Strait Talk: Whither Taiwanese Investment Next?
March 10th, 2008 | by This is China! |Mark Forman and I have been corresponding off-and-on for the past half year on-line on going’s-on between Mainland China and Taiwan. Mark, an American, has been living and working in Taiwan for more than ten years, after several years spent living and working in the Mainland. Our frequent conversations are lively and I always come away with a new understanding of cross-strait relations.
With the Taiwanese elections slated for March 22nd this year, we recently discussed the impact the elections will have on the Taiwanese investment environment: for Taiwanese investors and for foreign investors.
With Mark’s kind permission, I’ve re-printed our conversation. I’ve tried to keep my editorial instincts in check by not editing too much …
We started the conversation with an allusion to the horrible blizzards that crippled China during the Spring Festival and the resulting infrastructure meltdown.
Bill Dodson says: yeah.. i bet there’s a lot that went unreported.. this will take a few percentage points off gdp growth rate this year..
Bill Dodson says: ..not to mention the inflation.
Mark Forman says: I know factories we work with in Guangdong there Chinese staff all ended up staying in Guangdong for new years
Mark Forman says: right taiwan mfg activity will be picking up again it seems
Bill Dodson says: yeah.. it was a terrible year for the workers.. there lives really are shit here..
Mark Forman says: Chinese policies have forced many of them to pull up stakes and some coming back here while others go to VietNam or else where
Bill Dodson says: there are actually taiwan companies coming back to taiwan? that’s news to me.. :^)
Bill Dodson says: ..that’s huge, you ask me..
Mark Forman says: recent policy really making it hard for them to survice in China-rebate of vat tax repealed ,5% tax added, 5k RMB insurance payment per head, fire-proof employees
Bill Dodson says: i didn’t know about the insurance hit..
Bill Dodson says: what do you mean “fire-proof”
Mark Forman says: can’t fire without gov’t permission-isn’t that what you siad in your post?
Bill Dodson says: well, you just have to have a lot of documentation now.. european style now..
Mark Forman says: there are soem gov’t financed industrial parks here that are getting aggressive with so many years free rent,then low rent and tax break
Mark Forman says: still much industrial land avialaiable, and if gov’t makes it easier to import foreign labor so much less incentive to be in China
Bill Dodson says: you mean land available in taiwan?
Mark Forman says: yep
Bill Dodson says: oh, i didn’t know that..
Mark Forman says: always has been just no sensible gov’t programs in place-hence taiwanese light industrial factories poured into China
Bill Dodson says: do you think the re-investment in taiwan will make much of a difference for the upcoming election?
Mark Forman says: they were forced there by Pres Lee so he could add value to taiwan/HK air route which he sold to EVA airlines
Mark Forman says: well I think tehy need to do several things
Mark Forman says: one is direct transportation and then a lot of crude labor stuf can come from China then be finished and shipped from here-so trans-shipping good for both sides,touris from China will surge, and taiwanese working in China will come home more often easier and lower priced air fares
Mark Forman says: more companies will look at locating here if local investment starts moving and be able to get to Chian much more easily and not have to live in that toilet
Mark Forman says: but I am specualting
Bill Dodson says: yes, i like your idea about the transshipment.. i never thought about it from a product point of view, only from a people point of view..
Mark Forman says: transhipment good win/win scenario
Mark Forman says: it kind of happened some via fishing boats but never full scale above board and legal
Bill Dodson says: yeah.. if the kmt wins, you think it will take a long time to open that link up?
Mark Forman says: if they win I think they know the mandate is there and better boogie
Bill Dodson says: 
Mark Forman says: look at abian even making a vain effort to bring in a boatload of commie tourists lol
Bill Dodson says: abian? what’s that?
Mark Forman says: Chen Suibian=abian
Bill Dodson says: oh.. didn’t know you guys had a short name for the bloke..
Mark Forman says: what a lame effort that was-he is totally condescending thinking Taiwanese peopel would be fooled by that
Bill Dodson says: man, he really shot himself and his party in the foot.. taiwan was theirs to lose and they did..
Mark Forman says: so instead of doing that way back when there was time and could positively efect the outcome and economy of taiwan nothing-DPP is on it’s way out with him and here comes the Chiense tourists on one boat
Mark Forman says: please
Mark Forman says: yeah DPP is good at being opposition party-they never broke out of that mode when they became ruleing party
Bill Dodson says: oh, he was trying to show in a token way he was open to cross-strait commercial activity..
Mark Forman says: right
Mark Forman says: too little too late
Bill Dodson says: got ya..
Bill Dodson says: yeah.. was his to lose..
Mark Forman says: 11th hour rat ship for year of the rat… 
Bill Dodson says: when is the election?
Mark Forman says: next month 22nd
Bill Dodson says: oh, this will be an interesting year..
Mark Forman says: absolutely we might really have some news
Mark Forman says: China can spin 3 nos as 3 yeses do to their confidence that this will
bring Taiwan that much closer to coming home (gag, wretch, puke)…
Mark Forman says: so they can get good spin factor
Bill Dodson says: yeah, you know they’ve already worked something out with the kmt along those lines..
Bill Dodson says: the kmt’s been up to beijing several times the last two years..
Mark Forman says: of course-they don’t care about the light industry stuff anyway as you’ve stated
Mark Forman says: they want the big infrastructure stuff
Mark Forman says: and they’ll still happily accept any taiwan businesses that jump through their hoops
Bill Dodson says: so you think there’s a good chancet the kmt will actually formulate policies to encourage light industry to come back home..
Bill Dodson says: ..well, i’m sure there would be a lot of taiwanese wives that would be happy their husbands are back “home”..
Mark Forman says: well not in those words but make it attractive for domestic investment to jump start economy yes
Bill Dodson says: ..yes, i see..
Mark Forman says: taiwanese pulling out money for investment will result in more foreign investment
Mark Forman says: if taiwanese not willing to take chance, what foreign concern would dare risk [investing in Taiwan]??
Bill Dodson says: ..very good point..
