China lockdowns, Ukraine war make ‘relatively small’ impact on Taiwan economy
27 Apr, 2022
Taiwan has seen a “relatively small” economic impact from the combined effects of the war in Ukraine and Covid-19 lockdowns in eastern China, but is remaining cautious.
Taiwanese economy minister Wang Mei-hua said on Wednesday some companies were relying on existing stocks while others were postponing deliveries, and the government was keeping a close watch on developments.
Taiwan is a major semiconductor producer with a trade dependent economy that is expected to have grown 2.9 per cent on-year in the first quarter, slowing from 4.86 per cent for the previous quarter, with exports holding up well but weaker domestic consumption.
The lockdowns in Shanghai and neighbouring Kunshan city have affected the operations of many Taiwanese firms, especially in the key electronics components sector.
“As for Taiwan’s own GDP, we look upon with caution the Russia-Ukraine war and China’s lockdown, but at present the impact on Taiwan is relatively small,” Wang said.
Taiwan, which releases its preliminary first quarter gross domestic product number on Thursday, does not have a major trading relationship with either Russia or Ukraine, though it has joined Western-led sanctions on Moscow.
Taiwanese officials have repeatedly pointed to the island’s good economic fundamentals, including exports which in the first quarter jumped 23.5 per cent year-on-year.
Still, the stock market has taken a battering, with the main index down around 10 per cent so far this year.
Speaking earlier on Wednesday at parliament, finance minister Su Jain-rong said the National Stabilisation Fund – a formal government mechanism to intervene in the stock market in case of large fluctuations – was looking at market movements closely.
Taiwan has seen a “relatively small” economic impact from the combined effects of the war in Ukraine and Covid-19 lockdowns in eastern China, but is remaining cautious.
Taiwanese economy minister Wang Mei-hua said on Wednesday some companies were relying on existing stocks while others were postponing deliveries, and the government was keeping a close watch on developments.
Taiwan is a major semiconductor producer with a trade dependent economy that is expected to have grown 2.9 per cent on-year in the first quarter, slowing from 4.86 per cent for the previous quarter, with exports holding up well but weaker domestic consumption.
The lockdowns in Shanghai and neighbouring Kunshan city have affected the operations of many Taiwanese firms, especially in the key electronics components sector.
“As for Taiwan’s own GDP, we look upon with caution the Russia-Ukraine war and China’s lockdown, but at present the impact on Taiwan is relatively small,” Wang said.
Taiwan, which releases its preliminary first quarter gross domestic product number on Thursday, does not have a major trading relationship with either Russia or Ukraine, though it has joined Western-led sanctions on Moscow.
Taiwanese officials have repeatedly pointed to the island’s good economic fundamentals, including exports which in the first quarter jumped 23.5 per cent year-on-year.
Still, the stock market has taken a battering, with the main index down around 10 per cent so far this year.
Speaking earlier on Wednesday at parliament, finance minister Su Jain-rong said the National Stabilisation Fund – a formal government mechanism to intervene in the stock market in case of large fluctuations – was looking at market movements closely.
But he added that Taiwan’s economy is good, pointing to exports and domestic investment, and said there is no need for now to hold a meeting of the fund, which is how the government would flag any intervention in the market.
