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INDUSTRY FOCUS A Report on the Tech Sector

July 2011


Vo l u m e 4 1 N u m b e r 7


w w w. a m c h a m . c o m . t w

Putting New Taipei City on the Map 發現新北市


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4 Editorial

9 Issues

Encouraging Foreign Investment july 2011

VOlum E 41, NumbE r 7

5 Taiwan briefs



Andrea Wu

Lessons from the Plasticizer Scare; Good Communication on Drug Quality; Harsh Legislation or SelfRegulation


By Jane Rickards





Don Shapiro



美術主任 /

Art Director/ Production Coordinator


Katia Chen

inconvenient transportation links and the inferior educational and healthcare facilities in Taipei County. The recent elevation of the county to the status of special municipality under the name New Taipei City will mean more budgetary resources for investment in infrastructure improvements, however. The metropolitan MRT system is undergoing substantial expansion, and both the city government and private sector have major development projects in the works. As a result, New Taipei City is expected to continue to be one of the fastest growing places on the island. By Jane Rickards 撰文/李可珍


Staff Writer


Jane Rickards


Manager, Publications Sales & Marketing 廣告行銷經理

Irene Tsao



Chen Yi-chun/Lisa Huang

塑化劑恐慌的教訓;充分溝通,釐清用藥 品質規範;嚴苛立法或自我規範



American Chamber of Commerce in Taipei 129 MinSheng East Road, Section 3, 7F, Suite 706, Taipei 10596, Taiwan P.O. Box 17-277, Taipei, 10419 Taiwan Tel: 2718-8226 Fax: 2718-8182 e-mail: website: 名稱:台北市美國商會工商雜誌 發行所:台北市美國商會 臺北市10596民生東路三段129號七樓706室 電話:2718-8226 傳真:2718-8182

13 Putting New Taipei City on the map

TOPICS is a publication of the American Chamber of Commerce in

Taipei, ROC. Contents are independent of and do not necessarily reflect the views of the Officers, Board of Governors, Supervisors or members. © Copyright 2011 by the American Chamber of Commerce in Taipei, ROC. All rights reserved. Permission to reprint original material must be requested in writing from AmCham. Production done in-house, Printing by Farn Mei Printing Co., Ltd. 登記字號:台誌第一零九六九號 印刷所:帆美印刷股份有限公司

發現新北市 The high cost of real estate in Taipei city has long caused many businesses and would-be home owners to look at alternative locations in suburban areas, but they were often deterred by

18 Visions and Challenges Interview with Mayor Eric Liluan Chu

22 Seeing the Sights in New Taipei City By Steven Crook

經銷商:台灣英文雜誌社 台北市105敦化北路222巷19之1號1樓 發行日期:中華民國一○○年七月 中華郵政北台字第5000號執照登記為雜誌交寄 ISSN 1818-1961

OFFICERS: Chairman/ Bill Wiseman Vice Chairmen/ William E. Bryson / David Pacey Treasurer: Carl Wegner Secretary/ William J. Farrell 2010-2011 Governors: Michael Chu, Alan Eusden, Douglas R. Klein, Cindy Shueh Lin, David Pacey, Stephen Y. Tan, Lee Wood. 2011-2012 Governors: William E. Bryson, Alexander Duncan, Christopher Fay, William Farrell, Steven Lee, Neal Stovicek, Carl Wegner, Bill Wiseman. 2011 Supervisors: George Chao, Varaporn Dhamcharee, Jenny Lin, Ashvin Subramanyam, Ken Wu. COMMITTEES: Agro-Chemical; Asset Management/ Christine Jih, Winnie Yu; Banking/ Carl Chien; Capital Markets/ William Bryson, Jane Hwang, Jimin Kao; Chemical Manufacturers/ David Price; CSR/ Lume Liao, Fupei Wang; Education & Training/ Robert Lin, William Zyzo; Greater China Business/ Helen Chou, Stephen Tan; Human Resources/ Richard Lin, Seraphim Mar, Ashvin Subramanyam; Infrastructure/ L.C. Chen, Paul Lee; Insurance/ Mark OÆDell, Dan Ting, Lee Wood; Intellectual Property & Licensing/ Jason Chen, Jeffrey Harris, Scott Meikle, Douglas Weinstein; Manufacturing/ George Chao, Albert Li; Marketing & Distribution/ Christopher Fay, Wei Hsiang, Gordon Stewart; Medical Devices/ Nelson Hsu, Daniel Yu; Pharmaceutical/ David Lin, Edgard Olaizola, Jun Hong Park; Real Estate/ Peter Crowhurst, Kristy Hwang; Retail/ Prudence Jang, Douglas Klein; Sustainable Development/ Eng Leong Goh, Kenny Jeng; Tax/ Cheli Liaw, Jenny Lin, Josephine Peng; Technology/ Revital Golan, R.C. Liang, Jeanne Wang, Deborah Yen; Telecommunications & Media/ Thomas Ee, June Su, Jason Wang; Transportation/ Michael Chu; Travel & Tourism/ Pauline Leung, David Pacey.


25 “last Inch”: Is Taiwan’s Financial market ready for upgrading? By Andy Chu


30 The Growing Chinese Naval Capacity

A review of Red Star Over The Pacific: China’s Rise and the Challenge to U.S. Maritime Strategy, by Toshi Yoshihara and James R. Holmes. By June Teufel Dreyer


34 Control yuan: Taiwan’s unique Government “Watchdog” Based on an ancient Chinese model, this highlevel organization has responsibility for audit and impeachment. It can also issue “corrections” to government agencies. By James Peng

c ov er ph o to : c ra ig fe rgu s o n


taiwan business topics • july 2011

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Ju ly 2011 • Volume 41 n umbe r 7



2011 3M Taiwan New Customer Technical Center Announcement. 3M CEO Geroge W. Buckley (second from the right), 3M Taiwan Managing Director George Chao (second from the left)

Tech Sector: Looking for Ways to Spur Momentum 38 Should Taiwan be Generating More Start-ups?

By Timothy Ferry

40 A Slowdown in Startups

By Alan Patterson

關於3M 公認的創新研究和發展領導者,1902年成立的3M公司生產數以千計創 新產品在眾多的多樣化市場。3M的核心力量是運用其40多個不同的技術 平台去做結合與創新,來達到範圍廣泛的客戶需求。隨著270億美元的 銷售額,3M公司全球員工80,000人,並已在65多個國家營運。3M 台灣 成立於1969年,目前在台北設有辦公室,台中、高雄各有一個聯絡處,

42 Taiwan Regulators Veto KKR-Backed Buyout of Yageo



By Alan Patterson

45 Taiwan’s Magic Touch Behind the Apple iPad

By Alan Patterson

梅鎮,於2005年在南部科學園區成立台灣明尼蘇達光電股份有限公司, 各地為顧客提供服務。更多詳情資訊請上WWW.3M.COM.TW, 或加入3M facebook與我們聯繫。

About 3M 3M is a diversified technology company operating worldwide across six business segments: industrial and transportation; health care; display and graphics; consumer and office; safety, security and protection services; and electro and communications. Founded in 1902, 3M has expanded significantly over the years from its core strengths of abrasives, industrial tapes, adhesives, and film products. A recognized leader in research and development, 3M today produces thousands of innovative products for dozens of diverse markets. 3M currently employs some 80,000 people worldwide and has operations in more than 65 countries.


47 Fun for the Fourth

Established in 1969, 3M Taiwan is based in Taipei City and has liaison offices in Taichung and Kaohsiung; a logistics center in Dayuan, Taoyuan County; as well as a plant and an R&D center in Yangmei City, Taoyuan County. In 2005, 3M Taiwan Optronics Corporation was established in the Southern Taiwan Science Park as the only manufacturer of prism sheet films in Taiwan. There are more than 2,100 3M employees serving customers around Taiwan.

50 AmCham Companies Through the Years

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E d i t o r i a l 鼓勵外國投資

在距今不久的2007年,台灣曾獲得龐大的 153億美元新外來直接投資(FDI),但過去

這幾年來,外來直接投資金額少得可以,讓人覺得 台灣競爭力前景堪慮。例如2010年,台灣只吸引 到38億美元的外來直接投資,遠低於南韓的129億 美元、印尼125億美元、越南110億美元,以及馬 來西亞和泰國各90億美元(中國今年6月就獲得單 月129億美元外來直接投資,這是許多國家望塵莫 及的規模)。此外,台灣今年前5個月吸引到的外 來直接投資總額,比早就低迷的2010年水準再減 少14%。 行動力很強的行政院經濟建設委員會主任委員 劉憶如一直盼望逆轉這個情況。她認為,外來直接 投資帶來的好處不僅是資金,還有就業、科技、市 場、訓練,以及國際往來機會與聲望。最近數月, 她率領由民間部門和政府組成的巡迴招商代表團, 前往新加坡、印度、美國和日本。劉憶如表示,許 多出席招商會的外國投資人聽到台灣幾個主要產業 的發展計畫,以及得知兩岸關係自展開經常性班機 直航和簽署「兩岸經濟合作架構協議(ECFA)」 以來有所改善後,對台灣的興趣也隨之提高。 不過投資計畫需要時間萌芽發展。在此期間,許 多可能的投資者或許看到新聞報導指出,台灣主管 當局經過漫長的研議過程後,駁回一些受到高度矚 目的投資申請案,因此打退堂鼓—最近一次例子就 是受到美國私募基金業巨擘KKR集團支持的台灣 電子零組件製造商國巨收購案。華爾街日報的解讀 (不論是對或錯)是這項駁回反映「台灣對開放本 土企業接受外來投資的謹慎態度」,該報指出,台 灣去年也阻止美國國際集團有意將旗下南山人壽賣 給香港一個財團的提案。 台灣政府就他們對國巨案的疑慮所提出的「官 方」解釋,主要焦點放在本案涉及的槓桿程度,以 及小股東是否受到足夠保障。不過其他分析師對國 巨案決策的解讀是,這顯示台灣政府不願允許大型 上市公司私人化,以及基本上對私募業者的反感。 台北市美國商會不會冒昧嘗試評斷前述種種看法 是否正確。不過最起碼似乎相當清楚的是,台灣主 管當局處理這些個案的方式存在著程序性問題,在 投資人中心引發疑慮。許多投資界人士認為,審核 過程缺乏必要的透明度。 此外,台灣政府對私募業者若無偏見,就須採取 更多行動,清楚表明這個態度。時代已經改變,私 募股權現在是投資資金的最重要來源之一 — 在提 升被投資企業的價值上,成績也不俗。歧視私募業 者之類的投資者,抑或漠視外界觀感,讓人誤以為 此類歧視存在,絕無法恢復台灣原有吸引外來直接 投資的競爭力。 4

Encouraging Foreign Investment


s recently as 2007, Taiwan recorded a substantial US$15.3 billion in new foreign direct investment (FDI), but in the past few years the numbers have been rather anemic, raising questions about Taiwan’s competitiveness. In 2010, for example, Taiwan attracted only US$3.8 billion in foreign direct investment (FDI), considerably less than the US$12.9 billion for Korea, US$12.5 billion for Indonesia, US$11 billion for Vietnam, and US$9 billion each for Malaysia and Thailand. (In a different league entirely, China took in US$12.9 billion this June in a single month). In the first five months of this year, in addition, the amount of FDI that Taiwan attracted was down 14% from the already low 2010 level. The energetic Minister of Economic Planning and Development, Christina Liu, has been seeking to turn the situation around, recognizing that FDI brings in not only capital, but also employment, technology, markets, training, and international connections and prestige. In recent months, she has led delegations from both the private sector and government on investment-seeking road shows to Singapore, India, the United States, and Japan. Liu says that many prospective foreign investors show increased interest in Taiwan after hearing about this country’s development plans in key industries and learning about the improved cross-Strait relationship since the start of frequent direct flights and the signing of the Economic Cooperation Framework Agreement (ECFA). But it takes time for investment projects to germinate, and in the meantime many would-be investors may be turned off by news reports that Taiwan’s regulators, after a prolonged process of deliberation, have rejected some high-profile investment applications – most recently the takeover bid for electronics components manufacturer Yageo Corp. that was backed by U.S. private-equity giant Kohlberg Kravis Roberts (KKR). Rightly or wrongly, The Wall Street Journal interpreted the rejection as reflecting “Taiwan’s caution in allowing foreign investment in local companies,” noting that Taiwan last year also blocked American International Group’s proposed sale of its Nan Shan life insurance unit to a Hong Kong consortium. Government officials’ explanation of their concerns in the Yageo case focused mainly on the degree of leverage involved and whether minority shareholders had been sufficiently protected. But other analysts interpreted the Yageo decision as showing the government’s reluctance to allow major listed firms to privatize, as well as a basic antipathy toward private-equity firms. AmCham will not venture to try to judge the validity of the various assertions. But at the very least it seems clear that procedural problems exist in how the regulators have addressed these cases, creating doubts in the minds of investors. Many in the investment community feel that the approval process falls short of the necessary transparency. Further, if there is no bias toward private-equity companies, the government needs to do more to make that absolutely clear. Times have changed, and private equity is now one of the most important sources of investment capital – and has an impressive track record of enhancing the value of the companies invested in. Either discriminating against such investors, or allowing the impression to remain that such discrimination exists, is no way to restore Taiwan’s competitiveness as a favorable location for FDI.

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BY ja n e R I CKA R D S


STILL HUMMING Even as the United States, a major buyer of Taiwan’s consumer electronics, struggles to regain economic momentum following the devastating financial crisis over two years ago, and amid worries about the Eurozone debt crisis, Taiwan’s economy last month continued to show robust export-driven growth on the back of strong demand from emerging economies. Toward the end of May, the Directorate General of Budget, Accounting and Statistics (DGBAS) upped its GDP growth forecast for 2011 from the 4.92% projected in February to 5.06%, saying it expected the global economy to remain on the road to recovery. Other fore-

casters also raised their projections. Citibank increased its forecast for the year to 4.9% from the earlier 4.5% on the grounds that the economic shock from the Japanese tsunami was not as severe as had been expected and that Taiwan’s opening to individual Chinese tourists would provide strong momentum. Polaris also raised its forecast – to 5.2% from an earlier 4.78%, also saying that the impact of the Japanese disaster was not as great as had been thought. Standard Chartered adjusted its forecast from 4.6% to 5.6%, citing stronger-than-expected recovery in the first half of the year, with signs that momentum would continue into the second half. The bank added that domestic demand, boosted by projected wage hikes and

Taiwan stock exchange index & value






















June chart source: TwSE

Unit: NTD billion

improving employment conditions due to Chinese tourism, would play a greater role. Exports, at US$25.17 billion in June, were up by 10.8% over the same month of last year, the Ministry of Finance said, while imports were up by 12.5% to reach US$23.79 billion, making for a favorable trade balance of US$1.4 billion. Export orders, a leading indicator, were also up 9.18% in June, at US$37.36 billion. Employment trends were also positive. Although the unemployment rate rose from 4.27% in May, its lowest level in 33 months, to 4.35% in June, when seasonally adjusted – a better indicator of long-term trends – it contracted from 4.41% to 4.40% in the same period. In addition, yields on fiveyear government bonds in late July climbed to their highest level since January 2009. The New Taiwan dollar, which currently stands at roughly 28.8:1 against the U.S. dollar, over the past year has been the third-best performer among Asia’s 10 most-traded currencies, Bloomberg reported. Domestic inflation, although minor next to other Asian countries, still put Taiwan’s economic officials on alert. At the end of June, the Central Bank

raised its policy rate by 12.5 basis points to 1.875%, citing the possibility of higher inflation later this year. The bank noted that international raw material prices are currently at relatively high levels, creating the risk of global inflation. But it added that imported inflationary pressures had so far been partially offset by New Taiwan dollar appreciation, and as a result the consumer price index (CPI) had risen by only 1.36% in the first five months of this year. “However, for the rest of the year, price hikes of imported raw materials are expected to add to more pressures,” the Central Bank said. The DGBAS forecasts that the CPI will rise by 2.83% in the second half of 2011, averaging 2.10% for the full year. Illustrating that rising trend, the CPI in June was up 1.93% year-on-year, compared with the 1.65% level registered in May, on the back of higher electricity usage for summer. Local media also said that the recent plasticizer scare caused hikes in fruit and vegetable prices. CROSS-STRAIT

TAIWAN OPENS TO INDIVIDUAL TOURISTS Taiwan and China in late June started allowing individual Chinese tourjuly 2011 • taiwan business topics

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ists to visit the island, in a relaxation of restrictions that previously permitted such travel only in organized tour groups. The shift could boost the earnings of airlines and hotels, as well as to provide some overall economic stimulus, as individual tourists are more likely to travel to far-flung places and to spend more on lodging, dining, and shopping. The first Chinese tourists able to travel under the relaxed rules will come from the cities of Beijing, Shanghai, and Xiamen, the head of the Chinese tourist authority, Shao Qiwei, said. The cap on individual tourists is 500 a day, for a maximum stay of 15 days. Standard Chartered bank economist Tony Phoo said if each visitor spends an average of US$2,000 per trip, as Chinese tourists tend to do,

the change in policy will boost annual GDP growth by 0.1 percentage points. He said mainland tourists had already spurred the retail sector, which grew by 10% year-on-year for the first quarter and is likely to maintain that momentum for the year as a whole. The Mainland Affairs Council said that since Taiwan first permitted Chinese tourism in July 2008 up until the end of May this year, over 2.35 million mainland tourists have visited, injecting nearly NT$120 billion (US$38 billion) into the economy.

PIECES OF ANCIENT PAINTING REUNITED Art connoisseurs say that one of the 10 most important Chinese paintings is Huang Gongwang’s 1350 ink painting of roll-

ing mountains and rural villages, known as Dwelling in the Fuchun Mountains . It was so beloved by a wealthy Ming Dynasty art collector, Wu Hongyu, that he decided to take it with him to the next world, commanding his servants to burn it with his body in 1650. His nephew saved the painting from the funeral pyre at the last minute, but it was torn into two sections that remained apart for over 360 years. The largest section, roughly 6.3 meters long and equaling 86% of the original, entered the imperial collection of the Qing Dynasty in 1746; it was brought to Taiwan by the Kuomintang (KMT) when it fled China in 1949, and was housed in the National Palace Museum. The smaller section ultimately ended up

STILL SMILING — Former President Lee Teng-hui arrives for a fundraising dinner of the Taiwan Solidarity Union pro-independence political party, a day after an indictment for embezzling. Lee has denied the prosecutors’ accusations.

in the Zhejiang Provincial Museum. In an exhibition entitled “Landscape Reunited: Huang Gongwang and Dwelling in the Fuchun Mountains ” that runs until September 5 at the National Palace Museum, the painting is seen in its entirety for the first time in centuries, symbolizing the increasingly warm ties between the two sides of the Taiwan Strait. DOMESTIC

INDICTMENT BROUGHT AGAINST LEE TENG-HUI Former president Lee Teng-hui, who governed Taiwan from 1988 to 2000, gaining international fame for being Taiwan’s first democratically elected president, was indicted at the end of June on charges of embezzlement and money laundering by a special anti-corruption task force under the Supreme Prosecutor’s Office. Lee, 88, is accused in of siphoning off US$ 7.8 million from secret diplomatic funds originating with Taiwan’s National Security Bureau, and then using those funds to build the Taiwan Research Institute, where he is now honorary chairman. Liu Tai-ying, the KMT’s former financial chief who founded the institute, was also indicted. Lee became the second ex-president of Taiwan to

photo : ap/Chiang Ying -ying


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face corruption charges; his successor, Chen Shui-bian, is already serving a prison sentence. If found guilty, Lee could face at least 10 years in prison, although prosecutors are calling for a lenient sentence in light of his advanced age. During his tenure as president, Lee implemented groundbreaking democratic reforms. He instituted Taiwan’s first popular presidential election in 1996 (previously presidents were NEW TEAM — President Ma Ying-jeou (center) announces his choice of Premier Wu Den-yih chosen by the National (right) as his vice presidential running mate in next January’s election. Incumbent Vice PresiAssembly) and won the poll dent Vincent Siew (left) will be retiring. photo : ap/Chiang Ying -ying handsomely. In the lead-up to the election, China lobbed something that “absolutely missiles into nearby waters, US$10.5 million. When the Den-yih as his running had not happened and I ministry reimbursed the forcing then U.S. President mate in the January 2012 bureau, only US$2.7 million would never permit this Bill Clinton to send two election, with the apparkind of thing to happen in was used to balance the aircraft carrier groups to ent hope that Wu’s relative the Republic of China.” bureau's books, prosecuthe Taiwan Strait in a seripopularity and strong roots Political analysts said it tors allege, with the rest ous military crisis. Lee also in Taiwan’s south would siphoned off by Lee and Liu. will take time before the fostered a sense of Taiwan help boost his approval effects of the indictment Following the indictidentity, causing China to ratings. In early July those on the upcoming presidenment, pro-independence revile him as a “splittist.” ratings stood at 32.3%, tial election are known. After leaving office in 2000, groups immediately according to the Global Corruption charges swirlaccused the judiciary of he was expelled from the Views Survey Research political bias. Many, includ- ing around yet another KMT for supporting the Center. Wu, 63, is a native ing Democratic Progressive pro-independence leader founding of the hardline Taiwanese and former might discourage swing Party (DPP) presidential pro-independence Taiwan mayor of the southern city voters from backing the candidate Tsai Ing-wen, Solidarity Union. of Kaohsiung. “Because he DPP, some said, while found the timing suspiProsecutors are accusis from the grassroots and others – including some cious, as the day after the ing Lee of secretly held local positions for a lawmakers in Ma’s own indictment Lee was due to donating US$10.5 million long time, he has a good KMT – said the charges attend a fundraiser with to an unidentified country, understanding of local could also drum up sympa- people,” Ma said. On July Tsai in a show of support. named in the local media thy for the elderly Lee and President Ma, for his part, as South Africa, during 2, the KMT national party thus benefit the opposition. congress, completed formalinsisted that he respects his visit to the country in judicial neutrality and May 1994. At the time, the ities, officially nominating PREMIER WU PICKED AS rejected the idea that prosforeign ministry lacked Ma and Wu as the party’s VP CANDIDATE ecutors were engaged in sufficient funds for the presidential ticket. DPP political persecution and donation, so the National sources said that Tsai, who President Ma in late election maneuvering as Security Bureau loaned the the Global Views Survey June named Premier Wu july 2011 • taiwan business topics

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SALE OF AIG UNIT said CLOSE TO APPROVAL The Financial Supervisory Commission (FSC) in mid-July said the Ruen Chen consortium had met all the stipulated conditions for purchasing Nan Shan Life Insurance, the American International Group’s

Economic Indicators Unit: US$ Billion Current Account Balance (2011 Q1) 10.75 Foreign Trade Balance (Jan.-May.) 8.7 New Export Orders (May) 37.62 Foreign Exchange Reserves (end May) 398.68 Unemployment (May) 4.27% Overnight Interest Rate (July 4) 0.371% Economic Growth Rate (2011 Q1)P 6.55% Change in Industrial Output y-on-y (May)p 7.82% Change in Industrial Output y-on-y (Jan.-May)p 11.66% Change in Consumer Price Index y-on-y (May) 1.66% Change in Consumer Price Index y-on-y (Jan.-May)p 1.36% Note:


p: preliminary

Year Earlier 10.33 10.41 33.73 360.12 5.32% 0.192% 13.59% 31.45% 39.99% 0.76% 1.19%



2010 Imports



2010 Exports

Taiwan life insurance unit, indicating that the US$2.2 billion sale is very likely to go through. The move put an end to an almosttwo-year saga that saw AIG frequently obstructed by Taiwan regulators in its efforts to sell Nan Shan in order to drum up cash to repay a massive U.S. government bailout from the time of the financial crisis. AIG’s first attempt at selling Nan Shan – to a Hong Kong-based consortium – was rejected on the grounds that the group was backed by mainland funds and linked to politicians in Beijing. The FSC said Ruen Chen had agreed to put an extra NT$3.2 billion (US$110 million) into a custody account, in addition to the NT$36 billion in cash and assets the consortium had previously agreed to place in the account.

144.1 154.1


15.4 15.9



119.7 131.9



19.8 9.8









62.9 22.9




12.3 13.7

Corning, the U.S. specialty glass-making giant, in mid-June opened an advanced technology center in the Neihu Technology Park in Taipei aimed at providing design and development support for its customers in the consumer electronics industry, such as computers and smartphones. One of the world’s leading suppliers of glass substrate for liquid crystal display flat panels, Corning said that the center’s technical experts would also focus on developing cutting-edge applications where Corning glass technologies can play a critical


13.7 18.1



11.9 14.4


role. “Extensive resources such as glass characterization, product analysis, prototyping and systemlevel testing will be offered,” said Jean-Pierre Mazeau, senior vice president of Corning Science and Technology. “Through these services, as well as ongoing glass technology and training, we can help develop solutions to our customer’s most pressing product development challenges.” The company, whose latest breakthrough product is scratch-free Gorilla Glass, reported 2010 revenue of US$1.92 billion.


Research Center says is running neck and neck with Ma in opinion polls, will announce a running mate at the end of August.




Unit: US$BN Source: BOFT

NESTLÉ TO BUY 60% OF TAIWAN SNACK FIRM Nestlé, the world’s largest food company, agreed to buy 60% of Hsu Fu Chi International, a mainland-based snack and candy maker, for 2.07 billion Singaporean dollars (about US$1.7 billion), Reuters reported. The company founders, the Hsu family from Taiwan, will own 40% after the acquisition. The move amounts to the Swiss food maker’s largest purchase in China. Nestle’s intention to use Hsu Fu’s distribution system for its other products could greatly help the multinational brand penetrate China’s mass markets. Hsu Fu Chi, founded in 1992 by four brothers from Taiwan, has four factories and 16,000 employees in China.

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Issue s

Lessons from the Plasticizer Scare Better preparation, communication, and coordination could improve the situation the next time an incident occurs.


aiwan’s biggest-ever food scare began when government inspectors testing beverages discovered dangerous levels of industrial plasticizer DEHP in mid-May. In the following weeks, various plasticizers were found in a range of food and drinks. The crisis that flooded the local media throughout most of June went firmly international, with China, Hong Kong, Korea, and the Philippines withdrawing Taiwanese products from supermarket shelves, severely impacting Taiwan’s image as a reliable exporter of foods and beverages. It also created widespread public concern domestically, causing a dramatic slump in food and beverage sales. Members of AmCham’s Retail Committee believe that much of this panic and accompanying loss of business could have been averted with stronger, faster, and more effective government action utilizing a science-based approach to food safety. It was a full nine days after the discovery that DEHP was being used by upstream ingredient suppliers Yu Shen and Pin Han Perfumery to save costs from more expensive palm oil before the government announced May 28 that it would ban sales in five categories of food (including sports drinks, teas, and jams) unless they had been tested and certified to be free of plasticizers. In addition, the lack of clear communication from the government allowed the media to take center stage in supplying information – not always accurately – to the public. “I saw a report on a local TV news channel that DEHP could be responsible for Taiwanese boys having shorter penises. This is not science-based,” notes a multinational food company executive. The public would have been better served, he suggests, if high-level government officials had “stood up at the first moment, perhaps accompanied by scientists, to offer the scientific facts.” The consumer panic put enormous pressure on retailers, who frequently insisted that food companies test their entire range of products – not just those in the five suspect categories, and even including imports – by a certain date or else face having their products pulled off the shelves. Then as inspectors searched almost 40,000 outlets by June 15, ordering 28,153 items removed from the shelves, problems in coordination between central and local government levels meant that many items were recalled in error. The rush to complete testing by the deadlines placed a heavy burden on Taiwan’s limited number of testing laboratories. Crisis management, Committee members stress, is important but should only come up as a last resort. They urge the government to allocate more resources to food safety and to devise a long-term blueprint covering such aspects as consumer education

塑化劑恐慌的教訓 加強準備、溝通和協調,下次意外發生 時,情況就可改善。

灣歷來最大宗的食品恐慌風暴,始於5月 中旬政府查驗人員檢測飲料,發現工業 用塑化劑DEHP含量達到危險等級。接下 來的數週,在許多食品和飲料中發現不同的塑化 劑。大半個6月台灣新聞媒體都在密集報導這場 危機,後來更延燒到國際,中國、香港、南韓 和菲律賓將台灣產品自超市下架,對台灣出口的 食品、飲料品質形象造成嚴重衝擊。這也引發台 灣本地民眾的廣泛憂慮,造成食品和飲料銷售銳 減。 台北市美國商會零售委員會的委員認為,若 政府利用有科學根據的方法,針對食品安全採取 更堅定、迅速和有效的行動,這波恐慌和伴隨而 來的生意損失其實大多可以避免。在發現上游原 料供應商昱伸和賓漢香料公司為了省下較昂貴的 棕櫚油成本而使用DEHP的整整9天後,台灣政府 在5月28日宣布,除非產品經過檢測,證實不含 塑化劑,否則禁止販售5大類食品(包括運動飲 料、茶飲和果醬)。 此外,缺乏來自政府的明確溝通,讓媒體成為 向公眾提供資訊(未必全部正確)的主要焦點。 一位跨國食品公司高層主管指出:「我在本地一 個電視新聞頻道上看到報導說,DEHP可能是台 灣男童生殖器較短的原因。這並無科學根據。」 他表示,若政府高層官員「在第一時間站出來, 或許由科學家陪同,提供科學事實」,民眾能即 時獲得正確資訊。 消費者恐慌對零售通路業者構成龐大壓力, 業者反覆強調,食品公司必須在某個日期前檢測 旗下所有產品—不光是5大類產品,甚至還包括 進口商品—否則就面臨產品下架。接著當檢查人 員在6月15日前搜查將近4萬家零售通路,勒令 28,153項商品下架之後,中央和地方政府之間溝 通協調不足,意味許多商品都被錯誤召回。在期 限前倉促完成檢驗,對台灣數量有限的檢測實驗 室也構成沉重負擔。 美國商會零售委員會強調,危機管理很重要, 但應該只當作最後的手段。委員們敦促台灣政府 投入更多資源維護食品安全,並規劃涵蓋消費者 教育和加強食品成份來源追蹤技術等面向的長期 方案。此外,制定符合世界衛生組織之類國際標 準的明確食品安全規範,台灣政府就能更容易向 民眾釐清安全添加物的含量。 業者也要求台灣政府,在食品安全議題上和業 界更密切合作。一位企業高層舉例,立法院經常 根據並無商業經驗的科學家建議就通過法律,並 未諮詢製造商、零售通路或消費者等利益相關者 的意見。這位企業高層表示:「結果就是,新規 範若非窒礙難行,就是實際上毫無效力可言。」


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Issues and the adoption of ingredient traceability technology. In addition, by setting clear food-safety regulations aligned with international standards, such as that of the World Health Organization, the government can more easily clarify to the public the levels of additives that are deemed safe for consumers. Companies also request that the government cooperate more closely with industry on food-safety issues. For example, said one executive, the Legislative Yuan often passes laws based on the advice of scientists with no commercial experience and without consulting stakeholders such as manufactures, retailers, or consumers. “The result,” he said, “is that new regulations are either hard to execute or have little effect in reality.” —– By Jane Rickards

Good Communication on Drug Quality The government will not require makers of originator drugs to participate in a program aimed at generics.


n a successful example of dialogue between industry and government, the Department of Health’s Bureau of National Health Insurance (BNHI) this month clarified that researchbased pharmaceutical manufacturers will not be subjected to provisions of a Drug Quality Promotion Scheme initially aimed only at makers of generic products. The Scheme, announced in October 2009, was originally designed to encourage generics companies to accelerate efforts to raise their quality standards by enabling those who met certain conditions to receive higher reimbursement prices as an incentive. Last year, however, BNHI indicated that the program would be expanded to include producers of innovative medicines as well. The Bureau also considered that on-site inspections of manufacturing plants would be needed to prove that the facilities met the required certification, known as PIC/S GMP. In addition, the originator manufacturers would need to provide the Taiwan Food & Drug Administration (TFDA) with a detailed dossier (a Drug Master File or “DMF”) with data on all their active ingredients. Failure to participate in the Scheme would mean lower reimbursement prices for the originator medicines, as they would lose their status as a price standard and be reclassified into a price group together with those generics that have not yet complied with PIC/S GMP and DMF standards. But the AmCham Taipei Pharmaceutical Committee, together with other international industry organizations, made a strong case that the proposed policy was unreasonable. Among the arguments: • Increasing the reimbursement price of generics creates unfair


充分溝通,釐清用藥 品質規範 灣政府不會要求原開發廠藥品製造商加 入一項針對學名藥的方案。

政院衛生署中央健康保險局本月澄清, 開發性製藥廠將不適用原本只針對學名 藥製造商所設之「全民健康保險提升民 眾用藥品質方案」條款規定。這是業界和政府之 間成功對話的一個例子。 2009年10月宣布的這項方案,旨在提供誘 因,給達到某些條件的業者較高的健保給付藥 價,以鼓勵學名藥廠加速提升品質標準。不過去 年健保局指出,這項方案也將擴及涵蓋開發性製 藥廠。健保局也考慮必須進行藥廠實地檢察,以 證明製造設施達到「國際醫藥品稽查協約組織藥 品優良製造規範(PIC/S GMP)」要求的核證。 此外,開發性製藥廠也必須將所有藥品有效成 分資料的詳細檔案(即藥品主檔案/Drug Master F i l e,簡稱D M F),提供給台灣食品藥物管理 局。 未加入這項方案,就意味原開發廠藥品只能獲 得較低的健保給付藥價,因為這些藥喪失作為藥 價標準的資格,會被重新歸類,和尚未達到PIC/S GMP要求和DMF標準的學名藥落入同一組給付價 格。 不過台北市美國商會製藥委員會與其它國際業 界組織認為這項政策不合理,也一同提出了反對 的確切理由,包括: • 提高學名藥給付價格,會製造不公平的市 場競爭,甚至可能迫使在兩年一度藥價調 整中被大砍給付價格的原開發廠藥品退出

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Issue s

market competition that might even force originators – whose prices have been slashed during biennial price cuts – to withdraw from the market. • Research-based manufacturers have already been proving to the TFDA, or are preparing to do so before the announced December 2014 deadline, that they meet or exceed PIC/S GMP standards by submitting documentation from the country of manufacture. • Requiring “on-site inspections” of production facilities by the BNHI would thus be redundant. It would also be discriminatory against makers of innovative drugs, whose factories are all located abroad. TFDA would charge US$35,700 per audit, causing those companies to incur substantial unnecessary costs, and it would take years to complete, as hundreds of sites would be involved, whereas TFDA has resources to conduct only 30 inspections a year. • Reformatting data to submit a Taiwan-specific DMF file would be a further burden – and would also be redundant as most of the information would have been submitted previously, albeit in a different format. After reviewing the situation, BNHI provided assurances that the Scheme would in fact be limited to generics products only. “It is encouraging that BNHI listens and takes our recommendations based on clear rationales,” says David Lin, co-chair of the Pharmaceutical Committee. Some progress was also achieved on a related issue. As a result of the incentives provided under the Scheme, numerous cases have been identified of generic drugs that actually receive higher reimbursement prices than the original. In most markets, generics are valued for their low prices, helping to contain healthcare costs. The “only in Taiwan” phenomenon of high generics prices is generally attributed to the lack of an indigenous industry for innovative drugs. For the government, promoting the pharmaceutical industry thus equals developing the generics sector. In the rules it is adopting for its upcoming 7th Price Volume Survey and subsequent price adjustments, however, BNHI has made known that generics prices will be set at lower than or equal to – but definitely not higher than – the prices of the original drugs. —By Don Shapiro

Harsh Legislation or Self-Regulation The cosmetics industry views a proposed “corrective advertising” law as unreasonably vague and possibly unconstitutional.


hen the Legislative Yuan (LY) returns from its summer recess in September, it is expected to take up a series of bills initiated by the Department of Health’s Food & Drug Administration (TFDA) and aimed at advertisers of food items, drugs, medical devices, and cosmetics who are deemed guilty of “serious violations” by including false or misleading content

市場。 • 開發性製藥廠已向食品藥物管理局提出證 明,或準備在2014年12月截止期限前,提 交來自生產國的相關文件,證明他們達到 或超越PIC/S GMP標準。 • 因此健保局要求「實地檢察」藥廠生產設 施,可能是多此一舉。同時也是歧視廠址 全都在海外的原創藥製造商。食品藥物管 理局每次稽查收取35,700美元費用,使這 些業者蒙受鉅額之非必要成本,且需耗時 數年才能完成。查核涉及數百處場所,但 食品藥物管理局每年只能進行30次檢查。 • 為了繳交能滿足台灣官方要求的DMF檔案 去重新整理資料格式,只會帶給藥廠更多 負擔,而且也是多餘之舉,因為藥廠過去 已經檢附多數資料,只是格式不同。 健保局在檢討情況後提出保證,表示這項方案 其實只限於學名藥產品。美國商會製藥委員會共 同主席林達宗說:「我們很樂見健保局聆聽並且 接受了我們論據充分的建言。」 另一個相關議題也有所進展。由於提升民眾用 藥品質方案提供的獎勵措施,許多被鑑定為學名 藥的個案獲得比原來更高的給付藥價。在多數市 場,學名藥的價值在於其較低廉的價格有助於控 制健保成本。如今學名藥給付價格攀高的現象可 說是「台灣僅見」,一般認為是因為台灣本土缺 乏擅長研發的原創藥產業。台灣政府似乎把「促 進製藥業發展」與「發展學名藥產業」之間劃上 等號。 不過,對於即將進行的第七次藥價調查和後續 藥價調整之相關規則,健保局已表明學名藥價格 將會低於或等於(肯定不會高於)原廠藥價格。


嚴苛立法或自我規範 化妝品業者認為,有關單位提出的「更 正廣告」相關修正草案,規範模糊,極 不合理,甚至可能違憲。

立法院結束暑期休會,9月恢復開議時, 預料會開始審理行政院衛生署食品藥物 管理局提出的一系列法案。這些法案針 對廣告中含有不實宣稱或誤導內容,而被視為 「違反情節重大」的食品、藥品、醫療器材和化 妝品。新法要求違規業者刊播「更正廣告」,糾

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Issues in their ads. The new legislation would require those companies to publish “corrective advertising” rectifying the alleged erroneous information as well as to cease sale, distribution, and display of the products or services involved. In May, prior to the recess, the proposed revisions affecting food, pharmaceuticals, and medical devices passed review by the relevant legislative committee, and they will be on the LY’s agenda when it reconvenes. In the face of industry objections coming from such organizations as the Taipei Cosmetics Industries Association and AmCham’s Retail Committee, however, the proposed revision to the Cosmetics Law failed to receive LY committee approval. The bill was returned to the Executive Yuan, which in turn requested TFDA to give the matter further consideration. Perhaps with some rewording, the bill is expected to be resubmitted in the upcoming LY session, as TFDA has already notified the Cosmetics Industry Association that it regards the legislation as necessary and proper. The agency views the proposed measures in the bill as a reasonable trade-off for its plan to end the current system of pre-market censorship of cosmetics advertising. But industry organizations, for their part, plan to continue their opposition. They note that no other major country has enacted corrective advertising laws, and say that is for good reason – such legislation would violate constitutional guarantees of free speech. Regulators have the right to punish infractions through fines or other penalties, they maintain, but not to tell offenders what to say. Ordering the termination of sales and distribution, in addition, is an extremely harsh penalty. Another concern is the vagueness surrounding the proposed system. What exactly would constitute a “serious violation,” for example? And do bureaucrats have the expertise to make accurate, reliable, and objective determinations of the truth or falsehood of an advertising statement? The “heavy-handed and very vague administrative power” created by the law – combined with the existing arbitrary nature of censorship decisions as well as the inconsistencies by and among censorship agencies – “give the industry shivers when facing these undefined concepts,” says an AmCham Retail Committee member. He adds that passage of the law will potentially discouraging businesses from committing more resources to this market. As an alternative to passage of this bill, the Retail Committee’s cosmetics subcommittee suggests that Taiwan follow the wellestablished practice in many major markets – including the United States, Europe, Japan, Korea, and Hong Kong – of relying on industry self-regulation of advertising. Among the best-known examples is the National Advertising Division (NAD) of the New Yorkbased Council of Better Business Bureaus, which has developed professional expertise in advertising review and has a longstanding reputation for fair and effective settlement of disputes. AmCham member companies that have participated in such organizations in other markets have offered to share their experience with TFDA in order to work out a system for Taiwan that would best serve the interests of consumers, regulators, and industry.

正被指為錯誤的資 訊,並停止販賣、 供應或陳列相關產 品或服務。 在立院休會前,食 品藥物管理局針對食 品、藥品和醫療器材 所提出的修正草案, 已在5月通過立院相關 委員會的審查;立法 院恢復開議後,這些法 案將列入議程。不過, 「化妝品衛生管理條 例」的修法 提案,在面臨來自台北 市化粧品商業同業公會和台北市美國商會零售委 員會等組織的業界反對聲浪下,未能獲得立法院 委員會核准。法案被退回行政院,行政院因而要 求食品藥物管理局再研議。 預料這項法案可能在經過修改部分措詞後,在 立法院即將展開的議期中再度提出,因為食品藥 物管理局已向化粧品同業公會表達立場,認為這 項立法必要且適當。食品藥物管理局將法案中的 提議措施,視為其計畫終止現行化妝品廣告事前 審查機制的合理替代。 不過對業界組織而言,他們打算繼續提出反 對。他們指出,其他主要國家均未制定更正廣告 法律;這些組織表示,這種作法有充分理由,因 為更正廣告法律可能侵犯憲法對言論自由的保 障。業界組織認為,主管當局雖有權透過罰款或 其它罰則懲罰違規行為,卻不宜告訴違法者該說 些什麼。此外,勒令停止販賣、供應,是極度嚴 苛的處罰。 另一個引發關切的問題是當局提出的制度規 定模糊不清。例如究竟怎樣會構成「違反情節重 大」?針對廣告內容的真偽,官員是否擁有能做 出正確、可靠和客觀決定的專門知識?美國商會 零售委員會的一位委員表示,新法所創造出「嚴 厲卻非常模糊的行政權力」,加上審查決策機制 的武斷、不同審查單位看法的差異,難免讓業者 提心吊膽,無所適從,不敢投入更多資源深耕台 灣市場。 美國商會零售委員會化妝品小組委員會建議, 與其通過這項法案,台灣不如追隨包括美國、 歐洲、日本、南韓和香港在內的許多主要市場 已廣為接受的作法,仰賴業界自我規範廣告。 最廣為人知的例子之一,就是總部位於紐約的 「優良企業行為協會(Council of Better Business Bureaus)」全國廣告部(National Advertising D i v i s i o n),已發展出廣告審查的專業知識技 術,長久以來享有能公正有效排解爭端的美譽。 已在其它市場加入類似組織的美國商會會員企 業表示,願和食品藥物管理局分享他們的經驗, 為台灣找出一個最能滿足消費者權益、主管機關 規範和業界發展需求的制度。

—By Don Shapiro



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new taipei city

Putting New Taipei City on the Map 發現新北市


he high cost of real estate in Taipei city has long caused many businesses and would-be home owners to look at alternative locations in suburban areas, but they were often deterred by inconvenient transportation links and the inferior educational and healthcare facilities in Taipei County. The recent elevation of the county to the status of special municipality under the name New Taipei City will mean more budgetary resources for investment in infrastructure improvements, however. The metropolitan MRT system is undergoing substantial expansion, and both the city government and private sector have major development projects in the works. As a result, New Taipei City is expected to continue to be one of the fastest growing places on the island.

台 北市房地產價格持續高漲,辦公、居住成本日益增 加,迫使許多公司與有意購屋者往台北市郊發展。 過去,礙於交通不便、教育資源有限、醫療設施不足, 台北縣總讓人怯步。但隨著台北縣升格為直轄市,改名 新北市後,用在基礎建設的經費也會隨之增加。情況將 有所改變。最明顯的是,捷運不斷延伸、擴建。新北市 政府與民間單位都在推動大型開發案。不難看出,新北 市仍將是台灣成長最快的地區之一。 BY JANE RICKARDS ph o to :c ra ig f ergus on

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Cover Story


ffering sweeping views of the Pacific Ocean and emerald bamboo forests, Vantone Taipei 2011, a collection of holiday apartment buildings currently under construction on a mountain in the Danshui district of New Taipei City, is tailor-made for China’s moneyed classes and forms the first-ever substantial Chinese property investment in Taiwan. When completed in three years’ time, the 29,734 square-meter site will feature elegant multi-storied buildings with one household per floor, giving owners a 360-degree bird’s-eye view of Taipei 101, Danshui’s coastline, and other landmarks. “They are among the best views in Taiwan,” says Tony Chao, managing director of real estate firm Jones Lang LaSalle. “It’s a good area to escape the cold, especially for people who normally live in northern China during wintertime.” The company in charge is Vantone International Development Co., a whollyowned subsidiary of Singapore-based Vantone Capital, which is invested in by Beijing Vantone Real Estate group and others. A private Taiwanese developer is also involved, says Chao. The project, which the government approved in April, aims at providing vacation homes for Chinese visitors, who under recently

revised regulations are now permitted to stay in Taiwan for up to four months a year. Vantone Taipei 2011's website offers information only in simplified Chinese characters and gives offices in Shanghai and Beijing as contact points. New Taipei City, which came into existence at the end of last year as an upgraded version of the former Taipei County, is the first place in Taiwan to be targeted by significant Chinese investment, reflecting the vibes surrounding the city as a place of high potential. Forming a ring around the capital city of Taipei, New Taipei City has always been a latent force to be reckoned with. Its area of 2,052 square kilometers is eight times the size of Taipei, and its population of nearly four million people includes talented employees who represent one-sixth of Taiwan’s overall workforce, 43% with university qualifications. Close to the nation’s financial and political heart in Taipei, but with cheap and plentiful supplies of land, the city is home to 248,000 registered businesses (18.5% of Taiwan’s total) and more than 20,000 factories. Nearly all the island’s key industries – including electronics, biotechnology, pharmaceuticals, chemical materials, and optics – are present. Two of Taiwan’s biggest multinational companies – Acer and Hon Hai Precision Instruments – are headquartered there.

北市淡水小坪頂山區大興土木,忙著打造高級 度假豪宅「萬通台北2011」。它坐擁一望無 際的太平洋,四周碧綠竹林環繞。「萬通台北 2011」是專為中國富豪量身打造的頂級別墅。萬通地產 也成為第一家在台灣投資的中國地產開發商。 「萬通台北2011」佔地29,734平方公尺,預定三年 內完工。頂級公寓大樓造型優雅,標榜一層一戶,提供 360度全視野。台北101、淡水海景、著名地標等,盡 收眼簾。「這裡有全台灣最棒的美景」,房地產投資管 理公司仲量聯行總經理趙正義說。「對冬天住在中國北 方的人來說,到這裡過冬再好不過了。」 北京萬通地產透過在新加坡成立的Vantone Capital, 轉投資到台灣成立全資子公司「萬通國際開發公司」 (Vantone International Development Co.),再由「萬通國際 開發公司」負責「萬通台北2011」建案。趙正義表示, 共同參與的還有一家台灣私人開發商。這項建案四月才 獲得政府批准,銷售對象以來台度長假的中國觀光客為 主。依據新修訂的法律,中國觀光客來台一年最長可停 留四個月。「萬通台北2011」的官網只有簡體字版,也 僅公開上海、北京辦公室的聯絡方式。 去年底,原來的台北縣升格成為新北市。它潛力無


Until recently, development of the area was held back somewhat by its status as a county, which meant that it received limited funding from the central government compared with jurisdictions such as Taipei. But that changed in December, when Taipei County was formally elevated to the rank of a special municipality on the same level as Taipei and Kaohsiung. The challenge now is to make the best use of the expanded budget to improve the poor public transport and infrastructure that is the legacy of past limited funding, boost tourism (see the accompanying story), and in general transform the city’s positioning from a “bedroom” satellite of Taipei (over one million people live in New Taipei City but work in Taipei) into an independent and culturally vibrant city. Already the property market is responding. As Taipei land prices surge and New Taipei City transport links improve, local developers and home buyers have shifted their focus to this area, which last year saw the greatest surge in property prices in Taiwan – rising 20% on average, compared with 17% in Taipei, according to Tony Chao. In material prepared for TOPICS, the Taiwan branch of real estate firm CB Richard Ellis says local developers last year spent NT$51.4 billion (US$1.77 billion) on purchasing land parcels in

窮,在台灣所有的城市中,最先得到大規模中國地產公 司青睞。新北市像個戒指般環繞首都台北市,但它一 直難有機會展現真正實力。新北市面積達2,052平方公 里,是八個台北市的大小;人口近四百萬,勞動人口佔 台灣總勞動力的六分之一,素質優秀,其中43%有大學 學歷。新北市距台灣的金融、政治中心-台北-不遠, 但地價相對便宜,可利用的土地亦多。在新北市登記有 案的公司達248,000家(佔台灣總數的18.5%),2萬多家 工廠都設在這兒。可以說,台灣的主要產業這裡都有, 包括電子、生物科技、製藥、化學材料、光學等。台灣 規模最大的跨國企業中,有兩家-宏碁、鴻海-將總部 設在新北市。 事實上,新北市的發展一直到最近才上來。過去, 礙於「縣」的行政地位,台北縣分發到的中央補助款有 限,無法與台北市等屬於直轄市級的城市相比,發展也 因此受限。不過,去年十二月,情況改變了。台北縣正 式升格,與台北、高雄一樣,都屬於直轄市。 新北市當務之急是善用新增的預算,大力整頓過去受 限於經費不足而落後的交通系統與基礎建設、振興觀光 業(請參見本期故事)。整體而言,新北市必須走出老 被認為是台北市「臥室」的衛星城市形象(一百多萬人

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New Taipei City

photo :far eastern group

New Taipei City. The most-sought-after locations are along or close to MRT lines. Traditionally Taipei was the preferred location for property investment by the financial and other service industries, CBRE adds. But the surge in commercialproperty prices in Taipei by more than 50% over the last three years, coming amid stagnant growth in office rental income, has caused investment yields to dive from around 4.5% to less than 3%, driving investors away. New Taipei City property investments have looked more attractive, even with the luxury tax introduced June 1 by the central government. While no site in New Taipei City has yet reached the price of over NT$1 million per ping found in upmarket Taipei neighborhoods, the Xinzhuang district, which will see partial completion of an MRT line by next year, has seen the greatest increase in property prices – by 32% year-on-year for the first quarter of 2011. Chao says current prices of NT$700,000$800,000 per ping in Xinzhuang are a bubble that will soon be corrected, with rates leveling to around NT$600,000 per

ping, the price of property in the New Banqiao special district (known in real estate circles as the “new Xinyi District” due to its modern buildings). CBRE says home prices in the nearly 50-hectare special district escalated more than 40% in the last five years, and the area constitutes a regional transport hub due to the confluence of High Speed Rail, MRT and railway stations, along with bus terminals. “Superb amenities” are also planned for the district, says CBRE, such as a Super Dome sports stadium, five-star hotels, and grade-A office buildings. In addition, the Far Eastern Group is investing NT$6.5 billion (US$224 million) to build a trendy department store complex, due to open in October, in the special district. It will accommodate 12 designer brands, including YSL, Gucci, and Bottega Veneta, making them available in New Taipei City for the first time, says Sophia Yiin, assistant vice president of the Far Eastern Resources Development Company’s development and operations department. Jones Lang LaSalle and CBRE say

住在新北市,每天前往台北市工作),蛻變成真正獨 立、充滿文化活力的城市。 台北縣升格,新北市房地產市場很快有了回應。趙正 義指出,台北市地價飆漲,漲幅驚人;另一方面,新北 市交通建設大幅改善。一推一拉,建商、有意購屋者開 始將目光轉向新北市。去年,台灣房地產漲幅最高的區 域就是新北市-平均漲幅達20%,高於台北市的17%。 世邦魏理仕有限公司台灣分公司為Topics雜誌準備的資 料顯示,去年建商光是在新北市購買建築用地就花了新 台幣514億元(約17.7億美元),大家競相爭逐的地點清 一色都在捷運沿線或捷運附近。 世邦魏理仕有限公司還提到,傳統上,金融等服務業 都偏好在台北市投資房地產。過去三年來,台北市商業 用地地價漲了50%以上,但辦公室租金不見起色,投資 報酬率由原本的4.5%左右一直下跌,現在連3%都不到。 這情況嚇跑了不少投資人。因此,就算中央政府六月一 號開徵奢侈稅,新北市的房地產價格還是顯得相當誘 人。 目前,新北市還沒喊出像台北市高檔地段每坪新台幣 100萬的價格。但是,地價已蓄勢待發。新莊區捷運明 年部份完工,地價已先應聲上漲,2011年第一季比去年

that numerous multinationals, along with domestic high-tech and financial services companies, have recently been inquiring about office space in New Taipei City. And those who have already set up there seem happy with the decision. “Reasonable rents and excellent transportation via the MRT make [Banqiao] a very convenient location for our operations,” says Lee Wood, managing director of the Taiwan branch of HSBC Life (International), based in Banqiao. “Overall, it seems that New Taipei City is up and coming.”

Not so distant For ordinary home buyers, portions of New Taipei City are still affordable, says Chao of Jones Lang LaSalle, with property in such districts as Danshui, Linkou, and Tucheng still available for under NT$200,000 per ping. “If you look at the distances involved, it’s really like living in Taipei,” he says. A l l e n Yu a n , g e n e r a l m a n a g e r o f Linkou-based Bourns Electronics (Taiwan), a maker of high-end electronic

同期漲了32%,漲幅最大。趙正義表示,新莊目前開出 每坪新台幣70萬元到80萬元,但這價格明顯是泡沫了, 很快就會修正。合理價位每坪應該在新台幣60萬元上 下,和新板特區(因為現代化的大樓林立,房仲業都稱 之為「新信義計劃區」)差不多。 世邦魏理仕有限公司指出,五年來,佔地近50公頃的 新板特區房價飆升超過40%。高鐵、捷運、台鐵三鐵共 構,再加上公車往來頻繁,交通四通八達。新板特區儼 然已成為地區性的交通樞紐。世邦魏理仕有限公司說, 現在這塊區域還計劃打造「超優質生活圈」,包括超 級巨蛋體育館、五星級飯店、A級辦公大樓等。除此之 外,遠東集團也斥資新台幣65億元(相當於2億2千4百 萬美元),在新板特區興建一高檔精品百貨公司,預計 十月開幕。遠東資源開發股份有限公司開發管理部協理 尹淑芬說,百貨將網羅聖羅蘭、古奇、Bottega Venetia 等十二個大師級設計品牌,這對新北市是第一次。 仲量聯行、世邦魏理仕都指出,好幾家跨國公司、本 地高科技及金融服務公司最近紛紛開始在新北市找地。 至於已經進駐新北市的企業,看起來都很滿意及早下了 這個決定。「租金合理,有捷運,交通四通八達。板橋 對我們來說,真是再方便不過」,總部位於板橋的匯豐

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MRT ROUTE PLAN—Expansion of the transportation network by means of the San Huan San Xian is considered to be the linchpin in New Taipei City’s development program. photo : courtesy of new taipei city government

components, marvels at the perception of Linkou’s remoteness versus actual transport time. It seems like the boondocks, he says, but actually Linkou is only 25 minutes away from central Taipei by car. The Taiwan subsidiary was set up in

1986 on 120,382 square meters of land in an industrial park that is now showing its age. But Yuan considers it to be a good location and regards Linkou as having great growth potential. Transportation can be a major head-

人壽保險國際有限公司台灣分公司總經理伍德力說,「 看樣子,新北市追上來了。」

沒那麼遠 仲量聯行總經理趙正義表示,對一般自用屋買主而 言,新北市依舊有些地區房價較讓人負擔得起,淡水、 林口、土城等地仍有每坪低於新台幣20萬元的物件。「 如果從距離來看,還是像住在台北市」,趙正義說。 台灣柏恩氏電子股份有限公司位於林口,是家專門生 產高科技電子零件的公司。台灣柏恩氏電子總經理袁台 生說,有意思的是,台北人往往覺得林口相當偏僻,可 是林口到台北市實際所需交通時間並不長。他說,林口 好像位在荒郊野外,但林口到台北市區開車只需短短25 分鐘。柏恩氏電子的台灣子公司成立於1986年,位在林 口工業區內,佔地120,382平方公尺。林口工業區現在 確實顯得老態龍鍾,可是袁台生認為林口地點好,成長 潛力無窮。 袁台生說,林口到板橋、台北、桃園的車並不多。對 沒車的人來說,交通確實讓人頭痛。還好,到2014年, 拜機場捷運通車之賜,林口的交通狀況應該也會跟著改 善。不過,袁台生補充說,林口還是需更多公車才行。


ache for those without a car, however, as there are only a few bus routes to Banqiao, Taipei, and Taoyuan, says Yuan. This situation may be alleviated with completion of the MRT line to the airport in 2014, he says, but more buses will still be needed. The water supply can also be a problem during periods of drought, Yuan adds, though Linkou’s location on a plateau diminishes concerns about flooding. In its 25-some years of operations, Bourns has never suffered any damage from earthquakes or typhoons. Because of those advantages, and also because it is halfway between Taipei city and the international airport, with good highway connections (a roughly 30-minute journey either way), logistics and distributions companies have shown interest in Linkou, says Tony Chao. Once public transportation connections improve, Yuan foresees Linkou’s cheap property prices as attracting large numbers of businesses and home buyers, in turn attracting investors in entertainment and shopping complexes. Whether in Linkou or elsewhere, new MRT links are therefore critical for New Taipei City’s development. Current plans call for constructing what are known as the San Huan San Xian – three circular and three linear MRT lines. New Taipei City mayor

除了交通問題,他也指出,枯水期水源供應不足也是林 口的一大問題。可是,另一方面,林口位在台地上,淹 水的機會相對減少。柏恩氏電子在台灣經營了25年,未 曾因為地震或颱風災害蒙受損失。這是林口的優點。趙 正義說,除此之外,林口位於台北市和桃園國際機場之 間,高速公路貫穿(無論到北上台北市或南下桃園國際 機場,約30分鐘就能抵達)。貨運、物流公司都對林口 表示興趣。 袁台生預見,等大眾運輸系統接通之後,林口便宜的 地價將使大量企業、購屋者湧現。緊接著,娛樂設施、 購物中心投資者也將跟進。事實上,新的捷運系統對整 個新北市的發展都很重要,在林口如此,在新北市其他 區域亦然。現在新北市的捷運計劃稱為三環三線-包含 三個環狀、三條輻射線狀的捷運線。新北市市長朱立倫 說,他的任期到2014年,他任內不可能完成整個三環三 線的建設。但到那個時候,所有捷運建設應該都已開工 進行了。屆時,繞二環北半部的新莊線和機場捷運都會 開始營運。 三環中的第一環是環中線加文湖線。文湖線行駛距離 達10.9公里,行駛範圍串連木柵動物園和北台北地區。 不過,要構成一個完整的圓,短時間內還辦不到。另 一段貫穿西南,由新店附近經板橋到五股,總長15.4公

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Eric Liluan Chu says that although it will be impossible to complete construction before the end of his term in 2014, work on all the lines should at least be well under way by then, with the Xinzhuang line – which forms the northern half of the second circular line – and the airport MRT already up and running. The first circular line, known as the Huanzhuang line, will include the 10.9-kilometer Wenhu line that runs from the Muzha zoo to northern Taipei. But it is not likely to form a complete circle very soon; another 15.4-kilometer segment on the southwestern side that runs from an area near Xindian through Banqiao to Wugu is not expected to be operational until 2016, while the two connecting sections are still in the planning stages. The second circular line, which includes the 19.7-kilometer Xinzhuang line in the north, is 90% complete, Chu says, while construction is scheduled to start in September on the southern 22.1-kilometer section known as the Wanda-Zhongho-Shulin line. The third “circular line” is not really a circle, but more like a V-shape, with the vertex at Taipei Main Station and the sides consisting of two winding routes, one connecting to the international airport in the

north and the other serving portions of Banqiao in the south. Work on extending the existing Banqiao line to the outer suburb of Dingpu is 60% complete, Chu says, and there are plans to extend it further to Yingge, with construction to start in 2014. Construction of the 51-kilometer airport link is said to be 70% complete. The linear routes, all still under planning, include extensions to the Danshui line, a Xizhi-Minsheng line that goes from Taipei through Nankang to Xizhi, and an Ankeng line that runs in a southwesterly direction away from Xindian. The New Taipei City government stresses that all lines still under planning remain subject to possible future reviews. Lo Chih-cheng, a Soochow University political science professor who is a Democratic Progressive Party candidate for the Legislative Yuan from Banqiao, sees it as a weakness for the New Taipei City government that it does not have its own MRT bureau, but concedes that Taiwan may not have enough specialized MRT talent to make that possible. Half the funding for New Taipei City’s MRT construction is coming from its own budget and half from the central government, but the systems are designed and built by the Taipei Rapid Transit Corp.

里,預計要到2016年才會完工。如何連接這兩段路線目 前仍處於計畫階段。 三環中的第二環由長19.7公里的新莊線組成。朱立倫 表示,新莊線90%已經完工;長22.1公里,繞行南邊的 萬大-中和-樹林線預訂九月開工。第三「環」不能算 是真正的「圓環」,反而比較像個「V」字型。由台北 火車站分出兩條線,其中一條由北邊連接桃園國際機 場;另一條從南邊將一部份的板橋連接起來。而將捷 運板橋線延伸至附近頂埔的工程已完成了60%,朱立倫 說。未來還計劃將之再延伸至鶯歌,工程預定在2014年 展開。至於長51公里的捷運機場線已完成70%。 三線目前還在規劃之中;它指捷運淡水線延伸線、由 台北經南港到汐止的汐止民生線、跑新店西南區的安坑 線。新北市政府強調,這三線都還在規劃,不排除視未 來狀況而變動的可能。 東吳大學政治系教授羅致政將代表民進黨出馬競選板 橋區立委。他認為,新北市沒有自己的捷運局是一大弱 點。但他也承認,台灣或許沒有足夠的捷運人才再組一 個捷運局。新北市捷運建設的預算一半來自新北市政府 本身,另一半由中央政府撥款。但整個新北市的捷運系 統都由台北大眾捷運股份有限公司(TRTC)負責規劃、興 建。台北捷運公司的董事會中,代表新北市的董事人數

(TRTC), which has few members on its board representing New Taipei City. As a result, Lo says, the corporation tends to prioritize MRT construction in Taipei. New Taipei City may be put at a further disadvantage by the central government’s fiscal deficit, he notes. Lo says the DPP agrees that completion of the Huanzhuang circular line should be the New Taipei City government’s top priority, as it will link other parts of New Taipei City with the seat of the municipal government in Banqiao without the current need to go through Taipei. This inter-linkage would help develop the local economies and also ease traffic congestion in Taipei. Meanwhile New Taipei City’s other transport advantages include the new Port of Taipei in Bali and the proximity to Keelung harbor.

Building a Golden Corridor One of Mayor Chu’s most ambitious plans is his “Golden Corridor” project, which seeks to work with the private sector and the central government to improve the scope and efficiency of local industry and help create industrial clusters. It is hoped that the program can help create at least 30,000 jobs per year.

很有限。羅致政指出,在這個情況下,台北捷運公司免 不了以台北市的捷運建設為優先,難免犧牲新北市。羅 致政還強調,中央政府預算赤字增加,對新北市的預算 也很不利。 羅致政說,民進黨認同興建環莊線是新北市政府的首 要之務。這條捷運線能將新北市各個地區與位在板橋的 新北市市政府連結起來。完工後便不必像現在一樣,必 須繞經大半個台北市才到得了板橋。這條連結新北市內 部的捷運線還能帶動地方產業,疏解台北交通。此外, 位在八里的台北新港,甚至不遠的基隆港,都是新北市 的交通優點。

打造產業黃金走廊 朱市長最重要的政策之一就是打造「產業黃金走 廊」。藉著與民間及中央政府合作,提升地方產業規模 與效率,創造群聚效應,期盼每年至少能創造3萬個就 業機會。新北市政府解釋,「產業黃金走廊」以國道一 號、國道三號、台64線構成「A」字型產業軸帶,台北 港自由貿易區也包含在「產業黃金走廊」內。朱立倫進 一步說,新北市與經濟部合作,針對五個老舊的工業 區,進行傳統工業區更新轉型、園區老舊設備現代化、

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Cover Story The Golden Corridor is an A-shaped industrial belt formed by Freeway No. 1 and Freeway No. 3, crossed by Expressway 64, the city government says, and includes the Port of Taipei’s free trade zone. With cooperation from the Ministry of Economic Affairs, Chu is refurbishing five old industrial parks, modernizing their infrastructure and establishing links with nearby academic institutions. One of these is the former Wugu Industrial Park, now renamed the New Taipei Industrial Park, which is only 10 minutes away from downtown Taipei but offers rents half the price of those within the


city, says Chu. There are also plans for a Xinzhuang Knowledge Park and a Greater Xizhi Trade Park. The latter has been strongly supported by President Ma Ying-jeou, who reportedly has pushed central government agencies such as the Industrial Development Bureau and the Ministry of Transportation and Communications to get involved. A large industrial cluster is already naturally forming in Xizhi, as it is home to 7,175 companies that have capitalization of at least NT$100 million (about US$3 million), the city government says. Among them

are Acer, Wistron, semiconductor distribution company Zenitron, and the sole Asian unit of Garmin, the global positioning company. The city government has already set up a promotion committee for the Xizhi Trade Park, and municipal officials met in March with local industry representatives to obtain their input for the drafting of a concrete development plan. Firststage priorities will be to improve traffic conditions, water and electricity supply, and basic infrastructure, the city government says, while over the longer term it will seek to collaborate with the Neihu

Visions and Challenges Eric Liluan Chu, the mayor of New Taipei City, previously served as Vice Premier in 2009-2010, Taoyuan County magistrate from 2001 to 2009, and member of the Legislative Yuan from 1998 to 2001. He holds a Ph.D. in accounting and MBA in finance from New York University and has taught at National Taiwan University and Baruch College of the City University of New York. He recently talked with TOPICS editor-in-chief Don Shapiro and staff writer Jane Rickards.

photo :courtesy of new taipei city government

Overall, what is your vision for New Taipei City in the next four years? Historically, during the Qing Dynasty and Japanese colonial era, the area covered by today’s New Taipei City and Taipei city was all Taipei County. After World War II when the ROC government came to Taiwan, the area was divided into Taipei County and Taipei City. Now Taipei County has been promoted to what we call New Taipei City, a directly controlled municipality by the central government. It covers a very diverse landscape. Much of New Taipei City is urban, but the surrounding mountainous and coastal areas are also within the city limits, so we need to take care of people not only in the metropolitan regions but also in the countryside. So what is the vision for New Taipei City? First of all, it is to enable our


metropolitan areas to compete with Taipei or to be even better than Taipei in the kind of lifestyle we can offer. After our upgrading to New Taipei City, our citizens are looking forward to a better life, even if they live in the countryside. Infrastructure is the first challenge, because for the past 50 years Taipei City basically received the most attention from the central government. For example, the mass transit system is mainly serving downtown Taipei. Even for other forms of infrastructure, we are still way behind. That is the reason why people felt that we needed to be promoted to a directly controlled municipality: to get more budget for infrastructure, starting with transportation infrastructure. That’s why we’re working so hard to plan the San Huan San Xian transit systems. They will form a network of circles and spokes linking all the districts in metropolitan Taipei together. Development of the surrounding river areas is also important. The Danshui River is so vital for this metropolis – and not just its right bank [Taipei City] but

also the left bank. I have the obligation to make the river not only clean but also beautiful. We want people to love the river and make the river part of their lives. Another part of the vision for New Taipei City is localization – so that people not only live here, but can also find jobs here, have their children educated here, and enjoy good care for their elderly parents. Before, children had to go to downtown Taipei to study to get a better education. Now I’m trying to improve the educational quality here, so that New Taipei City’s younger generation can study locally and won’t feel the need to go to downtown Taipei as their first choice. Before, the job opportunities were also mainly in downtown Taipei. But today, because it’s too crowded and too expensive downtown, more and more employers are choosing New Taipei City after doing a cost-benefit analysis. In Banqiao, Xinzhuang, Sanchung, and Zhonghe – as well as in Xindian and Xizhi – a lot of people are selecting New Taipei City as a place to open a business, whether it’s a store or factory or oper-

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Technology Park and Nankang Software Park to produce a cluster that can attract foreign-invested industries. The goal is to bring 2,300 businesses into Xizhi within four years, creating over 80,000 jobs. Chao of Jones Lang LaSalle points out that property values in Xizhi are still NT$200,000 to $300,000 per ping, whereas neighboring Nankang is four or five times more. Michael Ng, CEO of Amko Solara Lighting Co., says his company is very satisfied with its Xizhi location. The innovative R&D-intensive company specializes in energy-efficient lighting and smart control systems and

has customers in Europe and the United States, including Fortune 500 companies such as Coca Cola. Amko Solara started roughly six years ago in Taipei with 500 square meters of office space, before moving to Xizhi and expanding to the current total of 3,600 square meters. “Taipei is extremely expensive and we were very limited there in terms of space,” Ng says. The first step the company took in Xizhi was to tear down all walls and partitions to create a large open-plan office conductive to brainstorming. Other tech companies have since moved

into the building, producing a mini cluster effect. “It’s good to see what other people are doing,” Ng says. He touts Xizhi as a good place for budding entrepreneurs. Provided a private car is used, transport connections are excellent – for example, the Xinyi District is reachable in 15 minutes. Public transport, though, remains inadequate. In addition, both Ng and HSBC Life’s Wood mentioned a shortage of suitable restaurants in New Taipei City, although Wood says the situation seems to be getting better, especially in the area around the Banqiao special district.

ations center. We’ve been able to create a lot more job opportunities, so that people don’t have to travel to downtown Taipei to make a living. We will also build more hospitals and other healthcare facilities. The elderly should be able to get the help they need right here in the community instead of having to travel to other places. A final aspect to be mentioned is entertainment. New Taipei City already has many tourist attractions and shopping and recreational areas – and there will be more and more. We are inviting investors to build hotels and shopping malls, and we will renovate our tourist attraction areas, to increase the number of entertainment activities and events for our people. The goal is to make people feel that New Taipei City is a great place

to enjoy life.

London’s Millennium Bridge. The first one, in Xindian, will be finished by the end of the year. We’re planning another one for next year. I hope to complete at least three by the end of my term.

Could you elaborate on the plans to clean up the Danshui River? Before, the river was used mainly in the Danshui and Guandu areas. Now we’re seeking to build docks so that people can take cruises from Danshui to Taipei city, to Sanchung, to Banqiao, to Xinchuang – that’s my plan. The riverside will be decorated and landscaped into parks, and all the bridges will be remodeled and decorated. I want it to be like the Washington DC or New York area, where all the river banks form wonderful riverside parks and all the bridges have a special beauty. We have focused too little on our river. In addition, we’re building a series of bicycle and pedestrian bridges, just like

INSPECTION TRIP—With so many development projects under way, Mayor Chu often dons a hard hat to check on the latest progress.

What are the plans to get businesses to come here and create jobs? The first thing we have to do is try to have more land supply. There is a strong demand for science parks and wellequipped office buildings. That’s why we’re working on transforming some of our old industrial parks into modern science parks. What are your main current challenges? The first is the budget deficit for both central and local governments. The budgetary deficit problem of the central government means they cannot give us enough support as a directly controlled municipality. We cannot expect the kind of financial support that was provided to Taipei City previously. That’s the first problem. Another difficulty is managing the change from a county government to city government. It’s a totally new system for those civil servants. A county government can count on the local township and city governments to perform a lot of the needed services, but now everything has to be done directly by the New Taipei City government itself. Our personnel will have to change their attitudes, methods, and organization – everything. It’s a new system and a challenge for us.

photo : courtesy of new taipei city government

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Cover Story Besides the government-built facilities, the area also has privately developed industrial parks. The Far Eastern Group, founded in Banqiao 60 years ago, is developing the Taipei Far Eastern Telecom Park (Tpark) partially on the site of its old textile mills close to the Banqiao special district. In recent years, one of the group’s fastest growing companies has been Far EasTone, a leading mobile communications operator. According to Sophia Yiin, Group Chairman Douglas Hsu was motivated to launch the project by recognition that digital communications is becoming more and more important in modern life and from a conviction that Taiwan can be highly competitive in this field. Ericsson has already moved into the park, and it is expected that some other leading multinational companies will soon follow. In addition to telecom, Tpark is seeking to attract companies engaged in cloud computing, green energy, and other cutting-edge tech ventures. Designed by noted German

design company Atelier Dreseitl, the park offers one of most ecologically friendly environments in Taiwan. It also features sculptures of giant buttons in homage to the site’s history. In its analysis of how New Taipei City is developing, CBRE expresses bullishness about the plans for the new MRT links, but cautions that “we are not certain about the demand driver for the newly-developed technology parks in New Taipei City.” It notes that some are having difficulties attracting tenants in the face of competition from the parks in Neihu and Nankang. While the Neihu Technology Park has seen a 300% increase in land prices in the past three years, causing some high-tech companies to relocate to New Taipei City, CBRE points out, the flow has not been sufficient to absorb the available supply. In addition, the planned Beitou Shihlin Technology Park from the Taipei City government will constitute another direct competitor.

擴大與鄰近大學的產學合作。朱立倫說,五股工業區現 已改名為「新北產業園區」。從台北市區過來,車程只 要10分鐘,但是租金只需台北市的一半。 「新莊知識產業園區」、「大汐止經貿園區」也是「 產業黃金走廊」計劃的一部份。其中,「大汐止經貿園 區」特別受到馬英九總統青睞與支持。據說,馬總統要 求經濟部工業局、交通部等中央政府單位積極參與。事 實上,汐止早已形成一個大型產業聚落;登記資本額至 少新台幣1億元(約3百萬美元)以上的公司就有7,175 家,新北市政府說。宏碁、緯創、半導體零組件通路商 增你強等,都位在汐止。全球衛星導航公司Garmin在亞 洲的唯一的據點-台灣國際航電,也位在汐止。 新北市政府已設立「大汐止經貿園區推動委員會」。 新北市政府說,今年三月,市府官員與地方產業代表會 面,聽取地方代表對初步計畫的構想。第一階段的首要 之務就是大幅改善交通、水電等基礎設施。長期計劃則 將與內湖科學園區、南港軟體園區合作,形成產業聚 落,吸引外商。「大汐止經貿園區」的目標是在四年內 為汐止引進2,300家公司,創造8萬個以上的就業機會。 仲量聯行總經理趙正義指出,汐止房價現還維持在每 坪新台幣20萬元到30萬元之間,與比鄰的南港動輒高 出4或5倍的價格相比,仍屬便宜。勝方光電科技股份 有限公司執行長黃致豪說,很滿意汐止的地點。勝方光 電的主要產品是節能極光燈與智慧型電網監控系統,非 常著重研發與創新,客戶不乏可口可樂等名列《財星》 (Fortune)500大的企業。大約六年前,勝方光電在台北 市成立,當時辦公室面積只有500平方公尺。後來公司 搬到汐止,辦公室面積隨之擴大,現在總面積為3,600 平方公尺。「台北實在太貴了,能使用的空間也相當有


Implementing urban renewal Urban renewal is also seen as vital for developing New Taipei City, which has some of Taiwan’s ugliest housing and decrepit factories in old industrial areas. Tony Chao notes that this could become an important business in future, as 40-60% of the buildings are more than 20 years old. Deputy Mayor Hsu Shih-chien has been put in charge of an urban renewal team to try to increase the momentum for redevelopment. One of the challenges will be to deal with the resistance that urban renewal projects often encounter. In one recent case, Sanchung residents in July protested plans to tear down their houses to make way for the Danshui Manhattan Project being jointly promoted by the Taipei and New Taipei City governments, saying they were not given enough notice. Currently if owners of roughly 80% of the floor space in a building agree to an urban renewal project, the government

限」,黃致豪說。 勝方光電搬到汐止後,第一步就是打掉內部所有的牆 壁和隔間,創造有利大家集思廣義的開放式辦公環境。 在勝方光電之後,其他科技公司陸續進駐同一棟大樓, 產生了迷你群聚效應。黃致豪說:「能看到別人在做些 什麼,這樣很不錯。」他常向人推銷汐止之好,尤其適 合才起步的企業家。假如自己開車,交通完全不成問題 -15分鐘便可抵達信義區。只不過,汐止的大眾運輸系 統還不夠完善。交通之外,黃致豪和匯豐人壽總經理伍 德力不約而同指出,新北市像樣的餐廳不夠多。但是, 伍德力也認為,情況已有改善,在新板特區一帶已可找 到不少好餐廳。 除了政府的建設外,新北市也不乏由私人企業建設的 工業園區。六十年前,遠東集團由板橋起家。現在,它 在新板特區附近,遠東的舊紡織廠用地上,打造出台北 遠東通訊園區(Tpark)。近年來,遠東集團內成長最快的 就是在手機通訊業佔一席之地的遠傳。遠東資源開發公 司開發管理部協理尹淑芬表示,遠東集團董事長徐旭東 很早就看出,現代生活中數位通訊的角色益發重要;徐 旭東堅信,台灣在數位通訊這塊領域能夠有競爭力,他 因此決定打造台北遠東通訊園區。 愛立信已進駐台北遠東通訊園區。它認為,未來一 定會有更多跨國公司先後前來。台北遠東通訊園區不只 打算經營電訊產業而已,它還將努力吸引雲端運算、綠 能等高科技相關企業進駐園區。台北遠東通訊園區由知 名德國設計公司Atelier Dreseitl負責規劃,擁有全台灣最 強調綠色節能的辦公環境。園中還有好幾個大型鈕釦雕 塑,代表遠東集團不望曾在當地開創紡織事業的歷史。 世邦魏理仕有限公司分析新北市發展時表示,捷運線

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by law should force any holdouts to go along with the majority. But such cases are often considered politically sensitive, and according to media reports some non-government organizations are pushing to amend the law to offer more protection to the minority householders. Chao says more than 200 urban renewal projects in Taipei city are on a waiting list because one or several residents refuse to participate. “There are political constraints in Taiwan. Residents can find a city councilor and blame the government, so most projects are very slow,” he notes. Chao finds a more positive attitude toward urban regeneration in New Taipei City, but adds that in a democratic society, government must be respectful of the rights of all citizens. One potential weakness of New Taipei City is its dependency on good relations with Taipei, which for decades has enjoyed the most budget and political attention – and whose politicians are unlikely to

be enthusiastic about sharing resources with their neighboring city. In addition to Taipei’s involvement in New Taipei City MRT construction, Mayor Chu and Taipei Mayor Hau Lung-pin have come up with several joint development plans, such as the Danshui Manhattan Project (which combines financial and tech businesses with tourism along the Danshui River) and the Greater Taipei Golden Twin Cities plan (under which the two cities will jointly apply to host the 2019 Asian Games and also institute various cooperative policies to boost the cities’ economies). Such joint plans may be inevita ble, given that New Taipei City encircles Taipei, but it still may be a challenge for the two governments to work together successfully. Lo Chih-cheng notes that even if both mayors are from the same party, as is the case with Chu and Hau, cooperation might be difficult as they will both want to work in their own city’s interest to impress their voters. Another challenge for the new city

興建計畫對當地發展絕對有利,後市可期,但它也警 告,「我們不確定外界對新北市新科技園區的需求是否 有那麼多。」該公司不諱言,面對內湖科技園區、南港 科技園區的競爭,新北市有些科技園區在招攬公司前來 進駐上,遭遇不少困難。三年來,內湖科技園區的地價 漲了300%,迫使一些高科技公司遷往新北市。但世邦 魏理仕指出,新北市科技園區仍有供過於求的情形。另 外,台北市政府也將打造北投士林科技園區,直接挑戰 新北市的科技園區。

輔導都市更新 新北市住宅醜陋,工業區廠房破舊不堪,都市更新刻 不容緩,對新北市的發展至關重要。趙正義強調,新北 市的建築中,40%到60%屋齡都超過二十年,都市更新 可能帶來可觀商機。新北市副市長許志堅負責帶領一個 都市更新團隊,推動都市再發展的契機。 都市更新最常遇到的挑戰就是來自居民的抗拒。近期 案例之一是台北市、新北市政府共同推動的「淡水曼哈 頓計劃」。七月份,三重市民發動陳情,抗議政府為了 這項計劃,強行拆除他們的房屋,事前也沒有即時知會 有關住戶。目前,一棟建築內,若80%的住戶同意進行 都更計劃,政府有權要求反對的少數住戶順從多數,強 制拆遷。 只不過,這樣的情況在政治上總是相當敏感。根據媒 體報導,有些非政府組織已開始推動修法,要求給予反 對都更的少數住戶更多保障。趙正義說,台北市政府手 上有200多件都更計劃都因為一戶或多戶不願參加,只 好擱置。他還說:「在台灣,很多事情都會扯上政治,

will be to train public servants to handle the increased responsibilities that come with managing a special municipality. Before the upgrading, the various villages and townships within Taipei County enjoyed more autonomy in managing their own affairs. New Taipei City is a huge and diverse area, including crowded urban districts, rural areas, and fishing villages, but all will now be governed by a single city government rather than by their own communities. “The beauty of New Taipei City is its diversity, but this can be difficult to manage,” Lo says. For example, tasks that may be easy for Taipei to carry out, such as using standard garbage bags and having uniform garbage collection practices, maybe difficult for New Taipei City, where many people live in small communities in remote rural areas and may be accustomed to simply dumping their trash. Some villages in the past sponsored free shuttle buses for their communities, but in the name of standardiza-

很綁手綁腳。住戶往往去找議員想辦法,怪罪政府一 番。所以大多數計劃的進行速度很慢。」 趙正義發現,新北市對都更的態度較積極。但他也強 調,在一個民主社會,政府必須尊重所有公民的權利。 新北市必須維持與台北市之間的良好關係,是它一 大潛在弱點。數十年來,台北市獲得最多中央預算,在 政治上最受關注。台北市的政治人物對與新北市這個鄰 居分享資源並不熱衷。台北市除了參與新北市的捷運工 程建設外,新北市長朱立倫與台北市長郝龍斌更一同推 動數個合作開發計劃,例如「淡水曼哈頓」計劃(結合 金融、科技業與淡水河的觀光業)、「大台北黃金雙子 城」計劃(台北市與新北市將共同申辦2019年亞運;透 過共同決策兩市合作的模式,推動北北兩都成為經貿重 鎮)。 也許,共同決策兩市合作是免不了的。畢竟,新北 市將台北市團團包圍。但要兩個政府合作無間,挑戰不 小。羅致政指出,就算兩個市長同出於一個政黨,像朱 立倫和郝龍斌一樣 ,但為了選票,他們一定會先為自 己的市民著想。論及合作,難度還是很高。 新北市的另一挑戰是訓練公職人員,應付成為直轄 市後隨之增加的責任。升格前,台北縣的小鄉鎮在處 理地方事務上,享有較多自治權。升格後,情況有所改 變。新北市範圍廣,包含擁擠的都會區、鄉村、小漁村 等形形色色地方面貌。現在,這些地方全歸一個市政府 管轄,再也不像從前,自己管自己。「新北市就美在它 的多元化,但這對管理而言,會是個困難,」羅致政指 出。 有些政策在台北市較容易推動,到了新北市,難度 也許就變高了。舉例來說,台北市民必須使用台北市專

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Cover Story tion, the New Taipei City government has cancelled these services, Lo says, since other communities might complain that they don’t enjoy the same service. Some richer townships offered fellowships for their students and provided better care for elderly residents, but again in future all will need to be treated equally. Mayor Chu cites improving education and social welfare as key tasks that his administration will face. The city already

has 18 universities (containing 11 innovation incubators) and 17 vocational schools, and the city government stresses the presence of an educated workforce as one of the area’s main attractions for foreign investors. By raising educational standards, Chu says he hopes to put an end to the need for students to travel into Taipei for good schooling. He also plans to create a volunteer network to help the elderly, and to expand the number of

kindergartens and facilities for long-term care of the aged. This year’s New Taipei City budget of NT$156 billion (US$5.4 billion) is equivalent to NT$40,000 per citizen, compared with NT$60,000 for residents of Taipei. The New Taipei City government says that in light of its new status, it hopes to gradually receive increase the budget so that it can reach the NT$60,000 level within eight years.

Seeing the Sights in New Taipei City Especially recommended are Sanxia and its famous Zushi temple, the historic town of Damshui, and the onetime mining region east of Keelung. BY STEVEN CROOK photo :far eastern group


few weeks after Taiwan Business Topics assigned me to write about New Taipei City from a tourism perspective, I read a review of Dralion, a new show from Cirque du Soleil, in the online edition of an Ohio newspaper. “Captivating yet lacks a unifying theme,” wrote Margaret Quamme in The Columbus Dispatch. “[It] overloads the senses...wildly colorful, randomly multicultural...loud... nonstop movement.” My immediate thought: These words fit New Taipei City to a tee. Many complain about the dense population and roundthe-clock congestion in what used to be Taipei County. Thanks to its 41,000 residents per square kilometer, Yonghe has plenty of loud, nonstop movement. Yet Wulai has just 15 people per square kilometer, and is known for hot springs and birdwatching trails. There is no “unifying theme,” for sure. In addition to the commuter towns and industrial parks that surround Taiwan's capital, the special municipality has some of the island's most attractive coastal scenery and a good number of mountains. New Taipei City is certainly multicultural. There are Hakka communities, including one in Sanzhi whose most famous son is former President Lee Teng-hui. About one in three of Wulai's inhabitants are Atayal aborigines. The Southeast Asians who live in Zhonghe and Yonghe celebrate the end of the Thai and Burmese lunar year with a raucous Water Festival. Hundreds of Western expatriates can be found in Danshui and Banqiao. Because Taipei County has had a reputation for extreme


urban ugliness, in this article I focus on New Taipei City's manmade attractions – to restore some balance, as it were. And as getting from one part of the donut-shaped special municipality to another can easily take an hour, I chose to home in on three regions: Sanxia, the mouth of the Danshui River, and the area to the east of Keelung's busy harbor. (Keelung itself is not part of New Taipei City). Worthwhile attractions elsewhere in New Taipei City include the Museum of World Religions in Yonghe, the Lin Family Gardens in Banqiao, and the Juming Museum in the hills above Jinshan. Sanxia and Yingge are twin towns separated by the broad Dahan River. Yingge can be reached by train, and it has numerous pottery shops and the highly-rated Ceramics Museum (; admission NT$99), but Sanxia deserves more of your time. Sanxia's most famous place of worship is regarded as a pinnacle of religious art in Taiwan. But on my most recent visit to Zushi Temple, my initial response was to think it grossly overrated. After all, patches of crudely painted concrete are visible, as is some messy wiring. But when I started going over the wood and stone carvings inch by inch, I was quickly won over. In addition to the usual dragons and sages, there are crabs and other crustaceans, elephants, fish, owls, pangolins (scaly anteaters about the size of a fox), and a whole orchestra of musicians. The gold leaf-bedecked ceiling of the central chamber, where incense is offered to Zushi, is breathtakingly ornate.

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New Taipei City

用垃圾袋,倒垃圾也採定點、定時收取的方式。但很多 新北市民住在偏遠地區的小社區,習慣找個地方傾倒垃 圾。台北市收垃圾的模式在新北市不一定行得通。免費 公車是另一例。有些城鎮原本有免費接駁公車服務居 民。現在,為求各地有一致的規定,新北市政府取消了 這些服務。羅致政說,這是因為沒有免費公車的城鎮可 能會抱怨不公平待遇。再舉個例,有些較有錢的城鎮提 供獎學金給家鄉學子,對老年人的照顧也較好;但有些 城鎮就做不到。未來各地勢必無法各行其是。 朱市長還強調,提升教育與社會福利是任內重要工 作。新北市內有18所大學(共有11個創新育成中心)、

17所職業學校。新北市內擁有高教育水準的勞動力, 將成為吸引外資主力之一。朱立倫表示,他希望提高新 北市的教育水準,未來學生就不需要辛苦地前往台北市 上學了。他也計劃推動協助銀髮族志工網、廣設托育中 心、老人長期照護中心等。 今年新北市的預算為新台幣1560億元(相當於54億 美元);算起來,每個市民可分得新台幣4萬元。與台 北市民平均每名市民可獲得新台幣6萬元相比,還有一 段差距。新北市政府表示,有鑑於新北市的直轄市地 位,希望獲得的中央預算能逐年增加,在八年內讓新北 市民也享有每人平均新台幣6萬元的預算。

Zushi, which means “divine progenitor,” is the godly name of Chen Zhao-ying, a 13th-century government official honored for his bravery at a time when the Mongols were invading China. The temple's long history has been punctuated by violence and dissent. Founded in 1769, it was flattened during the War of 1895. Rebuilt in 1899, major renovations began in 1947 under the supervision of local politician and acclaimed painter Li Meishu. Since Li's death in 1983, progress on the temple has been stymied by rows between the management committee, which prefers to use cheaper semi-finished decorations imported from the Chinese mainland, and those who back Li's policy of employing only local master carvers and artists. Use Sanxia's bilingual map boards to find the nearby gallery showcasing several of Li's masterpieces. Managed by Li's son, the Li Mei-shu Memorial Gallery (Tel: 02-2673-2333; admission NT$50) is only open on weekends and national holidays, but groups can visit on weekdays if they make a reservations at least 10 days in advance.

Several sights are associated with the Westerners who lived in the town in its heyday. Less than 100 meters east of the Danshui MRT Station stand warehouses that date from the 1860s, and which were owned by Shell Petroleum (now Royal Dutch Shell) from 1897 until 2001. Of Westerners who have passed through Danshui, none is more famous than George L. Mackay. In his 1896 book From Far Formosa, this Canadian missionary described Danshui as “a smoky, dirty town.” Tamkang High School and Aletheia University, both founded by Mackay, have become landmarks. Until 1999 the latter was known as Tamsui Oxford College. The original 1882 redbrick structure is a pleasing blend of Taiwanese residential and Western ecclesiastical architecture. A street bearing Mackay's name links Zhongzheng Road and Zhongshan Road. This minor thoroughfare has various sights related to the missionary, including a brass statue at the eastern end of the street; Mackay's original clinic at No. 6 (closed Mondays; admission free); and the old single-floor house which Mackay rented for a while at No. 20 (not open to the public). Tamsui Church at No. 8 (open for services only) was designed by Mackay's son. Mackay, who died in 1901, and several of his descendants are buried further up the hill in a small graveyard beside (and accessed from) Tamkang High School. The adjacent plot is the Danshui Foreigners Cemetery, the final resting place of at least 75 and possibly as many as 81 Westerners who died in Taiwan – or in the nearby ocean – between 1867 and 1974. The 19 Americans buried here constitute the largest national contingent. The U.S. Embassy in Taipei administered this plot of land between 1973 and 1979, but after diplomatic ties between Washington and Taipei were ruptured, the graveyard was in legal limbo for several years. It now belongs to the Ministry of Finance, and the Canadian Chamber of Commerce organizes an annual clean-up. Many of the gravestones list the profession and nationality as well as the name and date of demise of the deceased. Generally speaking, military officers were interred to the north, while Roman Catholics were put in the south. Most of the graves on the east belong to missionaries, while merchants and their families were buried over on the west. Returning to the waterfront, you may well think that the

Baroque-style shop houses Sanxia's oldest thoroughfare and former business hub has been reborn as a touristy “old street” and reverted to its pre-1945 name, Sanjiaoyong Street. By far the largest building on the 26-meter-long street is a hangar-like temple, but it is the redbrick Baroque-style shop-houses that catch the eye. Some are more than a century old, although the street's distinctive look did not appear until around 1915, when the colonial authorities ordered gutters to be added for reasons of public health. For the 2004-2006 renovation, hundreds of mud bricks were fired for internal partitions, while sagging roofs were straightened. Embellishments of vases (a symbol of tranquility, as in both Mandarin and Taiwanese the word for vase, ping, is a homophone for peace), lotuses, dragons, and lions were redone. The street was paved with chiseled granite slabs, while manhole covers and house numbers were made to look as traditional as possible. Like Sanxia, Danshui is not nearly as important now as it was in the final years of Qing rule. During the three decades before Japan took control of Taiwan, it was a treaty port. As in Shanghai, traders from the British Empire, Russia, the United States, and France enjoyed special rights and protections.

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Cover Story stretch of Zhongzheng Road promoted as Danshui Old Street is neither old nor especially interesting. It does, however, feature Fuyo Temple, which is notable for its historical connection to the Sino-French War of 1884-85. During that conflict French marines occupied Keelung, but were beaten back by the Chinese imperial forces defending Danshui. A battered-looking wooden plaque hangs from a ceiling beam in the main chamber. Conferred by order of Emperor Guangxu, who wished to make public his recognition of and appreciation for the goddess Mazu's apparent intercession on behalf of the Chinese side, it reads yi-tian-chang-you (翌天昌佑), which can be translated as “bright heaven's blessing.” What with its miniature turrets and red walls, Fort San Domingo (closed Mondays; admission NT$60/40) resembles a Victorian folly. This square fortress has in fact been around since 1646, when it was built by the Dutch East India Company; some sources refer to it by its Dutch name, Fort Antonio. The current moniker is actually that given by the Spanish to a stockade they built here in the 1630s. In 1867, the British government chose the site to be its main Taiwan consulate. They renovated the fort (look carefully and you will find a brick marked “VR 1868,” VR being Queen Victoria) and erected the sublime two-floor consular residence next door. The fort has safes, a stove for burning documents, and cells for detaining British nationals (who were immune to local laws but could be punished by UK courts). The consulate was closed in 1972 when the UK upgraded its Beijing mission to an embassy.

Across the river Until 2003, most visitors to Danshui ignored the township south of the estuary, but what is now Bali District has jumped up the tourist rankings thanks to the Shihsanhang Museum of Archeology. The main building, inspired by the shape of whales, sand dunes, and ocean waves, won a major architecture award even before the museum opened its doors to the public. The museum presents 500-to-1,800-year-old relics unearthed at the site, the only prehistoric settlement so far discovered in Taiwan where iron was smelted. The exhibits also touch on five other prehistoric cultures that thrived in the Taipei area between six and two millennia ago. Even if pottery shards and human bones do not excite you, you may still find Bali to your liking. The town is comfortably laid back, and in addition to some pleasant bike trails, there are curiosities like the Liao Tian-ding shrine. Liao was a Robin Hood type who battled Japanese colonial forces; icons of him began appearing in temples soon after his violent death in 1909. If industrial heritage appeals to you, head to Ruifang District near Keelung, where scars and structures left by mineral extraction have been leveraged into two worthwhile destinations, the Gold Ecological Park and Coal-Mine Ecological Park. The Gold Ecological Park celebrates the mining history of Jinguashi, which tourists ignored until recently in favor of Jiufen and its teahouses. Jinguashi was a boom town for much of the 20th century, but mining ceased in 1987. The park has four must-sees, two of which are museums. The Environmen-


tal Education Building describes local geology and climate, while the Gold Building lists some impressive facts, such as the area having more than 600 kilometers of mine shafts and tunnels. The Gold Building is where you can learn about the Allied prisoners-of-war who labored and died in Jinguashi's mines during World War II, as well as touch the park's famous 220.3-kilogram gold bar. The estimated monetary value of this ingot – said to be the world's largest – has in recent months topped NT$300 million (US$10.3 million). The Crown Prince's Chalet was built in 1922 to accommodate Prince Hirohito, later Japan's emperor, on a state visit. The public is seldom allowed inside, but the bilingual signs in the garden are a superb introduction to Japanese architectural concepts. Benshan Fifth Tunnel is the only underground section open to the public, and one of the few places in the park where admission is charged (NT$50 per adult). Visitors are handed hard hats and asked to sign disclaimers before they enter, but if anything the tunnel feels too safe. As a depiction of mining conditions – wax figures shovel, drill, and submit to searches when leaving the mine – it seems somewhat sanitized. This is not a criticism that can be made of the new CoalMine Ecological Park in Houtong, a tiny riverside town squeezed between forest-covered hills. Gold was discovered here in 1893 and coal mining began a few years later. Soon 6,000 people were living in Houtong. The town's last mine closed in 1990 and the population now stands at around 500. (Coal mining in Taiwan ceased altogether in 2001, and the island now imports more coal each month – five to six million tonnes – than its mines produced in all of 1968, the industry's peak year.) Houtong is on the Taipei-Yilan line, and if you arrive by train, head first for the nearby Vision Hall. Pick up a leaflet, then go over to the twisted remains of the Coal Preparation Plant. Visitors to the Coal-Mine Ecological Park, like those to the Gold Ecological Park, should be prepared to walk. A good short hike is from the Coal Preparation Plant across the river, and then upstream to the entrance of Fuxing Pit. This involves going through a poorly lit 30-meter-long tunnel, but the other side offers good views of the river. The mining railroad that used to run parallel to the road and through the tunnel is now mostly hidden by foliage or buried under asphalt. On the way to the pit, you will pass the U.S. Aid House, a set of one-and-a-half story miners' homes built with American government money in 1957. Returning to the more populated side of the river, make a point of getting to the Geology House and the Commemorative House of Miners, two side-by-side exhibition halls. The former goes into absorbing depth about all aspects of the area's natural environment. The latter is full of gritty details about miners' lives, and reveals that – because of the Chinese aversion to the number four, which sounds like the word for death – tunnels were numbered one through three, three-and-a-half, five, six and so on. Like the men who dug coal from Houtong's hills, New Taipei City is hardworking and unpretentious. For better or worse, it is also diverse, colorful and loud. But it is in places like Houtong and Jinguashi, where movement has all but ground to a halt, that it is most captivating.

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“Last Inch”: Is Taiwan’s Financial Market Ready for Upgrading? BY ANDY CHU


he past three years have been a period of rapid growth for Taiwan’s capital markets. “Just five years ago,” says Michael Lin, senior executive vice president of the Taiwan Stock Exchange Corp. (TWSE), “Taiwan lagged behind its neighbors in Asia, but now it is second only to Hong Kong with respect to global visibility.” With its active and well-regulated stock market, strong tech-oriented manufacturing sector, and increasingly close economic connections with the fastgrowing China market, Taiwan has much to offer to international portfolio investors. As it has gained experience in recent years in handling cross-border transactions, becoming a more sophisticated financial actor in the international arena, Taiwan’s financial industry has reached the point where at least many domestic players regard it as qualified to be considered a fully developed market. What then has been holding back the major financial indexes from rating it as such? In June, MSCI Inc., whose stock indexes are tracked by investors with nearly US$3 trillion in assets, announced that Taiwan, along with South Korea, would continue to be treated as an emerging market rather than be upgraded to developed status. The New York-based index provider pointed to a lack of full currency con-

vertibility plus the rigidity of the investor identification system as the major factors keeping both markets from receiving the “developed” designation. In its announcement, MSCI emphasized the need for change in those specific areas before either country would receive an upgrade in the future. In the coming month, in addition, FTSE, the influential London-based provider of stock market indexes owned jointly by The Financial Times and the London Stock Exchange is due to announce its latest classification of Taiwan’s financial market. Industry leaders are hoping to achieve an upgrading to developed status, as Korea did last year, but feel far from certain that it will take place. The level of optimism on the subject dipped somewhat following the recent MSCI announcement. For many leaders in Taiwan’s financial industry, MSCI’s decision was disappointing but not particularly surprising. They have long been aware of the concerns of foreign investors with respect to the flexibility and liberalization of Taiwan’s financial markets. Over the past several years, they have therefore engaged the Taiwanese authorities in extensive dialogues on how to make Taiwan’s markets more accessible and less restrictive. But despite some changes in government policies and efforts by industry to step up market

promotion in light of these changes, overseas investors’ concerns have continued to linger. Still, industry leaders have generally remained positive about the progress made by Taiwan’s financial industry and the prospects for future development. They seem confident that as long as Taiwan continues to provide improved market access to foreign investors, an upgrade should take place before much longer. Whether that actually transpires, however, may depend largely on the attitude of the Central Bank of the Republic of China (CBC), which takes the maintenance of Taiwan’s financial stability as its primary responsibility. Following the recent MSCI announcement, the CBC responded by issuing a statement clarifying its market policies – and contending that no foreign exchange restrictions exist in connection with foreign institutional investors’ operations in Taiwan’s equity market. The New Taiwan Dollar, the CBC insisted, is fully convertible for foreign investors. The Central Bank went on to present a case for the advantages of Taiwan retaining emerging market status, noting that Taiwan’s relative dominance in that market – it currently enjoys a significant share of the emerging market cap – has been financially rewarding.

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Foreign investors looking to invest in emerging markets have found Taiwan to be an attractive option. Industry sources, however, question the purported benefits of retaining the “developing” status. Besides the fact that Taiwan’s economic fundamentals, market size, and liquidity, among other characteristics, all point to a market that deserves to be upgraded to “developed” level, they note the large economic incentive for being upgraded, as well as the financial vulnerability that comes with remaining an emerging market. In terms of the potential monetary benefits of upgrading, it has been calculated that over 70% of all investment funds are in developed markets, with only about 20% in emerging markets. Additionally, pension funds from all over the world tend to be invested only in developed markets. It is therefore argued that while Taiwan is an attractive option for investors specifically looking to invest in the emerging markets category, the overall market size for developed markets is much larger than it is for emerging markets. While there is no guarantee that Taiwan would attract increased investments if upgraded, the potential is evident, as Taiwan would be able to tap into a network with far more investors and more funds. TWSE’s Michael Lin estimates that upgrading could lead to an immediate influx of around US$2 billion in new investments. There is also concern about the risks of remaining a player in emerging markets. Jimin Kao, Senior Vice President and General Manager of Merrill Lynch Securities (Taiwan) Limited, is among the industry leaders who say they appreciate the arguments in favor of remaining in the emerging market category, but see potential pitfalls in doing so for too long a time. Kao says that one of the primary reasons emerging markets are currently attractive to investors is the economic downturn and stagnation in the United States and Europe. But once those economies recover, their financial markets will rebound, possibly drawing investments that are now going into emerging markets. In the long run, Kao says,


“attaining developed market status will create a level of stability, which also comes with it the added convenience of being a member of an elite club.” At the very least, being upgraded may help Taiwan’s financial markets hedge against instability going forward. As mentioned above, Taiwan’s financial regulators have sought to make Taiwan’s financial market more attractive to foreign investors by resolving a number of issues that had been matters of concern, such as block trading measures, introduction of omnibus trading accounts, and the implementation of a T+2 DVP settlement cycle. At this stage, three problem areas appear to remain unresolved: Prefunding, Foreign Exchange concerns, and the Identification Specific System. Regarding prefunding requirements, some investor concerns about penalties have largely been eliminated. In the past, when an investor failed to pay for a trade, a severe penalty was levied without any inquiry into the reason for the failure, which might have been caused by factors outside the investor’s control. U.S. and European investors in particular were concerned about the potential damage to their international reputation, in some cases deterring their willingness to invest. Even though Taiwan’s prefunding rules have since been liberalized, however, foreign investors continue to worry about being penalized. That appears to be the result of insufficient communication with industry players internationally about the changes that have been made, and those investors’ comments might have influenced the MSCI decision. In any case, if Taiwan is to attract more investments, it must be able to clearly relay to foreign investors its current market practices and allay any uneasiness that may exist due to past practices that no longer are relevant. As for foreign-exchange trading, all Taiwanese stocks are currently denominated in New Taiwan dollars, and foreign investors are required to convert their foreign currencies to New Taiwan dollars before trading Taiwanese stocks. The problem cited by foreign investors is that there are

no offshore markets for 24-hour conversion, which can be a great inconvenience for traders situated on the other side of the world. But given that the NT is not an international reserve currency, and thus not in demand for trading in all markets throughout the day, the CBC reportedly does not believe that this should be a paramount issue in assessing the flexibility and liberalization of the NT dollar on the forex market.

Conversion requirements Another issue raised by investors relates to the futures and options market. Currently, when realized gains in NT dollars reach a certain threshold, foreign investors are required by law to convert those holdings to US dollars. This step necessarily increases the foreign-exchange conversion costs and adds an administrative burden, particularly if the investors intend to use the earnings to invest further in the futures and options market, in which case yet another transaction is required to convert the funds back to NT. The CBC instituted the regulation because it does not want foreign investors to speculate on the NT dollar by holding it for too long. Given the CBC’s concerns, it is considered unlikely that the bank will undertake any reforms in this respect. An additional area that causes some uneasiness for indexes and investors is Taiwan’s Identification Specific System. Unlike the situation in the United States and many other jurisdictions, when a broker places an order to the exchange in Taiwan, the investor needs to provide a raft of personal information. For the trade to go through, the broker does not need to provide all of the investor’s information up front. However, after the trade is matched, the broker is required to forward that detailed investor data. From one perspective, the ID system is an efficient mean for the settlement process in terms of affirmation, reaffirmation, and allocation, and all information that may be required in the future is on hand. Looking at it from another angle, the need to make

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investors provide all information in every transaction can be an inconvenience for investors. Many industry players concede that it is hard to say definitively whether the system is good or bad, but given that the regulators have not indicated any plans to change the system, the expectation is that the current requirements will remain in place. In any case, while amending the system to lessen the information burden might expedite trading, the current system is not seen as severely inhibiting trading activity. A bright spot for investors, and a possible factor influencing the attitude of the indexes going forward, is CBC’s plan to adopt an “overnight draft” policy. Already approved by the CBC and awaiting final implementation, the policy would give investors one night’s worth of credit to complete trades that may be held up or negatively impacted by time zone differences and cross-

border issues. The policy is aimed at making it more convenient for foreign investors to trade in Taiwan. With this policy in place, Taiwan’s financial regulators hope investors will find Taiwan’s financial markets an increasingly attractive option for investing their funds. W h i c h a d d i t i o n a l r e f o r m s Ta i wanese financial regulators may need to make in order to be upgraded is not certain. For example, FTSE upgraded Korea to “developed” status last year, even though many consider its restrictions to be even more rigid than Taiwan’s. What is certain is that Taiwan needs to remain accessible for foreign investments, and to try to increase that accessibility where possible. With the emergence of China and other players in the region, Taiwan’s financial market needs to continue to advance in order to remain attractive. There are no guarantees that Taiwan’s financial market will be upgraded

by the rating services in the near future. It seems clear that the CBC continues to adopt a cautious attitude toward implementing any reforms that might jeopardize financial stability, and as a result MSCI and FTSE may continue to view the Taiwanese market as too rigidly controlled. But as long as financial regulators further liberalize the market to the extent they are able to, and remain open to suggestions from the international community, Taiwan’s financial industry should be moving in the right direction. “The financial world is a global society that is [most receptive] to friendly and effective markets – and Taiwan is one of them,” says Michael Lin, adding that he expects Taiwan’s upgrading to happen within the next two to three years. Many others who share his enthusiasm agree that Taiwan is now at the “last inch” before being upgraded.

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“In Ericsson we believe in Telecom industry’s long-term growth potential and its leading role in the networked society. We see Tpark’s pioneer vision in its state-of-the-art office buildings and overall park planning, which is designed according to the most sustainable and eco-friendly methods ever seen in Taiwan. Tpark will undoubtedly create a telecom cluster, and a more pleasant and green work environment. We are happy to be the first to move in!” — Philip Tseng, President of Ericsson Taiwan

Tpark – More than Just a Grade-A Office Tpark is located at the economic-political center of New Taipei City. Founded by the Far Eastern Group, it is a decided break from the stereotypical cramped office buildings in an Asian concrete jungle. While providing advanced technology as an international platform for testing communications equipment, it is also designed to create an atmosphere of “offices inside a lush forest.” As such, Tpark gives Taiwan’s science parks a brand new image.

Offices in lush parkland: eco-friendly and hightech

To create an eco-friendly environment, Tpark appointed the world-renowned German design company Atelier Dreiseitl to plan and implement the park’s construction in accordance with green and ecological principles. The goal is to create an energy-saving and sustainable environment with low carbon and greenhouse gas emissions. In the heart of Tpark, a water course is set up to nourish the green parklands and connect the northern and southern zones. Trees have been planted along the water course to increase greenery and help absorb heat and water. The park also features a sophisticated rainwater


recycling system that includes green roofs, a storm-water recycling system that irrigates the park, and a pond-like water retention basin. In addition, public art works, pedestrian walkways, and bicycle paths help create a unique environment where high-tech and green ecology interact.

A platform for four major high-tech industries: communications, green energy, cloud computing and digital content Tpark is designed to attract and further the growth of Taiwan’s four major high-tech industries – communications, green energy, cloud computing, and digital content. It positions itself as the exchange platform for domestic and international telecommunications companies. Inside Tpark, testing facilities for various mobile communications technologies such as TD-LTE and WiMAX have been set up by the Far EasTone Co., one of Taiwan’s leading telecommunications companies and a member of the Far Eastern Group. In addition, an “IT Security Evaluation Laboratory” has been established there by Taiwan's Telecom Technology Center (TTC) to help local IT security-related companies obtain international and local certification. Tpark also offers an IOT (Inter-Operability-Test), including L2/L3 function testing and Single-Multi-RAT network testing) platform for open-ended testing for mobile and broadband services. Moreover, the builtin high-speed optical fiber networks allow the residing

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companies to engage in R&D work that requires mass computing and transmitting, local and international real-time connections, and field trials. A f t e r E r i c s s o n ’s entry into Tpark, more companies will soon follow suit, bringing in an increasing number of various testing applications and thus creating a cluster effect. Interactions between businesses in the park will greatly expedite the speed of R&D and innovation so as to engineer an entire upgrade of these industries.

Superb transport links and communications infrastructure Unlike most of Taiwan’s science parks that are located outside major cities, Tpark is situated in the economic and administrative center, the Banqiao District of New Taipei City. From Tpark, it is easy to reach any area in Taiwan. Transport links are remarkably convenient: the park is at the crossroads of the Taiwan High Speed Railway, highway, rail, and MRT systems. An MRT station and 24 bus lines connecting with all parts of Metropolitan Taipei are a mere few steps outside the park. A Taiwan High Speed Rail station, the Second Expressway, and the Number 1 and Number 2 Freeways are only a five minute car-ride away, while the Taoyuan International Airport and Taipei’s Songshan International Airport just 40 minutes away by car. Moreover, the Nankang Software Park, Neihu Technology Park, Longtan Technology Park, and Hsinchu Science Park are easily accessible. In addition, the park’s high-speed broadband fiber optic networks allow resident companies to connect easily and quickly with the world. Tpark’s overall ecological design, operating environment, convenient location, superb technology testing platforms, and fiber optic broadband networks provide major competitive advantages unprecedented and unequalled by other science parks. Tpark is at the forefront of technological convergence. It poses an ambitious goal to attract the following industries: communications; ICT; digital content; gaming software; electronic books; video and music services; cloud computing; hardware and software technology; green energy R&D—such as solar panels, LED lighting, wind power, bio-fuels, hydrogen fuel cells and electric cars. These industries can fully utilize the abundant resources and cluster effect of Tpark, garnering an overwhelming growth and competitive edge while mapping their global presence!

Tpark’s business advantages

• High-tech & eco-friendly. A new industrial cluster that integrates business development with environmental concerns. Employs the most sustainable ecogreen designs seen in Taiwan, allowing businesses to save costs. • Excellent location and transport. Convenient and fast transport connections in a New Taipei City transport hub. Easy access to MRT, Taiwan High Speed Rail, rail lines, highways, two international airports, and other science parks. • Offices in parkland. Situated in a 33,000m2 green park, providing a relaxed and cozy atmosphere that attracts and inspires the workforce. • Flexible office space. Ample office space that can be rented out floor by floor, tailored to the individual needs of each resident company. • Superb conference facilities. Sizeable lecture halls and multi-function conference rooms suitable for international conferences. • All-inclusive. Includes residential buildings, hospital, an academic institute, R&D labs, testing centers, office buildings, commercial centers, restaurants, and recreational facilities. • Professional Security Management. Internationallevel security team supervised by a specialist in property management (Colliers International), with 24-hour surveillance and top-quality service.

Telephone: +886-2-7741 7806 Contact Person: Paula Lien Website: Email:

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The Growing Chinese Naval Capacity The implications for Taiwan’s security and continued U.S. dominance in the Asia Pacific are profound.



Red Star Over The Pacific: China’s Rise and the Challenge to U.S. Maritime Strategy By Toshi Yoshihara and James R. Holmes. Naval Institute Press, Annapolis, MD, 2011. 304 pages. ISBN-10: 159114390X; ISBN-13: 978-1591143901


People’s Liberation Army (PLA) commentary cited by an apprehensive Indian analyst refers to Taiwan, along with Sanya, a newly constructed naval base on Hainan island, as “China’s two eyes at sea.” As that citation indicates, the military buildup of the People’s Republic of China (PRC), combined with its increasingly assertive international behavior, has caused considerable global anxiety. This concern was very much in evidence at a recent meeting of the Singapore-sponsored International Maritime Defense Exhibition and Conference (IMDEX), whose raison d’etre is to strengthen information-sharing capabilities among various navies and maritime agencies. To a Japanese correspondent’s query to Chinese delegate and People’s Liberation Army Navy (PLAN) commander Wu Shengli on why China was so concerned with the South China Sea, the admiral grasped the reporter’s arm and said “how would you feel if I cut off your arms and legs? That’s how China feels about the South China Sea.” If the admiral understood that other nations may have equally valid concerns about their security and their ability to conduct commerce in these and other Asian waters, he provided no evidence of it. To extend Admiral Wu’s metaphor, what the PLAN has done over the past two decades seems less like protecting its arms and legs than extending both the length and strength of those limbs. How China has done this and the implications for peace and security in the Asia Pacific region are the focus of Yoshihara and Holmes’s masterful study. Despite China’s limited history of maritime warfare, the PRC leadership has crafted a usable past to cultivate support from the Chinese people for seagoing ventures in Asia, while at the same time attempting to assuage any misgivings their naval buildup might provoke internationally – for example, in celebrating the

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600th anniversary of the seven sea voyages of Zheng He, it portrayed them as more peaceful than is strictly accurate (in 1411, Chinese forces intervened in an internal war in today’s Sri Lanka, quashing a rebellion by Buddhist leader Alakeswara and imposing Ming sovereignty). The image Beijing wishes to project is that of a Sino-centric regional, or perhaps world, order premised on Chinese exceptionalism in international affairs. As a case in point, the authors cite a Renmin Ribao article claiming that Zheng He’s expeditions gave “full expression to the Chinese spirit of harmony as expressed in Confucian teachings” and contrasts this to the voyages of Christopher Columbus and his successors, which “opened up a large group of colonies” and were bent on “a typical predatory rise.” Just as Zheng He’s “treasure ships” enhanced the interchange of goods between civilizations, this line of argument continues, the PRC’s rise as an economic power will contribute to increasing international peace and prosperity – and continuing this illustrious tradition, the PRC will never seek hegemony. Yoshihara and Holmes find that this view has found wide acceptance in Western academic circles. The authors question this line of logic, pointing out that the Communist government can hardly claim to be a direct descendant of the Ming, or for that matter any other imperial dynasty. One can almost imagine Mao Zedong’s horror if he were to hear the comparison being made. Second, the voyages were not actually as peaceful as sometimes portrayed. Third, since they lasted only a very short time, it is fanciful to extrapolate from so brief an interval in the country’s long history that present-day China has no penchant for military dominance. Had the Ming emperor not ordered the cessation of the voyages, it is entirely possible that a less peacefully maintained Sino-centric regional hegemony might have emerged. Although the authors do not mention it, Confucianism also saw the Chinese emperor as the ruler of tianxia (天下, all under heaven), with full authority to dictate standards of conduct in this comprehensive sphere.

Adherents of Admiral Mahan Yoshihara and Holmes, both professors at the U.S. Naval War College, note the interest Chinese military journals have shown in the theories of the acknowledged founder of modern naval strategy, Alfred Thayer Mahan, one of the first professors at the NWC. Although his theories are required reading at military academies around the world, Mahanian strategy has recently been eclipsed by what might be called post-modernist perspectives. Rather than emphasizing the climactic battle, as Mahan did, the post-Mahanian approach is predicated more on noncombat missions aimed at upholding good order at sea in the face of nontraditional challenges. The Chinese – and the Indian authorities as well – are exceptions. Atlantic Monthly columnist Robert Kaplan wrote that whereas the U.S. Navy pays homage to Mahan by naming buildings after him, the Chinese do him greater honor by avidly reading his works. Assuming that the PLAN and the

Indian navy transcribe Mahanian theory into naval strategy and forces, say the authors, it becomes more likely that an epic fleet battle will occur. Comparing China to pre-World War I Germany, another previously land-centered nation that attempted to transform itself into a major maritime force, some scholars have concluded that history has not been kind to such efforts, implying that China’s ambitious naval plans are likely to meet the same fate. The authors disagree, arguing that a careful comparison of Bismarckian German and post-Mao China indicates the specious nature of this soothing scenario. In their analysis, the German navy intellectually remained a coastal navy despite its tactical ocean-going proficiency, rendering it ill-prepared to undertake a buildup comparable in size and duration to that of Great Britain. At the same time, the government of the United Kingdom made a conscious political choice to uphold Britannia’s maritime pre-eminence whatever the cost. Berlin’s mistake was to institute a shipbuilding program large enough to provoke a determined response from London, while balking at the massive investment that winning naval superiority from England would have entailed. German commanders were inexplicably reluctant to take the strategic initiative as sea. Unlike Berlin, Beijing suffers from no comparable leadership deficit. Party and government have carefully nurtured the national will and developed the country’s naval capabilities to support their long-term ambitions. The geopolitical situations of the two countries are also quite different. Germany had, and has, a constricted coastline, and its ships had to pass within the shadow of the British Isles to reach Atlantic seaports. China, with its longer coastline and more numerous ports, faces no near neighbor with maritime might comparable to that of Britain. Moreover, Beijing has always couched its initiatives in defensive language that seems to have been accepted at face value by substantial numbers of foreign scholars and decision makers. Unlike the often bombastic rhetoric emanating from the Kaiser’s Germany, Beijing has taken care to avoid attracting undue attention or provoking countermeasures. Having established the non-comparability of the two situations, the authors proceed to examine the mechanics of how the PRC will put its strategy into practice, considering such indicators as fleet tactics, subsurface combatants, missile and anti-missile developments, and soft power. The PLAN has methodically tested and refined its surface and subsurface combatants, producing a new ship class every few years without committing to serial production. There is no good news for Taiwan here. Although the quote that opened this review seems to indicate that the PLA already considers Taiwan to be operationally part of its military, most Chinese analysts concentrate on the importance of Taiwan to the PRC’s strategic future. The PLA’s inability to break out of the first island chain into the Pacific without possessing Taiwan is standard commentary in Chinese journals. The chain is visualized as an arc running south from the Japanese archipelago to the Philippines, with some strate-

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Hawk, all in the 2007-2009 period, are gists projecting its trajectory all the way cases in point. On another occasion, past the Indonesian archipelago to the U.S. naval vessels were denied perBritish-administered Indian Ocean base mission to take shelter in Hong Kong at Diego Garcia that is frequently used harbor ahead of a storm. by U.S. military planes. As Yoshihara and Holmes point Another commonly heard suppoout, the tyranny of geography pressition is that the PLAN could attain ents Washington with a more difficult decisive Mahanian command by prosituation than London confronted a cenjecting power eastward from Taiwan. tury before. As a result, the U.S. navy’s While currently Taiwan is an obstacle, dominance in Asian waters comes neithe PRC’s possession of it would be the ther naturally nor cheaply. Forwardkey to the open ocean. Since the island deployed expeditionary forces must occupies the mid-section of the first operate through a complex web of island chain, PRC strategists reason, mutually supporting bases and logisits capture would cut the chain in two. tical arrangements. These facilities tend From there, the Chinese fleet and naval to be expensive and can be maintained aviation units could use Taiwan as a only through constant and often difficult major base, and sea and air combat diplomatic negotiations. In setting priradii from bases on the island would orities, U.S. policy planners must weigh reach the flanks of Japan and the Phil- EMINENT NAVAL THEORIST – The works the costs against other threats that loom ippines. Analyst Jiang Yu visualizes of Alfred Thayer Mahan (1840-1914) are studied more assiduously these days in larger and are more proximate, as in the this as China and Taiwan forming a China than in the United States. Middle East. In short, many voters and T-shaped battlefield position able to photo : wikipedia officials find it difficult to see a pressing defend against semi-encirclement and need to deal with the Chinese military facilitating a breakout from the second buildup. island chain that stretches from the JapThe authors’ assessment is that, despite the lack of anese archipelago south to the Marshall and Bonin islands, perceived urgency in America, Beijing is on the brink of comincluding the U.S. base at Guam. manding the seas “with Chinese characteristics.” The PRC’s Unlike Wilhelmian Germany’s North Sea-facing coast, maritime capacity, as measured by hardware, seamanship, which held little value for the British, the bodies of water and war fighting skill, has reached the point where Chinese bounded by the first island chain are integral to the globalized strategists’ theorizing will be put to the test. As the PLAN order underwritten by the United States and its allies – watercontinues to grow in strength, the U.S. navy has been downways that are immensely important to the economic vitality of sizing, and the national will to underwrite the international all regional economies, including China’s. A number of other order appears to have eroded as well. Asian states host U.S. bases and facilities that are critical to Given the PRC’s view of Taiwan as key to its ability to sustain American power projection and to deter or reverse break out into the Pacific and its leadership’s undoubted will aggression. In the authors’ opinion, American command to have the ability to do so, the island’s future de facto indeof the areas outside East Asian nations’ territorial domains pendence is in peril. The authors summarize the findings of constitutes the sine qua non of regional stability. And free a 2009 RAND Corporation study detailing the military balnavigation cannot be sustained for long without the security ance in the Taiwan Strait that contains more bad news for the guarantees that only the American navy can provide. island’s residents. Quantitative and qualitative analysis indicates that the PLA’s larger modern missile and air forces will Challenge to U.S. power pose a nearly insurmountable challenge to Taiwanese and American efforts to command the air over the Strait and the If, as seems likely, China is challenging U.S. sea control, island. Massive ballistic missile salvos launched against TaiWashington must choose between rising to the challenge, as wan’s air bases would severely hamper the ability to generate Britain did a century ago, and ceding its long-held position. enough fighter sorties to contest PRC air superiority. The much-publicized 2001 collision of an American electronic According to RAND, Washington can no longer be consurveillance plane with a Chinese jet, followed by the imprisfident of winning the battle for the air. This conclusion onment of the U.S. plane’s crew, may have been the opening represents a change from RAND’s 2000 study on the same sally of the challenge. This incident has been followed by a topic, with three of the study’s five authors having particistring of events, some mentioned by the authors and some pated on the earlier report as well. Nor do the RAND study’s not. The harassment of the USS Impeccable, the collision conclusions stand alone; other respected scholars have made between a Chinese submarine and the towed array sonar of the same assessment. To be sure, there are caveats. Apart the destroyer USS John S. McCain, and the surfacing of a from their limited, and unimpressive, foray into Vietnam Song-class PLAN submarine close to the aircraft carrier Kitty


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in 1979, Chinese forces have not fought a major war since Korea in 1950, and the PLAN has never fought one. How the Chinese fleet will fare under real wartime conditions against a capable regional naval force, let alone the U.S. navy, is, say the authors, anyone’s guess. The PLAN’s persistent reluctance to engage in serious combined operations with fellow navies apart from port calls may betoken a lack of confidence as well as a penchant for secrecy. These caveats notwithstanding, the authors take issue with the comfortable conclusion that it will be a long time before the PLA can challenge the U.S. military. This may be true internationally, but the Chinese leadership has no intention to confront American forces globally, at least at present. As this study makes clear, the PRC’s approach is patient incrementalism; in Mao Zedong’s famous statement, a long march of ten thousand li starts with a single step. The Chinese military may now have the end of that journey in sight. A regional confrontation is an entirely different matter. U.S. forces are dispersed world-wide, with a disproportionate number devoted to Afghanistan and Iraq. Even given a cessation of hostilities there, the Middle East is likely to continue as a focus of attention, given the importance of its fossil fuels as well as the apparent intractability of the Israeli-Palestinian dispute. Meanwhile, despite Washington’s repeated pronouncements that the United States is a Pacific state and remains committed to the peace and security of the Asia Pacific region, U.S. forces are stretched thinly in the area. In

addition, although the authors do not mention it, Washington has not evinced a desire to do anything other than accommodate China. Those not especially interested in the fine points of naval strategy are apt find the authors’ discourses on the juxtaposition of Mahanian grammar to Mahanian logic confusing. The index leaves much to be desired — for example the lack of any reference to the recently constructed major naval base at Sanya, to Diego Garcia, or to a number of the individuals mentioned in the text. Finally, there is no effort to discuss the countermeasures being taken by Asian states who feel threatened by the PLAN’s growing power. There is no mention of rising defense budgets in other Asian powers, nor their efforts to form countervailing coalitions, albeit in as quiet a manner as possible to avoid provoking what they already perceive as the regional hegemon. But these are quibbles. The authors have produced a cogent argument for U.S. military planners to rethink whether there is a mismatch between their oft-repeated commitments to maintain peace and security in the Asia Pacific hemisphere and their capabilities to actually do so in the face of growing Chinese power and assertiveness.

— June Teufel Dreyer is professor of political science at the University of Miami, Florida.

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Control Yuan: Taiwan’s Unique Government “Watchdog” Based on an ancient Chinese model, this high-level organization is responsible for audit and impeachment. It can also issue “corrections” to government agencies.



he Control Yuan, one of the five branches of the Taiwan government, is a supervisory body with roots dating back to the Chin dynasty (246-206 B.C.), when the office of yü shih (御史) was created to monitor the bureaucracy’s performance. In modern times, founding father Sun Yat-sen looked to that model when creating the structure for the Republic of China after the fall of the Qing dynasty. Finding the conventional division of government into the three branches of executive, legislative, and judicial to be insufficient, he added two more branches to represent the traditional Chinese governmental powers of supervision (control) and examination to provide further checks and balances. The institution of Control Yuan, designed to ensure that government officials are clean, fair, and properly serve the public interest, has no exact par-


allel in Western countries, though its functions have been loosely compared to those of the General Accountability Office under the U.S. Congress, combined with the ombudsmen role often seen in Europe. The status of the Control Yuan, however, is much higher than that of its foreign counterparts, as the body is considered co-equal with the other four Yuans, including the Executive Yuan headed by the Premier. The Control Yuan was enshrined in the current ROC Constitution promulgated in 1947, and its members were chosen through indirect election in June 1948 by provincial assemblies and by Mongolian, Tibetan, and overseas Chinese representative councils. A Constitutional amendment adopted in May 1992 changed the selection process, stipulating that the 29 Control Yuan members be nominated by the President with the consent of the National

Assembly, and serve six-year terms. When the Assembly was later abolished, the consent function was shifted to the Legislative Yuan. Serving as the government’s auditorgeneral is one of the Control Yuan’s powers, and of its 1,300 employees, 800 of them work in its Ministry of Audit. The Ministry supervises the execution of budgets, approves payment orders and receipts, examines and approves financial accounts, and seeks to detect any irregularities or improprieties with regard to government property and financial affairs. Better known to the public is the Control Yuan’s role in investigating official misfeasance or malfeasance. From the time of their taking office in August 2008 through May this year, the current Control Yuan members have received 75,587 petitions from citizens alleging misconduct on the part of public offi-

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cials. After review, 1,666 of those cases became the subject of investigation, which can either be carried out by Control Yuan members themselves or commissioned to other organizations. When those findings show evidence that misconduct has occurred, the Control Yuan may bring the official up on impeachment charges. If an examination committee consisting of 13 Control Yuan members votes to impeach, the case then goes to the Public Functionary Disciplinary Sanction Commission under the Judicial Yuan to rule on guilt or innocence. Those found guilty could face a range of penalties from demerits to removal from office. As of May, the current Control Yuan had completed 77 impeachment cases, some of which had been initiated under their predecessors, and brought impeachment charges against 204 officials. In M a y, f o r e x a m p l e , t h e C o n trol Yuan impeached the directors of the Taichung City government’s urban development and economic development bureaus for alleged mismanagement leading to a fire at an illegal pub in March, killing nine people and injuring 12. Both officials stepped down before the impeachment. In addition, in urgent cases of improper conduct by a public functionary, the Control Yuan may issue a censure to the official’s supervisory agency, ordering the official’s removal from office. If, on the other hand, an infraction is not considered severe enough to warrant impeachment, the Control Yuan may directly mete out administrative penalties, as the current members have done to 2,635 civil servants. “We are in charge of administrative punishments,’’ Control Yuan President Wang Chien-shien said in an interview. “Don’t think the Control Yuan is a tiger without teeth [as some critics have claimed]. We can be very powerful if we want to bite, as we can launch an investigation on our own initiative. Once we begin investigating a certain official, he could face serious punishment and may have to step down. We are really powerful, and those with such power must be clean, candid, and fair.’’

CONTROL CENTER—The Control Yuan building on the corner of ZhongShan South and ZhongXiao East Roads is one of the finer examples of architecture from the Japanese colonial period. photo :wikipedia

Wang notes that the Control Yuan cooperates closely with the judicial authorities. When its investigations uncover evidence of bribery or other law-breaking, the cases are forwarded to the prosecutors’ office for possible legal action. In addition, the prosecutors and police may forward cases to the Control Yuan to investigate if it appears that officials should receive administrative as well as legal punishment. “Foreign guests typically have difficulty understanding our system – they don’t know what’s `Control’ and what’s `Yuan,’’’ Wang says, adding that even Taiwan citizens have erroneous perceptions about what the Control Yuan can do. “When they see me, many people say ‘President Wang, we are relying on you to arrest everyone guilty of corruption.’ Actually, that’s the job of the Judicial Yuan. Those who violate the law can be sentenced to imprisonment or even death. What we handle are the administrative punishments.’’ The Control Yuan typically receives about 2,500 cases a month – some 30,000 cases a year – but it only has

the capacity to take on about 700 to 800 cases. In fact, its members are already exhausted from the workload, says Wang. About one-quarter of the cases received are complaints about the alleged misbehavior of judges in trials in which the complainant was a party. These cases are not accepted. “If we were to do so, that would make us the fourth level of trial court, higher than the judicial system,’’ says Wang.

“Saint Wang” Earlier in his career, Wang had served as Minister of Finance, Vice Minister of Economic Affairs, and as a legislator. A devout Christian known for his high integrity, he has been nicknamed “Saint Wang’’ by the local media. Wang stresses the need for the Control Yuan and its president to remain objective and politically neutral. In fact, he wears a vest with the Chinese characters大公無私, meaning “fairness and impartiality,” imprinted on the back. “If the Control Yuan were to be

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used to advance private interests, it would be a disaster,’’ he says. ``It could be used as a machine gun to attack the people in other parties, to impeach officials not on your side.” Under the Control Yuan rules, the head of the institution is not allowed to become involved in any cases, and each member investigates cases independently. “I cannot and will not give any orders to our members’’ about what or how to investigate, says Wang. He also notes that “I’ve been in this position for three years, and President Ma has never – zero times, I emphasize – asked me or hinted to me anything about the cases investigated by the Control Yuan.’’ A n o t h e r f o r m o f C o n t r o l Yu a n power is to propose corrective measures to executive-branch agencies that are deemed to be following improper practices. Over the past three years, for example, Control Yuan members have investigated around 20 cases related to the Department of Health. They issued corrections in more than 10 cases involving such matters as mishandling preventative measures for dengue fever, failure to detect a state-owned hospital’s dilution of patients’ medication or some surgeons’ intentional removal of healthy organs for the insurance benefits, and inappropriately conducted surveys and adjustments of pharmaceutical prices, according to reports on the Control Yuan website. “Some health ministers have complained that we’ve been harassing them, but health and food safety is the most important thing for us to take care of,’’ Wang says. “Most health ministers lasted in office for only a few months. If we accused them of low efficiency, they responded that they had only been in office for a short time and couldn’t take responsibility. So we issued a correction first, and then if they still can’t improve, we’ll impeach them. We have to be fair and do it step by step.’’ The Control Yuan also gave corrections to Financial Supervisory Commission officials in recent years for alleged mismanagement in supervising credit card and debit card issuance and related default payments, failure to


move swiftly to deal with some financially troubled financial institutions, and failure to prevent groups of scam artists from using dummy accounts to cheat the public and disturb the financial order, according to the Control Yuan website. In other recent cases, the Con trol Yuan this summer called on the Tourism Bureau to look into complaints of excessive prices and poor service for mainland Chinese visitors. It also took the Ministry of Economic Affairs to task for arbitrarily changing the subsidization system for solar energy producers, and pointed to the thousand design changes in the Fourth Nuclear Power Plant currently under construction, cautioning the Taiwan Power Co. not to start operating the plant unless it was absolutely safe.

Source of controversy The Control Yuan has at times been the source of political contention. For a long period of time between 2005 and 2008, the body was unable to function as usual when the Legislative Yuan, controlled by the opposition Kuomintang, refused to vote on the slate of candidates for Control Yuan membership nominated by then President Chen Shui-bian of the Democratic Progressive Party. The KMT at that time demanded that the appointment of Control Yuan members reflect the proportion of seats held by the political parties in parliament, but no consensus on the appointment process could be reached, leaving the Control Yuan without any members for three and a half years. The impasse was not broken until the election of President Ma Ying-jeou returned the KMT to power in 2008. Controversy over the Control Yuan extends to its place in the political structure. “In constitutional theory, the power of impeachment should belong to parliament,” says Hwang Jau-yuan, professor of law at National Taiwan University. “If impeached officials decline to step down, parliament can use its powers of legislation, budget screening, or other means” to force compliance. “But under our system, the Control Yuan has only limited power,

which is why it is frequently called a ‘tiger without teeth.’’’ Hwang likens the Control Yuan’s impeachment process to indictment by prosecutors; the actual punishment must still be executed by the Public Functionary Disciplinary Sanction Commission under the Judicial Yuan. “Since its power is so restricted, some scholars question why this function has been elevated to such a high level as a Yuan.” Although Hwang concedes that the Control Yuan has made important contributions and that many of its members have been highly respected for their integrity and courage, he argues that because the members are not elected by the people and enjoy only limited powers of impeachment, the institution’s prestige has been curtailed. Its function as a disciplinary agency to monitor the government’s operation could be executed just as well by an independent committee, Hwang says. “So the debate now is not whether such a function should exist or not – it’s necessary and important – but rather whether it should be executed by such a high-level agency.’’ Control Yuan President Wang says he would welcome public discussion on whether the body should remain in existence or be abolished, and whether its power should be expanded or decreased. “Whatever would most benefit the whole nation, I would support that conclusion,” he maintains. Abolishing the Control Yuan or redefining its powers would require a constitutional amendment, which would have to be passed by threefourths of the members of the Legislative Yuan present and voting, after a quorum of at least three-fourths of all lawmakers had been reached. After the passage by the legislature, there would be another hurdle: ratification by at least half of all eligible voters. Given the difficulty of amending the constitution, Hwang suggests enhancing the role of the Control Yuan by creating a committee under it with responsibility for protecting human rights. This change could be made without revising the constitution.

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Should Taiwan be Generating More Start-ups? Although would-be tech entrepreneurs face a number of obstacles, Taiwan still has a number of advantages in its favor. BY TIMOTHY FERRY



• Should Taiwan be Generating More Startups?


• A Slowdown in Startups


• Taiwan Regulators Veto KKR-Backed Buyout of Yageo


• Taiwan’s Magic Touch Behind the Apple iPad



uiting Chuang, founder and CEO of internet startup Richi, has faced a number of challenges over the past couple of years. From financing to programming to coming up with the right business model, starting up an internet company – or any company – is rife with obstacles. But for the National Taiwan University grad with big ambitions, the highest hurdle she had to overcome was her own insecurity. “The biggest struggle we faced was to make the decision to start a startup company,” she admits. Compared to that, “everything was quite smooth.” Already a product manager for one of Taiwan’s technology giants in 2008, she said her decision to depart the comfortable confines of corporate Taiwan was based on a number of factors. After several years in the corporate world of high-tech manufacturing, she had become convinced that the “prime time of hardware was over” and that it was now the turn of software and internet services. M o r e i m p o r t a n t l y, t h e y o u n g woman wanted to be at the forefront of a new wave, to make an impact and realize a dream – something unattainable within a big company. Now, three years and several business plans and financing rounds later, the company is scheduled to begin

operations this August. Richi will serve as an online currency exchange in which virtual currencies ranging from Facebook credits and Zynga points to airline miles and credit card credits will all be exchangeable in relative valuations. Already in its third financing round, the company is on schedule to raise US$2 million for this latest effort. In many ways, Huiting Chuang and her co-founders seem to defy the common image of Taiwan’s workforce. Respondents to AmCham’s most recent Business Climate Survey generally considered Taiwan’s workers to be hardworking, loyal, and easy to train, but too frequently passive and uncreative. But if Taiwan is going to succeed in the burgeoning world of e-commerce and software development, it’s going to need a lot more people like Huiting Chuang. The many recent global success stories in software and internet services – including Facebook, LinkedIn, Zygna, and Apple’s Appstore – have not escaped the notice of Taiwan’s technology giants. Chuang notes that “most big companies are awake to software – Apple’s Appstore was the wake-up call.” They are looking for a piece of the action, much as they have for every other technological trend over the past 40 years – from

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motherboards and chipsets to handsets and tablets. But with internet services requiring very different skill sets than Taiwan is generally known for, making that transition might be very difficult. Revital Golan, a tech-industry consultant from Israel, sees big challenges for Taiwan in this unfamiliar market. She founded her company, Anemone Ventures, partly to bridge the gap between Taiwan and other technology centers such as Israel, but for other reasons as well. “I love Taiwan,” she says. “I love it for the family; I love it for the business.” She’s skeptical, however, that Taiwan will ever make it to the level of its neighbors Singapore and Hong Kong. With issues ranging from national education to immigration policy to communication skills, she feels Taiwan will have to make deep-rooted changes to succeed as an international services hub. Golan’s native Israel provides a compelling role model for Taiwan. The country is also diplomatically challenged, and is actually cut off from trade with all but three of its own neighbors. But rather than inhibiting development, in many ways these challenges have actually spurred technological innovations and GDP growth. Indeed, the Jewish state has already made a big name for itself in tech – particularly in internet- and softwarerelated industries. Israel has the second highest number of technology firms on the NASDAQ of any country besides

the United States. The internet sector accounted for more than 6% of GDP in 2009, and employs 4% of the labor force. Israel also has the highest proportion of engineers in the world, and dedicates 4.5% of GDP to R&D – by far the highest global R&D intensity. Last year, Israeli tech startups raised US$127 million in IPOs. This is not to say that Taiwan has been a slouch. But Taiwan’s growth is built largely on manufacturing, leaving it highly vulnerable to the vagaries of the global economy. When consumers in developed markets stopped buying LCD TVs and other high-tech goods during the Great Recession, Taiwan’s economy contracted. Even more important are the paradoxes implicit in Taiwan’s success. As noted in a recent Bloomberg article, Taiwanese firms have created over 7 million jobs on the mainland, compared with only 2.2 million manufacturing jobs remaining on Taiwan itself. At around 4%, Taiwan’s unemployment rate might be low by Western standards, but it compares unfavorably to other newly developed Asian economies such as Singapore and Hong Kong. And even for many of those with jobs, life is becoming more difficult as living costs, particularly for housing and food, continue to rise.

ITRI’s efforts Ta i w a n ’s I n d u s t r i a l Te c h n o l o g y



Research Institute (ITRI) is taking steps to try to help the economy leap to the next level. World famous as an R&D center, ITRI has in fact incubated many of Taiwan’s strongest industries, starting with semiconductors and going on to include display technologies, LEDs, and green tech. Although ITRI has been privatized, it nevertheless adheres closely to government policy, especially to boost GDP growth. “ITRI’s responsibility is to try and create the macro trends – to really nurse the next generation of industrial categories,” says vice president Johnson Sher. But with ITRI’s horizon for return on investment at 5-10 years and sometimes even longer, the pace is clearly outside the framework of the fast-moving world of internet technology. ITRI recognized that to develop this market, it needed a more nimble organization. For that reason, it became one of the founding partners of TMI-Labs, which opened its doors in March as an incubator for internet services and software developers. Among the other founding partners are venture capitalist Lee Kai-fu, a former president of Google China; Light Lin, founder of Taiwan’s Wretch social networking portal (since acquired by YahooKimo); and Mark Hsu, co-founder of Chinese portal Dubbed the “Innovation Factory,” TMI-Labs promises to provide capital to help e-entrepreneurs get started, provide them with mentoring by startup veterans from China and

Three of the major investors in TMI-Labs: (left to right) Light Lin, founder of; Lee Kai-fu, former CEO of Google China; and Mark Hsu, founder of Chinese portal photo : courtesy of itri

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Taiwan, and train them to become proficient and professional managers. Sher describes the investment in TMILabs as in keeping with ITRI’s larger mission. “We believe [internet] content and applications will define the future macro trends,” and that many opportunities remain in this field, he says. He cites location-based services and virtual healthcare as two such opportunities. Already, TMI-Labs is having an impact on local internet startups. Huiting Chuang says Richi was offered bandwidth by TMI-Labs, in conjunction with a local telecom operator, at a fraction of the usual cost, for example. That TMI-Labs will offer mentoring from both Taiwanese and Chinese e-entrepreneurs points to a stark difference between Israel and Taiwan. While both countries have large neighbors that deny their political legitimacies, Taiwan is able to collaborate extensively with China – and is in fact China’s largest source of FDI. Israel, on the other hand, is still embroiled in longstanding conflict with most of its Moslem neighbors. Golan

notes that “Israel adjusts to its security needs by developing advanced weapons in order to defend its borders.” Yet military-sponsored research has also been responsible for many of Israel’s most acclaimed technological advances, including voice recognition and online messaging systems (ICQ was developed in Israel). The military connection has been a boon to Israel’s tech industry for other, less obvious reasons as well. Many have noted the “band of brothers” effect of serving together in an active conflict zone. “The personal relations developed on the battlefield are strong and contribute to future cooperation in the business sector,” notes Golan.” Several of Israel’s most famous technology companies were founded by partners who had served together in combat. Further, Golan and others observe that Israel’s military is unusual in that it encourages ordinary soldiers to speak up on issues of strategy and tactics, a practice that nurtures innovative thinking. This is perhaps a manifestation of the oft-acclaimed chutzpah characteristic of

Jewish culture, which Golan describes as meaning forthright, bold, and assertive. Chutzpah, according to many, is the secret ingredient behind Israel’s success in technology, giving its people the confidence to start – and often fail with – new companies. Since around 70% of startups end in failure, would-be entrepreneurs need resilience and the courage to try again. “You need to have a culture that doesn’t punish failure,” observes Golan. In Israel, she notes, failing with one startup and then opening another shows you are someone with the initiative and guts to go for your dreams. Taiwanese investor Jamie Lin agrees, saying that risk-aversion is “exactly the thing in our culture that’s stopping people from starting companies.” He notes that “our entire education system is built on the need to be right all the time. It’s a meritocracy-based culture, and you’re either a winner or a loser.” “You’re not encouraged to go off the beaten path that the teacher is taking you down,” says Lin, himself a product of the Taiwanese educational system. “Our entire training is based on repetition –

A Slowdown in Startups BY ALAN PATTERSON


he environment for startup companies in Taiwan is not as good as it was in the 80s and 90s when the information technology business was booming, says Kenneth Lin, chairman of the Taiwan Private Equity & Venture Capital Association (TVCA). “Taiwan’s information and communications technology (ICT) industry has developed successfully and reached maturity,” he notes. “Now business is tough, and that affects the venture capital (VC) business.” TVCA has nearly 300 VC members, who together have the equivalent of about US$8.3 billion under management. “It’s not very much,” says Lin, adding that the amount of money under management has not grown significantly in the last four years. Still, Lin sees opportunities for Taiwanese startups and VCs in areas such as key materials related to the IT industry. In the past, Taiwan relied heavily on Japanese suppliers for such key materials as polysilicon, the material used to grow monocrystalline ingots that are then sliced into wafers for chip manufacturing. Now Taiwanese startups are starting to supply polysilicon and ingots to local companies such as Taiwan Semi-


conductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker. Lin points to Taiwan’s TPK Holdings, the company that makes most of the touchscreens used in Apple’s iPad, as an example of a successful recent startup. “They created their own technology,” he notes. Now that Taiwan’s IT industry is dominated by so many large players such as TSMC and Quanta Computer, the world’s largest notebook computer maker, those big companies can afford to fund in-house startups and have no need to go to VCs to raise money. That is part of the reason why it is so difficult for independent startups to succeed, says Lin. TSMC early this year announced two startups, TSMC Solar Ltd. and TSMC Solid State Lighting Ltd. TSMC Solar will make solar cells used to generate energy from sunlight, while TSMC Solid State Lighting will make energy-saving LED lighting. “It is almost essential for a successful company like us to form new companies,” said TSMC Chairman Morris Chang. “The new businesses indeed must stand on their own and must be

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your teacher tells you a formula, you memorize it and get very good at it, and that’s how you get good scores.” He calls this “training kids like machines.”

Encouraging creativity The government appears well-aware of the problem and has been adopting measures to try to encourage creativity within the nation’s educational system. So far, though, progress has been slow, and junior high school students still sit through 12-hour-long school days as they cram for onerous entrance exams to senior high. “It’s almost impossible to change – it’s in our 5,000 years of history,” Jamie Lin observes. Another obstacle in Taiwan’s way is the communication skills of its workforce, particularly engineers. According to Golan and many other business leaders, English skills in Taiwan are still sub-par. An exception is doctors, whose medical training is largely in English. But the same does not apply to engineering, and Golan notes that her clients from Europe and Israel find communi-



TAIWAN VC Investment by Industry Category Semiconductor Electronics Telecommunications Opto-Electronics Information Software Biotech Traditional Manufacturing Internet Other Major Technology Precision Machinery & Automation VC Industry Advanced Materials Other

Percentage 18.49 14.19 12.47 12.47 14.06 4.96 4.05 4.05 2.27 3.18 2.06 2.47 1.44 3.2 SOURCE: TVCA

cating with Taiwanese engineers to be a “nightmare.” Despite a few notable domestic success stories, it is a situation that clearly diminishes Taiwan’s chances of being a global R&D center or entering the larger global internet services market.

entrepreneurial.” Both companies are aiming for initial public offerings (IPOs) in a few years, Chang said. Twenty years ago, the success rate for startups going to IPO – defined as enabling the VC to make back the initial investment plus a profit – was 30-40%, according to Lin. Now that number has dropped to only 3%, he says. “There are big companies out there that are always looking for ways to create new business divisions,” Lin said. “In this environment, it’s not easy to create a new business.” That assessment is borne out by Taiwan government statistics showing that only about half of startups survive at least five years. Four or five years ago, there were more companies seeking startup capital, says Lin. “Every year, we saw 300 cases, but now that number is less than 100.” One reason for the decline is that would-be company founders no longer find it so easy to raise money from their families. “We always ask startup founders looking for VC funding how much of their own money is invested in the venture,” Lin says. “We need to see their commitment.” Dexin Corp., a startup that makes Bluetooth-technology products designed for simple wireless networking of PC devices and peripherals, is one new company that Lin is excited about, perhaps because he is the chairman. The company is among the first in the world to make Bluetooth headphones that can even

Funding is also an issue of concern. Hardware businesses have so far not been seen as a ready source of investment cash. According to Huiting Chuang, size is the issue; the bigger tech firms don’t want to complicate their business operations

be used underwater. The product was demonstrated at this year’s Computex show in Taiwan. Like TSMC, Lin also sees opportunities for funding local startups in solar energy and LEDs. At the same time, Taiwanese VCs are also looking at areas outside of technology manufacturing, such as the cultural innovation sector. Taiwan also has a number of food and beverage chains that have successfully made the leap into China with the help of venture capital, Lin says. The best-known example is 85ºC, the café and bakery chain. But Taiwan lacks companies like Facebook or Groupon, the U.S. social networking and e-commerce web sites that have caused a stir among U.S. investors. After the pop of the global tech bubble in 2000, most of Taiwan’s internet-related startups disappeared, Lin says. The survivors are companies like PChome, a popular online shopping platform. A bit further over the horizon, “biotech and medical equipment show promise, but these will take a long time,” Lin says, since American and European companies dominate the business and make the rules. With the number of successful startups in Taiwan shrinking, many VC companies have altered their business model, investing less in pure startups and more frequently in companies that are in the expansion stage. They are also active in mergers and acquisitions and in the private-equity business, investing in companies that are not listed on a stock exchange, Lin says.

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with lots of small investments in many startups. Instead, they prefer a minimum commitment of US$2 million, but that is far more than most internet startups can handle at once. Established tech firms in Taiwan “tend to want to extend their business instead of investing in standalone companies,” says Jamie Lin. “They want to start a new business unit” with some strategic synergy with their existing businesses. Whereas high-tech tycoons in Silicon Valley like to put their money to work by investing in startups, their Taiwan counterparts put their money into corporate ventures. That choice may have some advantages, but it limits their awareness of what might develop into the “Next Big Thing.” Private incubators such as Lin’s Appworks are stepping into the gap. Every six months, Appworks invites six to ten budding internet companies to its facility,

where it helps these would-be Zuckerbergs refine their business plans and develop the marketing and computing skills necessary for success. At the end of that period, those with promising business plans are rewarded with funding. Lin points to Taiwan’s most successful restaurant bookings site, EZtable, as a successfully incubated firm. Despite Taiwan’s limitations, he sees great potential in Taiwan for future success in the internet market, whether the global or Chinese-language internet market. With 400 million users, the Chinese internet presents a huge opportunity for Taiwanese e-entrepreneurs. On the other hand, Lin sees more cultural commonality between Taiwan’s internet sector and Silicon Valley, giving each successful internet firm the choice of either or both markets. He also sees Taiwan’s burgeoning entertainment sector as a distinct advan-

tage. “Asians around the world are listening to our music, watching our television shows, and following our celebrities,” he notes. Taiwan’s hardware industry also provides the advantage of a ready platform for internet apps. L i n r e g a r d s Ta i w a n ’s p e o p l e a s another great advantage, pointing to the work ethic that Taiwan is famous for, as well as its relatively low salary levels. The people here are not only talented, he says, but have shown their knack for entrepreneurship in the past, as evidenced by the large numbers of family-owned SMEs and even the big conglomerates founded only within the past 40 years. Wi t h o u t d o w n p l a y i n g t h e c h a l lenges, Lin notes that even in a generally risk-adverse society, “there are always anomalies” – and that it may take “just a few thousand” people to create an entire ecosystem of web entrepreneurs. Hopefully that will be enough.

Taiwan Regulators Veto KKRBacked Buyout of Yageo Blockage of the plan to delist the electronic parts maker from the local stock exchange may have a negative effect on foreign investors’ interest in Taiwan. BY ALAN PATTERSON


wo industry giants have again been blocked by Taiwan regulators in an investment case that may have broad implications for the island’s equity markets and foreign investment. Taiwan’s Yageo Corp., the world’s largest maker of chip resistors, and Kohlberg Kravis Roberts & Co. LP (KKR), one of the world’s largest buyout specialists, have hit a snag in their plan to delist Yageo from the Taiwan Stock Exchange (TWSE). Taiwan’s Investment Commission, a


unit of the Ministry of Economic Affairs, on June 22 rejected the NT$46.8 billion (US$1.6 billion) takeover bid backed by New York-headquartered KKR for the Taiwan company, a decision that is likely to further dampen the appetite of overseas investors evaluating prospective opportunities in Taiwan. “The government is not acting fairly, and this will jeopardize Taiwan's international reputation,” complains C.Y. Huang, president of the Taiwan Mergers & Acquisitions and Private Equity Council (MAPE).

For Taiwan to attract foreign capital, he asserts, foreign-investment approval decisions must be based strictly on legal provisions, not on regulators’ subjective judgments. Orion Investment Co., a joint venture of KKR and Yageo founder Pierre Chen, in April this year announced a plan for a management-led buyout of Yageo. Orion made a cash offer of NT$16.10 per share of Yageo, at the time a 14% premium over the company share price. In rejecting the plan, the Investment Com-

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mission objected that the deal would have left Yageo with excessive debt and that minority shareholders were not provided with enough information to judge whether the offer was satisfactory. Investment Commission Executive Secretary Fan Liang-tung told local media that Taiwan continues to welcome foreign investment, including projects by privateequity firms, but not highly leveraged transactions such as the KKR-Yageo deal. “Everything in the KKR/Yageo bid was done in accordance with the law, but the government used other reasons to reject it,” argues C.Y. Huang in decrying the “lack of transparency and accountability.” Some industry analysts, however, view the Investment Commission’s concerns about protecting minority shareholders as justified. “We don’t think the bid was a fair one, as the tender offer price of NT$16.10/share was too low,” says Nicholas Teo, an analyst in Taipei with the brokerage and investment group CLSA. “We project that a cyclical upturn for the industry is ahead and Yageo's financial fitness is structurally turning a r o u n d f o r t h e b e t t e r, w i t h p r o f i t ability recovering to levels not seen for a decade.” He put CLSA’s target price for the stock at NT$21. Even so, the rejection aroused feelings of déjà vu in many observers. Last year, for example, Taiwan regulators blocked a bid, led by Hong Kong-based Primus Financial Holdings and worth the equivalent of US$2.15 billion, for Nan Shan Life Insurance, part of American International Group (AIG). The regulators said the Hong Kong group had failed to prove its financial capability and longterm commitment to operate the venture (the government was also known to suspect that the deal was supported by funds from China).

Resemblance to ASE case However, the buyout bid with perhaps the strongest similarities to the Yageo-KKR deal came in 2006, when the regulators turned down a US$6.4 billion bid by U.S. private-equity firm Carlyle Group to take over Taiwan’s Advanced Semiconductor Engineering (ASE), the

world’s largest chip-packaging company. At the time, ASE Chairman Jason Chang was said to be seeking to delist the company in Taiwan in order to relist in another jurisdiction, presumably Hong Kong, that would allow ASE to invest more freely in China. Taiwan has restricted investment in China by its hightech companies for fear of losing jobs and technology to its political rival, now also a growing competitor in global electronics markets. “The ASE deal was rejected as it might have influenced the Taiwan stock market due to its high market cap,” says CLSA’s Teo. “Also, while ASE wanted to be delisted to have flexibility to invest in China, the government [was still maintaining its] controls on tech companies investing in China.” “Clearly, delisting a global leader from Taiwan is not going to be looked upon favorably,” says Bill Wiseman, head of the Taipei office of management consultancy McKinsey & Company. But he sees the rejections as examples of excessive regulation – and believes the unintended consequence has been to lower valuations for companies in Taiwan. Wiseman notes that except for 2009, during recent years the valuations of stocks in Taiwan have been among the lowest in Asia, with government overregulation playing a role. “The actions by regulators are clearly one factor creating



this ‘Taiwan discount,’ but obviously not the only factor,” Wiseman says, indicating that fears over low barriers to entry or quality of corporate governance are also involved. “If you dig into the details on this particular segment of the market, it isn't terribly hard to make the case that higher cash flow should follow higher return on equity, and higher valuation should be a function of cash flow performance. But the value of Taiwan's market leaders often does not reflect these superior fundamentals.” The plans of Yageo and ASE to delist from the TWSE have come around the same time as Taiwan has sought to attract new listings by overseas companies on the local stock exchange. That effort has so far met with only mixed success. One of the highest profile listings so far has been by Japanese chipmaker Elpida, which raised the equivalent of US$145 million on the local stock market in February. In the meantime, large multinational companies such as Prada, Samsonite, and commodities trader Glencore have flocked to Hong Kong to benefit from high valuations for their IPOs, raising billions of dollars in capital in one of the world’s fastest growing equity markets. Other Asian equity markets are aiming to follow suit as economic power shifts to the region. Shanghai’s stock exchange is preparing to allow listings by foreign companies for the first time, with plans

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underway by Coca-Cola, Volkswagen, and Europe’s largest bank, HSBC, to launch IPOs there. In Taiwan, by contrast, the story has been largely one of disapprovals and departures. For example, fear of China’s influence may have played a part when Taiwan regulators in 2009 blocked an offer by the PRC’s state-owned China Mobile Ltd. for a 12% percent stake in Taiwan's Far EasTone Telecommunications in a deal that would have been worth the equivalent of US$528 million. The few successfully completed deals in Taiwan in recent years have been exits, with international life insurers such as Prudential (U.K.), ING, and Aegon leaving the island after selling their stakes to local entities. “ Ta i w a n i s a l r e a d y a m a r g i n a l market” for international investors, MAPE’s Huang was quoted as saying in a June 22 Financial Times report. “If the government still puts so many obstacles in the way, then people just say ‘forget about it.’” Others have also been critical of the rejections. “Foreign investors may avoid Taiwan purchases if they can after such episodes,” said Sam Hsieh, a Taipei-based fund manager who helps manage the equivalent of US$7.8 billion at Fuh Hwa Investment Trust Co., in a Bloomberg News report “They now know they will have to consider not just the valuation, but also political and social concerns that may result from a deal.” C.Y. Huang notes that even Yageo’s minority shareholders, whom the Investment Commission sought to protect, must be wondering whether the rejection of the Yageo-KKR deal was a good decision. Since the Investment Commission ruling, Yageo’s share price has dropped by about 10% to the NT$12-13 range. From the time the buyout plan was announced in April, the share price has plummeted by about 20%. The Orion bid for Yageo was to have been funded by an NT$28 billion loan. It would have followed KKR’s 2007 investment of about US$230 million in Yageo through a purchase of convertible bonds. KKR said that following its initial investment, Yageo has expanded production capacity, created jobs, gained market


share, and achieved revenue growth.

Appeal process The buyout deal is not off the table just yet, as Orion has 30 days after receiving official notice of the rejection to appeal the decision, and the firm says it plans to stay the course. “KKR remains fully committed to its investment in Yageo and its partnership with the company's leadership and management,” Julian Wolhardt, a KKR senior executive, said in a public statement. “Yageo has established a strong position in its industry, and KKR has full confidence in the ability of Yageo's management to continue to grow the company.” Bankers who were ready to participate in financing the deal were cited in a Reuters report as saying that the Investment Commission’s concerns about excessive debt financing are unfounded. The bankers said the debt levels for the Yageo buyout are reasonable and noted that about 30 banks had committed to the deal. One unnamed Taiwanese debt-finance banker cited in the Reuters report said that the debt-to-earnings ratio before interest, taxes, depreciation, and amortization (EBITDA), a standard measure of leverage, was less than four times, an acceptable level. Another banker noted that KKR's track record on buyouts in Asia provided a good reason to participate in the deal. The private equity firm's portfolio companies have weathered the 2008 financial recession well because KKR is careful about the amount of debt it uses in its acquisitions, he said. Private-equity funds such as KKR should be seen in a more objective light than is often the case in Taiwan, Yageo founder Pierre Chen said in a recent interview with the Chinese-language CommonWealth magazine. Capital is capital, whether from a qualified foreign institutional investors (QFII), hedge fund, or private-equity fund, Chen was quoted as saying, adding that private equity funds “spot value others don’t see.” He also described the advantage of private-equity funds as their world-class management expertise and capital, which provide access to resources around the world and help a management team put a

company in better order. But there are also certain drawbacks, such as ultimately having your company sold off, Chen was quoted as saying. While such an outcome might not fit the company founder’s long-range objectives, “there is really no right or wrong when it comes to this,” Chen observed. The Yageo founder is no stranger to big multinational deals, which in the past helped the company leapfrog to become the world’s largest supplier of resistor chips and the world’s third largest supplier of multilayer ceramic capacitors. In 2000, for example, Yageo acquired two component departments from European giant Philips Electronics NV, vaulting Yageo into the ranks of the top component suppliers. For now, there are signs that the Taiwan regulators may become even stricter with buyout deals similar to Yageo’s. Taiwan plans to tighten processes for tender offers to improve information disclosure and better protect minority shareholders, Reuters reported on June 27. The measures would include asking potential buyers to set up an independent internal committee to assess whether the offer price is fair, the report said. “The biggest hurdle is the Taiwan government,” which has been opposed to taking companies private,” says C.Y. Huang. While that “is a normal thing that happens in other places such as Singapore,” he says, Taiwan officials also “have a bias toward private equity,” regarding it as “vulture' capital.” The KKR-Yageo bid would have delisted the electronic parts maker for further tweaking of Yageo’s profitability and possible expansion, after which KKR would have resold Yageo for a tidy profit to a strategic buyer or as part of a new IPO. That’s what KKR, the company made famous by its huge buyout of RJR Nabisco, does best. Everything has a price, as investors often say. Many in the market believe it may be in Taiwan’s interest to encourage KKR and Yageo to return to the table to negotiate a price that better meets the interests of minority shareholders, while still enabling Taiwan to burnish its image overseas as a place that doesn’t just say no.

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A Report on the Tech Sector



Taiwan’s Magic Touch Behind the Apple iPad Two manufacturers – TPK and Wintek – play a crucial role in the supply chain.



wo Taiwan companies are vital to the success of Apple Inc’s iPad. Taiwan’s TPK Holding Co. and Wintek Corp. supply virtually all of the touchscreens used in iPads and iPhones, and the two companies have been struggling to keep up with demand. While Taiwan’s larger liquid crystal display (LCD) makers such as Chi Mei Innolux and AU Optronics have seen sales shrink in the LCD TV and computer monitor business, revenues for newcomers TPK and Wintek have surged since the introduction of the iPad. In the second quarter of this year,

TPK, the main supplier of touchscreens for Apple’s iPad, saw sales more than triple from the same period a year ago. Wintek, the second largest supplier of touchscreens for the iPad, has seen sales nearly double. The supply of touchscreens has been one of the constraining factors keeping Apple founder Steve Jobs from meeting demand for iPads, according to industry analysts. Despite that, the iPad has become one of Apple’s top-selling products since its launch last year. Hewlett-Packard, Samsung Electronics, and Research in Motion

are among Apple rivals that aim to squeeze into the business, but analysts are doubtful about their ability to secure supplies of touchscreens. CLSA analyst Tammy Lai, who covers TPK, notes that about 70% of the touchscreen output from TPK and Wintek goes to Apple. “It will be very difficult for other tablet makers to get touchpanels,” she says, since production capacity at TPK and Wintek is “fully loaded” with orders. In the meantime, TPK has seen its sales rise to record levels in May and June consecutively. “Apple has been get-

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A Report on the Tech Sector

Global Forecast of Unit Shipments of iPad and Other Media Tablets (Thousands of Units)


180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0

Other Media Tablets







SOURCE: IHS iSppli April 2011

ting about 80% of the touchpanels that it needs,” says Lai. “That should increase to about 90% during the second half of this year.” Launched last year, the Apple’s iPad accounted for 85% of the market for tablets in 2010, according to full-year figures reported by ABI Research. Samsung’s Galaxy Tab ranked a distant second to the iPad in market share, with about 8%, the research firm said. Samsung makes its own LCD screens. ABI expects global tablet shipments this year to more than double, reaching as many as 50 million units. TPK and Wintek have been expanding production capacity, which in the second half of this year should increase by about 20-30% over the first half, according to Lai. In the meantime, Chi Mei Innolux, Taiwan’s largest LCD maker, has been trying to start production of the more technologically advanced touchscreen LCDs, she says. “Chi Mei Innolux was qualified to supply touchpanels in June, but the production levels are still very low,” Lai said., with its extensive media library and success selling the Kindle e-reader, is another company that has been rumored to be entering the tablet business. Taiwan’s E-Ink Holdings, which supplies most of the monochrome touchscreens used in the Kindle, saw its secondquarter sales this year jump by 57%


from the same period a year ago to reach NT$5.3 billion (about US$183 million). Apple has reportedly agreed to higher pricing, where necessary, to secure needed components, according to market researcher IHS iSuppli. Apple’s fast action to lock up much of the available capacity of the leading component suppliers has left many competitors scrambling for needed components, particularly touchscreens, IHS said in an April 21 report. Manufacturing issues at Apple led to a shortfall in iPad 2 shipments in the first quarter, according to IHS iSuppli, which forecast that Apple will ship 39.7 million iPad units this year, down from the February forecast of 43.7 million. IHS iSuppli predicts that iPad shipments will rise 163.3% in 2011, down from the 189.6% projected in February. Shipments of tablets by Apple’s rivals will not overtake the iPad until 2013, IHS said. Taiwan’s second-quarter 2011 sales of LCDs, which are used in everything from games and mobile phones to computers and televisions, fell by about 10% from the same period in 2010, based on sales figures the manufacturers provided to the Taiwan Stock Exchange. However, TPK’s second quarter sales more than tripled to NT$32.5 billion, while Wintek’s sales during the same period nearly doubled. “Consumer demand for the major products using LCD panels, like televisions and computers, remains weak,

especially in the United States and Europe,” said Sweta Dash, senior director for liquid crystal displays at IHS. TPK’s stock price has nearly doubled since the company first listed its shares on the Taiwan stock market in November last year, and Wintek’s shares have risen by about a fourth during the same period. With TPK and Wintek so critical to the success of Apple’s iPad and iPhone, will the companies have the ability to raise prices with Apple and improve profitability? CLSA analyst Lai says no. “Apple has been very generous in terms of pricing in the past,” says Lai, who expects that Apple will demand price reductions from the companies in the future. Besides the expected squeeze on prices by Apple and potential new entrants, Lai says TPK and Wintek face a still larger threat. “The risks are on the demand side,” she says, since “the next model of the iPhone seems like it will be a refresh model” with no compelling new features. Shipments of the iPad, however, are still robust, she says. One other kink in Apple’s supply chain has been Hon Hai Precision Industry, the world’s largest contract electronics manufacturer. Hon Hai’s manufacturing problems, including a recent fire at one of its plants in China, has limited its ability to meet demand from Apple, and that could also crimp the outlook for TPK and Wintek, Lai says.

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FUN FOR THE FOURTH AmCham Taipei and the American Club in China (ACC) this year continued the tradition of jointly hosting a poolside party to celebrate U.S. Independence Day. About 300 people turned out for the family-oriented event on Sunday, July 3, which featured water activities for the kids and a sumptuous buffet spread with a wide assortment of delicacies. Brief welcoming remarks were made by AmCham Chairman Bill Wiseman, who made sure to mention that 2011 is the Chamber’s 60th anniversary year, as well as by ACC General Manager Todd Bretzlaff and ACC Treasurer Donald Bailey.

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Delicious Street Treats at the Night Markets


t o u r i s m B u r e a u , r e p. o f C h i n a


aiwan has chefs and restaurants deserving of Michelin stars, yet some of the very best food can be found at eateries that lack air-conditioning, where the only furniture consists of folding tables and plastic stools. Moreover, some of the tastiest snacks are sold by vendors who work in the open air and cook on mobile stoves. Hawkers of ready-to-eat hot and cold delicacies can be found on every busy thoroughfare in every town and city. For many first-time visitors to Taiwan, the sight of vendors stirring vats of steaming soup and pushing oyster omelets around a hot plate has them reaching for their cameras. Taiwanese – and many long-term foreign residents – react differently. The smells wafting from such places are likely to make their mouths water. Despite the advent of fancy malls and department stores, the streets where hawkers gather between dusk and midnight continue to attract droves of shoppers. Roadside vendors selling colorful clothes and cute fashion accessories offer hard-to-

beat prices. Taiwan’s version of a bazaar offers a shopping and eating experience that is both enjoyable and convenient. For foreign visitors, a visit to a major night market not only enables them to fill their stomachs with tasty fare not found in tourist-oriented restaurants, but also provides the chance to fill their camera memory cards with striking images. They are also likely to come away with a bag of mementos and gadgets, none of which will lighten their wallets by more than a few dollars. Most important of all, spending an hour at a night market is an excellent way of understanding life in Taiwan as it is lived by hard-working urbanites, and witnessing the priority local people give to eating well and the delight they take in buying and selling. The modern night market, which spans the range from ultra-traditional to highly innovative cuisine, came into being after World War II when traditional lifestyles collided with the rapid social changes that were then taking place. For much of Taiwan's history, temples served as social

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s e e i n g ta i w a n and business hubs as well as religious centers. Indeed, some of the island's oldest night markets are closely associated with places of worship. The most famous of these is the Miaokou Night Bazaar in Keelung – miao [廟] meaning “temple” and kou [口] meaning “mouth” or “entrance.” This market developed around Dianji Temple and is now more famous than the shrine. Big-city night markets emerged as true social institutions when Taiwan's economy took off in the 1950s and 1960s. Hordes of rural residents moved to the cities and took factory jobs. Many lived in cramped dwellings that lacked electric fans, let alone air-conditioning. Night markets were popular because it gave these blue-collar workers somewhere inexpensive to go on sweltering evenings. At the same time, demobilized soldiers and other refugees began selling specialties from their hometowns on the Chinese mainland. Few had enough capital to open a restaurant, so they joined the ranks of those cooking and selling in night markets. This influx is one reason why Taiwan continues to offer an unbeatable variety of Chinese cuisines.

P e r e n n i a l n i g h t - m a r k e t f a v o rites include barbecued squid, steamed sweetcorn, and what Chinese-speakers call luwei [滷味]. This category of braised foods includes tempura, soybased items such as tofu, and animal parts that delight lovers of exotic cuisine (gizzards, hearts, and necks of chickens, ducks' tongues, and various pig innards). The less adventurous might prefer the savory delight known as dachangbaoxiaochang [大腸包小腸], which means “small sausage” (a grilled pork sausage) “wrapped inside a large

sausage” (a sausage-shaped mass of sticky rice). It resembles the Taiwanese version of a hot dog. Here are some of the best places to go to check out night market food, and some of the delicacies most worth trying:

Shilin Night Market is home to Taipei’s most popular after-dark feeding frenzy, thanks to 500-plus vendors and a location conveniently close to the Jiantan MRT Station. Many visitors are eager to try the market's famous dabingbaoxiaobing [大餅包小 餅], literally “small bun wrapped inside a large bun.” The small bun is a deepfried dumpling filled with red beans or sesame. This is folded inside a larger bun that looks an Indian chapatti, which is then flattened with a stick. Because Shilin Night Market is often packed with people, visitors may prefer the less crowded Gongguan Night Market (next to National Taiwan University) as Raohe Night Market (within walking distance of Songshan Railway Station). The offerings in these places go beyond the tastes of Greater China. Indian food can also be enjoyed in Raohe Night Market, while Gongguan Night Market is said to have some of the island's very best takoyaki. Each portion of this Japanese snack contains several golf ball-size balls of octopus and batter. Fried on a griddle and then drizzled with bonito flakes and mayonnaise (and maybe a dash of wasabe, depending on the customer's preference), they are best eaten when they are piping hot. Some night market chefs have successfully fused foreign recipes with local ingredients. One such creation is squid stuffed with risotto. A whole

squid is filled with pan-fried risotto, then deep fried until the outside is crispy. Flavored with mustard and mayonnaise, this gourmand's dream can be found at Feng Chia Night Market in Taichung. Named after the adjacent university, Feng Chia is said to be Taiwan's largest conglomeration of outdoor vendors. This claim is hard to verify, as night markets grow and shrink over time, but no one would dispute that it is big indeed. A lot of night market fare is fried, but healthier options are easy to find. In every market there are vendors who sell small boxes of washed, cut, and ready-to-eat fruit, including Taiwan's excellent pineapples, mangoes, and guavas. Fresh juices and papaya milkshakes are very popular. For visitors who are feeling the summer heat, the best option is shaved ice rather than conventional ice cream. This is a plate of ice that has been ground into a fine powder and flavored with fruit or other toppings. Typical options include condensed milk, mint syrup, azuki beans, sweet pink balls somewhat like mochi, and jelly made from aiyu figs. A variation is called xuehuabing [雪 花冰], meaning “snowflake ice.” This ice dish is made from milk instead of water. “A Hungry Girl in Taipei,” a prominent English-language foodie and blogger, sampled this dessert at Lehua Night Market (within walking distance of the Dingxi MRT Station in New Taipei City's Yonghe District). According to her blog, the taste was like “how you would imagine sticking out your tongue and eating freshly fallen snow.” Details of these and other night markets can be found on the Taiwan To u r i s m B u r e a u ' s w e b s i t e , w w w.

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AmCham Companies through the Years As AmCham Taipei turns back the clock during this anniversary year to review its six decades of service, it is also asking its member companies to share photo remembrances of their early presence in Taiwan.

The opening of the first Costco warehouse in Taiwan, in Kaohsiung on January 18, 1997. Costco CEO Jim Sinegal (in the middle with glasses) visited Taiwan for the occasion. Costco Taiwan General manager Richard Chang is the tall gentleman toward the left.

A Caterpillar D8 track-type tractor used by the Taiwan Sugar Corp. in Tainan during the 1950s. Capital Machinery Ltd. is the sole authorized dealer in Taiwan for Caterpillar products and services.

The original employees of the Dow Taiwan representative office established in 1968, with Alan Brink as the first manager. Sales that year surpassed US$1million.

The Jiantan Station is a landmark of the Taipei MRT’s Red Line, which opened in 1997. Parsons Brinckerhoff International provided general consultancy service for the line’s construction, including planning, design review, and construction supervision.

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Cover Story - Putting New Taipei City on the Map Industry Focus - A Report on the Tech Sector