Taiwan sees upside from China power curbs if orders shift

Economy20 minutes ago (Sep 30, 2021 12:35AM ET)

(C) Reuters. FILE PHOTO: A police officer stands beside the Taiwanese Central Bank logo in Taipei, Taiwan February 26, 2018. REUTERS/Tyrone Siu

TAIPEI (Reuters) -Taiwan may benefit from orders being shifted to the island if China’s power curbs disrupt the country’s exports, Taiwan Central Bank Governor Yang Chin-long said on Thursday.

The world’s second-largest economy is grappling with power cuts and electricity rationing after a collision of tight coal supplies, tougher emissions standards and strong manufacturing demand has pushed the price of coal, the biggest source of China’s electricity, to eye-watering records.

Yang, taking lawmaker questions in parliament, said that if China’s power crunch caused its exports to do badly, manufacturers could shift orders to the island.

“If their exports are bad, there will be an order transfer effect for Taiwan,” he said.

China’s new export orders contracted again in September, but less than the previous month, according to its official manufacturing Purchasing Managers’ Index (PMI).

Yang said the central bank is also paying close attention to the impact of China’s electricity problems on financial markets.

Taiwan faced its own power problems in May, with outages connected to a drought that drastically lowered water levels at hydropower plants and high demand during hot weather.

Taiwan’s export-dependent and tech-heavy economy has benefited from the COVID-19 pandemic due to demand for equipment like laptops and tablets to support the work-and-study-from-home trend around the world.

Yang said the economy may grow 6% this year, depending on how trade and domestic consumption hold up for the rest of 2021.

The central bank last week raised its 2021 estimate for gross domestic product (GDP) growth to 5.75% from the 5.08% forecast in June.

Taiwan has kept its benchmark interest rate at a record low since March of last year.

Whether to raise it will need to take into consideration the impact of tightening of monetary policies in advanced countries, like the United States, on Taiwan, as well as inflation and the COVID-19 pandemic, Yang said.

If the United States decides to raise rates, Taiwan may also consider following suit, he said.

Taiwan sees upside from China power curbs if orders shift

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Similar Articles

Most Popular

Colombia nabs Otoniel, drug kingpin and gang leader -government

World14 minutes ago (Oct 23, 2021 07:40PM ET) 2/2 (C) Reuters. Dairo Antonio Usuga David, alias 2/2 By Oliver Griffin, Nelson Bocanegra and Luis Jaime Acosta BOGOTA...

Colombia nabs Otoniel, drug kingpin and gang leader -government

World14 minutes ago (Oct 23, 2021 07:40PM ET) 2/2 (C) Reuters. Dairo Antonio Usuga David, alias 2/2 By Oliver Griffin, Nelson Bocanegra and Luis Jaime Acosta BOGOTA...

Focus turns to safety fears before New Mexico movie shooting tragedy

3/3 (C) Reuters. Director Joel Souza (R) is pictured with Josh Hopkins during an interview session at the uInterview.com offices in Manhattan, New York, U.S.,...

Subscribe here