Taiwan's exports surged 24.9% year on year while imports were even better at 44.7%YoY in February. We think this is because of strong trade in electronics and also the low base effect in the same month last year. Due to the strong import growth, the trade balance was reduced to $3.3bn in February, lower than $3.46bn in January.

Electronics took the lead, which is probably the result of 5G demand. Exports of electronic parts and products rose 46.2%YoY, while imports recorded a jump of 54.1%YoY.

Taiwan did not have an enforced extended Chinese New Year due to the coronavirus, which led to the suspension of factory production across Mainland China. Electronics product continued to be shipped to Mainland China and production levels do not, therefore, appear to have been dented.

But, in March, we think trade growth is likely to subside as the base effect will not be as pronounced.