Monthly Archives: May 2012

Enjoy Taiwan with a free movie and photo exhibition at the Milpitas Public Library, June 11- July 10

Come explore Taiwan’s way of life and the country’s unique influences around the world through a series of photo-essays at the Milpitas Public Library (160 N. Main Street, Milpitas). The Taipei Economic and Cultural Office in San Francisco and the Library will co-host a free photo exhibition, Why Taiwan Matters, and the screening of Warriors of the Rainbow: Seediq Bale in the library. Festivities will begin with an opening reception on Monday, June 11 at 5pm, with the movie to follow at 6pm. The reception, exhibition and movie are open to the public and free of charge.

The 34-photo exhibition explores Taiwan’s vitality and creativity with snapshots of life on the island. Why Taiwan Matters introduces Taiwan’s success stories and its unique journey as a trend setter, from its ubiquitous convenience stores to its medical health sector, and from preserving traditional Chinese culture to developing its green industries. Relying on brainpower rather than military might, the exhibition shares Taiwan’s experience of “honing the people’s skills, which turns out to be the most valuable … resource in the world today.” (Thomas Friedman in the New York Times, March 10, 2012).

Coupled with the opening of the exhibition is the screening of Warriors of the Rainbow: Seediq Bale, a Taiwan-made film and a contender for this year’s Oscars (best foreign language film). The movie was just in Bay Area theaters last month, but thanks to the film’s distributor, Well Go USA, library patrons can see the movie for free at the library’s auditorium on Monday, June 11 at 6pm. The film is directed by Wei Te-sheng (famed for 2007’s Cape No. 7) and produced by Hollywood director John Woo.

Warriors of the Rainbow: Seediq Bale is a movie about the 1930 aboriginal rebellions against the Japanese colonial rule in Taiwan. Centering on Mona Rudao, one of the leaders of the Seediq tribe living in the mountainous area of central Taiwan, the story parallels the Native American story, of how the American West was founded at the cost of the Indian tribes. Based on a true story, the epic film bears similarities to Mel Gibson’s Braveheart, and portrays the universal struggle among oppressed peoples for their freedom.

Click here for more information about the film.

With more mainland visitors, Taiwanese take pride in their way of life

Although China’s blind activist Chen Guangcheng and Premier Wen Jiabao might not have much in common, they both do want to visit Taiwan. And they are not the only ones.

This month, Han Han, a well-known blogger from China made a three-day trip to Taiwan and posted his observations online. Selected by TIME magazine to be one of the world’s 100 most influential people in 2010, Han posted a 2,500-word article vividly describing his positive experiences in Taiwan. The article quickly elicited heated discussions and was forwarded on. On the first day of the posting, it was read by over 400,000 internet users and forwarded to another 170,000.

Was Han’s positive impression a matter of chance?

In his posting, Han said he was much more impressed by a taxi driver than by his meetings with President Ma Ying-jeou and Taiwanese celebrities. He recounted how he had left his cell phone in a taxi as he left his hotel to go sightseeing. While frantically searching for a way to contact the taxi driver, he received a call from the hotel reporting that the driver had delivered the phone back to the hotel. Han then called the driver to offer a reward, and was told by the driver, “It’s nothing special. Don’t mention it. It’s a piece of cake.”

Han noted, “Maybe I met all the good people in Taiwan by luck. Maybe my superficial impression that almost all people are kind came from a short stay. Undoubtedly, if I could have stayed in Taiwan for a few more days, I would have certainly seen something unsatisfactory … There is no perfect place in the world, no perfect system, nor perfect culture either. In the ethnic Chinese communities, Taiwan may not be perfect, but there is no place better than it.”

He lamented, “I am lost in a culture destroyed by our predecessors, who also destroyed the traditional virtues, the trust among our people, the religious belief and consensus [during the Cultural Revolution], but did not create a Brave New World.” He said, “I would like to thank Hong Kong and Taiwan for providing shelter to the culture of China, protecting the Chinese tradition from catastrophe.”

“Even though we have the Ritz Carlton and the Peninsula Hotel, brand names like Gucci and LV, even though we can easily produce an epic film…, host the World Expo and the Olympics…, we feel no pride at all after having walked through the streets in Taiwan, having met taxi drivers, fast food store owners and passersby.” In reflecting on the advancement of Taiwan, he said “What we are proud of ourselves now are things they already enjoyed before…Instead, they have kept what we lost. What they are proud of now are those things we are missing.”

A generosity of spirit

Commercial Times reporter Ella Huey-ju Chou wrote an article about the impressions of Taiwan by her 80-plus-year old uncle escorted by her cousin from Beijing on a visit to Taiwan. The first place her uncle wanted to visit was the resting place of Hu Shih (1989-1962), a famous Chinese scholar respected by both the Chinese and Taiwanese. Her elderly uncle wanted to go there to pay tribute to the former chancellor of Peking University. Politely declining Chou’s accompaniment, her cousin took his father for the visit. At end of the day, they were all smiles as they recounted their day.

While waiting at the Taipei Main Station for the metro, they asked a passenger for directions to Hu Shih Park. “The first guy had no clue, but asked others around him, who did not know either. This process went on and on four times. I felt really bad for causing so much trouble.”

After the pilgrimage to Hu Shih Park, they continued on to the National Taiwan Museum. After a tour inside, they asked someone to take a picture of them in front of the museum. From their accent, this person knew immediately they were from the mainland and volunteered his services as their enthusiastic guide, recommending more sites with better angles. In all, he cleared areas for them to take more pictures inside the museum. The cousin was touched by this person’s thoughtfulness.

On the way home, they became lost and asked for directions from the owner of a
snack shop. Unexpectedly, the owner escorted them, making sure they were going the right way before returning to his store. The cousin said, “Unbelievable, he left his one-man shop alone and went out to help us. This would have never happened on the mainland!”

Ella Chou pointed out in her article, “I hate the hustle and bustle of the election campaigns, feeling disgusted toward all the call-ins on talk shows in Taiwan. But I understand, if not for a democratic system to put the ruling party in a closely monitored environment, Taiwan’s society would not have enjoyed the current progress and openness. All this is impossible in China. Through the eyes of mainland Chinese tourists, I see the happiness of the Taiwanese people.”

Taiwan’s songs are music to mainlanders’ ears

During his day-to-day activities, Hippo often hears Taiwanese pop songs playing on Chinese radio. Originally from Taiwan, he now lives in Suzhou, China. He recalled in Want Daily, “One day as I rode in a company car to work, I heard Taiwanese pop songs which were popular a decade ago. I was curious and asked the driver about the selection. He said he was just tuning in to a Shanghai radio station, which plays mainly Taiwanese pop music with an occasional English song, because most Chinese enjoy listening to Taiwan’s pop music.”

Taiwanese pop singers probably take sixth place in the year’s top ten most popular hits as played on the Southeast TV station in Fujian, China. The remaining top singers are from Hong Kong, Singapore and Malaysia, with the last place being held by China. There are 1.3 billion people in China, while Taiwan’s population is less than 2 percent that of China. Still, Taiwan’s pop music dominates over Chinese pop music. Hippo supposes that maybe promising musical talent can be better cultivated in a free environment.

Taipei maintains its foundations

According to a Want Daily article, Zhong Yu and Zeng Zhen made a trip to Taiwan last May. The young women recorded their impressions in a pictorial book entitled “Follow me to Taipei,” which was published last month. The book quickly became a hot topic of discussion in their hometown of Chongqing, China. Since it is the first pictorial book about Chinese tourism in Taiwan, the first printing of 20,000 books quickly sold out within a week. Discussions about the book on the net quickly reached 300,000 people. It is expected to become this year’s bestseller in Chongqing.

In Zhong Yu’s memory of her Taipei visit, she was impressed most by the people. She described Taipei residents as friendly, saying that no one was impatient when she approached them for directions. Some even used their cell phones to access Google Maps to explain the directions in further detail.

Taipei is not a metropolis in style, said Zhong Yu. Full of low and old buildings, Taipei looks somewhat outdated physically. However, the better part of Taipei lies not on the surface, but in its backbone foundation, which is cautious, friendly, gentle, patient, and orderly.

What impressed Zeng Zhen most was a middle-aged Taipei friend who took them to eat the braised pork rice that was a favorite of his since childhood. After several decades, the stall is still in the same location. The braised pork rice still tastes the same and even the dishes accompanying the rice have not changed.

As with most other cities in China, Chongqing is undergoing rapid construction and development. You cannot find any historic heritage in modern Chongqing because so many old buildings have been demolished. Zheng Zhen is envious of Taipei’s residents for they can still enjoy the tastes from their childhood, walk on the same streets they took as primary school students and see the same scenery they saw in their youth. In the place where Zheng Zhen grew up, everything has changed. Her hometown is brand new, so new that she hardly even recognizes it.

Taiwan’s value and the molding of civil society of China

In a letter to the editor of Want Daily, Jack Yun-jie Lee, professor of National Open University in Taipei, pointed out that the civil characteristics of the Taiwanese people come from the democratic system and non-profit organizations.

Lee said that through democratization, the Taiwanese people have gradually become united in a common experience. At the risk of colliding with various social forces, they have learned from the democratic system to compromise, be mutually respectful and to tolerate difference. On the other hand, there are 40,000 non-profit organizations and more than one million volunteers quietly dedicated to helping the development of non-profit organizations and religious groups in Taiwan. They supplement the gaps in government resources and formal education in order to improve the quality of life for Taiwanese citizens and to cultivate the love of the people.

It is a fact that China has become a world power, with a high rate of economic growth, and a booming construction industry. However, the case of Chen Guangcheng shows the shortcomings of Beijing’s government. Lack of citizen participation and monitoring mechanisms contribute to an abuse of power and the corruption of government officials, leading to popular discontent.

Lee pointed out that in the face of a rising China, and closer cross-strait relations, Taiwan should think carefully about how to survive and what role to play in the future. Besides seeking economic and trade opportunities, Taiwanese people should use their civil society to influence the Chinese through cross-strait interactions.

Taiwanese-American Cultural Festival

On May 12, the Taiwanese-American Cultural Festival was held at Union Square in downtown San Francisco. The highlight was the performances by the Da-Guan Dance Theatre from National Taiwan University of Arts. The day-long festival also featured entertainment from local Taiwanese-American young artists.

The exhibitors included an orchid show, puppet show, calligraphy demonstrations, and tourist information about Taiwan. Several Taiwanese snack stalls were on hand to provide visitors with a taste of Taiwanese favorites.

The fourth and fifth pictures shown below are of Director-General Jack Chiang of TECO-SF, and David Chiu, president of the Board of Supervisors of San Francisco, respectively.

US analyst: Taiwan serves as a catalyst for China’s political reform

Upon seeing President Ma Ying-jeou begin his second term on May 20, Harry Harris wrote an op-ed article about his observations for the Fresno Bee (5/21). In it, he outlined President Ma’s achievements in stabilizing cross strait relations and spurring on economic growth in Taiwan.

Having worked in both the Nixon and Ford administration, Harris is a longtime observer of international affairs. He has also met President Ma twice. In his article, Harris praised President Ma for taking a non-confrontational attitude towards China that makes the region no longer a flashpoint for Washington.

Specifically, he wrote, “President Ma opened direct flights with the mainland. This has allowed Chinese tourists to visit Taiwan and see its scenic beauty. A free trade pact with China was signed to reduce cross-strait economic and trade barriers. Thus, Taiwan and China have enjoyed the best time of peaceful co-existence and close exchanges ever since the Chinese civil war in 1949.”

In contrast to the freedoms enjoyed in Taiwan and President Ma’s standing for honesty, the leaders in China have the opposite reputation, especially given the recent corruption scandal with Bo Xilai, and the tug-of-war in getting blind activist Chen Guangcheng out of China, he wrote.

Harris noted that President Ma has consolidated the democratic institutions and maintained good governance of Taiwan. Along with his fostering of frequent, friendly exchanges with China, President Ma made Taiwan serve as a catalyst for political reform on the mainland. This has spurred the leaders in Beijing to respond.

He concludes, “As communities of Chinese people, Taiwan has been successful; China needs to follow.”

To read the full article, please visit the Fresno Bee:


Taiwan Cultural Festival at San Francisco’s Union Square

On May 12, the Taiwanese-American Cultural Festival was once again held at Union Square in downtown San Francisco. This year, the festivities included a performance by the Da-Guan Dance Theatre from the National Taiwan University of Arts, along with a full lineup of local performers. Among the exhibitions was a showcase of Taiwan’s orchids, puppet shows, calligraphy demonstrations and tables offering tourist information about Taiwan. Taiwan’s famous snack food culture was also on display with many booths selling the island’s favorite foods.

Organized by the Taiwanese American Federation of Northern California (TAFNC), the event has been an annual event at Union Square since 2005. The festival takes place during the second week in May to coincide with Taiwanese American Heritage Week, which was a designation awarded in 1993 by President Bill Clinton. Union Square’s central location is ideal for Taiwanese-Americans to share their rich cultural traditions with each other and the large crowds who stroll by.

Among the people who attended this year was TECO Director-General Jack Chiang. He thanked the organizers, TAFNC and the Taiwanese American Professionals (TAP) for sponsoring the event, which has allowed Americans to enjoy the hospitality, warmth and dynamic lifestyle of the Taiwanese. He urged the American people to visit Taiwan. He reassured them, once they have been to Taiwan, they will fall in love with the island. In fact, New York Times columnist Thomas Friedman has repeatedly said that other than his own country, Taiwan is his favorite country. He called the Taiwanese “the luckiest people in the world.”

Representing the second generation of Taiwanese American, Chris Chang, president of TAP-San Francisco, said “For our parents, holding such a cultural event is to display and preserve Taiwanese culture. It is also important for the younger generations to understand the development of their parents in the United States. All the 200 volunteers at the event are second generation youths. We hope that as second generation Taiwanese Americans, we’ll help to fill the gap between the Taiwanese and Americans.”

The event was also attended by California State Senator Leland Yee, San Francisco Board of Supervisors David Chiu and other community leaders. Chiu, whose parents are from Taiwan, told the audience, “I want to thank the first-generation Taiwanese who immigrated to the US, because their sacrifice and America success paved the way for their children.”

President Ma sworn in for second term

On May 20, President Ma Ying-jeou was sworn in as the 13th president of the Republic of China. During his inaugural speech, he called his inauguration a milestone in Taiwan’s journey towards becoming a mature democracy. After the inauguration, he stressed that his administration will continue to carry out reforms he has put in place over the next four years, ensuring that Taiwan remains a nation that enjoys the benefits of peace, justice and prosperity.

Taiwan will promote its competitiveness through enhancing the drivers of economic growth, creating employment and realizing social justice, developing an environment characterized by low carbon emissions and high reliance on green energy, building up culture as a source of national strength, and taking active steps to cultivate, recruit and retain talents, President Ma said.

He emphasized maintaining cross-strait relations, diplomacy and national defense to ensure the ROC’s sovereignty and to boost the well-being of the people. The president said that all 16 agreements inked between the two sides up until now are part of the institutionalization of cross-strait reconciliation; hence, there is no urgency in discussing peace accords or relevant issues with mainland China at present.

He reiterated that the government’s cross-strait policy to maintain the status quo of “no unification, no independence and no use of force” and to develop peaceful cross-strait ties based on the Constitution and the “1992 consensus.” The “1992 consensus” between Taiwan and China, refers to the understanding reached by the two sides at the 1992 talks in Hong Kong, where the issue of “one China” was discussed. The core content of the consensus is “one China, respective interpretations.” In simple terms, “one China” is recognized by Beijing to mean the People’s Republic of China (PRC), and interpreted by Taiwan to mean the Republic of China (ROC) instead. The two sides recognize each other as a political entity and are willing to shelve the sovereignty dispute in order to promote exchanges and interactions.

“Our experiences over the past four years indicate that this is a feasible approach and that the current development of cross-strait relations is supported by most people,” President Ma said. “We will continue to push for the policy of ‘putting Taiwan first for the benefit of its people,’ to create a cross-strait peace dividend.”

On the economic front, Ma noted that Taiwan is pursuing the goal of free trade. The Cross-Straits Economic Cooperation Framework Agreement (ECFA) agreed upon between Taiwan and mainland China in 2010 is a model of bilateral free trade, while the Trans-Pacific Partnership (TPP) involves multilateral parties. At present, Taiwan is holding talks with Singapore and New Zealand on economic cooperation, he said.

Several top U.S. officials congratulated Ma on his re-election to a second term and wished him luck in the years ahead. Among them were Congressional Taiwan Caucus members Shelley Berkley, Gerry Connolly, Phil Gingrey and Mario Diaz-Balart, in additional to Debbie Wasserman Schultz, chair of the Democratic National Committee, and Pete Sessions, chairman of the National Republican Congressional Committee.

A letter from congress expressed the world’s gratefulness to Ma and to Taiwan for making the effort to ensure regional stability. It also included their willingness to see Taiwan as an observer in the World Health Assembly. The letter reiterated that US arms sales to Taiwan and the Taiwan Relations Act are critical to both countries in maintaining their long-term security partnership, as well to the peace and prosperity of the Asia-Pacific region.

For the full text of President Ma’s inauguration speech, please visit:


TECO chief co-hosts Why Taiwan Matters exhibit in Sacramento

In celebration of May’s Asian Pacific American Heritage Month, the Taipei Economic and Cultural Office (TECO) in San Francisco and the Sacramento Public Library co-hosted the opening reception of a photo exhibition, Why Taiwan Matters, at the Central Library (828, I Street) on May 7.

The exhibition explores Taiwan’s way of life and the country’s unique influences around the world through the photo-essays on display. The 34-photo exhibition introduces Taiwan’s success stories and its position as a trend setter, from its medical health sector to the ubiquitous convenience stores, from religion to pop music, and from industrial clusters to green technology.

In welcoming the attendees, TECO Director-General Jack Chiang spoke about the close relations between Taiwan and California and the significance of the exhibition being displayed in the state capitol during Asian Pacific American Heritage Month. He remarked on Taiwan’s economic strength as evidenced by the many scientific and technological professionals from Taiwan working throughout Silicon Valley. It makes it difficult to ignore Taiwan’s vital role in the world economy, he said. Despite a lack of natural resources, Taiwan has cultivated a free society filled with talented human resources, resulting in Taiwan’s ample soft power.

In all, ten guest speakers and dignitaries spoke at the opening reception and all affirmed Taiwan’s soft power, praising the contributions of Taiwanese technological talent in Silicon Valley. The speakers asserted that Taiwan’s emphasis on education, developing innovative cuisine, and the spirit of its citizens, have helped energize Asian immigrant culture in California.

The evening festivities included a complimentary screening of Warriors of the Rainbow: Seediq Bale following the reception. Made in Taiwan and directed by Wei Te-sheng, the film was this year’s contender for an Oscar for best foreign language film.

The exhibition will be at the Sacramento Central Library until May 31.

US presses to normalize Taiwan’s participation in WHO

On May 21, Taiwan joined other nations in attending the annual conference of the World Health Assembly (WHA), the supreme body of the World Health Organization (WHO), held in Geneva. Whereas other nations attended as members of the WHO, Taiwan again attended as an observer. Though this year, the US State Department expressed its strong support for normalizing Taiwan’s participation in the WHA.

Taiwan’s Health Minister, Chiu Wen-ta led the delegation to the WHA and delivered a speech. According to the United Daily News, he responded to criticism from opposition Democratic Progressive Party (DPP) legislators that the WHA referred to Taiwan as “Taiwan (province), China” instead of its standing title of “Chinese Taipei.” He replied, “I will lodge a protest at an appropriate time and at an appropriate location.”

In his speech to the WHA, Minister Chiu urged “the WHO Secretariat to respond to our request that Taiwan’s participation in the WHO be expanded from its attendance at the WHA to its inclusion in other WHO meetings and mechanisms, and that Taiwan be given equal access to information and documents.”

The English-language Taipei Times reported that the US Department of State said in a recent report to Congress that the Geneva-based organization did not hold discussions with member countries before deciding to refer to Taiwan as a “province of China” in its internal documents. The report was referring to a letter from Anne Marie Worning, executive director of the office of WHO Director-General Margaret Chan, sent in September last year, that asked its recipients to refer to Taiwan as “Taiwan, province of China” instead of “Chinese Taipei.”

Taiwan was admitted to the WHA as an observer in 2009 under the name “Chinese Taipei” and has lodged a strongly worded letter in protest to the WHO over the issue of the unilateral change in the nomenclature. The State Department said it has pushed the WHO Secretariat to follow the WHA model in resolving the Taiwan name dispute. The use of “Chinese Taipei” as the designation for Taiwan follows a model adopted by the World Trade Organization (WTO), which allowed Taiwan to use a title that is acceptable to both sides of the Taiwan Strait, the report said.

The report also voiced concern about the WHO’s many restrictions on Taiwan’s efforts to take part in various WHO-sponsored technical activities and consultations. Citing data provided by Taiwanese authorities, the report said Taipei applied to take part in 21 WHO working panels and technical activities last year, of which eight were approved, nine were rejected and four received no response.

Although Taiwan has repeatedly offered to contribute to WHO-organized health promotion programs around the world, it has often been denied access to those projects, the report said. For instance, Taiwan offered US$5 million towards a vaccination program during an outbreak of a new strain of H1N1 influenza, but the WHO turned down the offer because it would not accept Taiwan’s payment terms, the Taipei Times noted.

Saying that Taiwan has received a great deal of unfair or unequal treatment from the WHO in recent years, the report added that the only progress has been the WHO consenting to Taiwan’s attendance as an observer at the annual WHA since 2009. It added that Taiwan’s participation in the WHA as an observer should be normalized by allowing the island to take part in more activities, including joining the International Food Safety Authorities Network. Specifically, the report states, “For instance, in the way Taiwan ports are listed under the heading of China and in delayed communications with experts from Taiwan due to some communications being routed through Beijing or China’s mission in Geneva.”

Steve Shia, the deputy spokesperson of Taiwan’s Foreign Ministry, said the government finds it “unacceptable” that the WHO consults with any other party about Taiwan before contacting Taiwan, reported the Taipei Times. However, Shia reiterated the government’s contention that Taiwan and the WHO have been communicating with each other directly over IHR-related matters. “We have been able to access the WHO directly. We have never contacted the WHO through Beijing or the Chinese mission in Geneva as the US report said,” Shia remarked.

Taiwan will continue to lodge its protests with the WHO and also expresses its thanks to Washington for supporting Taiwan’s participation in the WHA as an observer, Shia said.

Taiwan businesses strive to expand into China’s domestic market

Taiwanese-owned and foreign-funded enterprises in China have seen their profit margins suffer due to the effects of the European and American debt crises coupled with the global economic recession.

The Economic Daily News reported that statistics from the Chinese government show that in the first quarter of this year, profits of all enterprises in China of a certain scale shrank by 1.3 percent from a year earlier. Profits of foreign-owned companies, along with those from Hong Kong, Macao and Taiwan, dropped by 12.6 percent. This level of reduction was similar to declines felt by China’s state-owned enterprises. A recent survey conducted by Tsinghua University, Beijing, showed that about half of the Taiwanese businesses in Guangdong province may be faced with closure within five years. Twenty percent of the Taiwanese firms in Dongguan and Shenzhen in Guangdong province, southern China, have incurred increased risks, because the majority of these firms are receiving fewer export orders than in the past, with a fall of 30 to 40 percent in the worst cases. In a word, the export-oriented Taiwanese-run businesses are facing unprecedented challenges.

The main reason behind this poor profitability for Taiwanese enterprises in China is that production costs have increased sharply, including labor costs, together with a shortage of skilled labor, the cancellation of land concessions, tightening environmental regulations, increased raw material costs, and an appreciation of the RMB exchange rate. Added to this, there has been a contraction of demand from international markets, while the level of competition has increased along with the degree to which goods are subject to protectionist policies, noted the paper

In the short term, the financial difficulties faced by Taiwanese businesses in China are not going to change, due mainly to an absence of any sign of a global economic recovery and the persistently low demand from international markets. According to a forecast from the IMF, Global Insight and other international agencies, global economic growth for this year and next will be significantly lower than the previous two years. Estimates are that the growth rates for worldwide exports and imports this year will be only 3.2 percent and 3.6 percent, respectively, about 16 percent lower than the previous year. Thus export-orientated Taiwanese businesses are bound to see even greater difficulties ahead.

The Economic Daily News pointed out that in the face of the weak global economy, Taiwanese firms can only apply strategies designed to upgrade their businesses and follow the Chinese government policy of expanding domestic demand. However, it is very difficult for the average small and medium-sized Taiwanese enterprise to upgrade their businesses as their technical foundations are relatively weak, and they lack substantial funds to support such a transformation. Besides, there are huge barriers to Taiwanese businesses expanding further into China’s already extremely competitive domestic market due to differences in product positioning, protection of intellectual property, and higher operation costs in the domestic market. In addition, China’s investment environment is undergoing a qualitative change, which is not favorable to the survival of small and medium-sized enterprises. Especially when the global economy is weak, there are signs that China’s economy might fall into stagflation, which would certainly usher in more pessimistic times.

Certainly, China’s government is expending efforts to promote industrial restructuring and upgrading. Taiwanese businesses are likely to lose market shares in China if they cannot keep up with the process of restructuring. The magnitude of the task ahead cannot be taken lightly, stressed the Economic Daily News.

Taiwan’s service sector reinvigorates domestic demand

“Taiwan’s industrial structure has long been imbalanced,” said National Chengchi University economics professor Lin Chu-chia in an interview with Taiwan Panorama. “The island is “excessively reliant on information technology and plastics, and is focused on economics of scale and cost cutting to enhance our export competitiveness. But even though we produce a lot of manufactured goods, the sector’s proportional contribution to GDP has been declining.” Lin stressed that because most Taiwanese manufacturers are OEMs, they contribute little value-added to Taiwan once the costs of the materials they import are taken into account.

Service providers truly having their day

In 2010, the value of Taiwan’s service sector was worth NT$8.7 trillion (US$295 billion), meaning that its output was worth twice that of the manufacturing sector. Over the last five years, services have accounted for almost 70 percent of our GDP, indicating that Taiwan has already entered the service-oriented post-industrial era, reported the monthly.

“Service businesses are those in which people provide services to other people; they involve human contact and require a lot of manpower,” explained Lin. If workers become idle when manufacturing moves offshore and move into the service sector, where barriers to entry are low, this reduces unemployment. Without this transition, the public will likely feel that the economy is weak, and no matter how robust the growth figures may be.

Where manufactured goods such as cell phones can be made in China or Southeast Asia just as easily as in Taiwan, services such as dining, lodging, and transportation are local almost by definition. Furthermore, by employing local resources and manpower, they maximize the economic benefits.

Lin offers US web search engine giant Google’s planned investment of NT$3 billion (US$100 million) to build an Asia-Pacific data center in Changhua, central Taiwan, which was approved in late 2011, as an example. Expected to open within two years of the start of construction, the costly facility will employ only 20 people at most. In contrast, the NT$80 billion (US$2.7 billion) that has begun to be invested in tourism over the past few years is expected to create 10,000 jobs – 19 times as many per dollar invested.

Economic downturn thrusts services into limelight

Taiwan Panorama reported a number of factors have thrust the new “stars” of the food and beverage industry into the spotlight. The impacts on manufacturing exports of the ongoing European debt crisis and the hazy outlook for the global economy have made this sector’s focus on domestic demand seem increasingly attractive by comparison.

“Over the last few years, the domestic food and beverage industry has grown at an annual rate of 2 to 6 percent,” according to Steve Day, chairman of the Wowprime restaurant group. “As of last year, Taiwan’s per capita income had reached US$20,000. This is a crucial milestone, one that fills us with hope for the future.” Day explained that inviting people to eat out has ceased to be a polite formula, and has instead become a way to genuinely further relationships. The food and beverage industry provides up-market venues for this kind of socializing.

The rapid growth of the “fine food economy” is also related to social changes. Increases in the number of working women and double-income households, together with the fast pace of modern life, have decreased the frequency with which people cook at home.

Logistics, services are Taiwan’s future

Service businesses are by their nature customer oriented. In Taiwan, the bulk of these are retailers (approximately 620,000), which generally do very well, growing by 6.6 percent in 2010). Convenience stores, which have a higher penetration rate in Taiwan than anywhere else in the world, are perhaps the most ensconced of all retailers in the everyday lives of Taiwanese people.

Taiwan has many convenience stores-chains, and competition is fierce, but Hsu Chung-jen, president of the President Chain, is nonetheless optimistic about the industry’s outlook, reported Taiwan Panorama. He feels that with consumption diversifying and retailers innovating, logistics and services are becoming Taiwan’s future.

An early 2012 Eastern Online survey of consumer behavior in convenience stores found that 72 percent of respondents paid their telephone, gas, credit card, and other bills in such stores. Indeed, the move by convenience stores into financial and telecommunications services is becoming more pronounced. The ubiquitous 7-eleven chain illustrates this uniquely Taiwanese phenomenon: it handles about 16,000 bill-payment transactions per day with a total value of about NT$6.4 billion (US$216million) per year.

According to Tu Jenn-hwa, an professor at National Taiwan University, Taiwan’s service sector is largely comprised of small and medium-sized enterprises that lack the resources to upgrade equipment or undertake R&D. Even those which would like to move out into the global marketplace are hard pressed to do so. They just cannot compete with giants like America’s UPS or Germany’s DHL, shippers with global service networks, hundreds of their own airplanes, and enormous R&D capabilities.

Tourism is new powerhouse

Setting aside the question of the global economic recovery, many people see tourism as the best and most competitive of Taiwan’s service industries.

Mainland Chinese tourists have been flocking to Taiwan in ever greater numbers since being permitted to travel to the island in 2008. Their numbers eclipsed those of Japanese visitors for the first time in 2010, when mainland visitors accounted for some 30 percent of the visitors to Taiwan.

Competing for tourist dollars is a must for every nation, and economist Ma Kai argues that tourism is even more important to Taiwan than manufacturing. “But so far we’ve been content with just crumbs,” laments Ma in an interview with Taiwan Panorama.

In his view, the problem is that Taiwan has focused only on mainland tourists, thinking that they represent easy money. He counters that relying on mainland tourists is even riskier than depending on exports to the mainland because trade has a reciprocity that tourism lacks. If the mainland were to halt cross-strait trade, it would harm itself as well as Taiwan. But if it were to stop its public from visiting Taiwan, only Taiwan would suffer.

A new forecast from the Council of Labor Affairs suggests that the private sector will need 55,000 more workers at the end of April than it did at the end of January, including 24,000 in the manufacturing sector and more than 30,000 in the service sector. Compared with the same period last year, in 2012 personnel demand in the manufacturing sector has contracted by half, while that in the service sector it has remained steady. The numbers suggest that domestic demand is strengthening. Can the service sector reinvigorate Taiwan’s domestic economy? Only time will tell.