Taiwan's central bank mentioned South Korea in monetary policy materials released on the 2nd, stating that traditional manufacturing weakness amid external headwinds is not unique to Taiwan but a pattern observed in South Korea and Japan. The central bank explained this in its post-meeting press conference materials, addressing criticism about export polarization between booming semiconductor sectors and struggling traditional manufacturing. According to bond market sources on the 7th, the central bank cited China's dumping practices, tariff increases, and weak global final demand as combined factors affecting traditional export growth rates across the three economies, while noting gradual recovery trends in traditional manufacturing sectors.
Taiwan and South Korea Show Divergent Export Growth Between Tech and Traditional Sectors
Taiwan's electronics and ICT sector exports grew 64.4% from January to April, significantly outpacing the 7.7% growth in traditional manufacturing exports during the same period, according to Taiwan's central bank data. South Korea exhibited a more pronounced divergence, with electronics and ICT exports surging 116.5% from January to May compared to 8.3% growth in other traditional manufacturing sectors.
![Taiwan Central Bank]()
The Taiwan central bank stated in its post-meeting press conference materials that "the relatively sluggish trend in traditional manufacturing amid external headwinds is not a phenomenon unique to Taiwan, but a pattern observed identically in South Korea and Japan." The central bank attributed this pattern to the combined effects of China's dumping practices, tariff increases, and weak global final demand on traditional export products across the three economies.
Taiwan Central Bank Maintains Stable Policy Stance Despite High Growth Forecast
Taiwan has not signaled interest rate increases despite a growth forecast of 9.45%. Bond market observers are monitoring Taiwan's case regarding export and economic polarization and its implications for monetary policy. Market participants expect arguments to grow for considering polarization factors, even as two to three rate increases may be unavoidable, given that the benchmark rate has entered a somewhat restrictive level.
BOK Committee Member Raises Polarization Concerns in May Minutes
One Bank of Korea committee member expressed concerns about polarization in the May Monetary Policy Committee meeting minutes. According to the minutes, the member stated that "while overall economic conditions appear favorable based on indicators, the underlying problems of polarization by industry, region, and income remain serious."
Nomura Securities Reports Broadening Asian Export Momentum Beyond Tech
Nomura Securities reported on the 6th that Asian exports excluding tech items have gained momentum in recent months. Non-tech export growth reached 10.9% year-over-year in May, significantly higher than the negative 2.2% recorded in October last year. Nomura Securities explained that this suggests export expansion is no longer limited to semiconductors and AI server-related items but is broadening across categories.
![Asian Export Growth Rates Chart]()
Polarization concerns have weakened as export items beyond semiconductors have shown increases across the Asian region. The chart shows tech and non-tech export growth rates for Asia excluding Japan, illustrating the recent momentum shift in traditional manufacturing sectors.
FAQ
What did Taiwan's central bank say about South Korea in its recent policy materials?
Taiwan's central bank stated in materials released on the 2nd that the relatively sluggish trend in traditional manufacturing amid external headwinds is not unique to Taiwan but a pattern observed identically in South Korea and Japan. The central bank attributed this to China's dumping practices, tariff increases, and weak global final demand affecting traditional export products across the three economies.
How do South Korea's tech and traditional manufacturing export growth rates compare?
South Korea's electronics and ICT sector exports grew 116.5% from January to May, while other traditional manufacturing sectors grew only 8.3% during the same period. This divergence is more pronounced than Taiwan's, where electronics and ICT exports grew 64.4% versus 7.7% for traditional manufacturing from January to April.
