UPDATE 1-Taiwan's Aug export orders barely grow, China demand stalls
* Orders from China +0.1 y/y, US +9.1 pct
* Taiwan orders 'lacking support' - economist
By Michael Gold and Roger Tung
TAIPEI, Sept 25 (Reuters) - Taiwan's export orders in August came in well below expectations, with those from China stalling but U.S. ones up nearly 10 percent on continued demand in the electronics sector.
The 0.5 percent growth in overall export orders, reported on Wednesday, falls far short of a median 1.89 growth forecast from a Reuters poll of 10 economists. Orders had also risen 0.5 percent in July, defying expectations then for a fifth consecutive decline.
Orders from China, the island's largest export market, eked out a 0.1 percent gain in August. Taiwan's Ministry of Economic Affairs attributed the meagre gain to diminished appetite for flat panels after the Chinese government ended its subsidy on television-set purchases.
"The weak data showed that Taiwan's facing a big problem of lacking support, other than contract manufacturing for Apple," said Anita Hsu, an economist at Masterlink Securities in Taipei.
With global demand still weak, "I don't see any other bright spot for Taiwan through the end of year," she said.
The decline in China orders was partially offset by a 9.1 percent climb in U.S. orders, mostly attributed to large increases in electronics and telecommunications equipment.
Export orders typically lead actual exports by two to three months, and are an indication of the strength of overall Asian exports and of global demand for technology.
While Wednesday's Taiwan data was not encouraging, data released in the Philippines seemed to be good for that country's exports. Monthly imports there climbed to a seven-month high in July, which analysts take as a good sign as many of the imports go into assembled electric products that are later re-exported.
Exports are pivotal for Taiwan, and there is hope that the final months of 2013 will bring improvement.
"We're fairly optimistic about cargo orders looking ahead," said Pierre T. P. Yang, vice president of corporate communications at China Airlines, Taiwan's biggest carrier. "We need to keep an eye on whether the European and American economies will continue to see improvement."
Taiwan's technology industry is highly dependent on overseas demand for consumer electronics. The enthusiastic reception for the latest iPhone could be a good sign going forward for Taiwanese components, which make up a large share of exports
The island's homegrown brands, including once-dominant smartphone vendor HTC, have not fared as well. HTC has been beset by declining market share, component shortages and employee defections, causing its stock price to fall to its lowest level since 2005.
Taiwan PC makers continue to struggle as consumers move to tablets and other smaller mobile devices. Acer and Quanta Computer Inc reported August sales declines of 19 percent and nearly 14 percent, respectively, from a year earlier.
Local smartphone maker HTC saw sales slide 37 percent in July and 45 percent in August in the face of slowing growth in the high-end smartphone market and strong competition from makers of low-cost handsets, but suppliers to Apple are expected to have enjoyed a solid pickup this month on strong demand for the U.S. firm's new iPhone models.
As the U.S. and China remain Taiwan's biggest overseas markets, policy moves in the world's two largest economies are closely followed here. Last week's decision by the Federal Reserve to not yet reduce its stimulus is expected to continue bolstering the U.S. economy at a time when employment growth remains sluggish.
The Chinese economy faces headwinds in balancing high growth and the need to boost consumer demand, though signs point to stabilisation. Encouraging news came from the flash HSBC Purchasing Managers' Index (PMI) for September, which reached its highest level since March as targeted stimulus policies started to take effect.
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