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Taiwan exports contract 7.1% on weak demand for electronics

A container truck drives along a pier at Taiwan's busy northern Keelung harbour taken on August 8, 2011

Taiwan's exports contracted 7.1 percent in the first half of 2015 due to weak overseas demand for electronic products and falling oil and steel prices, the government said Tuesday. Exports totalled $142.4 billion in the six months to June, the lowest since 2011 when overseas shipments amounted to $154.1 billion in the first half of that year. The release of the official figures came after the government in May said gross domestic product was predicted to grow 3.28 percent in 2015 -- 0.5 percent lower than its previous forecast. "As the growth of global economies was slow, the inventory levels of electronic products were high while oil and steel prices remained low," the finance ministry said in a statement. The sign of slow exports first started in February and since then the trend has deepened. Exports in June contracted 13.9 percent year-on-year, the fifth monthly decline in a row, to the lowest monthly level since October 2010. "The outlook for the next two months, at least, are not good. Monthly exports in July and August are unlikely to return to the levels of last year," a finance ministry official said. Also affecting the export sector is the emergence of Chinese electronics supply chains which has led to the reduction of orders from the mainland, the ministry said. Sales to mainland China and Hong Kong fell 5.4 percent year-on-year during the six-month period to $22.6 billion while shipments to Japan and the United States shed 5.9 and 9.5 percent to $19.6 billion and $12.6 billion, respectively. Traditionally an export-driven technology hub, Taiwan has benefited from Apple's new iPhone6, launched last year. A number of top Taiwanese firms such as Foxconn and TSMC are reportedly among Apple's suppliers. But China has been pushing to grow its own tech industry with the development of domestic smartphone brands and homegrown hardware, including chips.