UPDATE 1-Taiwan Jan export orders shrink as China, U.S. demand falls

Thu Feb 20, 2014 4:18am EST

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* January export orders fall after 6 months of expansion
    * China orders down 3.9 pct, U.S. orders fall 5.0 percent
    * Europe orders up 2.0 pct, Japan up 1.6 pct

 (Adds quotes, details)
    By Faith Hung and Miaojung Lin
    TAIPEI, Feb 20 (Reuters) - Taiwan's export orders
surprisingly shrank in January, as a lull after the 2013
year-end holidays dampened demand in its key markets, raising
concerns for its high-tech manufacturers.
    Asian exporting countries are hopeful that sustained
recoveries in the Unites States and European economies will
counter a slowdown in the region's largest market, China. But
the effects of U.S. monetary tapering and weakened growth in
emerging economies risk affecting global consumption trends.
    Taiwan's orders fell 2.8 percent in January, worse than the
3.3 percent growth forecast in a Reuters poll and much lower
than the unexpectedly robust 7.4 percent expansion in December.
    The island's weak orders come as global markets were rattled
on Thursday by a contraction in China's factory activity that
will likely affect the region's supply chain. Mainland
manufacturing activity shrank in February to a seven-month low
as employment fell at the fastest pace in five years, a
preliminary private survey showed. 
    Taiwan's Ministry of Economic Affairs attributed the weak
export orders largely to soft demand in the Lunar New Year.
    Orders from China, Taiwan's largest export market, fell 3.9
percent while those from the United States dropped 5.0 percent.
    Orders from Europe and Japan rose 2.0 percent and 1.6
percent, respectively.
      
    Taiwan's export orders typically lead actual exports by one
to two months, but in recent months the data has diverged
significantly from actual exports, which have shown steady
decline.
    The ministry attributed this phenomenon to the fact that
export orders include those registered by Taiwanese companies in
mainland China, while exports only include those from Taiwan
itself.
    Export figures for January reflected this trend, falling 5.3
percent, largely due to distortions from the Lunar New Year
holiday.
    After a record 2013 for export orders, the first quarter of
2014 is expected to be more subdued, the government said.
    "The bad weather recently has slowed the recovery pace of
U.S. and European economies," the ministry said in a statement.
"And China orders could decline as China is pushing for
localisation of its supply chain and restructuring its economy."
    Taiwan's tech exporters, which are the main drivers of its
export machine, reported mixed results for January sales.
    Figures from beleaguered computer maker Acer Inc 
continued their downward slide, plummeting 18.5 percent
year-on-year.
    Hon Hai Precision Industry Co Ltd, the main
manufacturer of Apple Inc products, squeaked out meager
growth of only 0.33 percent.
    But Taiwan Semiconductor Manufacturing Co Ltd, the
world's largest contract chipmaker, reported that revenue grew
8.4 percent in January.
    

 (Editing by Jacqueline Wong)
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