Monthly Archives: June 2011

Taiwanese American Politicians

This month’s special report focuses on the crop of Taiwanese American elected officials currently serving in California. For this issue, Taiwan Insights talked with three Taiwanese American politicians to find out how they got their start in politics and the difficulties they experience in performing their jobs. In particular, we focused on the State of California’s Controller John Chiang, San Jose’s Councilman Kansen Chu and Cupertino’s Councilwoman Kris Wang and

The Bay Area has a large Asian American population that is represented in the faces of the politicians who speak up for them. Currently, northern California’s largest cities, Oakland and San Francisco, both have Chinese American mayors. And with six Asian Americans interested in running in the next mayoral election, the next mayor of San Francisco could also be Asian.

Here are some pictures of Chiang, Wang and Chu at work and leisure.

Controller John Chiang (1) with his mother, Judy, and his younger brother, Robert, in the 60s, (2) shaking President Obama’s hand; and (3) giving a press conference

Councilman Kansen Chu (1) with his daughter, Ann, in the early 80s, (2) with his wife, Daisy, and son, Walt, caroling with the North Valley Neighborhood Association in 2009; and (3) in his office this year.

Councilwoman Kris Wang  in her office this year.

With growing Asian residents, Taiwanese Americans are well represented in the Bay Area

While visiting Taiwan with his family this January, Edwin Lee received a telephone call from the San Francisco Board of Supervisors asking him to consider becoming the city’s acting mayor. Lee, whose ancestors are from Guangdong province, China, grew up in San Francisco’s Chinatown, previously worked at the Asian Law Caucus and maintained a sterling reputation while employed in various city departments. Very much a dark horse in the selection process, Lee would eventually agree to become the year-long interim mayor. In the same month, Jean Quan began her tenure as Oakland’s mayor, thereby establishing a strong presence of Chinese American politicians in Northern California’s two largest cities.

A powerful message  

“Now we have two leaders from our community who are leading the entire city. That’s a powerful message for young people. It tells them we don’t need to be in the shadows,” said David Lee, the executive director of the Chinese American Voters Education Committee told the San Francisco Chronicle. In the same article, Harry Lim, the former president and current board member of the Chinese Consolidated Benevolent Association, said he believes the two Asian American mayors will help close the centuries-old chasm between the immigrant community and the broader community.

In addition, San Francisco’s top leadership positions are also well represented by elected officials of Asian descent. They include the public defender (Jeff Adachi), the assessor-recorder (Phil Ting) and four of the eleven Board of Supervisors – David Chiu, Carmen Chu, Jane Kim and Eric Ma. In fact, four of the mayoral contenders who are vying to become San Francisco’s next mayor are Chinese Americans.

In the early twentieth century, there were roughly 300,000 overseas Chinese living in the United States. Today, there are about 700,000 ethnic Chinese people living in the Bay Area alone. And with such a large demographic, it is reassuring to see it reflected in the community’s leaders.

While Asians remain underrepresented in politics elsewhere in the United States, this is not the case in the Bay Area. Currently there are seven Taiwanese American elected officials in the Bay Area. Statewide, there are many more. Among the most prominent, is John Chiang, the controller for the State of California. If you happen to live in California and are one of the lucky ones to receive a state tax refund this year, then the check bears John Chiang’s signature

Embracing the difference

Born in New York City in the early 1960s, Chiang spent much of his childhood in a suburb of Chicago. Chiang’s father came in the 1950s for graduate school. Growing up, his parents spoke English to their four children, but a mix of Taiwanese-Japanese-Mandarin to each other. He didn’t even realize they were speaking three languages until his aunt pointed out to him that he was mixing his languages when he spoke.

Chiang’s formative years were spent mainly in a predominately white neighborhood. When asked if he felt discrimination directly, he acknowledged that kids did make fun of him because he looked different. Nevertheless, it should be noted that he must have been a popular student since he was elected the vice-student body president during high school. In comparing the different treatment of his childhood to today, he dwells very much on the positives. “America has made such phenomenal progress. Americans have become more open. As you engage, the walls tumble down. You have people in different mixes and the stereotypes start to disappear.” He mentioned that many of his friends’ children and his own godchildren are mixed-race and concluded, “We have different heritages, and we should embrace our differences for our benefit.”

Like most Taiwanese families, his parents placed a great deal of importance on education. In the Chiang household, “Studying always came first.” While other kids were out playing, the Chiang kids were expected to complete their studies and music practice, even if it took five hours. He would go on to study finance at the University of South Florida and continue on to receive a law degree from Georgetown University.

As one of the highest ranking politicians of Asian descent, Chiang spoke of the challenges of representing the interests of 38 million people. In pushing public policies, he added, one of the difficulties of his job is getting his message out without it being distorted. He does not mind the disagreements or differing views, but has little respect for dishonesty.

Getting a seat at the table

In 1976, Taiwan-born Kansen Chu arrived in the United States to go to graduate school. He received his master’s degree in electrical engineering from Cal State Northridge and started working for IBM in 1978. He also opened up a large Chinese restaurant. Through his restaurant, he hosted many community events, becoming acquainted with various local leaders. However, he credits his interest in public service with his involvement in the Organization of Chinese Americans (OCA), an advocacy group which works on elevating the political influences of Chinese Americans. Chu would eventually serve as the president for the Silicon Valley chapter of the OCA.

In an effort to get Chinese Americans more involved in politics, the OCA began to lobby for a Chinese-English ballot. Although San Jose had bi-lingual ballots, they were only available in Spanish and Vietnamese at that time. “During these activities, it started to dawn on me on the importance of Asians to be involved.” It’s difficult to play a part in the decision making process when you’re outside the room. “If you are in the room, you could make policies to affect other people. Getting a seat at the table is not only important for us, but also for our children,” Chu said.

Chu attributed the OCA for broadening his view of Chinese American issues. In particular, he spoke of his work to preserve the local Chinese American legacy, in part sparked by the events in the late 70s and early 80s.  During that time, some Chinese artifacts were discovered at the construction site of the Fairmont San Jose Hotel. As it turned out, several generations ago, the site was home to a Chinatown before it was burned down. He would find out that San Jose has had five previous Chinatowns, each one burnt down, and not necessarily as a result of accidents. In order to commemorate the site, Chu and the Chinese Historical and Cultural Project began raising money to rebuild a temple that once stood there. The result was the Five God/Goddess Temple, combining the gods and goddess of the early immigrants.

In talking about the hurdles faced by his office, he mentioned the budgetary concerns in re-negotiation with 11 different unions and 7,000 city workers. In speaking about the under-funded healthcare system in particular, he said, “Healthcare was so cheap, so everyone could have it. In the old days, they never asked the retirees to contribute to their healthcare after retirement.” This is no longer the case, Chu said. The skyrocketing realities of the past five to ten years have hurt both sides, current and past employees. Among the 11 council members who represent San Jose, Chu said, “We have different beliefs and priorities. We are just trying to find the common areas.”

We know how to study hard

Only a few miles away from San Jose is Cupertino. According to the 2010 census, Cupertino’s population is almost two-thirds Asian and Councilwoman Kris Wang is definitely a reflection of the people living in her city. Wang came from Taiwan to the United States for graduate school, eventually earning an MBA and concentrated her graduate study in computer science. Being more outgoing and vocal by nature, she is the antithesis of the quiet, soft-spoken Asians often seen in the Silicon Valley meeting rooms. While working in the private sector, she would see many Chinese engineers, but the managers were usually white. As someone not afraid to take the lead, it eventually put her on the management track, becoming a senior manager before she transferred her energies to the public sector.

In 2003, Cupertino Mayor Michael Chang’s term in office was coming to an end, and all eyes turned to Wang to replace him. She was asked to consider a bid for his city council seat, but she was initially hesitant, not wanting to be in “politics” with already so many other commitments.  She would eventually run and win, continuing on to be re-elected again in 2007. During her terms, she would also serve as the city’s vice-mayor in 2006 and its mayor in 2007 and 2010, elected there by her peers on the city council.

Initially, adjusting to leading such a public life was difficult and she thought of throwing in the towel. Instead, she redoubled her efforts, applying herself even harder to what she needed to know in order to excel at her new responsibilities. Referring to her slight accent, Wang said, “We may not speak as well, but we know how to study hard.”

In reflecting back, Wang can still recall the feeling of excitement during her inaugural ceremony as Cupertino’s mayor, “I never thought that 27 years later I would stand there… as a mayor in a US city. I knew my dad would be really excited, being a new immigrant from Taiwan.”

Although only a small city, Cupertino has a very stable revenue base with anchor companies such as Apple, Oracle and Hewlett-Packard.  With some of the best public schools nationally, the area continues to be popular with parents, especially Taiwanese American parents. When Wang’s son started kindergarten in 1987, Asian students accounted for 22 percent of the school district, now they account for 99 percent.

Even though Wang does not spend much time dwelling on her legacy, she did mention that one of her sons was elected as the student body president during all four years of high school, being only the second student to hold that distinction.  One can say that the apple does not fall far from the tree.

Advocating for ourselves without losing our cultural distinction

It is apparent that Chiang, Chu and Wang are excited to work towards making lasting policies that can impact people’s lives for the better. “Everyday, I wake up and figure out how to help people,” Chiang said. “Asian Americans and people of every background have a chance to participate in government.” This is now a global economy, a global world. Chiang believes that their actions cause ripples that extend beyond the United States. And the sense of how Asian Americans succeed is clear in that they have to honor everyone’s opinions.

In applauding how local Chinese American leaders have assimilated into mainstream American society, it is also important to add that their diverse cultural background gives them added dimensions in dealing with public policy issues. As an example, Jack K.C. Chiang, the director general of the Taipei Economic and Cultural Office in San Francisco, noted that California is the first state to legalize acupuncture because of the strong support from ethnic Chinese politicians and their voters. And in the case of banning the sale of shark fins, Chinese American politicians have shown their “dominant influence” on both sides.

During last month’s opening ceremony of the Taiwan Cultural Festival sponsored by the Taiwanese American Federation of Northern California at San Francisco’s Union Square, both Mayor Lee and Supervisor Chiu were present. The mayor spoke to the thousands of spectators telling them of his love of the island’s hot springs, and suggested a booth featuring Taiwan’s hot spring at next year’s festival. Chiu, whose parents emigrated from Taiwan, also told the audience of his high regard for Taiwan.

In talking to Taiwan Insights, Jack Chiang mentioned that California has the country’s largest Chinese American population. There are ethnic Chinese state senators and congress members in the state legislature. And in San Francisco, ethnic Chinese residents account for one third of the city’s population. Chiang hopes ethnic Chinese voters, including Taiwanese Americans, can be united on a future and take a more active role in their community. He added, “I expect there will be an elected ethnic Chinese mayor at the end of this year.”

Taiwan Sublime – Photo Exhibition in Salt Lake City, June 24 – Aug 5

Come and see Taiwan through the eyes of master photographers Chen Chih-hsiung, Liu Chen-hsiang, Huang Ting-sheng, and Chi Po-lin.  Capturing Taiwan’s natural beauty, its cultural richness and the simple scenes of everyday life, Taiwan Sublime will open next Friday at the University of Utah campus. Depicting Taiwan’s multi-faceted society, the 40 pictures are separated into four series of photographs.

This free exhibition will open on Friday, June 24 and close on Friday, August 5, 2011. Displayed throughout the different levels of the J. Willard Marriott Library, the exhibition is free and open to the public. It can be seen from 7am to 10pm daily.

The exhibition is presented by the J. Willard Marriott Library, the Chinese Society of Utah and the Taipei Economic and Cultural Office in San Francisco.

Minister Liu speaks about Investing in Taiwan in SF

On May 18, Christina Y. Liu, Taiwan’s minister of the Council for Economic Planning and Development (CEPD), led a delegation of more than 100 people to the Investing in Taiwan conference at San Francisco’s Westin St. Francis Hotel. Speaking to a packed house, Liu called for the audience to rethink Taiwan as an investment destination. “It’s such a gloablized field and to be more successful, you need more global partners.” She told the audience, “whatever field you’re in, if you are considering Asia, then Taiwan is your best partner.”

Liu explained that  last year, the administration of President Ma Ying-jeou launched the Golden Decade, which focused on strengthening both investment and exports. In the past, Taiwan’s growth relied on exports, but under the Twin Engine approach, the government is working hard to cultivate investments at home and abroad, she explained.

Part of the Twin Engine approach is to increase domestic demand. While some  might question whether Taiwan’s domestic demand is sufficient to drive growth being  such a small country,  according to the IMF’s economic forecast for the four Asian Tigers, Taiwan is projected to lead in growth until 2015. In its report released in April, the IMF set Taiwan’s growth at 10.82 percent for last year and forecasted a 5.42 percent growth  this year. The island’s growth is expected to outpace those of India and China. In addition, Taiwan’s private investment saw its largest increase (33%) while many other Asian countries had less than a third of that last year.

Another marked improvement is demonstrated by buoyant consumer confidence.  From 2001 to 2009, the index of consumer confidence  dropped sharply, but it is now rebounding  in Taiwan.

Why Taiwan? In answering this question, Liu referred to Michael Porter, a leading expert on business strategy and international competitiveness. Porter believes that for any enterprise to remain competitive it must offer a complete package and Liu believes that Taiwan’s solid soft power offers that comprehensive package. Among Taiwan’s assets, she mentioned the island’s technology, flexibility, knowledge and experience, innovation, diligence, international perspective, understanding of mainland China, global deployment, democracy, education, and a solid and rich industry base.

Currently, Taiwan is tackling 12 infrastructure projects, with an estimated total cost of US$133 billion. Liu and her delegates have traveled to other countries to seek out partners who might be interested in investing in these projects. They began their mission locally in Taipei, Taichung and Kaohsiung before heading abroad to Hong Kong and Singapore. In February, the group continued on to India seeking partners for the 22 emerging industries targeted by the government. While in the US, the group is focusing on industries such as biotechnology and medical tourism, culture and creative/digital content, renewable energy, electric vehicles, the hi-tech industry, land development and the tourism/globalization of Taiwanese cuisine.

Besides their stay in San Francisco, the delegation also stopped in New York City and Los Angeles, visiting 41 leading companies in five days.

President Ma calls for release of Chinese dissidents

On June 4, the 22nd anniversary of the 1989 Tiananmen Square massacre, President Ma Ying-jeou urged China to set two prominent dissidents free and to show its commitment to political reform. Excerpts of his remarks are translated below.

In Taiwan, we are so very fortunate that the freedom and democracy called for in the face of authoritarian rule of the 1960s by many activists have now been achieved. It is because of this that we are more than willing as ethnic Chinese to share our experiences and remind the mainland Chinese authorities of the need to be accepting of dissidents, and to appreciate their value in society.

When they are locked up and prevented from speaking, the true victims are not just the dissidents themselves. All of society suffers when erroneous policies go uncorrected. And the opportunity to hear a broader range of thoughts from members of the public is lost.

Mainland China’s economy has been growing rapidly for more than 20 years now. Indeed, it surpassed Japan last year to become the second largest economy in the world. In recent years, it has actively participated in international affairs by its involvement in peacekeeping operations, disaster rescue and relief, and establishing Confucius Institutes overseas. By expanding its foreign investments, mainland China is clearly signaling a strong intention to act as a responsible member of the international community.

But its spotty track record in the areas of democracy and human rights stands in stark contrast to its sparkling economic performance. The ongoing failure of the mainland authorities to redress the wrongs of the June 4th Incident, and the detention of such dissidents as Liu Xiaobo and Ai Weiwei on account of their public pronouncements, impede the mainland’s integration into the international community, and make it difficult for the country to emerge as a leader on the international stage.

The cross-strait relationship has steadily developed in the last three years, and now over a million people from Taiwan live and work in the mainland, which also sees more than 5 million visitors from Taiwan each year. Given the deep bonds of kinship, history, and culture that exist across the Taiwan Strait, as well as the increasingly close contacts between the people on the two sides, it is incumbent upon us to remind the mainland authorities that economic reform must be accompanied by political reform. Taiwan’s experience in transitioning from an authoritarian state to a democracy shows that reform, while not painless, can progress smoothly. Reform can bring a new beginning which includes stability and progress, and build trust in the government.

As we look back upon the 1989 Incident, we urgently hope the mainland Chinese authorities will have the courage to undertake political reforms and promote the development of freedom, democracy, human rights, and rule of law. “The journey begins,” as the saying goes, “with a single step.” The first step towards political reform is treating dissidents with leniency, and appreciating their value to society. I call upon the mainland authorities to do just that by acting soon to release Liu Xiaobo, Ai Weiwei, and other dissidents. This would greatly enhance the mainland’s international image. And more importantly, it would also help reduce the psychological distance between the people of the two sides.

Taiwan allows Chinese tourists to visit individually

Premier Wu Den-yih announced on June 1 that Taiwan will begin allowing Chinese tourists to visit the island individually from the end of June. The initial trial period is only open to 500 tourists daily from Beijing, Shanghai and Xiamen. They will be permitted to remain in Taiwan for seven days, with an extension up to 15 days in total.  

Direct benefits to businesses

The Economic Daily News reported that the arrival of 90,000 individual Chinese tourists will pump added revenue into Taiwan’s tourism industry during the second half of this year. Based on an average spending of US$249 per person per day, and an average stay of seven days, these new visitors will bring in an additional income totaling NT$4.5 billion (US$150 million).

The arrival of 500 independent mainland tourists per day means 180,000 people a year and an additional NT$10 billion (US$333 million) to Taiwan. Also, cross-strait flights will be increased from 370 flights per week to 500. Although these benefits are not as large as those brought by group tourism, more Taiwanese businesses will benefit directly since these individuals will not be limited to fixed destinations.

Such visitors will not be confined to group tours and set routes. They can venture out, allowing taxi drivers to be the initial beneficiaries. Restaurants and lodgings will also see increased business, since those tourists who can afford to eat and stay at high-end establishments can now do so, benefiting smaller-scale businesses.  

The United Evening News reported Chen Yan-I, deputy general manager of Ctrip, China’s largest travel site, said individual tourists will usher in a brighter future, because Taiwanese and Chinese people are of the same ethnicity, speak a common language, and share cultural and gastronomic tastes, meaning that more mainlanders  are expected to travel to Taiwan than go to Hong Kong. Chen noted that  middle-aged individual tourists are quite different from older travelers who are usually found in tour group. Individual tourists are likely to be from the well-off middle classes, and most of them have not been to Taiwan before.

Though most Taiwanese people are looking forward to welcoming individual visitors from China, they are also aware of the added risks involved, such as visitors overstaying their visas. The Liberty Times reported that Chen Chi-mai of the opposition Democratic Progressive Party, pointed out that Chinese “tourists” have brought issues of illegal immigration and illegal employment to many countries. In 2006, there were 190,000 cases of illegal Chinese immigrants in the United States. Records in Japan show the detention of 32,600 illegal Chinese immigrants up to  2005. Chen is urging the government to have a coordinated set of supporting measures ready before letting individual travelers from China into Taiwan.

Trajectory of Taiwan’s tourism potential

Taiwan reached a tourism mile-stone when in 1976 the one millionth-tourist arrived on the island. The second millionth came in 1989.  Sixteen year later in 2005 the third millionth arrived. The pace has sped up in recent years with the addition of Chinese visitors. In less than four years, the four million mark was reached in 2009. In 2010 alone, 1.5 million tourists visited Taiwan, a 26.7 percent growth over the previous year, adding NT$270 billion (US$9 billion) in tourist foreign exchange income for Taiwan.

The Global View monthly reported that the Madrid-based United Nations World Tourism Organization (UNWTO) predicted an average annual growth rate of 5-7 percent for tourism in the Asia-Pacific region, but Taiwan has far surpassed that forecast with a growth rate that is four times higher. The Pacific Asia Travel Association (PATA) rated Taiwan as one of the fastest growth countries for overseas tourists in Northeast Asia in 2010, far outperforming countries like South Korea, Hong Kong, and China.

The most important reason for Taiwan’s substantial tourist growth is that Taiwan has successfully developed the resources of different international tourists. Reviewing the statistics of international travelers to Taiwan over the last two years, growth occurred from almost every country. The number of Malaysians arriving, who now no longer need a visa to visit Taiwan, grew by 70 percent. Even the most difficult European markets saw an unprecedented growth of 3.16 percent, the magazine reported.

Hotel construction spurred

Since the start of Chinese group tourism in July 2008, the Want Daily reported that there have been 3.4 million Chinese people visiting Taiwan, bringing a total of NT$195.8 billion (US$6.5 billion) in foreign exchange earnings. The United Evening News reported that most Chinese tourists do not necessarily understand the real Taiwan since they are restricted to organized tours, which often offer only low quality, low cost travel. So far, only individual visitors who come to Taiwan for academic or cultural exchanges feel that they “love their Taiwan experience.” What has impressed them most is the kind and hospitable welcome that they have received from the Taiwanese people, and the free and relaxed atmosphere they experience.

In 2010 alone, there were 1.63 million Chinese visits to the island, an increase of 67.75 percent over the previous year, and substantially more than the 1.08 million Japanese tourists, the second largest source of overseas visitors to Taiwan. Chinese arrivals have replaced those from Japan as the leading source of Taiwan tourists.  On average, three out of every 10 visitors to Taiwan is now from China.

Starting from this year, the daily quota for Chinese group tourists has increased from 3,000 to 4,000. This year, it is estimated that the number of Chinese tourists arriving on the island will hit two million for the first time. According to data from the Directorate-General of Budget, Accounting and Statistics, the contribution of Chinese tourists to Taiwan’s GDP in 2010 was NT$65 billion (US$2.1 billion), boosting the island growth by 0.28 percent.

Taiwan’s projected tourism increase has spurred hotel construction in the last two years. A total of 26 hotels invested NT$2.8 billion (US$93 million) in remodeling and upgrading their facilities. Also, there will be about 14 newly constructed hotels in operation in two years. In six years time, the total number of rooms at tourist hotels in Taiwan will have increased from 21,095 to 27,747.

According to the Economic Daily News, there are almost 40 hotel investment projects currently underway, including both foreign and domestic investment. Even optimistic Chinese investors are seeing the growth potential and are making a contribution to this growth. It is estimated that the total investment will reach NT$100 billion (US$3.33 billion) and is expected to bring 40,000 new jobs.

More effort in attracting international visitors

Ng Chee Theam, vice president of Millennium & Copthorne Hotels plc in Singapore, said in an interview with the Global View that inbound visitors to Singapore number 12 million a year while those to Taiwan number 5.6 million. This means there is a lot of room for growth in Taiwan’s market. Besides, Taiwan government policy favors travel and tourism, which is greatly beneficial to hotel business. He added, “But I don’t think Taiwan needs to put too much effort towards drawing Chinese tourists. As a matter of fact, even without promotion, the Chinese will still come. Taiwan should treat Chinese tourists as domestic visitors and spend more effort in attracting international visitors because Taiwan has big potential for international tourism.”

The Global View reported last year Taiwan’s foreign exchange income contributed by international tourists totaled NT$270 billion (US$9 billion), plus NT$240 billion (US$8 billion) created by domestic travel, a total of at least NT$500 billion (US$16.7 billion). This year this has the potential to reach NT$550 billion (US$18.3 billion).

Janice Seh-jen Lai, director general of Taiwan’s Tourism Bureau, said the arrival of Chinese tourists is the key to opening the door to other countries. Before, when Taiwan was closed to Chinese visitors, many international airlines ignored or canceled their flights to Taiwan, limiting Taiwan’s access to the international travel markets. With the arrival of Chinese visitors, many international airlines will have confidence in Taiwan’s investment environment and will launch flights to Taiwan, solving the problem of attracting foreign tourists, Lai told the Global View.

Taiwan’s Golden Valley props up global smart phone industry

In central Taiwan, there is an area where over a thousand precision machine companies and tens of thousands of downstream suppliers reside. Called the Golden Valley, it covers approximately 37.5 by 0.87 miles (roughly 60 kilometers), and supplies many of the world’s hi-tech businesses, reported the Taiwan-based Business Weekly. It has the world’s highest density of precision machine companies, employing 300,000 people with an annual production value of NT$900 billion (US$30 billion).

Dependence on the Golden Valley

Without the businesses found in the Golden Valley, the global consumption of one billion iPhones this year would be cut in half and the solar plant owned by Google in the desert would be offline. Without this dynamic region, the semiconductor and display panel industries would face a broken supply chain since the top four equipment suppliers of semiconductors and flat panel displays depend on companies in this area for their components

Plus, German and Italian auto-parts companies rely on the mechanical equipment produced here. In the automotive industry, General Motors (US), Porsche (Germany) and Hyundai Motor Company (South Korea), all buy their gear wheels from the Golden Valley. Even China, the largest auto market in the world, is dependent on this area to provide tooling and processing equipment. 

Small companies with long arms

As an example, Quick Jet Machine Co. Ltd, supplies half the stainless steel frames for the iPhone 4. With only 130 employees, the company enables the newest iPhone to be 24 percent thinner than the previous version, producing the thinnest smart phone in the world.

Another company is HIWIN Technologies Corp., which is the main producer of ball screws, a key component for all precision machines. It was the first company in the valley to reach an annual revenue of NT$10 billion (US$33 million). Ball screws are necessary in the semiconductor equipment of the Taiwan Semiconductor Manufacturing Company, used in Apple’s iPhones, Siemens’ MRI scanners, and Google’s solar equipment.  

Now, due to high demand, businesses are rushing to buy Litz Hitech Corporation’s CNC control machine called “Tapping Center.” The only available suppliers, except for Japan’s Fanuc Ltd., are all based in Taiwan. They have outstanding orders of over 10,000 sets of these machines, with Apple accounting for 60 percent of the orders.

These precision machine makers in central Taiwan are shipping over a thousand sets of machines every month to machine shops in China so that over 30 tiny holes can be drilled in iPhones and iPads to install all the parts and components. However, the demand is outpacing supply, accounting for the wait in some places for Apple’s gadgets.

Concentrated business, diversified risks

Bert M. H. Huang, president of Victor Taichung Machinery Works Ltd., told the Business Weekly that precision machine makers in Taiwan have to look towards global markets to survive because the domestic market is too small. There are over 1,000 small and medium-sized companies congregated in the area, each with its own specialty and niche market. They have developed their special ability by quickly adopting different standards and specifications.

As soon as a promising new technology is available, they can get up to speed on the special customized orders for their customers to get the new product to market on time. The companies in the Golden Valley diversify and cooperate with each other to form a supply chain which avoids the unexpected risks of over production.

According to the Business Weekly, Taiwan’s Golden Valley is unique. In Japan and Germany, the set up is quite different, and one giant company takes all 10,000 orders and assumes 100 percent of the investment in equipment. They do everything from upstream to downstream. So they accumulate higher costs, are less flexible, and take all the risks. In Taiwan, the competitiveness of the Golden Valley means that they enjoy the advantage of businesses congregation and spread the risk.  

Taiwan’s precision machine makers have moved upwards to take over the middle class markets of Japan and Germany. Equipped with the skills that match those of Japan and Germany, they are diversified and cooperate among themselves. Meanwhile they are also able to shorten a third of their lead time, and are more flexible in multiplying their supply capability.

In 2010, the total output value of the Golden Valley surpassed that of South Korea to become No. 4 in the world. This year, Taiwan is expected to surpass Italy after grabbing over half of the smart phone processing orders from Apple’s iPhones. This would bring them to third place, behind Japan and Germany. In the Business Weekly, Taiwan’s Industrial Technology Research Institute predicted that the valley will retain its high growth rate, breaking the NT$1 trillion (US$33.3 billion) export value by 2015.

Swift action taken over food safety scare

In order to reassure Taiwanese consumers about the safety of the country’s food supply, the government said it will require safety certificates for the export of five types of food products — sports drinks, juices, teas, syrups and jams, and tablets and powders. “The aim is to restore global confidence in our food products and the ‘Made in Taiwan’ brand,” said Premier Wu Den-yih on June 2.

Taiwan’s Food and Drug Administration (FDA) discovered a clouding agent manufactured and sold by Yu Shen Chemical Co., Ltd. and Pin Han Perfumery Co., Ltd. as food additives that contained a plasticizer commonly abbreviated as DEHP and DINP respectively. The FDA immediately launched an investigation since both these substances are considered carcinogenic and are illegal as food additives.  Affected businesses nationwide were ordered to recall and remove tainted products from their shelves, including sports drinks, fruit beverages, tea beverages, jams, fruit pulp and fruit jelly, and food supplements in capsules, tablets or powders, according to the details announced on May 23.

As part of its actions, the FDA notified the World Health Organization (WHO) and the European Union’s Rapid Alert System for Food and Feed (RASFF) about affected products and about the companies involved. At the same time, countries that import any of these products were also notified as well.

In response, at least 15 countries and regions have taken their own special measures. The U.S. and Canada carried out emergency food safety inspections, while China, Malaysia and the Philippines banned the import of these products, and Hong Kong and South Korea now require safety certificates.

Although the total annual export value of the five product categories is relatively low, accounting for roughly US$23.50 million, the reputation of Taiwan’s food industry is at stake.

Premier Wu said the government will redouble its efforts to investigate the case, and to punish those responsible, cut off sources of the chemicals, destroy contaminated products, revise relevant laws and establish a food traceability system.

Starting from May 31, the five types of products have not been allowed on store shelves without a guarantee that they are plasticizer-free. As of June 2, a total of 18,123 goods from 6,219 distributors nationwide had been inspected.

The Taiwan-based China Times commented that the still evolving tainted-food scandal has created incalculable damage not just to people’s health, but also to Taiwan’s international image. And, the situation is a grave crisis that demands a rapid and high-level response and should be treated with the seriousness of a national security issue.

On June 10, the Legislative Yuan passed a revised act governing Food Sanitation, stipulating that any food manufacturers adding harmful additives to their products can get an administrative fine of NT$6 million (US$200,000). If it is determined that their products are harmful to people, they may face a 7-year fixed-term prison sentence,  criminal detention, or a combination of jail and a fine of NT$10 million (US$330,000).

Hsu Ming-neng, the FDA’s deputy director-general, said that the companies which have used illegal plasticizer would be severely punished in accordance with existing laws and should be dealt with on a case-by-case basis, adding that no ceiling is set for fines. Quoted in the China Times, he said, “We will bring to justice all those liable in the latest food scare.”

Pigeon racing – a lucrative sport in Taiwan

In mid-May, a total of NT$7 million (US$230,000) changed hands during a three-hour auction for racing pigeons in Shengang, Taichung (central Taiwan). According to the Taiwan-based Business Weekly, one particular small breed pigeon, weighing around one pound, was sold for NT$2.01 million (US$70,000), roughly the cost of a luxury BMW or Mercedes.

Many might not regard pigeon racing as a sport or a business, but it is a NT$70 billion (US$2.3 billion) industry and has existed in Taiwan for over 60 years. Pigeon racing creates at least a dozen NT dollar millionaires a year. On average, there is a stock market boom in Taiwan every three to five years, but pigeon racing can be far more lucrative, and is much more fun.

Pigeon racing is big business but without the high barriers of entry. Participants can be illiterate farmers or managers in the corporate world. In fact, it is estimated that at least 200,000 people on the island make a living from pigeon racing.

Unpredictability is one factor that attracts a racer. According to Business Weekly, pigeons can begin racing when they are less than six months old. Although inexperienced, they still have a chance of winning the race. Although pigeon owners attach a great deal of importance to a bird’s bloodline, any pigeon can take the lead out of the blue without any particular pedigree or previous record.

Recalling one race, a forty-year veteran of pigeon racing, Lai Ming-chang, told the Business Weekly, that in one particular race in which his pigeon was not expected to win, just in the last six seconds of the race, the bird suddenly raced to the loft at a speed of 80 kilometers per hour (60 mph ) and came in first. Lai took home prize money worth hundreds of thousands of NT dollars. In addition to the prize money, winning pigeons are also prized as breeding birds.

With about NT$1 billion (US$33.3 million) per year spent buying breeding pigeons, Taiwan is now part of the International Federation of Pigeon Racing. Whereas Taiwan is known globally for its export-based hi-tech manufacturing economy, in the area of pigeon breeding, the island is heavily dependent on imports from Belgium, where pigeon racing has a history dating back to the early 19th century.

According to the Business Weekly, due to the high jackpots that can be won, and the unpredictable nature of the racing, each pigeon owner pampers their birds. Often owners will feed their racing birds better food than they eat themselves. This extra special nourishment can include ginseng, deer horn, collagen and yeast. Accommodation-wise, these birds also live in high class digs that can include a loft built from juniper or teak wood, while their owners make do with something much more inexpensive. In this niche market, food, supplements and breeding birds are estimated to generate revenues of NT$3 to 4 billion (US$100 million) annually.

The height of the pigeon racing season climaxes on June 26 with the annual ocean race in northern Taiwan.