Monthly Archives: November 2010

Ruling KMT wins 3 out of 5 seats in municipal elections

Although the ruling Kuomintang (KMT) won the mayoral races in Taipei City, the Xinbei City (New Taipei Municipality, originally Taipei County) and the Greater Taichung City (to be formed by a merger of Taichung City and Taichung County) on November 27, the party lost heavily to the opposition Democratic Progressive Party (DPP) in other areas.

The big losses came for the KMT in the DPP’s traditional strongholds in the south, where the DPP scored double-digit victories in Greater Tainan City (to be formed by a merger of Tainan City and Tainan County) and Greater Kaohsiung City (to be formed by a merger of Kaohsiung City and Kaohsiung County).

In Taipei, voters reelected the incumbent KMT Mayor Hau Lung-bin over the DPP’s Su Tseng-chang. Hau garnered 793,101 votes, or 55.68 percent, to Su’s 623,808 votes, or 43.79 percent. The KMT’s Eric Li-luan Chu won Xinbei City, defeating DPP Chairwoman Tsai Ing-wen with 1,115,536 votes or 52.61 percent. Tsai grabbed 1,004,900 votes, or 47.39 percent. Both Tsai and Su lost this time, but they are generally considered as the most potential DPP candidates for the 2012 presidential election.

In Taichung, sitting KMT Mayor Jason Hu secured 730,284 votes, or 51.12 percent, beating DPP Secretary-General Su Jia-chyuan who captured a surprising 698,358 votes, or 48.88 percent. In Tainan, DPP Legislator William Lai won 619,897 votes, or 60.41 percent, trumping KMT Legislator Kuo Tien-tsai, with 406,196 votes, or 39.59 percent. Sitting DPP Kaohsiung Mayor Chen Chu defeated KMT Legislator Huang Chao-shun and independent Yang Chiu-hsing by a wide margin, garnering 821,089 votes, or 52.8 percent. Huang and Yang garnered votes totaling 319,171 and 414,950, or 20.52 percent and 26.68 percent, respectively.

The expanded municipalities will be officially established on December 25 with each mayor serving a four-year term.

 A warning sign for KMT

In Saturday’s elections, the five KMT mayoral candidates garnered 44.54% of the total ballots (versus the DPP’s 49.87%), losing more than 400,000 votes to the DPP. However, in the 2008 presidential election, the KMT’s candidate Ma Ying-jeou won a landslide of 1.1 million votes over the DPP’s Frank Hsieh. In the mayoral and municipal elections at the end of 2009, the KMT’s leading margin to the DPP was reduced to only 110,000 votes. This time around the KMT lost more than 400,000 votes to the DPP, equal to a loss of 1.5 million votes compared with the results from  its 2008 presidential victory.

Council members of the five municipalities were also elected. Except for the city council of Tainan, which is controlled by the DPP, the KMT won the majority of seats in city council elections in the four other cities. However, the KMT and the DPP control 130 seats from five city councils respectively. Compared with the numbers prior to this election, the KMT lost 53 seats while the DPP gained an additional 13 seats.

The United Daily News said, “This is a major warning to the KMT,” and “President Ma will encounter a hard fight in his 2012 re-election bid.”

President Ma’s administration has been credited with achieving sound economic performance for Taiwan – with the economic growth rate expected to be close to 10 percent and the unemployment rate dropping below 5 percent. His administration also signed the landmark economic cooperation framework agreement (ECFA) with China, so some people wonder why this achievement did not translate into a landslide victory for the KMT. 

The Taipei-based China Times reported that KMT Secretary-General King Pu-tsung thought voters in Taiwan simply have higher expectations of the ruling party than before. Political commentator Su Ying-kui said in a review in the United Daily News, “Relatively speaking, the elections are in favor of the opposition, because in any democratic country the average voters are often dissatisfied with the status quo. For the ruling KMT, we cannot say it has won the election, nor has it failed.”

The World Journal noted Ramon Myers, senior researcher of the Hoover Institution at Stanford University, as stressing that without the signing of the ECFA, the performance of the KMT in Saturday’s elections would have been a lot worse. He said that whether President Ma can win re-election in 2012, is heavily dependent on whether his administration can effectively implement the ECFA and enable ordinary voters to feel the economic benefits of the trade accord.

According the Central News Agency, President Ma said after the elections that the government will not change its established policy toward the mainland or alter its progress..

Son of former VP critically wounded by gunman

Overall voter-turnout in the five municipality elections was high, reaching 71.71 percent, second only to the 76.33 percent who turned out for the 2008 presidential election. The Liberty Times attributed the high turnout to the shooting of Lien Sheng-wen, son of former Vice President Lien Chan, plus the good weather on election day.

Lien Sheng-wen was shot in the head and critically wounded at a campaign rally in suburban Taipei one day before the elections. Lien was speaking on behalf of a KMT candidate for city councilor. A civilian was killed in the incident. The suspect in the shooting is in custody and may belong to a criminal gang. His motives are still under investigation. Because acts of violence are rare in election campaigns in Taiwan, it is generally considered the shooting had some kind of impact on the elections.

The United Daily News reported that “Nobody can be sure that the shooting incident did exert a decisive influence on the results of the mayoral election of the Xinbei Municipality,” and “the KMT did not take advantage of this incident by making a big fuss about it, but this unexpected incident might encourage KMT core supporters to vote, and this may have helped Chu to win the victory in a tight race .”

King Pu-tsung said he is deeply saddened that such an incident should happen, adding that he does not have any valid proof to show there was an impact on the elections, according to the China Times.

 DPP still faces more challenges

National Taiwan University professor Wang Yeh-li said in a review in the United Daily News that during the election campaign, DPP candidates mainly emphasized their administrative capabilities, mentioning little about national identity, cross-strait relations, the ECFA, or other core issues. He said that if the DPP depends solely on the support of over forty percent of the pan-green camp, and is not willing to focus on those key issues facing Taiwan, and is trying to win elections only by taking advantage of divisions among the pan-blue camp, then he is “not optimistic” that the DPP will  return to power. (The terms “pan-blue” and “pan-green” refer to the loose coalition of groups supporting the KMT and the DPP, respectively.)

The United Daily News said in an editorial that “the elections not only pose a significant challenge for the ruling position of the KMT, but also bring urgent pressure on the DPP to transform itself.” The newspaper noted that the KMT, with more than one year of consolidation time before the 2012 presidential election, is expected to gain an advantage as long as it performs well with regard to the two pillars of cross-strait relations and economic development. In this election, the DPP took a moderate line to attract average voters, instead of focusing on the two issues of national identity and cross-strait policy. However, with die-hard supporters of Taiwan independence, the DPP faces more challenges in taking positions to address the major issues with China such as direct flights, Chinese tourists entering Taiwan, and the ECFA before the 2012 presidential election. “In the post-mayoral election situation, the DPP faces more daunting challenges than the KMT,” commented the paper.

 “Five super mayors, five super engines”

The Liberty Times said in an editorial, “The most important message the elections bring to Taiwan’s political arena is that either the ruling party or the opposition could claim victory in the elections and find comfort with the results, or else find warnings to keep in mind, and some areas on which to work hard to make improvements.”

The Liberty Times noted that after the newly established five municipalities the whole country will be divided into 22 counties and cities, among them 16 controlled by the pan-blue camp and six by the pan-green camp. The total population under pan-blue control and pan-green control still remains at roughly 2:1.

Xinbei Municipality will have a population of 3.89 million, ranking as the country’s largest city; Kaohsiung City with 2.77 million will rank in second; Taichung City in third with 2.64 million population; and Taipei, the country’s capital and previously the largest city will have a population of 2.61 million and suddenly falling into fourth place; Tainan with 1.87 million will be fifth.

While the five municipalities occupy only 27 percent of the nation’s territory, their populations account for more than 60 percent, with 56.9 percent of the nation’s total national production and 50.2 percent of its financial and tax revenues.

The establishment of the five municipalities was one of President Ma’s campaign platforms in the 2008 presidential election, aiming to “enhance national competitiveness” and “balanced regional development.” The bill of restructuring the national administrative territory was passed by the Legislative Yuan on January 18, 2010.

Economics professor Chu Yun-peng of the Central University wrote a review in the United Daily News, “the most significance aspect of this election is that except for the mayor of Taipei, the other four mayors wield much greater power than previously and they enjoy much larger budgets and management authority than the leaders of other cities and counties,” he said.

Chu stressed, “After taking up their offices, these mayors should be able to set their economic growth targets, employment growth targets, and with expanded powers, they can control more resources, and roll out their four-year road maps. They will make every effort to improve the investment environment, actively seek business opportunities, promote investment and increase employment, and play an important role in developing Taiwan’s future economy.” He said, “In this scenario, Taiwan’s economy will be like as an airplane with five super engines, there will be a great opportunity to soar in the sky.”

2010 Taipei International Flora Expo

The 2010 Taipei International Flora Expo ( officially opened its doors on November 6. The expo is expected to attract 8 million visitors to its expansively groomed grounds covering 91.8 hectares (228 acres). Along with the bouquet of colors in its many gardens, the expo will include 14 pavilions providing extensive indoor displays and entertainment.

With a focus on the mantra of “reduce, reuse and recycle,” each of the buildings is designed to ensure a low carbon footprint through minimizing water and energy usage. Taipei City Mayor Hau Lung-bin said the event is another way to encourage visitors “to embrace new ideas and implement green practices for themselves, thereby achieving the goal of protecting our precious earth and all its unique beauty.”

The event will also put Taiwan on the world stage, showcasing Taiwan horticulture, science and environmental protection achievements. In particular, it will highlight Taiwan’s stellar orchid industry which now accounts for a third of the world’s market in terms of quantity. Just 20 years ago, the industry comprised of a small core of orchid enthusiasts. In 2009, the sector alone earned US$86.6 million.

With 87 organizations from 31 countries participating, the expo will continue until April 25 and is expected to boost the local floriculture industry by promoting a general interest in gardening and flowers. Organizers are expecting the event to generate some NT$16.8 billion (US$525 million) in ticket sales, advertising, booth rentals and from increased visitors to the various expo sites.

Photos by Wang Neng-yo (Taipei City Hall)

Taiwan prepares for all-volunteer military service

According to the Ministry of National Defense, Taiwan will move from its current conscription-volunteer ratio of 6:4 to 3:7 in 2011, then to 2:8 in 2012, 1:9 in 2013, and become a fully volunteer system by the end of 2014 or early 2015. This would mean a reduction from 275,000 to 215,000 personnel in the armed forces.

Money, the major obstacle

The biggest obstacle to adopting an all-volunteer system is finance. National Defense Minister Kao Hua-chu told the Legislative Yuan that the success of moving from the current system to an all-volunteer system by 2014/2015 depends on the government’s financial strength. According to CNA Newsworld, Legislator Lin Yu-fang said for every 10,000 volunteer soldiers, the government would need to increase human resources spending by NT$5 billion (US$1.6 billion) annually.

Still, it is not known how much money is needed to adopt a volunteer system. Pai Jie-lun, human resource director of the Defense Ministry, only revealed that the human resources budget of the defense ministry is NT$135.3 billion (US$45 billion) this year, which will definitely increase in 2011. According to the analysis of the budget center of the Legislative Yuan, the ratio of manpower spending in the national defense budget has been on the rise, currently around 45 percent, which has squeezed the purchase of weaponry and operational maintenance spending.

Higher retention

With an all-volunteer system, draftees will still need to undergo four months of basic military training. Under the new system, recruiting channels would include the training of volunteer preparatory commissioned officers, non-commissioned officers, professional soldiers and reserve non-commissioned officers (NCOs), graduate officers of regular military schools, and training institutes of college graduate reserve commissioned officers.

In recent years, the Defense Ministry has done a good job in promoting an all-volunteer system. Pai said the current conscription/volunteer ratio has reached 6:4 as planned. Among those volunteers, 60 percent are younger enlisted men and 40 percent are those who decide to stay in the military after having finished their military service. He declined to predict if the ratio of 7:3 will be achieved in 2011, only saying, “We’ll do our best.”    

He noted since the start of volunteer recruitment in 2003, there have been over 60,000 personnel who stay after they finish their service contracts. Among those finishing their regular services, 60 percent decide to remain in the military, including NCOs.

A more competitive military

One notion that only poor scholastic performers go into the military is no longer true since the average score for females admitted to military schools in the past five years was 61.75 – a score high enough to qualify them for the top national universities. The average score for male recruits was 53.83, also high enough to be considered at well-known private universities. These figures debunk the traditional notion and make the military much more competitive.

Salary-wise, the military is also working to set more competitive salaries for its volunteer personnel. Currently, the monthly pay of a new college graduates starts around NT$23,896 (US$770.00) while that of a volunteer soldier stands at NT$27,915 (US$900) including both base salary and professional allowance, NT$34,470 (US$1,112.00) for NCOs and NT$42,710 (US$1,378.00) for lieutenant officers. If the government allocates sufficient finance, the target base salary for soldiers would double, from NT$17,880 (US$577.00) to NT$35,760 (US$1,153.00). This would mean that college graduates would make a quarter to one third more than their civilian workers, allowing them to save more. When the service contract is completed, it allows them the luxury to choose another career with a decent level of savings as a cushion.

The old system

Taiwan’s national defense personnel are divided into two categories: civilian and military. Civilian personnel are recruited through national examinations and a more flexible open selection process, while military personnel are drawn through conscription and enlistment. The conscription system aims to recruit primarily soldiers, while the enlistment system recruits officers.

It is compulsory in Taiwan for all healthy men to complete a term of military service at the earliest available opportunity from the year they turn 18 to the year they turn 36. Since 2005, young men who have turned 18 have been able to enlist as professional soldiers without having to perform compulsory service first; women have also been able to serve as enlisted personnel since 2008.

Senior high school, vocational high school and university students can defer military service until after graduation so as to avoid interrupting their studies. With increased numbers of professional personnel in Taiwan’s regular forces, the period of compulsory military service was cut from 14 to 12 months in January 2008.

In a survey conducted by Manpower Bank in September, CNA Newsworld reported that over 50 percent of the respondents said they would become professional soldiers once Taiwan adopts the all-volunteer military service system.

Taiwan’s growing e-book market

Earlier this year at the Taipei International Book Fair, Taiwan’s publishing industry proclaimed 2010 as the “first year of digital reading in Taiwan.” In China where there is huge gap between the intellectual and the uneducated, the Chinese media even predicted that printed books there would die by 2018.

Digital devices igniting the market

In calculating the potential digital market, Global View monthly estimated that Taiwan has 27 million cellphones. Based on that figure, it can be optimistically estimated that 30 percent of those people would use smart phones by the end of 2010, which would translate to 9 million users.

In addition to the cellphones and e-readers, 69.9 percent of people in Taiwan are also internet users, with 85.7 percent of Taiwanese household using computers, giving over 90 percent of them access to digital reading, according to 2009 statistics released by the Institute for Information Industry.

In a recent Global View survey to understand the new trend of digital reading, people 18 and over were asked if they preferred printed books or electronic digital books. Almost a fourth responded that they preferred digital books.

Digital media the norm for young people

With regard to the digital reading experience, the survey found 51.8 percent of  people in Taiwan have had experience reading digitally via  their computers, 11.6 percent said they did so via their cell-phones or PDAs, and only 6.1 percent use  digital readers like Kindle or iPad. Roughly 46 percent said they have not had any digital reading experience.

Of those surveyed, 65 percent of people under the age of 45 said they have digital readers on their computers while for those between 25 and 29 years old, it jumped to 81.5 percent.

The Global View survey showed that on average Taiwanese people spent NT$1,375 (US$45.00) per year on buying 4.18 books (excluding purchases of magazines, comics and examination preparation books), a figure far below Hong Kong’s annual spend of NT$5,855 (US$195.00).

Taiwan Panorama magazine reported that though the publishing industry laments the decline of leisure reading in Taiwan, it’s hard to criticize people for not reading. After all, books are not necessarily a principle source of information, especially for younger generations who are more plugged into text information through online bulletin boards such as BBS, internet, text messaging, and social networking media like Facebook or Twitter.

Declining print media

Studying the habits of the new generation of e-readers has propelled the development of Cite Media Holding Group, said CEO Ho Fei-peng, who warned that printed books have only five years to transform. “The print media won’t disappear,” he said, “but will become an industry without any commercial value.”

According to Nielsen’s annual media survey, overall readership of Taiwanese newspapers fell from 65.8 percent in 1998 to 43.9 percent in 2008.

With some 40,000 titles published annually, Taiwan has one of the highest book-to-person publishing rates in the world, second only to the United Kingdom. But this impressive statistic belies the fact that most of the more than 1,000 publishing houses that cater to Taiwan’s 23 million residents are small in scope and manpower, with 60 percent of them operating annually on less than NT$5 million (US$166,700). Taiwan’s prolific book output speaks to the vitality and diversity of the small to medium-sized publishers – but will these same companies be able to make the leap from the traditional paradigms that currently hold sway into the brave new world of digital publishing?

The Taiwan government is planning to become the leader in Chinese e-content by investing NT$2,134 billion (US$71 million) to integrate e-reader and e-paper technology. By 2013, there should be 100,000 books in digital format available to domestic consumers, as well as two to three online libraries from which to download. They hope to bring the digital reading population up to 1 million.

According to Taiwan Panorama, recently Taiwan Digital Publishing Forum applied to the government for financial assistance with their project to covert 1000 books published between 1840 and 1990 into the ePub electronic book format. The selections were made by a committee of nine experts assembled by publishing veteran Jan Hung-tze with the intention of making classic Chinese writing more accessible to readers.

Alex Yeh, secretary general of the forum, urged the government to focus on creating a “digital-reading-friendly environment, as opposed to simply boosting the industry – subsidizing the industry won’t necessarily stimulate consumer spending,” he said.

Direct flights beckon more flyers

It has been over a year since the launch of direct flights between Taiwan and China. Since August 31, 2009, flight frequency has increased significantly. According to Taiwan’s national airline China Airlines (CAL), passengers who used to take a flight every six months are more likely to fly once a month, while those who flew once a month are doing so every two weeks.

More frequent flyers

Chuang Zi-ming, general manager of the Fubon Financial Holding Company, was assigned to Xiamen, Fujian, Province in China in March. It takes a little over an hour to fly between Taipei and Xiamen. Generally he works in Xiamen during the week and returns to Taipei to stay with his family on weekends. Before the start of direct flights, senior Taiwanese executives had to work in China for a couple of months just to take a short vacation home, reported Global View monthly.

According to Taiwan’s Civil Aviation Bureau, there were 14,492 flights across the Taiwan Strait in the first year after direct flights were offered, providing 6,686,803 passenger seats, carrying a total of 5,237,142 passengers, reaching a 78.32 percent flight capacity load. Average weekly passenger numbers more than doubled, from 46,000 to 99,000, compared with the charter flights that operated before the launch of direct flights.

Bridging the divide

Chuang told Global View that direct flights are a good bridge for the development of the economies across the strait. In general, direct flights have brought more frequent interactions between Taiwan and China.

Taiwan is strategically located between the three big economies of the world – China, Japan and the US. Taiwan has the potential to play a pivotal role as the operations center of the Asia-Pacific region. Kao Koong-lian, deputy chairman of the Straits Exchange Foundation, which represents Taiwan in negotiating with China, said Taiwan would loose its advantage if there were no direct flights between the two sides.

Also, according to the magazine, direct flights facilitate strategic planning by Taiwanese businesses in taking advantage of the division of labor between Taiwan and China, and increasing the competitive strength of Taiwan’s industries and products on the international market.

An economics professor at National Chengchi University, Lin Chu-chia, noted a new business model which takes the orders in Taiwan, processes them in China and then exports them from Taiwan. In this scenario, Taiwanese businesses move the semi-assembled products manufactured in China and assemble them in Taiwan, thus adding value as a Taiwan-made product.

Global View pointed out that, with regard to product research and development, direct flights reduce the time and energy spent on air travel, thereby  allowing R&D engineers and management executives to concentrate on improving product design and business management, which benefit both sides of the strait. In addition, the FTA-like Economic Cooperation Framework Agreement (ECFA) signed between Taiwan and China in June also adds to Taiwan’s industrial development.

Chang Ping-tsao, chairman of Taiwan’s General Chamber of Commerce, who often travels across the strait, said direct flights plus ECFA, and the rapid development of China’s high-speed rail projects will allow Taiwanese business managers a chance to further utilize the Chinese market to increase competitiveness and to create an international brand name.

Encouraging cross-strait investment and tourism

Direct flights plus China’s inland transportation development allow more frequent interaction among people, creating more demand for various financial products, including financing, monetary exchange, investment, life insurance, and travel insurance, according to Chuang. All these are opportunities for Fubon.

A survey by Global View in May showed that 53.6 percent of foreign businesses would increase their intention to invest in Taiwan due to direct cross-strait flights, in addition to ECFA.

Already, benefits can be seen in increased investments in Taiwan. In September, Taiwan’s economics minister signed 27 letters of intent to invest with international companies. Worth NT$108.25 billion (US$3.55 billion), it is expected to create 13,000 new jobs. Among them, Hewlett Packard will invest NT$3.6 billion (US$118 million) to set up a new R&D center, the largest of its type ever established in Taiwan.

Also, Taiwan’s domestic market has received a boost due to direct flights, which bring more Chinese visitors to Taiwan, as well as foreign investment, which both aid the island’s economic recovery.

According to statistics from the Tourism Bureau, the tourist market in the Asia-Pacific region declined 2 percent in 2009, but Taiwan has experienced a growth of 14 percent, the highest in Asia. As of August, foreign visitors to Taiwan increased 28 percent over the same period last year, while the average percentage growth in tourism was 5-6 percent in the region. Chinese visitors who take advantage of direct flights are the main reason for Taiwan’s tourism spike, which is also reflected in Taiwan’s overall economic growth this year. In August, the government upgraded GDP growth to 8.24 percent in 2010 with over 70 percent coming from domestic demand.

Direct flights bolster airline profits

Global View said if the upper limit of Chinese tourists allowed to enter Taiwan is relaxed from 3,000 (currently) to 5,000 a day, there will be 730,000 more Chinese tourists a year, which would translate to about NT$45 billion (US$1.47 billion) in foreign exchange income.

The magazine reported in the tourist high season in July and August this year, two major Taiwanese airlines, China Airlines and EVA Airways, created record high single month revenues. For example in August, EVA reported revenues of NT$9.843 billion (US$320 million). This is the fourth straight month EVA generated a monthly record high, adding to its annual growth of 49.06 percent.

Both CAL and EVA have turned their past losses into profit this year. Masterlink Securities Corporation predicted CAL will make a profit of NT$10.881 billion (US$356.7 million) and EVA NT$6.843 billion (US$224.3 million) respectively. For 2011, both companies are expected to continue this trend, with CAL making NT$11.826 billion (US$387.7 million), about a 9 percent growth rate, and EVA making NT$7.431 billion (US$243.6 million), about 6 percent growth.

Currency appreciation – subsidizing exports or stimulating domestic demand?

The government is working to limit any big jumps in the value of the Taiwan dollar in order to keep its export more competitive. The weak currency policy Taiwan has adopted for the past 13 years has sacrificed domestic consumption power in favor of subsidizing Taiwan’s exports, which now account for just six percent of the island’s GDP.

Commonwealth magazine reported that the exchange rate of the New Taiwan Dollar to US dollars has appreciated .by 6 percent since the beginning of this year. However, the US market share of Taiwan’s total exports has dropped to less than 10 percent. According to the real exchange rates calculated by the Bank for International Settlements based on the trading weight of each country, Taiwan dollars have devalued 14 percent over the last decade, the index dropping from 106.55 to 91.73. In other words, Taiwan dollars are rising on the surface, but devaluing in reality, and showing a clear trend of depreciation.  

According to the statistics compiled by the magazine, 94.5 percent of Taiwan’s GDP comes from domestic consumption. This shows a huge difference from the popular understanding that exports account for almost 70 percent of Taiwan’s GDP. If taking away the imports, the real contribution of foreign demand to Taiwan’s GDP would be much less.

Taiwan is a powerful exporting country, but also a big importer since almost all the island’s daily necessities, from crude oil to wheat and other staple grains are imported. If you take a look at both the imports and exports together, the weak Taiwanese currency means Taiwan has “sacrificed domestic consumption to subsidize exports,” according to  Sun Ming-te, the director of the Industrial Development Consultative Department of Taiwan Institute of Economic Research.

The current price that Taiwan pays for its imports is 1.46 times of that 13 years ago, while the export price is only 0.86 times of what is was 13 years ago.

Taiwan’s exports used to rely largely on the European and American markets, and it was acceptable to adopt an exchange rate policy favorable to the exporting industries so as to increase Taiwan’s economic growth. However, the current situation has changed. The triangle trading ratios between Taiwan, China and Hong Kong are getting higher and higher. Thus keeping a weak Taiwanese currency policy, which pegs the Taiwan dollar value to the US dollar, is less effective in stimulating local employment.

Chen Tian-jy, former Minister of the Council for Economic Planning and Development, and currently an economics professor at National Taiwan University, told Commonwealth that the best policy is to balance imports with the exports. A long-term policy of devaluing the Taiwanese currency to favor certain exporting industries will deform the structure of Taiwan’s economic resources, sustaining some industries that are no longer viable.

Taiwanese exporters do not want currency appreciation, but more pragmatically, they hate huge jumps in currency valuation even more. At least on the former, they can take a gradual appreciation of 1-2 percent and negotiate with their customers on acceptable pricing.

Wang Shu-ji, president of U-Ming Marine Transport Corp., told Commonwealth that the appreciation of the Taiwan dollar will inflict some degree of damage on exporters, but he is taking an optimistic attitude. “Taiwan dollars should appreciate when necessary to a certain level enough to maintain exporters’ competitiveness. As long as everyone stands on a relatively equal footing, we don’t need to be afraid. The final winners will be those with better management.”

Chen Tian-jy believes that appreciation or depreciation has no absolute influence on economic growth, as an example, he said “Taiwan dollars were strong in the early 1990s, and Taiwan’s economy did not dip into recession.”

Of course, currency appreciation is not a panacea. Sun Ming-te said that appreciation of the exchange rate has definitely forced industries to upgrade themselves, but more importantly, government must adopt a well-planned industrial policy, and businesses should increase their R&D so that the currency appreciation will produce positive results.

Sun noted it is not feasible for Taiwan to maintain a three to four percent economic growth rate in recent years, but the currency exchange rate is still similar to that of a decade ago.

Commonwealth stressed that it is a good idea to increase people’s consumption power by moving the long undervalued Taiwan dollar up a little bit, making imported oil, flour and cosmetics a little cheaper, and buying more goods with the same amount of money when Taiwanese people travel abroad.

Between virtual and real societies, Generation Y pursues happiness

Following an in-depth survey of 50 of Taiwan’s young leaders, the Taipei-based Business Weekly found among two thirds of those interviewed, the most frequent word used to describe their work was “interest,” followed by terms such as “love and happiness.” The survey by EOLembrian found Taiwanese professionals aged 20-30 said they are happier now than a decade ago.

Doing something you love

An example of entering a career that makes you happy can be seen in the running of Paper Together Studio, a company founded by three female graduates from Kun Shan University in Tainan. After winning the German Red Dot Junior Design Award in 2009 with their student project, the classmates decided to start a business. They worked in a cramped unit, taking no pay for the first year in order to trim their operating costs. Yang Ru-an, one of the co-founders, said while most people start companies with a focus towards making their first million, they were different. The three have discussed their goals many times and they all agreed that their goal was to make people happy. “Even though our business might fail, we wanted to achieve something we’ll be proud of in our life,” Yang said.

Paper Together is not unique in their ideals. The diverse population interviewed by Business Weekly ranges from ordinary students, office workers, web bloggers, farmers, to entrepreneurs running companies valued at tens of millions. For them, “happiness” is a common goal of their generation.

The pursuit of happiness

Those born in the 1980s place a higher value on the pursuit of happiness. They grew up at a time when Taiwan had become much wealthier. Most were born into middle-class families where 30 percent of the parents had advanced degrees. Fully supported by their parents, they have not worried about basic necessities such as food and clothing. They have also received a more liberal education than their parents.

Many in this generation returned to live with their parents after graduation, and are highly dependent on their families, according to Yi Chin-chun, a researcher of the Institute of Sociology, Academia Sinica. Their relationship with their parents is closer than those between their parents and grandparents.

Sociologist Peng Huai-chen noted that the parents of Generation Y have the highest saving rates in Taiwan’s history. This security has allowed the younger generation to pursue careers that make them happy, since their parents’ are financially comfortable.

In retrospect, this generation started school just as martial law was lifted. By the time they were in high school, people in Taiwan were able to directly vote for the nation’s president. In 2000, while most of them were in college, Taiwan’s ruling party was ousted for the first time. The next year, Taiwanese workers began to work a five-day week, allowing people to have more leisure time. As they graduated from college, they witnessed another dramatic political change as the ruling government changed yet again.

Optimistic in the face of economic downturn

Although the high economic growth sustained by Taiwan has come to an end, and the worldwide economic climate does not appear any better, they are not daunted by the high unemployment rate. Much to Business Weekly’s surprise, young people between the ages of 20 and 30 are not as pessimistic as their parents. According to the white paper compiled by the magazine, 53 percent of Taiwanese youth believe they can exercise their influence over society.

Meanwhile, in the interviews with Taiwan’s future leaders, Business Weekly found a common expression of a “willingness to help,” and “wanting to make a contribution to society, no matter how trivial.”    

Kao Wen-hong, general manager of Coca Cola Taiwan region, observed, “Of course, we wanted to help others when we were young, but we did so only after we had achieved something. However, the young people today are faster paced than us. They have reached the stage of altruism before they are sure of what they can achieve.”

Fu Ming-ming, vice president of the movie business group at Walt Disney Taiwan pointed out that the internet is a major contributor. Many among Generation Y had blogs while they were in middle school. They started online stores at high school. Fu said, “Social networking is a necessity for them. In addition to special insights, they receive instant feedback through their social networks, which adds an overall consciousness and encourages a willingness to help.”

The influence of one

As an example, Business Weekly recounted the story of 21-year-old Shen Hsin-ling. When Shen was ten, her mother spent a fortune to buy her a computer in the hope that Shen would become computer savvy. In middle school, she wrote letters to the newspaper editor to complain of the low purchase price of oranges and the resulting financial strain to farmers. Her efforts were ignored by the authorities. However as she began posting photos of the farmers on her website, more people began purchasing oranges to help the farmers out. It forced the government to re-examine instituting a guarantee on the purchase price of oranges. Her efforts awoke in her the possibility of using the internet to advance societal justice. It illustrated that even one single young person can effect change. “A small kid can become Popeye,” Shen said.

Coming from a poor family, Shen understood the importance of computer access for poor students. She set up a free website to help poor elementary students learn. With the help of like-minded people, she has developed a huge database of multi-media teaching materials. In the first year alone, she received 700,000 visitors. Soon she began to receive appreciation letters from single mothers who said their kids had made tremendous progress in their studies due to her site.

The generation gap

To many in the workforce, Generation Y has earned a reputation for being difficult to manage and taxing the understanding of even their own parents. However, on August 8, 2009, after Typhoon Morakat hammered southern Taiwan, these young people utilized the internet to mobilize the PTT Typhoon Morakot Disaster Rescue Team. PTT, it is the largest bulletin board system (BBS) internet forum in Taiwan with 1.6 million registered member users.

On the day Typhoon Morakat hit Taiwan, a huge amount of flood-related news was posted among tens of thousands of topics. More SOS messages were also posted asking for help. Within 24 hours, a 30-member virtual disaster rescue team was formed by young people from all walks of life.

Through the PTT typhoon disaster rescue team, volunteers and disaster relief supplies hurried to gather at the Chiang Kai-shek Memorial Hall the following day. More than 600 volunteers were mobilized and divided into different groups to help transport over a hundred tons of supplies to the disaster areas.

Growing up in a virtual world

Luke, a software engineer and one of the volunteers of the PTT rescue team, said “Taiwanese youth are not apathetic to this land. We are a virtual team, but not living in a virtual world. We are passionate and concerned about this land, and living a serious life. We don’t care about the political issues the other generations fought over.”

Liou Wei-gong, associate professor of sociology at Shoochow University, said, “This younger generation grew up in the digital age, where virtual society and real society co-exist, along with dreams and reality, spirituality and materialism, work and living. The division is not clear and not important to them.”

Angela Chang, general manager of Johnson & Johnson Taiwan Ltd., has worked in Taiwan and China. She believes that Taiwanese youth will not be on the weaker side because they are more conscious of the changing world, more tolerant of diversification, and have a more in-depth understanding of technology. They are way ahead of the Chinese youth. But she stressed that the key point of competitiveness lies in whether young people dare to explore and find their own path.  

Business Weekly concluded that Taiwan’s Generation Y who enjoy the advantage of happiness over their Chinese counterparts may well be leading the way towards strengthening the soft power across the Taiwan Strait.

Journalese, Taiwan’s new slang

Joe Hung, a veteran journalist with an excellent command of English, Japanese and Chinese, was stunned to see a headline using a local vernacular term that reported Taiwan’s first lady Christine Chou to have held “a hompah” the other day. He later learned that hompah was an abbreviation for “home party,” which was not his initial conclusion. As an experienced journalist and diplomat serving overseas for several decades, he quickly realized he had to brush up on Taiwan’s “journalese” upon his return to teach in Taipei.

In a column, “tatter’s notebook,” published in CNA Newsworld, Hung said Chinese is a terribly hard language to decipher when it is abbreviated. “Home” is transliterated as hong which means a “roar,” while the standard translation of the “party” nowadays is par tui, gobbledygook which actually means nothing. Or maybe it is “to assign a pair?” But the logogram used as a phonic part of “pah” means to “prostrate.”

Traditionally, hompah meant a marijuana or amphetamine-laden house party held by rich young layabouts. Police would show up to rouse the partiers from their slumber after a night of excess. So Hung was somewhat stunned to read that the first lady had thrown a hompah. Later, he was much relieved to learn that First Lady’s hompah was an entirely different type of gathering. She had merely invited young people to a party at the presidential residence. In other words, the term hompah has morphed from a party of ne’er-do-well kids getting high to a party without the negative connotations.

Another unique term is fun shi, which literally contains two characters suggesting “cosmetic powder” and “silk.” The inventor of this term wants the readers to understand them as “fans.” Hung said there are already appropriate terms like ying mi (movie fans) or ke mi (song fans), both marvelous Chinese journalese inventions.

Hakkian dialect, spoken in southern Fujian province in China and Taiwan, has also invaded the Mandarin press, said Hung. He found another vernacular term that came up was sa bo in a headline to describe “failure to find out.” The two characters – meaning “sand” and “nothing” – are unintelligible. He suggested the first character be replaced by more meaningful sou meaning “search” or “try to find.”

Nowadays, reporters often quote police as cracking many a yuan-qiao case. The uninitiated would surely be in the dark on what this meant. The term is enjo kohsai in Japanese, minus jo and sai. This term is used when Japanese police solve cases involving girls who seek the company of men “for help.” It is a new form of prostitution practiced by non-professional party girls who take advantage of the ubiquitous chat-rooms to trawl for customers.

Hung said, the Japanese, who like to abbreviate, didn’t cut short the enjo kohsai, though they do chop off English words into something English-speaking people can never understand, while believing these Japanglish terms are genuine English.

Hung said Chinese translators in ancient times also used a lot of transliteration. Buddha was transliterated into Chinese Fu-tuo two millennia ago. Actually Fu is not a Chinese word. It is Sanskrit, with the latter character omitted. So are Pu-sa and Luo-han. The former is a Bodhisattva, someone who is waiting to become a Buddha, an enlightened one. The latter part “Arhan” was first transliterated as A-luo-han. A more liberal translation or interpretation was applied to such Sanskrit words as wu wo (self-less), wu zhang (no eternity), and lun hui (transmigration of the soul). Hung believes ancient Buddhist scholars, unlike their present-day counterparts, did a better job in translating.

Solar industry seminar to be held Dec. 1

The Taiwan Trade Center in San Francisco, the North America Taiwanese Engineers’ Association (NATEA) and the Silicon Valley Taiwanese American Industrial Technology Association (TAITA-SV) will jointly sponsor a seminar, “International Business Alliance of Solar Industry” at the Hyatt Regency Hotel, Santa Clara, CA, on December 1.

Bret E. Lee, director of the Taiwan Trade Center in San Francisco, said the seminar will provide an opportunity for Taiwanese solar companies to seek strategic alliances and information exchange with American businesses. 

Taiwan has a well developed semiconductor industry, from which technology transfers have helped to build solid photovoltaic (PV) technology and productions chains both vertically and horizontally. With government support, including a “rising sun plan of green energy industry,” Taiwan is expected to attain PV production capacity worth US$15 billion by 2015 and establish a cluster or global PV manufacturers employing up to 45,000 people.

Currently Taiwan is the fourth largest PV maker in the world with seven silicon wafer makers (up stream), 45 battery module makers (mid stream), and 29 application system makers (down stream).

At the seminar, speakers will share insights into the PV industry’s development and their experiences of strategic business alliances.

Speakers will include:

Daniel Shugar, CEO of Solaria Corp., former president of SunPower System, and PowerLight, with over 20 years of industry experience. He will discuss the development of crystalline silicon photovoltaic technology and share his experience of over 500 projects serving commercial, industrial, and utility clients worldwide.

Frank Yang, senior director of business development with Stion Corporation, will explore thin film solar technology and successful partnership and business alliances, including with TSMC.

Ian Chao –president of E-Ton Solar Tech., Taiwan, will talk about solar horizontal integration, from Taiwan to the USA to the world, and the pros and cons of domestic production versus international manufacturing in the context of local sourcing requirements and US trade policy. He will also address the true PV business opportunities in the US and in Asian markets.

Paula Mints, director of the energy division at Navigant Consulting, Inc., is a widely recognized expert on PV technology and markets. She will give an overview of the US and Asian solar markets and technologies as well as her market forecast. She will also speak about the increasingly important role played by Taiwan’s PV manufacturers.

Due to limited seating, those who are interested in attending the event are advised to register at event/detail.jsp?id=1044&lang=en_US

TECO chief applauds American contributions to world peace

Speaking at the opening ceremony of the Annual Veterans Day Parade in San Jose on November 11, Taipei’s representative Jack K.C. Chiang applauded America’s contributions to world peace. “Without the American military fighting for freedom, democracy and humankind’s dignity, people in the rest of the world could not have enjoyed peace and prosperity,” he said.

The Annual Veterans Day Parade, the largest Veterans Day parade in northern California, has a history going back 92 years. Each year, the United Veterans Council of Santa Clara County (UVC) has conducted an Armistice Day Ceremony and staged a Veterans Day Parade with support from the City of San Jose and the County of Santa Clara.
The opening ceremony for this year’s parade was attended by many dignitaries including US Congressman Zoe Lofgren (D-CA), and Jack K. C. Chiang, Director-General of the Taipei Economic and Cultural Office (TECO) in San Francisco.

Chiang, the only invited guest representing a foreign government, stressed his appreciation of America’s role in maintaining global security as well as the long-term and solid friendship that exists between Taiwan and the US. He urged those attending not to forget the sacrifices made on the battlefield so that others may live in peace.

After addressing the ceremony, Chiang and the other invited guests joined the parade where they were welcomed by thousands of spectators who lined the streets.