Taiwan's Evergreen Marine (2603.TW), the world's fourth-largest container line, on Wednesday said it will dismantle a sixth of its fleet over the next four years as it sees no clear signs of an economic recovery.Not all news is bad...exports fell another 30% year on year in June (Forbes via AP):
Evergreen, which recorded a loss in the first quarter as a result of the economic crisis, plans to take down 31 old cargo ships after they are retired and to sell off the scrap metal, a company official told Reuters. It owns about 180 vessels.
"The shipping industry is facing severe challenges because of the global financial crisis," said the official, who declined to be identified because he was not authorised to speak to the media.
"Our chairman said this year would be the most difficult year for the industry because there is an oversupply of ships since the crisis struck. Basically, companies constructed too many ships in 2007 and 2008," he said.
Taiwan's exports fell 30.4 percent year-on-year in June, a slight improvement on the drops recorded in the previous six months, the island's government said Tuesday....but rose 17% over May of this year in overall value. The government announced a five-year, US$1.4 billion plan to invest in green technology which will certain act as a stimulus. The consumer price index also had its biggest decline in June, falling almost 2% year on year, a sharp increase in the fall from May of 0.8%, the fifth consecutive month prices fell. Falling prices might appear good on the surface, but recall that if businessmen can't make money selling stuff, the economy won't move and people won't get hired.
The Finance Ministry said June's exports totaled $16.9 billion, the highest figure since December when exports plunged 41.9 percent amid the global slowdown. May's exports of $16.2 billion were down 31.4 percent year-on-year.
The government might have hailed the rise in export values and the slowing year on year falls, but many experts were more gloomy. The South China Morning Post, long a cheerleader for the KMT Administration, observed last week:
They were also disappointed that the mainland's much-touted plan to stimulate consumption of electrical appliances in rural areas had yet to show any positive impact on Taiwan.It's been really interesting to see how different analysts are all over the map on the projected size of our decline this year, even though we are six months into the year.
"The export situation appears to be gloomier than we expected," said Tao Dong, Credit Suisse's chief economist for Asia excluding Japan.
"We know the recession dampened global consumer demand, wealth was destroyed and retailers were burning stocks since the collapse of Lehman Brothers. In the meantime, we hope retailers' inventory will be rebuilt and make exports better. But we haven't seen this happen yet in Taiwan and across Asia."
Mr Tao blamed poor demand for electronics dragging down the island's exports.
Goldman Sachs said in a research report it expected closer economic ties between the mainland and Taiwan would lead the island on an economic recovery path this half of the year and next year.
It forecast that Taiwan's economy would turn around from a 7 per cent decline this year to 3.5 per cent growth next year as cross-strait trade intensifies. Taiwan is among the first in Asia to post its trade figures. Other major indicators of global demand such as China and South Korea's trade data will follow in coming weeks.
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