Friday, June 12, 2009

Branding lifts Taiwan’s tea industry

With a new focus on the production of higher-end teas, and developing tea infused products and tea tourism, Taiwan’s tea industry is on the upsurge again.

Tea is a century-old business in Taiwan. However, Taiwan’s tea industry has suffered under the pressure of cheaper imports flooding its markets over the last decade. As a consequence, many of Taiwan’s tea fields have been plowed under in favor of planting betel nut trees, a higher cash yielding crop.

The cultivation of tea in Taiwan began in the 1700s, when it was first introduced from China’s Fujian Province. Under Japanese colonial rule (1895-1945), the tea growing business continued upward, producing 20,000 metric tons per year. In 1997, Taiwan produced 23.505 metric tons of tea from 21.199 hectares. It imported 7.692 metric tons and exported 2.918 metric tons. By the end of 2007, the amount of land used to cultivate teas fell to 16.256 hectares, with production dipping to 17.502 metric tons.

Although Taiwan’s tea consumption continues upward, with the invention of bubble tea - a frothy cold tea with tapioca pearls - so have cheaper tea imports from other parts of Asia. In 2007, Taiwan imported 25,000 metric tons, while exports fell to 2,004 metric tons. According to the Taiwan Tea Manufacturers’ Association, annual per capita tea consumption in Taiwan surged from 0.344 kilograms in 1980 to 1.3 kilograms in 1998 to1.54 in 2007.

Around 16,000 households in Taiwan are engaged in tea growing, averaging one hectare (2.5 acres), according to Taiwan Review. Since tea farming is both labor-intensive and is carried out locally on a small scale, it makes sense to cultivate high-end teas and to spend time in branding each region’s tea. More attention is paid to packaging, with refined designs to further its appeal.

Tea growers are banding together to popularize regional teas and to attract tourists. Farmers are beginning to educate visitors about their teas so they can better appreciate the labor and effort that goes into tea cultivation.

Besides, each region popularizing its tea and location, tea cultivators are also seeking to highlight the health benefits of drinking tea and tea-related products. Along with tea sales, tea houses are also serving tea-flavored products to broaden tea growers’ sales opportunities. Not only is the appeal of high end-teas growing, but also sales of lower-end teas.

According Chen Chung-i, the chairman of the Taiwan Beverage Industries Association, annual revenue from Taiwan’s beverage sector averaged about US$1.5 billion for the last ten years. Around 40 percent of the amount is from tea drinkers alone. Last year, Taiwan saw 285 new packaged drinks released onto the market, with 107 falling in the tea category.

Cultivating a following for fine tea is not just happening in Taiwan but also in the United States. When Roy Fong, founder of the Imperial Tea Court, first started selling high-end teas in San Francisco, it was a struggle to persuade people to pay for high-quality tea. He started with five pounds of Dragon Well tea costing US$160 a pound and it took him a year to sell it. Today, the same tea costs US$480 a pound and sells out in a week.

In the United States, where the wine growing business is a multi-billion business, touring vineyards for wine tasting is very popular with locals and tourists alike. Taiwan’s tea growing regions can very easily cultivate the same winning strategies to popularize their teas and tea tasting.

Faced with worst drop in economic growth, Taiwan opens more doors to China

In May, more Taiwanese industries opened for mainland Chinese investment, including public construction, services, and manufacturing. According to the Economic Times, the 101-item list includes telecommunication value-added services, tourist hotels, automobiles, computers and cell phones. However, civil engineering construction, petrochemicals, machine tools, and steel manufacturing are not included.

In the area of electronics manufacturing, only investment in passive components is permitted. Sensitive high tech industries such as integrated circuit design, packaging and testing, silicon wafers and liquid crystal display monitors are not on the list.

The paper also reported that the appreciation of the South Korean Won has slowed significantly. At a time of North Korean saber rattling, the South Korean Won faces strong depreciation pressure. Meanwhile, the New Taiwan Dollar has maintained the same appreciation trend, which could hurt Taiwan’s exports. As members of the four Asian Tigers, Taiwan and South Korea are strong competitors and both are highly reliant on export trade.

Hit hard by the global recession, Taiwan’s economic growth in the first quarter of this year dropped 10.24 percent from the same period in 2008, according to a report released on May 21st by the Directorate General of Budget, Accounting and Statistics. This marks the worst single quarter slump since 1961 when the government started compiling quarterly per capita income growth statistics.

The government has also adjusted its forecast for annual overall economic growth this year from minus 2.97 percent announced in February to minus 4.25 percent, the worst decline since records began. Despite poor first quarter performance, there are scattered signs that the decline is beginning to slow down.

Currently, Taiwan’s economic growth is ranked third among the four Asian Tigers, behind Hong Kong and South Korea, but ahead of Singapore. The Economic Times blamed this lag on the previous administration’s ideology oriented policies that corroded Taiwan’s economic development foundation, although the current administration is not exempt from responsibility.

Meanwhile, Lausanne-based business school International Institute for Management Development (IMD) released the 2009 competitiveness ranking which saw Taiwan drop 10 places from 13th in 2008 to 23rd. The Commerce Times called attention to this huge drop, saying it was a severe warning for the sustainability of Taiwan’s competitiveness.

Of the four factors and criteria used by IMD to evaluate a country’s competitiveness, Taiwan’s ranking dropped from 21st to 27th for economic performance, from 16th to 18th for government efficiency, from 10th to 22nd for business efficiency, and from 17th to 23rd for infrastructure.

The Taipei Times reported that the Council for Economic Planning and Development (CEPD) said the sharp contraction in exports in the second half of last year was the main factor behind Taiwan’s lower competitiveness ranking.

The CEPD said in a statement that GDP growth last year was a mere 0.1 percent and the latest IMD report was based primarily on data from last year. While the CEPD lamented the drop, it added that the situation would improve later this year when the government’s stimulus measures and cross-strait policies are reflected by the economy.

A New Era for Taiwan-PRC Relations, a panel discussion

On May 28th, a panel of distinguished speakers discussed the new era of Taiwan-PRC relations to a packed conference room at the influential K & L Gates Law Office in downtown San Francisco. The evening began with a reception at 5:30 pm.

The discussion was moderated by Dr. Robert Kapp, president of Robert A. Kapp and Associates, who offered some insights and humorous anecdotes from his days in Washington, DC and his experience as the president of the US-China Business Council. Speaking of cross-strait relations, Kapp said, “We talk and write, but measured changes have been slow, but that is not the case now.” He introduced each panelist (Dr. Chien-Min Chao, Prof. Chong-pin Lin and Prof. Lowell Dittmer) and allowed each to speak before the Q&A.

Dr. Chien-Min Chao, Deputy Minister of Taiwan’s Mainland Affairs Council, was the first panelist to speak. Chao pointed out that the Korean Peninsula and the Taiwan Strait used to be the two flashpoints in Asia, however within one year, this has changed. While Korea is brimming with problems, Taiwan’s ruling Kuomintang chairman Po-hsiung Wu was visiting China. Chao continued by summarizing the inroads made by Taiwan’s Straits Exchange Foundation and China’s Association for Relations Across the Taiwan Straits in hammering out critical agreements for smoother relations. With more relaxed travel regulations between the two countries, PRC visitors have now made more than 600,000 trips to Taiwan.

Despite friendlier relations there is still danger. China’s People’s Liberation Army continues to increase its budget and upgrade its military. While striving for stabilization and normalization of relations with China, Taiwan has taken a cautious step in advocating the “3 Noes” – no unification, no independence and no use of force. The reality is that Taiwan does more business with China than with Japan and the United States, so any joint agreements to iron out juridical, economic and banking cooperation would be beneficial for both sides.

Prof. Chong-pin Lin of the Graduate Institute of International Affairs and Strategic Studies, Tamkang University (Taipei) and a former Deputy Minister of Defense spoke next. As a close observer of cross-strait relations, he predicted cross-strait d├ętente outlined by seven milestones. Out of his seven predictions made in July 2006, five have already come to pass – (1) both sides would establish liaison offices, (2) direct transportation links across the Strait would be launched, (3) Taiwan would emphasize substantive diplomacy, (4) cross-strait military tensions would decline and (5) the DPP may reorient its attitude and policy toward China under the new cross-strait relations. Lin also predicts a cultural boom in the mainland with Taiwan’s creative industries (i.e. feature films, entertainment programs) playing an important role as a catalyst, and that Taiwan’s democracy will gradually alter the mainland. Time will tell if the latter two predictions also prove correct.

Nevertheless, Lin feels that China is moving toward more freedom. He believes China will look towards Taiwan and think, "If Taiwan can , why can't we?" Although China’s democratic transformation might not be a US-style model, but more akin to a Singaporean-style model.

Prof. Lowell Dittmer of the Political Science Department at the University of California-Berkeley, followed with his explanation on the logic of strategic alliances through the triangular relationship. He also touched on the new nationalism on both sides of the Taiwan Strait. With the demise of Communism, Nationalism has replaced Marxism-Leninism. On Taiwan’s side, there is a sub-ethnic split as a result of those families who have been living in Taiwan for centuries being suspicious of mainlanders who came to Taiwan in the period 1949-1971. This distrust has created a domestic rift.

Dittmer also spoke on the problematic security dimension for Taiwan. Since the end of the Cold War, China’s defense spending has gone up and up, while Taiwan’s has shrunk. D├ętente between Taiwan and China serves to postpone, not solve, the security problems existing in cross-strait relations.

The Asia Society, along with the University of San Francisco’s Center for the Pacific Rim, University of California’s (Berkeley) Institute of East Asian Studies, and the World Affairs Council of Northern California, hosted the panel discussion.

Taiwan descends on Licensing Int'l Expo in Las Vegas, June 2-4

Last week’s Licensing International Expo at the Mandalay Bay Convention Center in Las Vegas showcased some 20 Taiwanese companies exhibiting their cultural and creative products in the Taiwan Pavilion. Sponsored by the National Science Council (NSC), Taiwan’s e-learning and Digital Archives Program were amply displayed on 1,800 square feet of floor space.

At a press conference to kick off the Expo, Dr. Joseph Yang, the NSC representative and also the Science and Technology Division Chief of TECO-San Francisco, said that the exhibitors had brought a wide range of Taiwanese cultural objects for licensing, with many of the precious articles on display for the first time.

Charles M. Riotto, the president of the Licensing Industry Merchandisers’ Association (LIMA) expressed his appreciation for Taiwan’s yearly participation at the show, and for bringing Taiwan’s many cultural characteristics for licensing. He encouraged more Taiwanese companies to take advantage of the show as a platform to attract more licensing business opportunities.

LIMA, founded in 1985, is the trade group for the US$80 billion licensing industry. With over 1,000 member companies representing everything from major movies and mega corporate brands down to individual artists, LIMA pioneered the annual licensing show in New York City. This was the first LIMA show to be held in Las Vegas.

The opening ceremony of the Taiwan Pavilion began with a colorful and lively performance of Taiwanese aboriginal folk dance. With a theme of “Creative Taiwan–Beyond Incredible,” the specially designed Taiwan Pavilion was divided into three sections: Taiwan’s selected heritage, licensing brand names, and innovative brand names. The sections included digital archives, arts, cultural and creativity, animation, and digital learning.

On display in the selected heritage section was Academia Sinica’s (
http://www.sinica.edu.tw/main_e.shtml) huge National Digital Archive Program (NDAP). In 1998, Academia Sinica began their digital archive of Taiwan’s treasures. So far, a total of 3 million pieces of historical literature, architecture, documents, images and relics have been archived. The institution has established a sharing system so that the general public and schools can take advantage of the wealth of digitized materials. The institution has come to Las Vegas to encourage private companies to utilize this resource, sharing the wealth of Chinese and Taiwanese culture with a broader audience.

In explaining the importance of Taiwan’s digital archive, Yang said, “In the past, Taiwan attained remarkable heights in the IT industry, however, with a focus on hardware applications. As people’s living standard rose and appreciation for arts increased, Taiwan’s IT industry should now put more emphasis on artistic fashion designs in its productions in order to appeal to the international markets.” Since the commodities of the IT industry is now technically mature, the NSC has made great efforts in recent years to help local companies use the country’s high-tech edge to develop creative cultural products and add commercial value.


In the section under licensing brands were properties from the Bright Idea Design Company Ltd., Cathy Creative Company Ltd., and Artilize Worldwide Company Ltd. Some of these companies produce original designs - many drawing from the motifs found at the National Palace Museum, while others create original animated characters and animation-based products.

In the section for innovative brands, exhibitors included Taiwan Indigenous Association for Digital Heritage, Peter Pan Art Company Ltd., Tales by Pave, Vivo Tech Corp., Imagery Digital Graphics Company Ltd., Jetprint Image Services Printing Ltd., Pumpkin Creative Inc., and Royal Epen International Corp.

Among the products and designs were creative tattoos and printings from Taiwan Indigenous Association for Digital Heritage, and unique knitting patterns by the Atayal tribe. This was the first time these groups had participated in the Licensing International Expo with the hope of attracting international buyers.

At the closing of the exhibition, Ms Liu Ching-yi, spokesperson of the Taiwan delegation, expressed appreciation to the government for its strong support in the commercial application of digital archives in Taiwan. She said Taiwan has made inroads into this field by participating in the Licensing International Expo these past five years.

Taiwanese movie Artemisia to premiere on Link TV, June 12-28

The award winning Taiwanese movie Artemisia will premiere on Link TV, and can be seen on DIRECTV 375, Dish Network channel 9410 and also on select cable stations, from June 12th to June 28th.

Presented by the Press Division of Taipei Economic and Cultural Office (TECO) in San Francisco in partnership with Link TV, this premiere will also include an interview with the film’s director, Chiang Hsui-chung.

Produced by Taiwan’s Public Television System (PTS), Artemisia won the Golden Gate Award in the Television Narrative Feature category at the 52nd San Francisco International Film Festival (SFIFF) early May.

Chiang’s 86-minute debut is a beautifully scripted narrative about three generations of resilient women, focusing on 58-year old Ai-tsao (Artemisia). As a young woman, Ai-tsao defied her conservative family and married a man 20 years her senior. Twenty years later, she finds herself struggling to accept her argumentative mother, her unmarried daughter’s mixed-race baby and her closeted gay son. Amid the turmoil, she strives to keep her family together.

Chiang is no stranger to the San Francisco Film Festival. As a graduate student in theater and screenwriting at the Taipei National University of the Arts, Chiang also delivered a Golden Horse-nominated performance in Edward Yang’s epic A Brighter Summer Day (SFIFF 1992).

Link TV and the Press Division at TECO are proud to bring Artemisia from the film festival stages to the comfort of your home. To see the premiere of Artemisia on the small screen go to www.linktv.org/Artemisia or check your local listings for Link TV’s channel(s) on one of the following dates and times:

ARTEMISIA AIRDATES
Fri., June 12, 5pmPT/8pmET (Premiere) (Primetime ET)
Sun., June 14, 12pmPT/3pmET
Fri., June 19, 11pmPT/2amET
Sun., June 21 9amPT/12pmET
Tues., June 23, 8pmPT/11pmET (Primetime PT)
Thurs., June 25, 12pmPT/3pmET
Sun., June 28, 12pmPT/3pmET

Taiwan IT firms among world’s best performers

Four Taiwan IT firms rank among the top ten in the world in terms of their performance amid the global economic slowdown, according to Business Week’s annual report. In the June 1st issue, th US magazine listed Inventec Corp., Quanta Computer Inc., Wistron Corp., and Acer Inc. as ranking 4th, 7th, 8th and 10th respectively.

Three US firms are among the top ten, (Amazon - 1st; Oracle - 2nd; and IBM - 5th) while one firm from Germany (SAP - 3rd), India (Bharti Airtel Ltd. - 6th) and China (QQ.com - 9th) complete the top ten. To qualify for the top 100 IT firms worldwide, a company’s annual revenue must exceed US$600 million, excluding any monopolies.

In addition to the four companies already mentioned, Taiwan had ten companies ranked in the top 100. These were: High Tech Computer Corp. (ranked 13th), Asustek Computer (ranked 26th), Foxconn Electronics Inc. (ranked 40th), Taiwan Semiconductor Manufacturing Company Ltd. (ranked 48th), Compal Electronics Inc. (ranked 50th), and Simplo Technology Co. (ranked 52nd).

Even with the economic slowdown, the demand for certain products remains strong. The Commercial Times reported that despite a shortage of glass substrates, the outlook for Taiwan’s thin-film-transistor liquid crystal display panel industry remains positive for the third quarter on the back of strong demand. Lee Kun-yao, chairman of AU Optronics Corp., the largest LCD panel maker in Taiwan, said the average capacity utilization at Taiwan’s panel makers was below 50 percent in the first quarter of 2009, and currently stands at over 80 percent.

David Hsieh, vice president of the greater China market at Display Search, expects prices to continue upward into June. TV panels, whose prices remain relatively unchanged, will probably see an increase of at least US$10 per unit in June. In particular, 40-inch and 42-inch panels are both set to rise in price.

Not only do Taiwanese IT companies dominate the top ten, but a recent report by the Economist Intelligence Unit (EIU) also places Taiwan as the 6th most innovative country in Asia for the forecast period 2009-2013. According to the United Daily News, Taiwan had an index of 9.44, which is only topped by Japan, which has the highest-ranking index of 10.

Krugman advises on economic recovery, praises health insurance

Top American economist Paul Krugman, winner of the 2008 Nobel Prize in Economics, paid a two-day visit to Taiwan on May 14th as a part of his Asian tour.

In his first public speech, Krugman urged world governments to pay attention to the major threats to globalization, namely government protectionism aimed at shielding domestic industries from outside impacts, a return to mercantilism in Keynesian theory, and the long term imbalance of currency exchange rates.

Krugman believes that sooner or later world economies will bounce back and the recovery will be powered by investment from the private sector, noted a Central News Agency report. Although he did not predict when the current global economic slump is likely to come to an end, Krugman forecast that recovery would be generated by investment-led demand arising from fresh investment in technology innovation and low-emission policies.

President Ma Ying-jeou met with Krugman to ask his advice on strategies to help the island ride out the economic storm. Ma’s administration has taken many measures to deal with the global financial crisis, including offering full insurance coverage for bank deposits, issuing shopping vouchers to stimulate domestic consumption and increasing public investment.

As exports account for 64 percent of Taiwan’s gross domestic product, Ma asked Krugman what Taiwan could do to sustain its economic development if the US and European economics remain mired in recession.

Krugman’s responses were not known as the meeting was closed to the press, but in a Commercial Times editorial about economic recovery policies, Krugman said small economies depend on the demands of larger economies. So he believes small economies will not recover on their own unless super economies lead the way.

In addition to talking about the economy, Krugman praised Taiwan’s national health insurance system, saying he would recommend Taiwan’s model to the US public, the Taipei-based China Times newspaper reported.

He said people’s health is a public wealth and is essential to the establishment of the social security network, and the focus of private insurance companies is on making a profit. The US government cannot expect important policy like national health insurance to be fully implemented through private companies, he said.

At a forum held in Taipei on May 14, Krugman also noted that interactions between Washington DC and Beijing do not amount to a zero-sum relationship, the Taipei-based China Times reported. As a neighbor of China, Taiwan has no excuse not to improve trade relations with the country as long as political obstacles do not stand in the way.

In response to some who worry that Taiwan would lose its sovereignty with further strengthening relations with China, Krugman cited US-Canada relations as an example, adding, “countries can maintain extremely close relationships without being swallowed.”

Ma’s first year evaluated

On May 20th, the one year anniversary of President Ma Ying-jeou’s inauguration, the president said he would not rule out a peace agreement or a military confidence building measure with China on the pre-condition that China removes its missiles targeting Taiwan. Nevertheless, economic and trade issues remain the focus of his policies toward China. During his international news conference, he stressed that future relations across the strait should be decided by the 23 million people of Taiwan.

Ma said during his term as president, his administration would build a solid foundation for peace and prosperity for both sides of the Taiwan Strait and all his policies will be based on the concept of “no reunification, no independence and no use of force.”

“What’s going to be the future between Taiwan and the mainland should be decided for our part by the people of Taiwan and maybe in future generations. I don’t think conditions are ripe for making a decision,” said Ma.

He noted that Chinese leaders have undergone a process of change, especially regarding their strategies toward Taiwan. He said the change of attitude is the only way for the both sides to reach consensus on peace and prosperity, but he acknowledged there are still many challenges ahead. Ma defended his approach to rapprochement with the Chinese mainland, saying Taiwan’s sovereignty has never been sacrificed in all the agreements reached between the two sides of the strait since he took office a year ago.

Ma’s comments were in response to the hundreds of thousands of Taiwanese who took to the streets on May 17th with opposition Democratic Progressive Party (DPP) leaders to protest Ma’s friendly China policies. Ma said his government is doing its best to improve relations across the strait and tensions between Taiwan and China have been eased. He said his administration’s next task is to conclude an ecnonomic cooperation framework agreement (ECFA) with China to avoid Taiwan being sidelined. The ECFA will focus on customs duty, trade and arbitration, and economic accords.

A Taipei-based China Times editorial highlighted the president’s 180 degree policy change to rapprochement from the former DPP administration leading to direct talks, direct flights and less restrictive investment regulations for Chinese investments in Taiwan. As a result, Taiwan can now participate in the World Health Assembly (WHA) as an observer under the name “Chinese Taipei,” which the paper lauded as an historic breakthrough for Taiwan. However, the paper criticized Ma’s ruling Kuomintang (KMT) for its lack of domestic reform measures and for the unwillingness of senior party officials to hand power to the younger generation.

The United Daily News examined Ma’s first year performance and praised his cross-strait reconciliation policy, but also warned of consequences. The expansion of cross-strait interactions will result in the direct collision of two divergent political systems with similarly divergent interests, thus dredging up conflicts. According to the paper, it does not bode well to hurriedly sign many agreements without making sure necessary measures are aligned.

The proposed ECFA with China is one way to maintain Taiwan’s economic competitiveness, said the paper, but cautioned that the free trade agreement itself is a double-edged sword. Some industries are likely to benefit from it while other weak industries may suffer. Ma’s administration should be amply prepared to balance the pros and the cons, the paper cautioned.

The United Daily News also noted that Chinese investments should be monitored carefully to ensure that the security of Taiwan’s capital market is not put at risk. As for Ma’s ambition of promoting six new industries (biotech, green energy, tourism, healthcare, refined agricultural, and cultural creativity), unlike the United States, Taiwan is a small open economy with limited resources. Ma needs to set priorities for each of the industries and not focus on all six areas simultaneously, said the paper.

Overall, several opinion polls have marked an improvement in Ma’s approval ratings. The pro-DPP Liberty Times carried an opinion poll conducted by the Global Views Survey Research Center in mid-May showing 38.9 percent of Taiwanese approve of Ma’s performance after a year in office, while 48.6 percent said they are not happy with Ma’s governance. This was Ma’s highest rating since polls conducted at the time of his inauguration. The China Times’ survey showed 56.1 percent approval of Ma and 33.5 percent disapproval. The United Daily News survey gave a 52 percent approval rating, with 33 percent disapproval.

South Korea observes booming Chaiwan trade closely

The ripple effect of cross-strait rapprochement between Taiwan and China has reached South Korea, where the media recently coined the term Chaiwan (combining China and Taiwan) to describe this emerging phenomenon. Having strong economic and competitive relations with both countries, South Korea’s geographic proximity gives the country a front row seat from which to observe China’s trade preference for Taiwan.

Chinese groups buying Taiwanese goods

The Korea Daily recently reported that the market share of South Korean liquid crystal displays (LCD) in China has dropped dramatically from 46.2 percent in the first quarter of 2008 to 29.7 percent in the same quarter of 2009. During the same period China’s demand for Taiwanese LCD products increased from 35.6 percent to 56.5 percent.

South Korea’s share of China’s markets looks set to drop further as Taiwan plays host to an increasing number of procurement trips by Chinese companies. So far, the Taiwan External Trade Development Council (TAITRA) has arranged nine trade missions for mainland companies seeking to do business with Taiwan’s department stores, and with companies involved in the manufacture of LCD panels, 3C home appliances, light emitting diodes and with the renewable energy sector.

During the most recent trip, the Taipei-based China Economic News Service reported that China’s Guangxi trade mission led by the autonomous region’s chairman Ma Biao placed orders worth US$170 million. Another procurement mission representing eight companies placed orders totaling US$827 million, and will spend an additional US$1.4 billion in the coming year.


The China Video Industry Association has recently purchased US$2 billion dollars-worth of LCD panels. Also, a Chinese delegation from the Chinese LED lighting industry is due to visit Taiwan on June 9th to place an order for 1.4 million street lamps and other LED products. A renewable energy conference to be held in Taipei this August will also present huge business opportunities for the island’s LED industry. In September, an auto parts procurement mission will likely add a further US$738 million in business opportunities.

South Korea feels ripple effect

Some of the increased sales are fed by China’s new policy of promoting “home appliances to the countryside,” where farmers are encouraged to buy Chinese and Taiwanese brands in exchange for a 13 percent government subsidy on low-end television sets and other home appliances. South Korean brands are not included in the subsidy deal, according to the Korean paper.

Another Korean newspaper, the Seoul News, also reported that it is not only small to medium-sized companies that will feel the impact of the emerging Chaiwan phenomenon, larger companies such as Samsung and LG are not immune from worry.

Yet, it is not just South Korea that will feel the effects. A combination of Taiwan’s creative marketing strategies together with China’s vast purchasing power has created a new power-base in the retail sector, which is also being eyed by Japanese, European and American businesses.

Taiwan ups investment in China

In addition to procurement trips, Taiwan is investing more talent and capital in China. According to the Taipei-based China Times, Taiwan’s Uni-President Enterprises recently opened four new 7-Eleven stores in Shanghai. The new stores include an innovative “buffet island” – an instant cooking and frying station resembling a domestic kitchen that is the envy of Japanese convenience stores in China.

Taiwan’s RT-Mart International Ltd., a wholesale grocery warehouse similar to Costco, is also devoting tremendous resources toward RT-Mart China. The company has hired MT Huang from Taiwan’s RT-Mart International as CEO to bring the high level of service in department stores to warehouse stores. Last year, RT-Mart China stores generated US$4.9 billion in revenue. Due to aggressive expansion, it aims to overtake Wal-mart China and French-owned retailer Carrefour China.

With closer ties across the strait, business tactics are also changing. Minister Chen Tien-jy of Taiwan’s Council for Economic Planning and Development urged Taiwanese businesses to change their previous strategy toward China. Since China will replace the US as the largest market for many products, Taiwanese businesses should learn to treat China as a market, and not merely as a factory.

The change in cross-strait relations is also likely to influence where Taiwanese students pursue their studies. Whereas Taiwanese students previously pursued master of business administration (MBA) degrees in the US and Western Europe, they are now turning to China with an eye on the huge potential offered by the Chinese market. Deputy Dean Teng Bing sheng of Cheung Kong Graduate Business School, one the most expensive MBA schools in Shanghai, told The World Journal that although he has not seen many Taiwanese faces at his campus yet, he hopes to see this change by offering preferential treatment to Taiwanese students in order to encourage their enrollment.

Still some concerns

In an editorial last week, Taiwan's United Daily News commented that the combination of China's capital and market together with Taiwan's technology, talent and world-view, is pretty potent. However, Chaiwan does not reflect reality. There are differences and discrepancies both China and Taiwan need to adjust to, and in some cases, overcome. Stable and gradual cross-strait cooperation is welcomed, but rapid change might lead to turmoil and conflict.

The Taiwan concept, according to the United Evening News, is still controversial with both positive and negative aspects. In an age of globalization, it is necessary for industries to cooperate and have division of labor. Taiwan should understand the tangible benefits, and not just happily rely on unrealistic expectations. It is also important for Taiwan to have something in its own control, and not be at the mercy of China.

In the face of the emerging Chaiwan phenomena, the pro-independence Democratic Progressive Party (DPP) is understandably uneasy and concerned. However, the DPP has not been able to present a convincing policy for dealing with China. This remains the most challenging task for the opposition party, according to the China Times. DPP Chairperson Tsai Ing-wen said democracy and human rights are the most cherished values in Taiwan. When dealing with China, President Ma Ying-jeou should not shy awayfrom talking about the absence of democracy and human rights in China.


Ma himself acknowledges the risks in dealing with China. However, the key point is to have sound risk management and control. So the president thinks his administration has done fairly well. Ma agreed with former Vice President Annette Hsiu-lian Lu’s remarks that China is a changed country from the one that witnessed the Tiananmen Square Incident 20 years ago. He said China has become more influential and now subscribes to international norms with respect to anti-proliferation of nuclear weapons and anti-terrorism. China also shares the same or similar views as the U.S. on many international issues. Faced with increasingly close economic interdepedence across the Strait, Taiwan's government can not maintain a closed door policy towards China

Taiwan’s film heritage on show at the SF Public Library

The San Francisco Public Library, in conjunction with TECO, hosted a reception for Envision Taiwan with Films and Photos on May 23rd. Kicking-off two weekends of Taiwanese films and a monthlong photo exhibition, librarian and access service manager Marti Goddard welcomed the attendees. Afterwards, TECO Press Division director Manfred Peng gave a brief history of Taiwan’s cinema.

The photo exhibition will be on display until June 25th in the Chinese Center located on the third floor of the San Francisco Public Library near the Civic Center.

Highlights of Peng’s talk about Taiwan’s cinema history are as follows:

The 80s and 90s were the Golden Age of Taiwan’s film industry. In 1993, two Taiwan-made movies were contenders for the best foreign film at the Oscar Awards. The following year, Taiwan produced 29 feature films, which were entered in 55 international film contests in 51 countries, earning 54 nominations and 49 awards. This was a remarkable achievement. Since then, Taiwan’s filmmakers and their films have become common sights at major international film festivals.

Taiwan’s movies have received much international recognition. There are several reasons for these successes.

1. In the past, movies provided our people with an outlet for escaping. From the 50s to the 70s, the political atmosphere on the island was conservative, fostering a closed society. Stories of chivalry, Kung Fu action, and romances were conceptually escapist.

2. Taiwan’s film industry had been well established during the Japanese occupation, before Chiang Kai-shek moved to the island in 1949. Faced with China’s military threat and political infiltration, the Chiang government encouraged the development of the film industry and used it as a tool for propaganda. The state-owned “Central Motion Picture Co.” recruited the best talent for filmmaking and cultivated the “New Wave” movies in the late 80s.

3. In the early 80s, Taiwan became an “economic miracle.” People’s living standards rose, thus establishing a stable, strong middle-class. Good-quality movies were increasingly in demand. Along with rapid democratization, the young generation of filmmakers, the “New Wave” directors, utilized the ever-growing space for development to create a diversity of materials in this newly liberalized environment.

However, Taiwan’s film industry entered into a dark age in the late 90s. Filmmakers pursued international recognition and catered to Western film critics, without consideration for domestic markets. Finally, filmmakers abandoned the audience; the audience, in turn, abandoned their products. In the late 90s, the number of Taiwan-produced movies released dropped from over 200 a year in the early 80s to less than 20.

Last year, the movie Cape No. 7 turned the tide. It was an uplifting film without abstract, artistic language. It has earned over US$17 million at the box office so far – the second best in Taiwan’s movie history behind Titanic. In order to encourage this new trend, our government took the opportunity to amend its policy and stipulated that every feature film that makes US$1.5 million at the box office could be eligible for government sponsorship equal to 20 percent of its revenue. This will hopefully spur filmmakers’ orientation from artistic films to commercially successful ones.

In retrospect, the film industry epitomizes the modernization of Taiwan’s society.

- Beginning in the 80s, people moved away from the great-China consciousness to a Taiwanese identity.

- In the 90s, the film industry changed from a tool of political propaganda to a forum to study social issues.

- Today, filmmakers are catering to the interests of the local audience, instead of chasing international recognition.

Taiwan’s film industry has walked a unique road and experienced different lessons from other Chinese communities. We cherish this experience, because its growth and development is the story of the whole Taiwanese people.

Contest for an all-expanses paid monthlong tour of Taiwan

If you’ve missed the chance to compete for Australia’s “Best Job in the World,” don’t miss the opportunity to win Taiwan’s “Best Trip in the World” contest!

Taiwan’s Tourism Bureau is inviting people from around the world to form teams of at least two people, one of whom must be a foreign national, to come up with a money-saving, yet creative four-day itinerary for a trip in Taiwan.

The fifty teams that come up with the best itineraries will be selected and will each receive NT$7,000 (US$212) per day for up to four days (NT$28,000 or US$848 in total), to spend during their trip in Taiwan. The teams will also have the chance to win the grand prize – NT$1,000,000 (US$30,000) to travel in Taiwan for a month!

To reach a broader audience, the Tourism Bureau launched “The Best Trip in the World” contest on its website on May 22nd, along with contest rules and details.

Interested teams can enter the contest online until June 30 by filling out the “Team Entry Form” in English, Chinese or Japanese; submitting an itinerary, called “Plan for Team Travel in Taiwan,” which should include a clear theme for their tour; and uploading a short video pitch introducing their team members on the contest website.

The Bureau will announce the 50 selected teams on July 10th. The 50 teams must then travel to Taiwan and complete their four-day trip based on their itinerary, before the Aug. 31 deadline.

During their trip in Taiwan, each of the 50 teams must produce a short video and write a 200-word blog entry about their activities each day and post them on the contest website. Online readers can vote for their favorite team. Any of the 50 participating teams will also be eligible to win a four-day, three-night hotel package plus flights for two people so they can travel to Taiwan again at a later date.

In addition, after the 50 teams complete their travels in Taiwan, they must post an 800-word travelogue accompanied by a 3 to 5-minute video covering the highlights of their trip by Sept. 30th. Once completed, they will then be eligible to compete in the second stage of the contest – “NT$1,000,000 to Travel in Taiwan”- in which the grand prize will be NT$1,000,000 (US$30,000) to travel around the island for a month.

The team that wins this contest will be selected partly through online voting, which will be conducted from Oct. 1st to 30th . A committee from the Tourism Bureau will make the final selection of the winning team and announced the winners on Nov. 15th .

What are you waiting for? Hurry up and gather your teammates to travel to Taiwan! For contest details, please visit:
http://www.taiwanbesttrip.net/.
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About Me

The Press Division of the Taipei Economic and Cultural Office (TECO) in San Francisco represents the Government Information Office (GIO), Executive Yuan, Republic of China (Taiwan). GIO maintains nine Press Divisions in the United States, including the San Francisco office. The Press Divisions are in charge of promoting Taiwan's public relations and cultural exchanges. This blog is updated by the Press Division, TECO in San Francisco.