TAIPEI: Taiwan's exports fell for a 10th straight month in June, as global demand for electronics goods continues to tumble. The drop in numbers extends the longest run of declines since 2001.

Exports dropped 30.4 percent from a year earlier. The grim statistics followed a 31.4 percent decrease in May, the "Ministry of Finance" said in Taipei yesterday. The median estimate of 13 economists surveyed was for a 30.8 percent decline. Taiwan posted a trade surplus of $1.76 billion last month as imports slid 33.5 percent.

The global recession is hurting economies across the region, which is almost twice as reliant on exports as the rest of the world. Still, Taiwan's stock index has climbed 46 percent this year on optimism increased trade with emerging markets will help stoke an economy that shrank a record 10.24 percent in the first quarter.

"Demand from emerging markets, not just the mainland but also places like the Middle East and South Asia, is coming back," said Frederic Neumann, an economist at HSBC Holdings Plc in Hong Kong. "This may help to revive Taiwan exports even if the decline from the US market lingers a little longer."

Lin Lee-jen, director of the statistics bureau, said he expects export and import growth will turn positive in November. The decline in overseas shipments in June was the smallest in four months.

Taiwan Semiconductor Manufacturing Co, the world's largest maker of custom chips, forecast second-quarter sales and profitability that exceeded analyst estimates, signaling that rising demand on the mainland is driving a recovery in the chip industry.

The company is a benchmark for the technology industry because it makes chips for everything from mobile phones to flat-screen televisions.

The figures were released after the close of trading on the stock exchange. The TAIEX rose 1 percent yesterday.

The global financial crisis, which started with the collapse of the US property market in 2007, has triggered some $1.47 trillion of writedowns and credit losses at financial institutions and sent the world economy into its first recession since World War II, according to data compiled by Bloomberg.

Signs of revival are now emerging on the mainland and in the US, Taiwan's biggest export markets. The mainland's 4 trillion yuan ($585 billion) stimulus package is spurring domestic consumption.

The mainland's manufacturing expanded for a second month in April, and new loans more than tripled in the first quarter. An index of US services industries improved for a third month in June.

Gradual recovery

Taiwan's exports in the first half of 2009 fell 34.2 percent from a year ago to $88.49 billion and imports dropped 42.3 percent to $72.96 billion, for a surplus of $15.53 billion, yesterday's report showed.

"Export declines have bottomed and we are in the recovery phase," Neumann said. "The rebound will be very gradual."

Shipments to Japan dropped 18.6 percent in June and those to the mainland fell 35.8 percent from a year earlier, the government said. Exports to the US declined 29 percent and sales to Europe fell 38.5 percent.

Mainland businesses plan to buy $2.2 billion worth of electronics goods from Taiwan over the coming year, Taiwan External Trade Development Council said on June 5.

Morris Chang, chairman of Taiwan Semiconductor, said last month it will take until 2012 for global chip industry revenue to recover to 2008 levels.

Bloomberg News

(HK Edition 07/08/2009 page2)