The Port of Taipei developments are part of a US$558 million harbour expansion that will run for eight years as officials expect global marine shipping to pick up sharply this year.

Taiwan's export-reliant economy is expected to grow 5 per cent in 2011, with exports at a record US$305.1 billion, after a 2010 rebound from the downturn. Boom times in Taiwan mean that its major markets - China, Europe and the United States - are ordering more goods, translating to direct gains for marine shippers.

The International Monetary Fund has increased its growth estimate for the US economy to 3 per cent, easing some of the concerns of shippers.

Taiwan-based Evergreen Marine, the world's No 4 marine shipper, has welcomed the port expansion and says it will gradually add ships to its fleet, including 20 vessels for Asian, European and North American routes. 'If we looked purely at the growth scope of 2011, it still will be quite good,' it said.

Taiwan's bigger marine shippers expect a turnaround, based on normal economic cycles, following a troubled period of losses in 2009. Evergreen's losses came to NT$4 billion (HK$1.06 billion) over the second and third quarters of that year.

In March of the same year, a 1.1 million twenty-foot equivalent units (teu) capacity deep-water container port was opened in Taipei for companies based in northern Taiwan. The Port of Keelung's expansion also features a 48-hectare container terminal, a 123-hectare offshore storage zone and a container terminal covering another 123 hectares.

The southern city of Kaohsiung, Taiwan's biggest port and the world's 12th-most active, is pumping money this year into a 2.4-kilometre access road and a 2.3-kilometre jetty. Kaohsiung harbour officials, who expect sustained world economic growth, are seeking to raise competitiveness of the port that handles about 10 million teu per year by preparing it better for ships big enough for 10,000 teu.

The Kaohsiung port often feels the impact of external economic trends before they are obvious elsewhere in Asia, as it is so integrated into the global supply chain. Local officials see the harbour as part of a broader southern Taiwan logistics centre, adding to plans that could boost overall capacity by 6.3 million teu.

By March next year, the port will finish a 2.6-kilometre pier with 97 pontoon spaces, costing NT$2.42 billion, to give cargo and chemical shippers more space.

Port officials seek to expand partly because they assume that new direct shipping links between Taiwan and the mainland, the island's top export market, would stimulate traffic.

Since 2008, as part of landmark negotiations, the two erstwhile political rivals have opened more than 80 seaports to direct marine cargo shipments. Last year, they signed a deal to cut import tariffs on about 800 items, 15 per cent of all trade.

Some are critical of the expansion under way in port capacity and Stone Lin, shipping analyst with Yuanta Investment Consulting in Taipei, warned of competition from mainland ports. The rise of nearby ports such as Shanghai, Shenzhen and Xiamen along with the mainland's economic growth in the past 20 years has hurt Taiwan's marine shipping traffic. Mainland-bound transit shipments on which Taiwan once depended have fizzled out as foreign shippers head straight to the mainland, Lin said.

Kaohsiung's port ranked world No 3 by volume in the 1980s and slipped quickly after 2000 as Taiwan manufacturing moved to the mainland, contributing to the growth in ports there.

'Demand is OK this year because if the economy is improving, demand for shipping goes up,' Lin said. 'But Taiwan's position is still headed downward. The ports are now in China and a ship from Europe can go straight through to Shanghai.'

Bouncing back

Taiwan's export-reliant economy is expected to grow this much after it rebounded last year: 5%