Overseas orders filled by overseas production over 30% in second quarter

September 5, 2004

Ministry of Economic Affairs statistics show that the ratio of overseas orders placed in Taiwan and filled by overseas production averaged 28.5% in the first half of the year and remained at over 30% throughout the second quarter. Over 70% of this overseas production is based in China. These figures demonstrate the significant roles overseas investment and the outsourcing of production by Taiwanese enterprises play in driving the nation's rapid export growth.

Compared to a ratio of 24% in 2003, this year's figures reveal that Taiwanese production in China is expanding despite China's stringent power rationing this summer.

Taiwanese officials contend that the real ratio is likely to be higher than their statistics show. Many Taiwanese enterprises only have manufacturing operations in China and remain beyond the view of Taiwan's statisticians.

While some focus on the negative aspects of Taiwan industry's westward move to China, the MOEA points out that this transfer of production is in fact responsible for a significant portion of Taiwan's current export growth. Statistics show that 9.2% of Taiwan's export value, or USD 13.3 billion, came from overseas production in 2003. However, this figure has already risen to 14.5% in the first half of this year, accounting USD 12.2 billion in exports.

The MOEA also notes that Taiwan's overseas production also increases the dependence of overseas production bases on parts and components made in Taiwan. Illustrative of this effect, LCD panels, semiconductors and mobile phone components have been in order the top-three products exported to China this year.

(Economic Daily News)

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