TAIWAN: Cross Straits driving cargo growth, for now

The skies above Mainland China and Taiwan are getting busier according to a recent study titled “Taiwan Freight Transport Report Q4 2010,” by Business Monitor International (BMI). In June, the Beijing and Taipei governments committed to increase the number of cargo-only flights between the two countries from 28 to 48 per week with effect from […]


The skies above Mainland China and Taiwan are getting busier according to a recent study titled “Taiwan Freight Transport Report Q4 2010,” by Business Monitor International (BMI). In June, the Beijing and Taipei governments committed to increase the number of cargo-only flights between the two countries from 28 to 48 per week with effect from mid-June 2010. Freighters departing from Taiwan are now authorised to fly to Nanjing, Xiamen, Fuzhou and Chongqing, as well as Shanghai Pudong and Guangzhou. The authorities also agreed to increase passenger flights to 370 per week, compared with existing 270. The air freight industry has reasons to look positively towards 2010 after the International Air Transport Association HONG KONG (IATA) reported that figures for global air traffic improved in late-2009. The recovering air cargo environment will be broadly supportive of Taiwan’s freight transport sector over the next 12 months, according to the report. The island economy is enjoying a good recovery, with GDP growth expected at 9 per cent this year, after the 2009 contraction of 1.9 per cent, the BMI said. But it cautioned that a likely mainland slowdown in 2011 will cool the pace next year, with local GDP growth dipping to 1.4 per cent. Boosted by the opening up of cross- Straits cargo and passenger flights, Taiwan’s airlines will experience good freight volume growth this year, with an increase of 5.7 per cent to 856,070 tonnes. However, as business migrates to the mainland, the longer-term outlook is less encouraging with BMI now predicting average annual airfreight growth of 2.7 per cent over the next five years, lagging behind GDP growth. Taiwan remains an export-focused economy. The prospect of a free trade agreement (FTA) with China is further boosting the outlook for cross-straits trade. In real terms, Taiwan’s total trade fell by 10.9 per cent during the sharp global recession in 2009, but in 2010 BMI anticipate a very strong recovery with 22.5 per cent growth. Over the next five years, BMI believe annual trade growth will average 10.6 per cent, ahead of average GDP expansion over the same period.