms’ reluctance to invest at this time poses a serious challenge to the nation’s exports in later months if the companies can’t expand capacity rapidly enough to keep up with demand.
That is to say, Taiwan’s economy will not proceed at full steam as long as corporate investment is so heavily restrained. Other economic data released recently also contain mixed signals, and the public should be cautious about pinning hopes too heavily on other improving economic fundamentals.
The same applies to the recent euphoria on the local stock market. The government has interpreted this as a signal of improving sentiment among investors, though the market has been driven by rapidly increasing liquidity because investors have been buying up China-related shares rather than sticking to business fundamentals.
The current task for Taiwan’s economy — to climb back to where it was one or two years ago — promises to be long and onerous. It requires a collective effort to ensure that the recovery is sustainable.
What this task does not need is political fudging of the meaning behind the numbers.
The image was oddly quiet. No speeches, no flags, no dramatic announcements — just a Chinese cargo ship cutting through arctic ice and arriving in Britain in October. The Istanbul Bridge completed a journey that once existed only in theory, shaving weeks off traditional shipping routes. On paper, it was a story about efficiency. In strategic terms, it was about timing. Much like politics, arriving early matters. Especially when the route, the rules and the traffic are still undefined. For years, global politics has trained us to watch the loud moments: warships in the Taiwan Strait, sanctions announced at news conferences, leaders trading
The saga of Sarah Dzafce, the disgraced former Miss Finland, is far more significant than a mere beauty pageant controversy. It serves as a potent and painful contemporary lesson in global cultural ethics and the absolute necessity of racial respect. Her public career was instantly pulverized not by a lapse in judgement, but by a deliberate act of racial hostility, the flames of which swiftly encircled the globe. The offensive action was simple, yet profoundly provocative: a 15-second video in which Dzafce performed the infamous “slanted eyes” gesture — a crude, historically loaded caricature of East Asian features used in Western
Is a new foreign partner for Taiwan emerging in the Middle East? Last week, Taiwanese media reported that Deputy Minister of Foreign Affairs Francois Wu (吳志中) secretly visited Israel, a country with whom Taiwan has long shared unofficial relations but which has approached those relations cautiously. In the wake of China’s implicit but clear support for Hamas and Iran in the wake of the October 2023 assault on Israel, Jerusalem’s calculus may be changing. Both small countries facing literal existential threats, Israel and Taiwan have much to gain from closer ties. In his recent op-ed for the Washington Post, President William
A stabbing attack inside and near two busy Taipei MRT stations on Friday evening shocked the nation and made headlines in many foreign and local news media, as such indiscriminate attacks are rare in Taiwan. Four people died, including the 27-year-old suspect, and 11 people sustained injuries. At Taipei Main Station, the suspect threw smoke grenades near two exits and fatally stabbed one person who tried to stop him. He later made his way to Eslite Spectrum Nanxi department store near Zhongshan MRT Station, where he threw more smoke grenades and fatally stabbed a person on a scooter by the roadside.
RSS