The cooling international business cycle in 2005 has pulled down Taiwan’s growth of foreign trade. The growth rates of export and import of the first-half of this year are only 6.8% and 11.5%，far lower than the rates of 25.6% and 35.6% of the same period in 2004. Corresponding to the greater increase of import than export，the export surplus in the first-half of this year shrinks to USD420 million, with a decrease by 89.1% from the amount of the same period last year. The reduction of the contribution of trade sector has weakened the growing strength of Taiwan’s economy.
I. The Analysis of Export Surplus Reduction
The significant decrease of export surplus in the first-half of 2005 is caused by both long term and short term factors. The former is the continuous weakness of export competitiveness, while the latter includes Mainland’s decreasing imports, and Taiwan’s sharp increase of petroleum import and increasing purchase of great deal of transportation equipments and infrastructure. They are the primary factors which have been leading to the sharp reduction of Taiwan’s export surplus.
1. Immediate Causes
(1) Mainland’s decreasing imports The down-going growth rate of Taiwan’s export to Mainland in the 4th quarter of 2004 and the 1st-half of 2005 is primarily due to Mainland’s decreasing fixed investment, up-going price of imports, increase of inner production, and reduction of import. Such a economic weakness is an all-out phenomenon, no matter by merchants, enterprises, or the way of international trade.
(2) Taiwan’s sharp increase of petroleum import and increasing purchase of great deal of transportation equipments and infrastructure. The drastic increase of import of petroleum, transport equipment and infrastructure are a suddenly-happening economic phenomenon. It is estimated that the import of petroleum in the first 7 months will increase by USD 22 billion, with the cause of rising price. However, 30% of the import that can be tra