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Taiwan cuts growth forecast as economy contracts

31 July 2012 Last updated at 02:47 BST

A slowdown in exports of technology products is hurting the economy of Taiwan.

Data published by the government on Tuesday shows the economy contracted by 0.16% in the second quarter of 2012, compared to last year.

Exports account for more than 70% of the island's economy, mainly technology and electronic products. However shipments of those fell 20% in the first half of this year.

As the BBC's Cindy Sui reports from Taipei, the government wants to encourage other industries to sell products overseas.