The severe contraction in the island's exports comes after South Korea reported last week that its November shipments dropped 18 per cent from the previous year.

China is expected to release its November data tomorrow. While its exports have held up much more strongly than most economists had expected, increasing by 19 per cent in October, a Chinese newspaper reported at the weekend that preliminary figures showed exports last month declined from 2007. This would set off alarm bells in Beijing if it proved to be a true picture of export performance.

Tine Olsen, an economist at Moody's Economy.com, said: “The pain and suffering experienced by Taiwan is a warning of harder times to come for other sectors and economies which depend on export earnings.” Taiwan is one of the world's biggest producers of electronics and a key supplier of products from computers to bicycles.