Taiwan’s exports and imports in December plunged by a record 41.9 per cent and 44.6 per cent from a year earlier to US$13.64 billion and $11.78 billion, respectively, mainly due to the severe impact of the global financial crisis, according to statistics released yesterday (January 7) by the Ministry of Finance (MOF).

December exports fell for the fourth consecutive month due to a sharp slump in global market demand to $13.64 billion, the lowest since October 2003.

Lin Li-chen, director general of the statistics department under the MOF, said that weaker demand from the US and China for laptops, mobile phones and computer chips, which are among Taiwan’s major export items, was largely to blame for the record drop in the island’s exports in December. Exports of electronic products alone dropped 43.4 per cent in December, after falling 25.3 per cent in November.

On another front, imports declined for the third straight month in December to $11.78 billion, the lowest figure since November 2003.

Lin said the decline was mainly seen in imports of crude oil, basic metal and metallic products, and electronics goods.

Especially noteworthy is that Taiwan’s shipments to China and Hong Kong posted a record annual drop of 54 per cent in December, due mainly to weaker demand for electronics components used in products assembled by the mainland for export. Imports from the two markets showed a slight annual decline of 0.6 per cent in December, the first contraction since 2002, according to Lin.

Shipments to the US declined 23.5 per cent from a year earlier. Exports to Europe fell 29.5 per cent.

China and the US are Taiwan’s two biggest markets. Exports account for about 70 per cent of the island’s gross domestic product.

For the entire year of 2008, Taiwan’s exports totaled $255.66 billion, posting an annual growth of 3.6 per cent or $8.98 billion, while imports surged 9.8 per cent or $21.57 billion from a year earlier to reach $240.82 billion.

As a result, the island’s trade surplus reached only $14.83 billion in 2008, representing a plunge of 45.9 per cent or $12.59 billion, the largest drop in 27 years.

"Exports in the first half are likely to remain weak, before picking up in the second half," the MOF’s Lin said.