June 8 (Bloomberg) -- Taiwan’s exports fell at a slower pace for a second month as Chinese demand for electronics provided some relief for the recession-stricken economy.

Overseas shipments fell 31.4 percent in May from a year earlier, following a 34.3 percent drop in April, the Finance Ministry said in Taipei today. Economists expected a 34 percent decline. The island posted a trade surplus of $3.17 billion as imports slid 39.1 percent.

Exports, which account for about 70 percent of the economy, may keep improving as China implements a 4 trillion yuan ($585 billion) stimulus package and U.S. consumers increase spending. Taiwan Semiconductor Manufacturing Co., the world’s largest custom-chipmaker, forecast second-quarter revenue that beat analysts’ estimates on optimism Chinese sales will pick up.

“The export declines have bottomed out, but it’s still too early to expect a full recovery,” said Cheng Cheng-mount, chief economist at Citigroup Inc. in Taipei. “The pace of decline in shipments to China is easing as the stimulus measures start to take effect.”

The global financial crisis has triggered $1.47 trillion of writedowns and credit losses at banks and other financial institutions and sent the global economy into its first recession since World War II.

China, U.S.

Signs of a revival are emerging in China and the U.S., Taiwan’s biggest overseas markets.

Shipments to China fell 32.4 percent from a year earlier, less than April’s 34.6 percent decrease, the ministry said. Exports to the U.S. declined 28 percent, compared with a slump of 33.7 percent in the previous month. Sales to Europe fell 36.3 percent after they dropped 37 percent in April.

Chinese television makers plan to buy $4.4 billion worth of flat-panel products from Taiwan this year, double the amount forecast in December, Bai Weimin, secretary-general of the China Video Industry Association, said last week.

In the U.S., a Conference Board survey showed the group’s index of consumer expectations in May rose to the highest level since December 2007, and the share of people who said more jobs will be available in the next six months climbed to the highest level in more than five years.

The trade figures were released after the close of trading on the stock exchange. The Taiex stock index slumped 3.3 percent, the biggest drop since April 17. Taiwan’s dollar declined 0.5 percent against the U.S. currency.

Spurring Economy

Taiwan’s policy makers are trying to spur an economy that shrank 10.2 percent in the first quarter. The government plans stimulus spending of NT$858.5 billion ($26.2 billion) over four years on infrastructure works, tax cuts and consumer grants.

The central bank cut its interest rate to a record-low 1.25 percent in February. Central bank Governor Perng Fai-nan and his board will next meet on June 25. Economists including Cheng and Tony Phoo at Standard Chartered expect the central bank to keep the rate unchanged as the export slump eases and consumer prices fall.

Taiwan Semiconductor expects sales this quarter will total NT$71 billion to NT$74 billion, compared with analysts’ estimates for NT$52.4 billion.

Hon Hai Precision Industry Co., which makes iPhones for Apple Inc., and AU Optronics Co. increased factory workers in Taiwan and in mainland China in March to fill orders.

Exports of electronics products including semiconductors fell 18.6 percent last month after declining 21.3 percent in April, today’s report showed.

Overall shipments abroad slid 35.1 percent in the first five months of 2009 compared with the same period a year earlier. The value of exports was $16.17 billion in May, the highest in six months. Imports totaled $13 billion.

To contact the reporter on this story: Janet Ong in Taipei at jong3@bloomberg.net.

Last Updated: June 8, 2009 04:12 EDT