Monthly Archives: March 2011

Taiwan’s Lantern Festival

As the first full moon rises on the 15th day of the first lunar month, it marks the official end to Lunar New Year festivities and the beginning of the Yuan Xiao Festival (also known as the Lantern Festival). On this day, people in Taiwan celebrate the festival by making lanterns to brighten the night and they also attend Lantern Festival events.

In celebrating the Year of the Rabbit, this year’s Lantern Festival was held in Zhunan, Miaoli County, from February 17 to 28, with over 7.5 million people attending. The festival has grown and continues to attract more overseas visitors. In fact, the Discovery Channel was so taken with Taiwan’s Lantern Festival that it featured it in its “Fantastic Festivals of the World” program, selecting Taiwan’s Lantern Festival as one of the world’s best festivals.

The main theme for the Miaoli Lantern Festival was the “Auspicious Jade Rabbit” which conveyed the good wishes of the “Jade Rabbit Blessings of Fortune and Prosperity in the New Year.” The Jade Rabbit lantern measures 20.5-meters high and weighs 30 metric tons. The displays used innovative holograms developed by the Industrial Technology Research Institute (ITRI). The bulk of the exhibition was created by eco-friendly LED lights coupled with digitally controlled effects.

To see some of this year’s exhibits, please scroll through the pictures from last month’s Lantern Festival.

Photo courtesy of the Taiwan Tourism Bureau.

Sun Yat-sen’s emerging relevance discussed

Sun Yat-sen paved the way for China’s modernization and, indirectly, Taiwan’s transformation after 1949. He also strengthened connections between the Chinese community in the United States and their motherland. Sun left behind a great legacy for all of today’s ethnic Chinese people, stressed three eminent scholars taking part in a panel discussion on Sun Yat-sen and His Lingering Legacy at the Pacific Heritage Museum in San Francisco on March 3.

Veteran journalist Orville Schell, Stanford scholar Kuo Tai-chun and Chinese-American historian Sue Lee speaking from different professional backgrounds offered their perspectives on this larger-than-life figure. Sun is respected as the founding father by the Taipei government, while he is referred to as “a revolutionary pioneer” by the Beijing government.

Sun’s new relevance

The principal speaker, Orville Schell, is a well-known journalist, correspondent and author of 15 books. He currently serves as the director of the Asia Society’s Center on US-China Relations in New York City and is a fellow at the Weatherhead East Asian Institute at Columbia University. In his introduction, the moderator Bruce Pickering (Asia Society) likened Schell’s resume to “driving a fast bus,” since Schell has such a varied and accomplished resume, that continues to grow.

When Schell first began studying Chinese history, he found it interesting that Sun’s legacy was kept alive in Taiwan to serve as a guiding map for the island, but did not have the same relevance in China. He remembered thinking that Sun’s ideas were “rooted in history, but with very little relevance.” After all, “it looked like republicanism had failed.” He went on to explain that Sun has now reappeared with new relevance from his early assumptions.

In particular, Schell mentioned that although Taiwan followed Sun’s model of the Three Principles of the People (nationalism, democracy and livelihood); he wondered, “What is the model?” since very little of Sun’s writing remained after his library in Guangdong province was bombed and burned in 1922, three years before his death. There is little concrete information of what Sun envisioned for the new republic.

Much of Sun’s book was pieced together from the 15 to 16 lectures he gave in Guangdong province. Those notes were ultimately passed down and became The Three Principles of the People. This is the reason why the book is not particularly eloquent or well-organized, but more free formed like a lecture.

Schell wondered if Sun thought, “After we get rid of the Qing Dynasty, it would be okay.” Except the events did not take place in that way. After the dynasty was toppled, Sun did become president, but only for 45 days. He stepped down when it became clear that the northern warlord Yuan Shih-kai wanted the title of emperor for himself. The result – China would remain “cut up like a melon” among the Western powers.

According to Schell, Sun was not anti-foreigner, but he was anti-imperialist. Both Sun and his protégée Chiang Kai-shek were passionately against imperialism. “This was the piece of genetic material that got passed on,” Schell said. Both saw imperialism as demoralizing and prevented the Chinese from rising up. They believed only with the elimination of imperialism and the unequal treaties would nationalism thrive.

Intrigued by democracy

Schell thought the Chinese were intrigued by democracy, but not for the reasons we might think. “Most Chinese reformers were interested in democracy because it had given the West wealth and power. So they were willing to try it.” Though, if communism, Christianity or capitalism also offered wealth and power, they would cultivate those as well. This pragmatic statement drew some collective laughter from the audience.

In talking about democracy, Schell mentioned the commonalities between Deng Xiaoping and Sun. Both wanted China to have wealth, power and to be respected. Also, they believed that China needed a period of adjustment, what Schell referred to as “political tutelage.” Taiwan’s Deng was Chiang Ching-kuo. It was Chiang Kai-shek’s son, Chiang Ching-kuo, who started the democratization process in Taiwan. It took two-thirds of a century before the republic became truly democratic. Whether China might enter into a period like Taiwan after a certain period of political tutelage is still unknown.

Today, the Chinese do not follow Marxism-Leninism. People who are rich are incredibly rich and there is a lack of equality. Sun founded a movement that seemed to go nowhere, but now seems to have relevance. Schell likened Sun to a stem cell – it can turn into anything, a hair, an arm, anything.

Someone to take pride in

The second speaker, Sue Lee, vividly recalled that her grandfather, who came to the United States in 1911, had Sun’s portrait hanging in the family’s grocery store. For her, Sun “was someone I could be proud of,” that matched up to the stories of George Washington.

Sue Lee offered the audience a view of the early Chinese American community during Sun’s various visits to San Francisco. As the executive director of the Chinese Historical Society of America, she preserves the narrative of the Chinese American experience. She has worked under San Franciscan Mayors Agnos, Feinstein and Brown.

From 1898 to 1911, San Francisco was the ninth largest city in the United States. The port was huge and trade with the East was big business. Sun traveled to San Francisco (in 1896, 1904, 1909 and 1911) at a time when city, state and federal governments were enacting legislation to remove Chinese residents. The Chinese were used as scapegoats and were blamed for many things, including the bubonic plague that broke out between 1900 to 1909. After the 1906 earthquake, there was a movement to relocate all Chinese to the Bayview Hunters Point, further away from downtown.

Sun found fertile ground for his revolution in San Francisco. Chinese living in San Francisco were politically powerless, but they wanted someone to be an advocate for their rights. They desired a strong China and nationalism.

Lee said that the only documentation of Sun’s 1904 visit is in the National Archives. During that visit, Sun entered the United States with forged papers, stating that he was a United States citizen born in Hawaii. Hawaii was a territory of the US then. His papers included two witnesses’ signatures affirming his birth in Hawaii. Since US immigration was tipped off about his arrival, they held him at the Detention Shed, the predecessor to the Angel Island Detention Center. While there, he was able to smuggle a message to his supporters in Chinatown that he was being held and they worked to free him after 17 days.

An account of Sun’s visit came from an 80-year old woman whose family helped hide Sun during his time here when she was 10-year old. Since his visit to the Bay Area was clandestine, she acted as a scout and lookout. She talked about secret codes and knocks. Today, it is hard to weed out the myths from the facts. But despite this, Lee said, “He loomed large, because there were no other role models for us in those days.”

What would Sun do?

Professor Tai-chun Kuo followed with a look at how the Republic of China on Taiwan was able to carry out Sun’s Three Principles. According to Kuo, Chiang Kai-shek “wanted to wash away the shame of losing China by fulfilling the Three Principles.

As a research fellow at Stanford University’s Hoover Institution, Kuo’s main focus is on the political economy of Taiwan and China. She worked in public service in Taiwan from 1990 to 1997. As an academic, she has taught at the Graduate Institute of American Studies, Tamkang University (Taiwan) and is now assisting in organizing the archival papers of the Kuomintang (KMT), Chiang Kai-shek, Chiang Ching-kuo, T.V. Soong, H.H. K’ung and other leading Chinese individuals of the early republic.

Sun’s principles called for a planned economy and this caused a great deal of debate among the Kuomintang leadership in the 1950s. Although land reform was necessary under the plan, the KMT did not have enough budget to buy it all, so some wanted to raise funds by selling state enterprises. Such an idea ignited great opposition within the party since many saw state enterprises as the engine for change. The dilemma became how to structure Taiwan’s economy, while remaining true to Sun’s ideals, or as Kuo said, how to “untie the knot.”

In the Three Principles of the People, Sun called for equal land rights and regulation of private capital in order to ensure an equitable distribution of national wealth and lessen conflicts between the social classes. Chiang saw Sun’s idea of equalizing the country’s wealth as an important goal, so he adjusted and managed the principles. Kuo said it fulfilled Sun’s principles without being tied down by dogma. Kuo noted that Taiwan’s experience of transforming itself from a planned economy to a market economy around 1959 could be a valuable lesson for the leaders in Beijing today.

The lecture was sponsored by the Taipei Economic and Cultural Office (TECO) in San Francisco, the Asia Society, East West Bank, the Chinese Historical Society of American and the University of San Francisco.

In celebrating the centennial anniversary of the Republic of China, TECO’s Press Division has produced a photo exhibit, Sun Yat-sen: His Life and Legacy, which will be on display at the Pacific Heritage Museum until March 31. The museum in located near San Francisco’s Chinatown on 608 Commercial Street.

Scholarships in Taiwan with March 31 deadlines

There are two types of scholarships that are currently being offered by the Ministry of Education for study in Taiwan. The Huayu Enrichment Scholarship offers a six-month scholarship to study Mandarin and Chinese culture, while the Taiwan Scholarship program offers up to five years of stipend for students applying for undergraduate, masters, PhD programs and language training.  All applications must be postmarked by March 31, 2011.

The scholarships offer a monthly stipend of NT$25,000 to NT$30,000, which is roughly US$835 to US$1,000, depending on the exchange rate. This might not sound like much, but keep in mind that the minimum wage in Taiwan is around US$500 a month. In fact, you can get a decent room for US$300 or less, a studio apartment for US$400 and a really nice apartment for US$500 a month. Food is also cheaper in Taiwan, with delicious inexpensive food readily available on the street.

If accepted by one of the programs, applicants would still need to pay their own airfare and should have some money set aside to cover expenses before the scholarship money is available. Though a nice salary in Taiwan might be US$1,500, with most college graduates getting US$1,000, the scholarship money is definitely enough to live on. 

If you are interested in learning more, please visit the Ministry of Education’s websites at,,

SFIAAFF to screen two Taiwanese films

This year’s San Francisco International Asian American Film Festival (SFIAAFF) will feature 120 works, including two films from Taiwan. Presented by the Center for Asian American Media (CAAM), the festival will take place in ten locations in San Francisco, the East Bay and the South Bay from March 10 to 20. Started in 1982, SFIAAFF has become the biggest and most prestigious festival for Asian and Asian American films. Among the films from Taiwan are The Fourth Portrait and When Love Comes.

When Love Comes was  the winner of the Best Feature Film, Audience Choice Award, Best Cinematography and Best Art Direction at the prestigious Taipei Golden Horse Film Festival. The film  chronicles a family existing on the margins of society. Lai-Chuan is a young girl living with her extended family in a cramped Taipei apartment. The family struggles to eke out a living by running a small restaurant. Lai-chuan escapes into her daydream and time spent with her boyfriend.

Upon finding out she is pregnant; she is abandoned by her boyfriend and must turn to her family for support. The first showing will be on Friday night, March 11 at  San Francisco’s Landmark Clay Theater, with the second screening on Saturday night, March 19 at  San Jose’s Camera 12 Cinemas. For more information visit the CAAM’s website, .

The second film from Taiwan is The Fourth Portrait by Taiwanese director Chung Mong-Hong (director of Parking).  The film won both Best Director and Outstanding Taiwanese Film at Taiwan’s 2010 Golden Horse Awards. It’s a sweetly crafted story of 10-year-old Xiang. Upon his father’s death, he is left to join many disjointed families. There are bleak moments, but also comic ones as he weathers the brokenness of family life, the camaraderie of friends  and coming  of age as best he can.

The movie features such Taiwanese regulars as Leon Dai, Terri Kwan and King Shih-Chieh. The first showing is on Saturday afternoon, March 12 at San Francisco’s Landmark Clay Theater, and the second screening is on Sunday afternoon, March 20 at San Jose’s Cinema 12 Cinemas. To find out more about The Fourth Portrait, please visit: .

Conference considers the changing cross-strait relationship at UC Berkeley

A two-day conference entitled “China and Taiwan’s ‘Mobile Horizons’: Cross-Strait Through Cross-Discipline,” took place at the University of California, Berkeley on March 4 and 5. The event was sponsored by the Institute of East Asian Studies (IEAS) to discuss the connections between Taiwan and China in business, religion, popular culture, political issues and rapprochement.

Su Chi, Taiwan’s former national security chief and current advisor to President Ma Ying-jeou, joined the conference as a keynote speaker, summarizing the current situation and assessing future prospects. Former Taiwan Minister of Foreign Affairs Tien Hung-mao opened the conference with a featured lecture exploring the foundations of cross-strait relations. The view from China was represented in a special address by political scientist Yan Xuetong of Tsinghua University, Beijing.

In the opening speech addressing the conference, Tien said the relations between China and Taiwan has strengthened under President Ma’s administration. Whether the momentum can be sustained or not will depend on the future developments in Taiwan. Politics, aside, the trend of the cross-strait relations seems irreversible.

Other participants, who are jointly compiling a book on cross-strait relations based on the presentations at the conference, included Lowell Dittmer (UC Berkeley), Penny Edwards (UC Berkeley), Sara Friedman (University of Indiana), Tom Gold (UC Berkeley), Micah Muscolino (Georgetown University), Shelley Rigger (Davidson College), Michael Szonyi (Harvard University), Robert Weller (Boston University), Timothy Weston (University of Colorado), Wu Yu-shan (Academia Sinica), and Yeh Wen-hsin (UC Berkeley). Nancy Bernkopf Tucker of Georgetown University served as a commentator.

In the first panel discussion, Politicking, Rigger traced the historic process through which the People’s Republic China has come to define “China” for most Taiwanese people in her talk entitled “Redefining ‘China’: from the China Inside to the China Outside.” Rigger noted that nowadays even Taiwanese officials think of “China” as meaning the PRC (China outside), but in earlier times up to the 1980s, “China” meant the Republic of China (China inside) for Taiwanese people.

When Chiang Kai-shek led two million defeated Nationalist troops to Taiwan in 1949, the Kuomintang-led government used all measures, including propaganda, repression and mandatory use of Mandarin, to command Taiwanese people to think of themselves as Chinese citizens of the ROC.

Through a gradual process of democratization over the last few decades, Taiwanese consciousness and identity have been awakened as distinct from a Chinese identity, said Rigger. In 1986, the opposition Democratic Progressive Party (DPP) was formed without being banned by the ruling KMT. Chiang Ching-kuo, son of Chiang Kai-shek, even lifted martial law and the ban on travel to the mainland, transforming Taiwanese perceptions of the PRC, the China outside.

In 1988 Lee Teng-hui assuming the presidency after Chiang’s death became the first Taiwan-born president. China’s missile tests, military exercises and harsh political rhetoric in 1995 and 1996 resulted in Lee Teng-hui being elected for a second term and only served to strengthen the emerging Taiwanese consciousness.

Rigger noted that after decades spent debating how to reconcile Taiwan with the China inside, Taiwanese people have turned their attention to the China outside, and the threats and opportunities this holds. It is that China – the People’s Republic – that Taiwanese people recognize as “China.” The home of the Taiwanese is Taiwan.

Meanwhile, the PRC’s rapidly-rising global profile and assertive Chinese nationalism brought home just how completely it has come to dominate the world’s consciousness of China. “China” has come to mean the “People’s Republic of China,” internationally and within Taiwan. President Ma’s attempt to ask Taiwanese officials not to refer to the People’s Republic of China as “China”, instead, calling it “the other side”, “the mainland” or “mainland China”, underscores the popularity of that trend.

In the same panel, Wu and Dittmer presented a paper entitled “What Drives the Cross-Strait Rapprochement? Political Competition, Globalization, and Strategic Triangle.” Wu said the rapprochement between Taiwan and China since the inauguration of President Ma has its roots in three driving forces: 1) domestic politics in China, Taiwan, and the US, 2) globalization and economic imperatives, 3) the strategic triangle: security. And these three forces have converged to push Taipei and Beijing to moderate their cross-strait policies, while there are also constraints on the three forces on further improvements in cross-strait ties.

In the strategic triangle, Wu said former President Chen Shui-bian became an outcast in the eyes of both the US and China, while President Ma is changing that situation by seeking friendship from Beijing and Washington. President Obama is happy with Ma’s rapprochement with China. For the future, the three sides are likely to benefit from the rapprochement, but Wu warned that since political, economic, and security forces are conditionally related to cross-strait rapprochement, Taipei-Beijing ties remain vulnerable and fragile.

In the panel Building Connections, Gold presented a paper entitled “Bridging a Mobile Horizon” to use the micro-history of an American-run Chinese language program based first at National Taiwan University in Taipei and then at Tsinghua University in Beijing to examine how the changing political climate in Taiwan and in cross-strait relations has impacted a foreign organization. This organization is called the Inter-University Program for Chinese Language Studies (IUP), whose mission is to provide advanced level Chinese language proficiency to elite students intending to embark on careers in academia, government, business, the professions and the arts.

Currently headquartered in UC Berkeley, IUP started its Mandarin Chinese language program in the 1960s. Before 1979, American China experts used to spend extended periods of time studying Chinese in Taiwan as the mainland was off limits. After the US severed ties with Taipei and recognized Beijing diplomatically in 1979, American students of Chinese who would have had no choice but to pursue advanced language training in Taiwan before overwhelmingly headed to China instead. Against that background, the IUP board decided to move out of Taipei and relocate to Beijing.

This has resulted in a lack of experience in and understanding of Taiwan by the rising cohort of American China experts, many of whom will play important roles in advising the US government on, the formulation and implementation of American policy in the region, as well as training future generations of China hands in all fields. The IUP has tried to redress this imbalance through the Taiwan Familiarization Program (TFP), said Gold, who is also the Executive Director of IUP.

Started in 2005, the idea behind the TFP is to send a small select group of IUP students who, ideally, have never been to Taiwan, to spend a week on the island to understand Taiwan as a vibrant society worthy of study in its own right, as well as a place rich in intellectual resources and materials essential for the comprehensive study of many “China-related” topics. Another goal is for these students to build a unique set of bridges with each other across the strait based on this special experience. The results of the program are rather successful. Student evaluations have been uniformly positive, according to Gold. 

William Kirby’s paper about the expansion of the Taiwan Semiconductor Manufacturing Company’s Shanghai facility was read on his behalf by Gold. Kirby noted that TSMC’s action is the result of three factors: a need to be closer to the Chinese market, to take advantage of the engineering talent in China and the easing of the political situation across the Taiwan Strait.

Commenting on the second panel discussion, Dittmer said the IUP and TSMC are two case studies that demonstrate the gradual integration of China and Taiwan in language culture and in business, even though some issues remain unresolved. 

Analysts: Jasmine revolution unlikely in China

Just as in Egypt, it has been reported that a similar call to protest went out on the internet for China’s masses to launch a Jasmine revolution in the country. However, the situation in China today is very different from that in the Middle East and North Africa, and the same degree of passion for change is missing, reported Taiwan’s Central News Agency.

Almost all Middle Eastern and North African countries are ruled by dictators, and similarly suffer from poor economic performance, a growing disparity between the rich and the poor, and rising popular discontent. As a result, when the revolt broke out in Tunisia, people across the Middle East and North Africa readily took to the streets in protest. Like tumbling dominoes, Egypt followed. However, no one can predict where the last tile will fall, but it is fairly certain that the same scenario will not play out in China, according to the Central News Agency.

No strong ideological system in China

Perhaps the biggest difference is that China today has no strong ideological system. Its former Marxism-Leninism doctrine has lost its luster among a booming economic  market. Nowadays, Chinese people are focused on making money and place little  value on establishing an equitable society. Furthermore, since China’s people have already witnessed more than their fair share of political unrest throughout the twentieth century, and have witnessed the collapse of the former Soviet Union and the economic turmoil that followed, few are willing to revisit that kind of chaos, commented the Central News Agency.

Also, China has prospered, becoming the world’s second largest economy with the highest foreign exchange reserves. China’s economic transformation has improved the lives of its people, this has not been the case in the Middle East and North Africa.

In addition, China has extensive control over its internal propaganda system through the Communist Party, its government, and military intelligence. This leaves little room for public anti-government sentiment which has taken hold in the Middle East and North Africa. China nips all anti-government rhetoric and activities in the bud, allowing little opportunity for a Jasmine revolution.

The Central News Agency stressed that despite China’s one-party dictatorship – the disparity between the rich and the poor, its poor record  on human rights and corrupt officials – social discontent is suppressed and kept underground. With no substantial division among its leadership, the call for a Jasmine revolution could only take place in the virtual world, far from reality.

Different scenario from the USSR

The Taipei-based China Times noted that Taiwanese economic scholars often compare the democratic movement in the former Soviet Union with that in China. Still, there are very marked differences between the two countries. When Boris Yeltsin was elected to power and finally dissolved the Communist Party, the Soviet military did not intervene. This would not be the case in China where any democratic movement with the intention to overthrow the Communist dictatorship would be eliminated by the People’s Liberation Army. One need only look at to the bloody Tiananmen Square protests of 1989 to see this fact.

Another reason behind the collapse of the former Soviet Union is that the Communist Party was out of step with public opinion. After years of press reforms, the corruption of the Communist Party was revealed to the public, resulting in the loss of its popular support. Again, this is not the case in China thus far.

In an opinion piece for the San Jose Mercury News on February 22, Professors Tai-chun Kuo and Ramon Myers of Stanford University’s Hoover Institution wrote, that “China is insulated, to a degree, from the kind of changes that are shaking Egypt. Ordinary Egyptians’ economic problems helped drive the unrest there, but in China, double-digit economic growth has served to legitimize the government.” Also, they believe that Beijing is more skilled at manipulating patriotism to “steer its people away from the lure of individualism and dissent.” Hence, “China’s transformation will certainly not come in 18 days, as in Cairo.”

According to Kuo and Myers, “with greater exposure to the outside world and prosperity, they [the Chinese] will expect more from their own government. Beijing will find it even more difficult to appease its people with material comforts while putting off political reform.”

President Ma: New thinking to be expected in China

President Ma said that Beijing has done a good job of maintaining economic prosperity and development, however on February 22, he expressed his hope that Beijing would also speed up its political reforms and update its legal system to actively protect human rights. In this age when dictators appear to be toppling,  China should adopt a new way of thinking and a liberal attitude in the way it treats its dissidents so that democracy and human rights can be a common language for the people across the Taiwan Strait, Ma emphasized.

Taiwan’s per capita income to hit US$20,000

According to Taiwan’s Directorate-General of Budget, Accounting and Statistics, the island will join the ranks of nations whose per capita income reaches US$20,000 this year. This accomplishment will serve as a milestone, confirming the effectiveness of the government’s policies and bolstering public confidence, reported the United Evening News.

As one of the top economic performers among the four Asian Tigers, Taiwan’s per capita  income fell behind South Korea’s for the first time in 2005. Since then, Taiwan’s economic performance has come in last out of the four. In 2007, South Korea’s per capita income exceeded US$20,000, and now Taiwan is playing catch up.

The United Evening News reported that the economic forecasts from the government are  promising, with the economic growth rate exceeding 10 percent in 2010, a record high in the past two decades. This year’s economic growth is expected to reach 5.03 percent. However, financial and economic scholars have attributed last year’s high economic growth rate to the extreme low base of the previous year in the midst of the economic recession. And this year’s forecast is the result of the gradual global economic recovery.

Based on the 2010 Globalization Index – which measures the extent to which the 60 largest countries (by GDP) are connecting to the rest of the world – Taiwan’s composite score rose to 5.15 from 4.9 in the previous year. Overall, Taiwan ranked 12th, while the United States came in at 28th, and China at 39th. The combined score considered three areas – trade openness, technology and creative exchange, and the labor movement. Taiwan scored better than the United States in all these areas.

On the 2010 Legatum Prosperity Index, Nordic countries, such as Denmark, Norway and Finland occupied the top three positions, while Taiwan ranked 22nd, Hong Kong 20th, China 58th. Singapore ranked 17th, the highest for an Asian country, followed by Japan.

Taiwanese companies profit with iPhone/iPad success

As consumers around the world unpacked their newly purchased iPhone 4 or iPad, few realized that Taiwanese manufacturers played a crucial part in bringing these American gadgets to the marketplace, reported Taiwan Review. In fact, three large Taiwanese contract manufacturers and components suppliers are the workhorses behind the hardware for Apple’s popular products.

Based in Cupertino, California, Apple is famous for its Macintosh computers, along with its iPod, iPhone and iPad. The iPad alone sold one million units in just 28 days when it was introduced in April 2010. The iPhone’s metallic casing and its 5-megapixel built-in camera, as well as the touch panel of the iPad, which allows access to programs and on-screen typing, are all made by Taiwanese companies. On top of that, these companies also assemble the finished products and help Apple dispatch them to retail stores worldwide.

Hon Hai Precision

In fact, the success of Apple’s products has everything to do with the profitability of these firms, and vice versa, said Taiwan Review. “Steve Jobs’ achievements would not be possible without Terry Guo,” said Chang Tien-wen, author of The Tiger and The Fox: Terry Guo’s Global Competing Strategy. Guo is the founder of Hon Hai Precision Industry Co., the world’s largest electronics parts manufacturer, which is traded under the name Foxconn. He is the richest man in Taiwan, estimated to have a fortune of US$5.9 billion by Forbes magazine.

In 1974, Guo started his company in a Taipei suburb making plastic channel knobs for black-and-white television sets. He later expanded into the computer industry, and in 1988, with rising costs and surging orders in Taiwan, Guo set up plants in China to take advantage of that country’s cheaper land and labor costs. Over the years, Guo has expanded his company’s capabilities from producing PC exteriors to handling the production of internal computer components as well.

By making its own components  Hon Hai is able to undercut its competitors on finished product price without reducing its overall profit margins, Taiwan Review reported. According to Taiwan-based analysts, besides being the current exclusive supplier of Apple’s iPhone and one of the few makers of the iPad, Hon Hai and its affiliates also make products or parts for Hewlett-Packard, Motorola, Dell, Nokia, Sony, and Nintendo.

Fubon Securities analyst Allan Pu said Hon Hai’s impressive sales in the third quarter of 2010, the second consecutive quarter that it has achieved record revenues, were attributed to Apple, which remained the biggest contributor with its hot-selling iPhone 4 and iPad. In that quarter, Hon Hai raked in sales of US$21.4 billion, up 29.1 percent from the previous quarter and 71.3 percent from the corresponding period a year earlier.

This year looks to be even rosier, according to Citigroup analyst Kevin Chang, because Hon Hai is expected to assemble 70 million iPhones, 35 million iPads and 10 million iPod Nanos, worth US$42 billion.

Quanta Computer

Another company that benefits from relations with Apple is Quanta Computer Inc., the major assembler of the iMac all-in-one desktop computer, MacBook notebook and iPod Touch. Quanta is currently the world’s largest design manufacturer of notebook PCs,  producing about one-fourth of the world’s laptops in 2009, reported Taiwan Review.

According to Merrill Lynch Taiwan research analyst Tina Chang, in addition to Apple, other computer companies such as HP, Dell, Acer, Asustek, Lenovo, Sony and Toshiba all outsource their notebook production to Quanta. Notebook PCs account for 80 percent of Quanta’s revenue and the balance comes from other products such as GPS, MP3 players, handsets, servers, storage devices and LCD TVs.

Barry Lam started Quanta in 1988, just as the notebook computer was starting to grow in a market dominated by larger, bulkier desktop computers made by IBM. Today Quanta has grown into the world’s No. 1 notebook contract manufacturer based on revenue. The company’s revenue reached US$25 billion in 2009. In 2010, around 50 million laptops were shipped, a growth rate of 40 percent from 35 million units in 2009.

TPK Holding

Another company whose business is tied with the ups and downs of Apple’s products is TPK Holding Co., inventor of the glass-based capacitive touch panels (CTP) used in the iPad and iPhone, reported Taiwan Review.

When it launched an initial public offering on the Taiwan Stock Exchange on October 29, 2010, TPK’s shares soared to US$16 from the offer price of US$7. This first day surge gave TPK a market value of US$3.6 billion, a 55-fold increase from a capitalization of only US$62.2 million when the company was established in 2005.

Yuanta Securities analyst George Chang said, “TPK is a clear beneficiary of the booming smartphone demand given its status as the top supplier for leading smartphone makers – Apple and HTC Corp. – which have been gaining market share.” In 2009, Apple accounted for 46 percent of TPK’s revenue with three major products: the iPhone, iPod Touch and Trackpad, a multi-touch pad to go with Mac desktop computers.

Since the launch of the iPhone 4 and iPad in 2010, the proportion of Apple production in TPK’s total sales has risen to 73 percent. One of the reasons that TPK has continued to be Apple’s manufacturer is its ability to stay at the top of the industry technologically. George Chang cited the 9.7-inch iPad, which represents a significant size migration from the 3.5-inch iPhone, saying that TPK has demonstrated its ability to achieve a decent yield rate with production occurring in a timely fashion.

Another advantage, according to Taiwan Review, is that Taiwanese companies produce up to 60 percent of the key electronic components used in these devices, allowing them to assemble these products quickly.

Taiwanese companies are reaping the benefits of working with consumer favorites like Apple. However, if Apple products wane in popularity or other non-Apple devices catch up,  the falling value of Apple stocks would be a significant blow to the business performance of Taiwanese manufacturers, Chang cautioned.

Taiwan builds maritime mansions

According to Taiwan’s Yacht Industry Association, the value of the island’s yacht exports soared from US$334 million in 2008 to US$437 million in 2009, with one-third of this growth attributed to the Kaohsiung-based Horizon Yacht Company. In terms of worldwide production, Taiwan is still a very minor player in the global luxury yacht industry, but it is a major player in Asia.

Founded during dire times

Based on the 2011 Global Order Book released by ShowBoats International, and the data from Superyacht Fleet Information, there are currently 749 yachts over 80 feet on order or under construction at shipyards around the world. A superyacht refers to a large, expensive luxurious yacht with a professional crew. Italy is the top producer, accounting for a total length of 44,944 feet. It is followed by the US, the Netherlands, Germany, the UK, Turkey and Taiwan, with 4,432 feet. John Lu, co-founder and CEO of Horizon, told Taiwan Panorama that the global yacht industry is worth US$40 billion annually.

Luxury boatbuilding in Taiwan goes back over 40 years. In fact, it was once one of the high growth manufacturing sectors. In the 1980s, sales rose with exports of around 1,500 yachts per year worth US$200 million, making Taiwan the hub of Asia’s luxury yacht industry.

However, a sharp appreciation of the NT dollar in the 1980s, along with domestic wage increases, rising raw material costs, escalating sea freight charges and the imposition of a luxury tax in the US, all contributed to declining exports. The result was that sales plunged from US$180 million in 1987 to only US$50 million in 1994. During this time, around 70 percent of Taiwan’s yacht industry closed its doors, with only 20 yards surviving. Today, there are more than ten Taiwanese companies capable of producing yachts over 80 feet. It was during these dire times, in 1987, that Horizon Yacht was established.  

Focus shifted to European market

In an article entitled “Asia’s superyacht supremo: Horizon Yachts creates maritime mansions,” Taiwan Panorama reported that last summer a fleet of Horizon’s nine luxury vessels, worth US$40 million, was docked in Kaohsiung Harbor for the first time, showcasing the yachts’ extravagant beauty.

The most expensive among this elite collection was a long-distance 105-foot long cruising yacht costing US$11 million. It had three upper deck levels, one lower deck and twin 1,200 horsepower engines, offering a maximum speed of 12.5 nautical miles per hour. With full tanks of fuel, this superyacht could sail over 3,000 nautical miles without needing to refuel.  

Lu told Taiwan Panorama that as a newcomer, his company was flexible enough to shift focus from the traditional market of the US and to concentrate on the European market.

American buyers generally liked functional space, and a simple décor featuring lots of finished wood, and from a business perspective, the US had a relatively open market. European clients, on the other hand, preferred a more stylish and streamlined design. Taiwanese builders lacked the design tradition of Europe, especially of the Italians, who had developed a yachting culture over centuries. Most Taiwanese businesses were not ready to spend the exorbitant redesign costs to take on Europe.

Lu, on the other hand, braved the opportunity and invited a Swedish designer to create a series of European style streamlined yachts. In the first year after the shift to Europe, Horizon received five orders from Sweden.

Another winning strategy was to develop customization. Xie Quan’an, the boatyard manager at Horizon, told Taiwan Panorama that yacht hulls of 60 – 70 feet can generally be made from existing molds and be built in three to four months. But it takes at least a couple of years to build a luxury superyacht, which has to be constructed from scratch, and needs to go through a process of international accreditation.

Flexibility to respond quickly

Horizon has set up a dedicated section to produce molds for fiber-reinforced plastic (FRP) yacht hulls, separate boatyards for building yachts of different size ranges, and a specialized cabinet maker, thus integrating the company’s supply chain. “Building yachts is different from regular shipbuilding because customers sometimes change their minds and you have to be flexible enough to respond quickly,” said Lu.

The third strategy of Horizon Yacht was to focus on branding. Lu retained respected European and American designers with pricy fees to design yachts that could match the market trends.

To become more competitive, Horizon incorporated new techniques, such as the Seeman Composites Resin Infusion Molding Process, developed by the US Navy to enhance hull strength and durability without increasing weight or affecting performance. In 2004, the company also developed a new resin infusion technique, which was not only more environmentally friendly but could also reduce bubble defects in the FRP material, a common problem in manual construction, reported Taiwan Panorama.

Horizon’s 2005 revenue hit US$50 million, but then more than doubled to US$109 million in 2008. The annual export volume is running at 50 yachts, with Europe serving as the main market, followed by North America, Hong Kong and Australia.

In recent years, Horizon has been researching the development of zero-pollution, green-energy solar-powered yachts. After the completion of Taiwan’s largest FRP yacht measuring 136 feet in 1998, the company went on to develop Taiwan’s first solar-powered yacht (the SunCat 23) and the world’s first luxury solar-powered yacht (the SunCat 46) which can power an eight-hour cruise.

Taiwan seeking to avoid concentration of guest workers from a few countries

With signs of an economic recovery and a growing aging population, Taiwan will need more foreign workers to fill manufacturing jobs and to take care of its elderly. The number of foreign workers is soon expected to reach 380,000, a record high since Taiwan opened its doors to workers from overseas in 1989.

According to the latest numbers from the Council of Labor Affairs, the total number of guest workers in Taiwan reached 379,000 at the end of 2010. Wang Ru-hsuen, minister of the Council, said the number of industrial workers has risen to more than 190,000, mainly due to the economic recovery and increased factory orders, while the increase in the number of foreign care assistants is as a result of a growing demand for elderly care.

Currently, up to 41 percent of guest workers come from Indonesia. The Council of Labor Affairs is working on plans to recruit from other countries to avoid excessive concentration and dependence on a single country. Even in 2002, when diplomatic disputes between the two countries resulted in the number of Indonesian care assistants falling from 81,000 to 21,000, Taiwanese demand for foreign care assistants remained unchanged. Vietnamese  workers quickly plugged the gap surging from 15,000 to 71,000. Due to the graying of Taiwan’s population, the total number of households hiring a domestic helper is rising exponentially, with the most rapid increase still coming among Indonesian workers.  Currently, up to 73 percent of household helpers are Indonesians.

The Taipei-based China Times reported that the total number of guest labors exceeded 300,000 in just twenty years after workers were allowed into Taiwan. These workers are  employed in two main categories, manufacturing and household help. Initially 196,000 manufacturing industry workers were recruited in 2008, due to the lack of local workers willing to do the three D jobs (dirty, dangerous and difficult), plus there was a surge in major public engineering construction projects. However, that figure fell by over 20,000 the following year due to the global financial slump that saw many businesses fail.

Hsin Ping-lung, associate professor of the Graduate Institute of National Development, National Taiwan University, said currently Taiwan only admits foreign workers from six countries: Indonesia, Thailand, Vietnam, the Philippines, Malaysia and Mongolia. The bulk of workers from overseas are from the first four countries since foreign employment brokers are reluctant to develop contacts in other elsewhere.