Monthly Archives: October 2012

Will paparazzi culture exit along with Next Media?

Ten years ago, Jimmy Lai, chairman of the Hong Kong-based Next Media Ltd., brought paparazzi culture to Taiwan when he set up Next Magazine and the Apple Daily on the island. He then expanded his media empire by setting up Next TV. On October 17, Next Media Group officially sold off its business in Taiwan to concentrate on its ventures in Hong Kong. Many now wonder if Next Media’s exit will somehow make the island’s media industry less exploitative.

Whether in Hong Kong or in Taiwan, the Apple Daily specializes in carrying graphic pictures designed to shock, while Next Magazine is known for its exaggerated reporting and for being a purveyor of salacious gossip which can be somewhat malicious and often unconfirmed. It is not uncommon for the papers to be sued for slander.

The Taipei-based China Times reported that the Taiwanese public is concerned whether the unique “paparazzi culture” of Next Media will follow Lai’s withdrawal from Taiwan.

Wu Yu-sheng, a former Taiwanese legislator who was photographed by Next Media paparazzi in an extramarital tryst, said that paparazzi culture is an inevitable phenomenon of modern times. But the intrusion is done to the extreme and a cause of social conflict. He urges the new owners to take advantage of the ownership change to rethink the media’s responsibility. Wu stressed that although Next Media did have whistleblowing functions which impacted Taiwan’s media culture, as a whole, it still did more harm than good.

The United Daily News said in an editorial that the dilemma for Taiwan’s media is that it is too small in scale, but not in quantity – meaning that excessive numbers of media outlets are squeezed into a small area that contains Taiwan’s 23 million people. This recipe intensifies competition but brings minimal profit and will never produce high quality news programs.

It is very difficult to distinguish a “media of quality” from “one of quantity” in Taiwan’s limited pool. If the government imposes stricter restrictions on mergers and expansion of the media, then a vicious cycle of “low profit – low quality” media will continue.

In an interview with the China Times, Weber H. W. Lai, a professor at the National Taiwan University of Arts, said that it is necessary for the media to take real action in implementing self-discipline. One way to do this is by organizing a union for journalists, or to amend the law to prohibit media monopolies so as not to bring undue influence on the media by owners.

During the October 17 announcement at the Hong Kong Stock Exchange, Next Media said it had sold all of its interests to Jeffrey Koo Jr., chairman of the Taipei-based China Trust Charity Foundation for US$583 million. The employees union of the Apple Daily expressed sadness at Lai’s decision to exit Taiwan. Though market watchers might not be as surprised at Lai’s actions given Next TV’s revenue losses, which have dragged down the stock prices of Next Media.

The China Times reported that Lai, who once said, “only an inhumane guy can run a media business,” appeared at the Taiwan headquarters of Next Media on October 16 to bid farewell to employees at the two papers. He was quoted as saying, “I will not come back. Failure is also part of my life.” Then he repeated in English, “I won’t be back.”

Professor Lai believes that Koo will not be a second Jimmy Lai. Next Media will certainly change its current style even though this might impact its readership and cause a decline in circulation. If the new business owner insists on a change, he must develop ethics guidelines for his me empire.

US visa waiver gives Taiwan wider global reach

On October 2, the announcement of Taiwan’s membership into the US Visa Waiver Program (VWP) was made by US Homeland Security Secretary Janet Napolitano. Starting next month, Taiwanese nationals can enjoy visa-free entries into the United States, said the State Department. This new status will give Taiwanese people greater convenience and confidence when traveling aboard.

Taiwan’s Foreign Minister David Yung-lo Lin said that Taiwan has become the 37th country to join the American VWP, the 7th Asian country to get visa-free treatment, and also the only VWP member with no formal diplomatic ties with the US. Taiwan will reciprocate by raising Americans visa-free stay in Taiwan from 30 days to 90 days, starting November 1.

Minister Lin said that Taiwan will forge onward in negotiating with other countries which have not yet granted Taiwanese visa-free or landing visas, such as the Philippines, and Vietnam. Taiwan also hopes to improve the existing landing visa status with Indonesia as well.

Taiwanese will save US$30 million in US visa fees

Taiwan has long granted Americans visa-free entry and asked for the same from the US. After the September 11 attacks in 2001, Taiwan’s efforts came to a standstill. In 2007, the US passed the Homeland Security Act stipulating new requirements. In order to be granted visa-free status, Taiwan started to promote the issuance of e-passports in 2008, which reduced the rejection rate of Taiwanese applying for US visa to 2.22 percent in 2009. This lower rate enabled Taiwan to be considered for the US VWP, which required a rejection rate of less than 3 percent.

After the 9-11 attacks, closer border control was instituted by US Homeland Security with more rigorous procedures in place in order to qualify for VWP. Taiwan’s inclusion in VWP affirms that the Taiwanese people are law-abiding citizens and indicates the island’s social progress. As such, the rejection rate of Taiwanese stipulated in the American VWP dropped to 1.9 percent in 2011.

According to estimates by the Ministry of Foreign Affairs, joining the VWP will save about US$20 million in visa fees a year for the 400,000 Taiwanese visitors to the US. Based on the 1.5 times growth of Taiwanese visits to the United Kingdom after being granted the visa-free status, and similar growth of South Korean nationals to visit the United States after joining the VWP, it is reasonable to predict Taiwanese visitors to the US will grow to 600,000 and save a total of US$30 million in visa fees.

VWP brings considerable tourist revenues to US

According to the Taipei-based China Times, there were about 450,000 Taiwanese entering the US in 2011. Before the 9-11 attacks, Taiwanese visits to the US numbered more than 800,000 yearly. Therefore, there is room for growth in the number of Taiwanese travelers visiting the US after they gain visa-free entry.

Chen Shu-zhuan of Taiwan’s travel industry said that the VWP does not just save travelers the US$160 visa application fee per person, it also means that those people do not have to line up in long queues for interviews. It is a special relief for those who do not speak English, such as seniors. Potential visitors no longer need to be interviewed and the probability of their travel to US will increase substantially.

According to the Central News Agency, Luo Zai-ling, a Los Angeles-based businessman in the travel industry, commented that the visa-free program will increase the number of Taiwanese tourists traveling to the American West coast. The first wave of Taiwanese arrivals will peak at Thanksgiving, Christmas and the Chinese Lunar New Year in February 2013. From now to Chinese New Year, he estimates the initial influx of passenger traffic to increase 15 to 20 percent. He said that with sluggishness of the US economy in recent years, travel businesses have become heavily reliant on tourists from China. With Taiwan’s visa-free entry, the number of group visitors from Taiwan will grow, benefiting the local tourism industries.

Yu Guo-chen, who is active in the travel industry in Taiwan, said that the major Taiwanese routes are to New York-Washington on the East coast and Los Angeles-San Francisco-Las Vegas on the West coast. The travel agencies are expected to promote new routes with increasing visitors from the VWP. According to the Central News Agency, it is estimated that the new visa process will bring the US US$1.8 billion a year of tourist revenue from Taiwanese visitors.

Deeper meaning of VWP

The United Daily News pointed out that gaining visa-free treatment is one of the important policy indicators of the “flexible diplomacy” President Ma Ying-jeou has promoted since taking office in 2008. The mutual trust between Taiwan and the United States has been strengthened and bilateral relations are considered to be the best in the past 30 years. Moreover, the exponential growth of countries granting  Taiwanese travelers visa-free entry is impressive, growing from 54 in 2008 to 129 today.

Even though Taiwan has diplomatic ties with only 23 countries, there are 129 countries, including the EU member states, granting Taiwanese nationals visa free or visa on arrival privileges. Meanwhile, China has diplomatic ties with 165 countries, yet only 32 developing countries grant Chinese visa free status. Even Hong Kong, despite its affluent society, does not have this status since it is a Special Administrative Region of China.

Seen in this light, entry into the VWP is a significant victory for all Taiwanese people. They can now travel around the world without difficulty just from holding a Republic of China (Taiwan) passport.

VWP helps boost Taiwan’s sense of security

The United Daily News stressed that the United States is Taiwan’s most important ally and trading partner. Considered to be a safe haven by many Taiwanese, the US is the most favored country when Taiwanese are “insecure” about the island’s future. With the shift towards an open door policy with the VWP, it should boost the confidence of the Taiwanese, and lessen the “sense of insecurity.”

Taiwan is the only non-diplomatic member in the VWP and in order to qualify, the island had to undergo a rigid vetting process. The areas assessed included: the risk of Taiwanese to remain illegally in the US, illegal workers, and those engaged in criminal activities. The rejection rate of mainland Chinese applying for US stands at up to 20 percent, while it remained at less than 3 percent for Taiwanese. Taiwan’s consecutive low rate for the last two years was one of the reasons it received VWP status.

In the past century, Taiwan’s external relations have been stymied under 50 years of Japanese colonial rule and Beijing’s diplomatic isolation. This has attributed to the “pathetic feeling” of the Taiwanese people for decades and their feeling of disempowerment. But judging from the 129 countries granting Taiwanese travelers visa-free treatment, it can be concluded that Taiwan has developed vitality through its non-diplomatic efforts and vigorous society to establish an international status and evaluation beyond the rigid traditional diplomatic framework. At this point, the people of Taiwan should abandon the unnecessary tragic image of “international orphan” and embrace the whole world, stressed the United Daily News.

Mo Yan’s Nobel Prize win, from Taiwan’s perspective

Following the awarding of the Nobel Prize for Literature to mainland Chinese writer Mo Yan on October 11, all the major media outlets in Taiwan carried the story with bold headlines and colorful photographs. Since the award’s inception more than a century ago, not a single Chinese writer has been awarded a Nobel Prize for Literature, until now. It is high time this situation changed, proclaimed an editorial in the Taipei-based China Times.

Before Mo’s win, the 2000 Nobel Prize for Literature was awarded to Gao Xingjian, who was officially considered French, due to his residency in France and his strong opposition to the Chinese authorities. Also Gao’s literary works were hardly read in his native country, China, nor did his writings reflect mainland society, said the paper.

China’s literary divide

Since the reforms and the open door policies of the 1980s, Chinese literature has split into the school of pioneer writers and those seeking to get back to their roots, and later, into those dealing with urban themes and those focusing on rural nostalgia. In his 30-year career, Mo’s focus has been on the rural and the grassroots. His works have allowed Westerners to understand the Chinese countryside lifestyle.

Having been a member of the People’s Liberation Army, and now in a leadership position in the pro-government  “PRC Writers Union” for many years, Mo has been labeled a “red writer” from time to time. However, in his novels and other articles, he is definitely not “obedient” or a Beijing puppet. Whether you agree with his participation in government-affiliated groups or not, his body of work does help readers understand the universality of human nature, stressed a China Times editorial.

Bringing Taiwan’s society into mainland Chinese writings

Taiwan’s Minister of Culture, Lung Ying-tai, has known Mo for 20 years, and has often invited him to Taiwan. During Lung’s tenure as Taipei City Government’s Cultural Affairs director, she invited him to speak in Taipei several times. And in 2002, she invited him to stay in Taiwan as a “Taipei Writer in Residence” for a month. She also sent messages of congratulations to Mo after his award and hopes to issue another invitation for him to visit Taiwan again soon.

According to the United Daily News, Lung said she considers the invitations to Mo and other Chinese writers as a “cultural investment.” She hopes their time in Taiwan can be incorporated into their writing diet and be shared with the mainland Chinese.

She expressed a hope that Mo’s prize will open “a national door – a spiritual door” for China so that people around the world can see the innermost souls of the Chinese people, rather than only political discord. She wishes the same for China’s future leaders, that they might find merit in something other than politics, by seeing the essential value of literature. The award also allows China another way to merge into international norms by focusing on the humanities instead of merely economics, reported the United Daily News.

Despite the award, critics abound

Chang Ta-chun, another friend of the Nobel laureate and a Taiwanese writer, commented that Mo has deserved this win for a long time. Still others like Chen Fang-ming, professor of Taiwanese Literature at National Chengchi University, was surprised by the award to Mo. Chen said that the Nobel Prize for literature has often been awarded to dissident writers in recent years, but Mo is on the side of the government. Mo writes stories about farmers, but remains non-critical of the government. Chen considers him as “obedient” to Mao, according to the Liberty Times.

For those who are critical of Mo’s pro-government stance, Minister Lung said, there is always controversy surrounding any Nobel winner. Living in a constrained society as he does, some people choose to express anger, some people choose to protest, while some people remain silent. Lung urges critics to take a more tolerant attitude toward Mo because he has used humor to deal with his situation.

So far, the only Taiwanese Nobel laureate is Lee Yuan-tse, who won the1986 Nobel Prize for Chemistry. He received his PhD in Chemistry from the University of California at Berkeley and returned there to teach in 1974. That same year, he also became an American citizen. He is the former president of Taiwan’s Academia Sinica and is currently the head of the International Council for Science.

Tainan’s historic architecture

As the oldest city in Taiwan, Tainan is rich in and famous for its historic architectural structures. In the last 300 years, it was ruled by the Dutch East India Company, China’s Ming Dynasty, Qing Dynasty, Japan, and then the Nationalist Chinese government. And walking through Tainan, remnants of the city’s influences can be seen throughout its urban corners.

The architectural style in Tainan varies according to the different construction period. Most of the buildings reflect the style of building found in southern Fujian province, where most of the residents came from during the late Ming and Qing Dynasties. The imitation of Western Baroque architecture built by the Japanese during Japanese colonial rule also added another dimension to the city’s varied architectural style. And if you look hard enough, you can also still see traces of Dutch influence in the vicinity of the Anping and Sihcao Wetlands from centuries ago.

Chen Chong-heng calls himself an “amateur photography hobbyist”. Born and raised in Tainan, he is particularly interested in photographing architectural styles. To see more of his work, please visit his photo album at:

Closer Taiwan-Japan corporate ties despite islets dispute

Although Japan has angered mainland China and irked Taiwan with the apparent purchase of the Diaoyutai Islets from a Japanese family, Taiwan is still “buying Japan,” just as Japan is “buying the disputed islets,” said a joking headline in Global Views monthly. The play on words is because Taiwan considers the Diaoyutai Islets to be part of its sovereign territory, as does Japan and mainland China. However, despite the dispute, more Taiwanese companies are investing in Japanese enterprises.

According to the investment commission of the Taiwan’s Ministry of Economic Affairs, Taiwanese total investment in Japanese enterprises in 2011 reached US$250 million, six times more than one year earlier. This accounted for almost 7 percent of Taiwan’s total foreign investment, and was the highest on record.

In 2011, Taiwan ranked No. 2 for mergers and acquisitions with Japanese businesses, only behind the US. If taking into account those deals not registered with the government, the actual figure would be much higher.

Reasons for merger fever

An increasing number of Taiwanese firms are investing large sums to acquire Japanese companies and are thus gaining access to technology. The largest such transaction was last year’s US$437 million buy-out of Covalent Materials Corporation (a former subsidiary of Toshiba) by Sino-American Silicon Products Inc. (SASP), a publically-traded Taiwanese company.

Besides access to technology, mergers and acquisitions allow Taiwanese companies to consolidate relations with customers. For Japanese companies that want to reduce manufacturing costs, one of the ways is to partner with a Taiwanese company. This was one of the objectives behind Powertech Technology Inc.’s partial purchase of EBS, a subsidiary of Japan’s Elpida Memory. As the third largest DRAM manufacturer in the world and a provider of IC chip probing, packaging and testing services, the Taiwanese company spent US$50 million to acquire 26 percent of the shares in EBS.

Such deals also allow Taiwanese companies to gain access to new business areas, as was the strategy employed by AU Optical Corporation with its partial purchase of the Japanese firm M. Setek. The deal allowed AU to successfully enter the solar energy business and acquire several large international customers.

Taiwanese companies also gain access to local distribution channels by building on solid customer relations. A 2010 example was the US$187,000 investment by Taiwan’s Merida Bikes to purchase a 30 percent stake in Japan’s Miyata Industrial Company together with a position on its board of directors. Through the extensive sales channels of Miyata, Japan’s third largest bicycle brand, Merida was able to expand its market share in Japan.

Still, the most basic motivation for buying shares in a company remains simply for investment purposes and to build a profitable portfolio. This appears to have been the case when Taiwan’s Excelsior Healthcare Group purchased a 4 percent stake in Japan’s 3-D Matrix, whose products treat hemostasis. The 2011 investment netted Excelsior huge profits when 3-D Matrix went public on Japan’s stock market.

Japan invests heavily in Taiwan too

Global Views reported that, according to Taiwan’s Ministry of Economic Affairs, Japan’s total investment in Taiwan in 2011 reached 441 deals, the highest number in 20 years. In the first half of this year, Japan’s investment in Taiwan reached US$192.64 million, 40 percent higher than for the same period last year. Meanwhile in the period from January to May this year, Taiwanese investment in Japan reached US$270 million, 11 percent higher than for the same period in 2011.

Recently, Japan’s purchase of the Diaoyutai Islets has angered Chinese people and stirred strong anti-Japanese sentiment, causing many Japanese companies in China to shut down temporarily. It is worth watching to see if Japanese companies will be forced to transfer their orders to Taiwan or even relocate to Taiwan.

Global Views reported that Canon, the world’s leading digital camera maker, was forced to close its Zhuhai factory in Quandong province, China, due to the anti-Japanese protests. Luckily, the company’s manufacturing schedule was not overly affected since a solid supply chain has been maintained in Taichung (central Taiwan) for 40 years.

Nine years ago, Canon thought of relocating its entire manufacturing facility to China. However, now the firm understands the benefit of remaining in Taiwan. Over the next three years, five out of ten digital cameras made by Canon will be made in Taiwan, making the island the world’s largest manufacturing center for digital cameras.

Symbiotic relationship

Japanese companies are in possession of important technology, but they are inflexible with regard to production costs and connections in China. Taiwanese firms, on the other hand, are weaker in technology, but good in all other aspects. So it makes sense for Taiwanese and Japanese companies to form partnerships.

According to a report from Japan’s Nomura Research Institute, the investment success rate of Japanese enterprises in China would be 68 percent if they were to operate alone. However, their prospects rise to 78 percent, if they collaborate with a Taiwanese company.

In recent years, the competitiveness of Japanese and Taiwanese companies has lagged behind that of Korean businesses. As such, it is a good strategy for Taiwanese and Japanese firms to join forces to compete against Korea.

Taiwanese chairs dominate NBA VIP areas

Earlier this year, Jeremy Lin’s performance for the New York Knicks basketball team made Taiwanese people very proud. Yet, even before this remarkable achievement, Taiwan had another close connection with the National Basketball Association (NBA); the majority of VIP seats used by NBA teams are made by Spec Seats, a Taiwan-based company. Currently, nearly three-quarters of the NBA teams have installed these high-end folding chairs as a perk for VIPs.

Business Weekly reported that the chairs, costing US$500 each, are made by this small company (40 employees) based in the countryside of Taoyuan County (northern Taiwan). Lin Mei-chuan, 78, founded the company and leads a seven-member R&D team to study human ergonomics and the combination of materials that go into producing such a high-quality product. Lin said, “Any human being when awake must either stand or sit down. On average, a person will sit on up to nine different chairs every day. So making chairs is a business that is never out of date.”

About 90 percent of the portable seating systems made by Spec Seats are exported to the US. Over 70 percent of the NBA chairs were produced by Spec Seats, which specializes in custom-made high-specification chairs.

Why does this unremarkable looking chair cost so much? The answer can be found in its unique design features that have led to 58 patents. Business Weekly reported a regular chair is completed in about eight or nine manufacturing processes, while Spec Seats performs almost 60 processes to produce one of its chairs.

When the Knick’s wanted to make the VIP seats for Madison Square Garden more comfortable, they turned to Spec Seats. As a smaller company, it is innovative and flexible. After the company successfully worked with the Knicks, the Irwin Seating Company and Hussey Seating, ranked No. 1 and 2 respectively, sought to cooperate with Spec Seats. Irwin even wanted to sign a three-year exclusive contract with Spec Seats. Bruce Cohen, senior vice president of Irwin, said, “We have no choice but to work with them because they own so many patents.”

By focusing on R&D a small traditionally-run Taiwanese company conquered the American market for portable chairs, concluded Business Weekly.

Taiwanese filmmakers share experiences with Bay Area audience

This year’s Taiwan Film Days was held at the New People Theater in San Francisco’s Japantown from October 12 to 14. The movies included classic Taiwanese feature films such as A Brighter Summer Day and six new blockbusters. Directors and special guests included Peng Kai-li, the widow of Edward Yang who directed A Brighter Summer Day, Fung Kai who directed Din Tao, and Tsao Jui-yuan, the director of Joyful Reunion. Each stayed to answer questions after their respective film.

During the Q&A session after Joyful Reunion, an audience member expressed her thanks to the organizers for bringing so many good Taiwanese films each year to the Bay Area so that she could better understand Taiwan.

This is the fourth Taiwan Film Days sponsored by the San Francisco Film Society (SFFS) in conjunction with the Taipei Economic and Cultural Office (TECO) in San Francisco. With the exception of A Brighter Summer Day, SFFS selected the six films from a semi-final pool of 30 newly-released Taiwanese films.

Fung Kai, director of Din Tao, the opening movie in the film festival, told the audience, “I shot TV programs for more than 20 years and could produce any TV drama with my eyes closed. This is the first time I have tried to make a movie. I feel blessed to win Taiwan’s box office champion this year.” He pointed out, “Din Tao is about the culture of Taiwan’s most grassroots temple fairs, but can still win the appreciation of an American audience in the Bay Area. Vivid story telling is the most important aspect in a movie. It goes beyond the barriers of cultural differences,” he said.

The Chinese title of Joyful Reunion is the same as Ang Lee’s famous Eat Drink Men Women (1994). Tsao Jui-yuan said he had no intention of competing with Lee, but wanted to tell the story of another generation via Joyful Reunion. Tsao pointed out that Lee’s movie is about gourmet food, relationships between man, woman, their families, while “simplicity” is the main theme running through Tsao’s film about vegetarianism, ecology, and the conceptual communication of love.

Peng Kai-li talked about her deceased husband Edward Yang, who directed A Brighter Summer Day, saying that Yang was a computer engineer before switching to a career in film. Yang’s directing skills were deeply influenced by his engineering background, telling a story in a neat and systematic way. Peng also mentioned that the main character in A Brighter Summer Day was drawn from Yang’s own high school experience.

Other films screened at the 4th Taiwan Film Days included Jump! Ashin, Days We Stared at the Sun, Ye Zai and Blowfish.

TECO chief explains Taiwan’s position on disputed islets

In an October 18 letter to garner support for President Ma’s Ying-jeou’s East China Sea Peace Initiative, Bruce Fuh, director-general of the Taipei Economic and Cultural Office in San Francisco, wrote to leading politicians and scholars in California, Nevada and Utah to update them on the Diaoyutai Islets dispute.

“On September 11, the Japanese government officially nationalized the Diaoyutai Islets in the East China Sea, further escalating tensions between Japan and mainland China. Given the huge concentration of Asian-American residents in your community and the nationalistic intensity surrounding this dispute, I would like to bring this regional security issue to your attention” Fuh began.

He wrote that the Diaoyutai Islets were discovered in the period of the Ming Dynasty (1368-1644, China) and then passed to the administration of the Qing Dynasty (1644-1912), under the jurisdiction of Taiwan. Rich in fish such as mackerel and bonito, the surrounding area of these islets has been the fishing ground for Taiwanese fishermen for over a century. Because of the relationship between the monsoon and ocean currents, it is easier for Taiwanese fishermen to get there than for Japanese vessels, which must sail against the wind and currents.

In 1895, during the war with the Qing, the Japanese cabinet incorporated the islets confidentially into Japanese territory by unilaterally classifying them as “uninhabited land without owners.” After the Sino-Japanese war, “Taiwan and its appertaining islets” were ceded to Japan in the Treaty of Shimonoseki. The treaty was later nullified after WWII, restoring the islets to the pre-1895 status and returning them to the Republic of China in 1945.

Fuh stressed that from 1945 to 1971, the Diaoyutai Islets were under US administration, but the US made it clear that the 1971 transfer of administrative rights of these islets to Japan did not constitute sovereignty. The refueling of this dispute took place this April, when Tokyo Governor Shintaro Ishihara said he had started negotiations to buy the Diaoyutai Islets from a Japanese family.

Director-General Fuh pointed out that while claiming sovereignty over the disputed Islets, President Ma has called for constructive dialogue among the parties concerned by championing the East China Sea Peace Initiative. The initiative is already well-received by the US administration and senate, Japan and the European Parliament.

As anger and nationalistic feelings in Japan and mainland China are stirred up, President Ma’s East China Sea Peace Initiative promoting cooperation between the countries—in fishing, mining, marine scientific research, marine environmental protection, maritime security and non-traditional security issues—is a winning compromise. A similar solution worked in the North Sea, where sovereignty disputes were put aside to jointly develop that area’s resources for the benefit of the whole region.

With more territorial disputes in the Asia Pacific region brewing, Taiwan’s strategic position is quietly becoming more important. The Taiwan government peace initiative means it is willing to play a key role in maintaining regional stability, which is definitely important to US interests, Fuh stressed.

Report: Higher education problems must be addressed

With one-fifth of Taiwanese college students needing to take out loans in order to pay for college, hundreds of thousands of students are graduating with mounting debt. Worsening the problem is the added unemployment rate of college graduates, which has soared 56 percent, a record number, according to Commonwealth monthly.

Although Commonwealth reported that Taiwan’s investment in higher education is higher than the average among the 34-member Organization for Economic Cooperation and Development (OECD), still Taiwan’s higher education is “like a luxury cruise liner lacking much power.”

According to the Commercial Times, the Ministry of the Interior announced that the number of people with a master’s or doctoral degree in Taiwan reached 925,000 at the end of 2010 and was predicted to reach one million by the end of 2011, making Taiwan among the best educated countries in the world.

Six years ago, Taiwan’s Ministry of Education commissioned the Higher Education Evaluation & Accreditation Council to conduct compulsory evaluations of every university department in five-year cycles, with the evaluations expected to affect enrollment and government subsidies. At the same time, universities began to use an “N-year clause” (requiring teachers to earn promotion within “N” years) and to use teacher evaluations as the basis for promotion and contract renewals.

Under this key performance indicator (KPI) system, accumulating points became the most important criteria for universities to obtain public funding and for teachers to earn promotion and retain their jobs.

The tally of points became part of each university’s website, with teachers required to post their own results, from which an overall annual ranking was determined. Points could be added for publishing research papers, recruiting students to the school, and even for media appearances. The points totals were designed to appear in the national news, Commonwealth reported.

Although the approach has some merit around how to evaluate a professor’s performance, the downside was that teachers became too busy chasing points – which are primarily tied to research – such that teaching effectiveness and enthusiasm were largely ignored. According to a survey conducted by Commonwealth, the teachers that responded believed the score-keeping used by the schools strayed from the focus of teaching. In all, 86 percent of those surveyed said that the performance indicator gave the highest score accumulation for conducting research, rather than for teaching.

Commonwealth pointed out that the declining birth rate is another problem for Taiwan’s higher education system. Over the past 15 years, births in Taiwan have fallen by a third, and beginning in 2016, nearly 30,000 fewer students than today will be attending their first year of university, equivalent to the current enrollment levels at over 30 universities.

Fifteen years ago, the admission rate of students who took the college entrance exam was 60 percent, and it is now 88 percent. This acceleration is a sign of the pace of university expansion that has essentially turned higher education into another commodity. Nowadays, presidents of colleges have to maintain contact with high school principals. Kao An-pang, the president of the private Kainan University, understood this and stored dozens of phone numbers of high school principals in his cell phone. Professors are not exempt from this expectation, since they are also expected to recruit students. They are trained to be successful sales executives, to further use their personal connections and to maintain close contacts with high schools.

Global exposure is also another area of concern. According to the Commonwealth survey, 90 percent of the responding college teachers said most universities should increase international exchanges while allowing mainland Chinese students to study in Taiwan is not part of this policy, the majority (52 percent) of the teachers surveyed by Commonwealth said Taiwan should admit more mainland students. Twenty-two percent even proposed that they be accepted immediately and without imposing any quota.

Taiwan embraces companies returning from mainland China

Twenty years ago Taiwanese businesses were leaving the island in droves for greener pastures in China. The exodus helped China rise economically, but also dramatically changed Taiwan’s business landscape, causing the hollowing out of industry, Commonwealth reported recently.

Today, the lavish banquet that once personified the Chinese economy is nearing an end as many mouth-watering incentives have disappeared. Each year for the past three years, around a hundred Taiwanese companies have relocated back to Taiwan.

Relaxing foreign labor quotas to meet needs

Since 2006, investment in Taiwan by Taiwanese returnees from the mainland has steadily increased, according to the Department of Investment Services under the Ministry of Economic Affairs. This year, such investment is expected to top US$1.67 billion. So far, a total of 27,695 new jobs have been created by these returning companies.

Cho Shia-chao, vice minister of Economic Affairs, told Commonwealth that the number of Taiwanese businesses returning from China reached 42 in just the first half of this year. These are only the companies that have registered with the Ministry of Economic Affairs seeking help, so the actual number is likely much higher. The biggest concern voiced by returning Taiwanese investors always centers on the shortage of labor. “We have already heard many complaints from industry that they can’t find workers, and it’s for sure that there are many kinds of jobs that the Taiwanese won’t do,” admitted Cho. He is convinced that raising recruitment quotas for foreign laborers would not take jobs away from Taiwanese workers.

Invisible cost factors

“Making rice noodles on a scale such as ours can only be done in Taiwan,” asserted Lin Ming-tung, 64, chairman of Tiger Brand Cheng Tung Industrial Co. Ltd. in an interview with Commonwealth. Lin, who founded the company some 40 years ago, is known as the king of rice noodles in Chinese communities around the world. Last year, the famous noodles—70 percent of which are exported worldwide—generated revenue worth US$4 million. This was only possible because Lin developed a fully automated production process for noodle making, which traditionally was largely done by hand.

In 2005 Lin left to set up shop in China, lured by low wages, cheap land and the desire to expand into the Chinese market. However, just two years after establishing a factory in Xiamen, Fujian Province, Lin became fed up with the rapidly rising labor costs and poor employee attitudes. In 2007, he packed his bags and happily returned home.

When Lin started his China venture, a worker’s monthly wage stood at US$64. Two years later, wages have soared to US$114. But what angered Lin more than the 50 percent salary increase was the lax attitude of his Chinese employees. “While running my business in Taiwan for so many years, I have seen that the vast majority of Taiwanese workers have a sense of responsibility. They place certain demands on the quality of their own work. But you don’t see this kind of attitude in Chinese workers at all,” lamented Lin. “I started to reminisce about my time in Taiwan and finally understood how precious these invisible cost factors were.”

Further automation in order to stay competitive

The return of these quite competitive companies from China generates increased pressure on local industries to speed up long overdue automation. The biggest side effect of the mass exodus of Taiwanese industries to low-cost countries some 20 years ago is that it has held up the pace of automation in Taiwanese industries.

“Who would be willing to spend money on automation if there is plenty of cheap labor available?” questioned Commonwealth. In the past, Taiwan’s annual demand for industrial robots stood at around 1,200 units. This figure is expected to increase markedly this year. Industrial automation requires higher initial investment. As a result, the returning companies will need to invest more resources into innovation and in producing high value-added products.

In Tainan’s Yongkang District stands the headquarters of the world’s top supplier of bicycle chains, KMC Chain Industrial Co. Ltd. Before 2008, the Yongkang factory had virtually stopped operating, relocating production to China. But now the site teems with activity again.

Deborah Wu, vice president of marketing and daughter of the company’s founder, Charles Wu, said that KMC increased its investment in Taiwan not because it fared badly in China, but because it realized the importance of continuing to add value for Taiwanese production. While Taiwanese finished bicycles sold abroad at around US$200 in the past, prices rose to US$350 per unit , and since KMC has continued to increase its investment in Taiwan the price has now risen to US$450.

At the London 2012 Olympic Games, the bikes used by two gold medalists and one runner-up in cycling were made by KMC in Taiwan, Wu told Commonwealth with pride.