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Commercial Times: The plight of Taiwanese investors
Central News Agency
2014-05-19 11:22 AM
Anti-Chinese riots in Vietnam last week led to huge losses for Taiwanese businesses in a country many erroneously consider to be friendly to investments. In reality, labor strikes are a frequent occurrence in the communist country, where electricity shortages help create a nightmare environment for investors. Though last week's riots were an isolated incident, it underscored a risk that Taiwanese companies could lose all of their investments unless they have insurance against fire and riot damage. The policy of encouraging Taiwanese businesses to invest in Southeast Asia was first introduced by former President Lee Teng-hui as a way of slowing Taiwanese investment in China. Investing in the region, however, creates more difficulties than investing in China due to differences in culture and language. Taiwanese businesses began to move to mainland China more than 30 years ago during the early years of China's economic reform and opening. As the economy there became stronger, Taiwanese investments in labor-intensive and highly polluting industries started to become unwelcome. Efforts by Chinese firms to create their own brands and develop domestic supply chains have only increased competition between industries on both sides of the Taiwan Strait. It is clear that Taiwanese investors face problems, whether in Southeast Asia or in China. Now is the time for the government in Taipei to make a complete change of course in its industrial policy and stop encouraging companies to go overseas for the sake of "internationalization." What should go overseas are Taiwanese products, while the companies should stay home. Taiwanese industries should internationalize marketing strategy but localize production. Localizing production will create demand for workers, which will help to raise salary levels in Taiwan and resolve the long-time problem of wage stagnation. (Editorial abstract -- May 19, 2014) (By Y.F. Low)
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