Taiwan Trade with China Grows

Jason Sandefur

Editor�s Note: The following is presented by Taiwan-based Fastener World magazine as part of a news column exchange with FIN.
Nearly 60% of Taiwan manufacturers believed they were operating in a �good� economy in March, according to a survey by the Taiwan Institute of Economic Research. Only 6% rated the economy as �bad,� while about 35% gave it an average ranking. Survey results indicate that production and new orders are on the rise, improving profits. Levels of inventory are steady, as domestic and export prices remain unchanged. Fastener manufacturers expected continued improvement over the next six months.
The overall economic enthusiasm was bolstered by a 12.9% growth in trade to US$4.69 billion between Taiwan and China from January to February, the Board of Foreign Trade reported. Exports to China accounted for 15% of total Taiwan exports during that period, a 4% jump from 2001. The increase boosted the trade surplus 19.7% to US$2.95 billion.

�John Wu, chairman of the Taiwan Industrial Fastener Institute, expects fastener exports to grow 5% in the next six months. Despite this, Wu told industry executives at China Steel Corporation that increasing wire costs are outpacing fastener prices. He urged the company and other suppliers to stabilize wire prices for the remainder of 2002 to assist fastener manufacturers.

�The secretary general of the Chinese Fastener Industry Association, Jin-Yao Feng, led a group of nine delegates during a visit to Taiwan in June. The group visited several fastener factories and China Steel Corporation. Considering the potential for expanding business opportunities in China, Feng encouraged manufacturers on both sides of the Taiwan Strait to cooperate. He said the dilemma of �dumping� steel products by both countries has seen a temporary reprieve, causing him to predict that an intensified exchange of technology and communication could provide a more permanent solution to the situation.

�Following in the footsteps of a deal authorizing San Shing Hardware Works Company to produce screws and nuts for U.S. fastener company MacLean Fogg, Chun Yu Works & Company Ltd. signed a contract with Simpson Industries Inc. to manufacture small screws. The three-month usage agreement calls for 100 million pieces a month starting in July. The deal is expected to help Chun Yu increase revenue by as much as US$3.2 million in the third quarter. The contract allows Simpson to renew orders with the Taiwan company as needed.

�Despite China�s efforts to protect its domestic steel market by limiting Taiwan exports of steel products, authorities encourage exports of other manufacturing materials, according to Sheng-Feng Wu, director of Taiwan Steel & Iron Industries Association. Taiwan�s steel industry still benefits from the arrangement, because exports of materials for further processing make up 60% to 70% of Taiwan�s overall steel exports to China. \ �2002 FastenerNews.com