UPDATE 1-Taiwan sees 'relatively small' hit from China lockdowns, Ukraine war
(Adds comments from economic planner, paragraph 8)
TAIPEI, April 27 (Reuters) - Taiwan is taking a cautious approach but at the moment sees only a "relatively small" impact on its economy from both COVID-19 lockdowns in eastern China around Shanghai and the war in Ukraine, a senior minister said on Wednesday.
Taiwan, a major semiconductor producer, has a trade dependent economy that is expected to have grown 2.9% on-year in the first quarter, slowing from 4.86% for the previous quarter, though exports have held up well.
China has locked down Shanghai and neighbouring Kunshan city to control a COVID-19 outbreak, impacting operations of many Taiwanese firms, especially in the key electronics components sector.
Speaking to reporters in Taipei, Taiwan Economy Minister Wang Mei-hua said some Taiwanese companies there were relying on existing stocks, while others were postponing deliveries, and the government was keeping a close watch on developments.
"As for Taiwan's own GDP, we look upon with caution the Russia-Ukraine war and China's lockdown, but at present the impact on Taiwan is relatively small," she added.
Taiwan, which releases its preliminary first quarter gross domestic product number on Thursday, does not have a major trading relationship with either Russia or Ukraine, though it has joined Western-led sanctions on Moscow.
Taiwanese officials have repeatedly pointed to the island's good economic fundamentals, including exports which in the first quarter jumped 23.5% year-on-year.
The National Development Council, in charge of industrial development policy, said in a report issued on Wednesday that even with an uptick in domestic COVID-19 cases, turnover in March for the wholesale, retail and catering industries still increased compared with the same period last year.
Still, the stock market has taken a battering, with the main index down around 10% so far this year.
Speaking earlier on Wednesday at parliament, Finance Minister Su Jain-rong said the National Stabilisation Fund, a formal government mechanism to intervene in the stock market in case of large fluctuations, was looking at market movements closely.
But Taiwan's economy is good, he said, pointing to exports and domestic investment, and there's no need to hold a meeting of the fund for now, which is how the government flags it is going to intervene in the market. (Reporting by Ben Blanchard; Additional reporting by Roger Tung and Jeanny Kao; Editing by Kim Coghill & Simon Cameron-Moore)
