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TA I WA N R E V I E W

July / August 2016

July / August 2016

台 灣 評 論

INSIGHT

CULTURE

PHOTOGRAPHY

6 8 Island Life 18 54 More Than Just a Theater A Sustainable Vision

Through fostering Taiwan’s worldclass renewable energy sector, the government aims to power the nation toward a greener future.

TA I WA N R E V I E W

Premier ­ Lin Chuan Leading an Innovation Revolution

Vo l . 6 6 No. 6

GPN2004000005

The new home of renowned modern dance company Cloud Gate is a center of artistic expression and collaboration.

Taiping Island, part of the sovereign territory of the Republic of China (Taiwan), is a thriving outpost in the South China Sea.


Cloud Gate Theater in New Taipei City’s Tamsui District (Photo by Liu Chen-hsiang, courtesy of Cloud Gate Culture and Arts Foundation)

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Taiwan Review July / August


EDITORIAL

台 灣 評 論

Viable Path to Prosperity

P

resident Tsai Ing-wen ( 蔡 英文 ), who took office in

May, has pledged to revitalize Taiwan’s economy by pursuing a New Model for Economic Development, one that focuses on innovation, employment and equitable wealth distribution. The public, having experienced years of stagnant wages, elected her with the expectation that she would guide the country down a path toward increased salaries, improved working conditions and greater job opportunities. These weighty goals can be achieved, but not overnight. They are just part of the Tsai administration’s plans for an economic transformation that will foster domestic innovation while at the same time diversifying trade by, among other things, increasing the nation’s presence in South and Southeast Asia. The president’s focus on the economy is demonstrated by her appointment of Lin Chuan (林全) as premier. A former finance minister, he has decades of experience in the public and private sectors and is known as an advocate of financial reform, having spearheaded the creation of the alternative minimum tax system. His expertise will be an invaluable asset to the Cabinet as the government pushes forward its initiatives. A key step to achieving this new economic model is to reinforce the nation’s relations with countries around the globe while pursuing bilateral and multilateral trade agreements. Of particular importance to the new administration is the U.S.-led Trans-Pacific Partnership (TPP). The comprehensive trade agreement, which has not yet come into force, has been signed by 12 countries around the Pacific Rim that combined account for just shy of 40 percent of global gross domestic product. The president has expressed her hope that the U.S. will support Taiwan’s bid for inclusion in the next round of TPP negotiations.

One of the most significant challenges for the Tsai administration is export diversification. Currently, mainland China, including Hong Kong, accounts for roughly 40 percent of Taiwan’s exports, with a further 18 percent going to Southeast Asia and 12 percent to the U.S. In order to decrease the nation’s overreliance on a single market, Tsai has devised her New Southbound Policy. The plan involves enhancing ties with Association of Southeast Asian Nations member states and South Asian countries such as India, and is being organized by the recently inaugurated New Southbound Policy Office under the Office of the President. In order to ensure its continued economic prosperity, Taiwan must boost its competitiveness and attract greater levels of investment from overseas. The key to this is innovation, a concept at the core of Tsai’s five major industrial development objectives. The president’s strategy centers on boosting the capabilities of five major local industries, namely biotech and pharmaceuticals, sustainable energy, national defense, smart machinery, as well as the Internet of Things and other smart technologies. For the latter industry, the president has proposed northern Taiwan’s Taoyuan City as the hub of the Asian Silicon Valley initiative, which aims to transform the special municipality into a center of high-tech innovation and entrepreneurship. It will take time for this new vision of economic revitalization to come to pass. Tsai has asked that the people be patient, that they be optimistic, but most of all that they be resolutely united behind the common goal of ushering in a new era for the nation. The president’s plan is a viable path to economic prosperity, but it will take the concerted efforts of the government, businesses and private individuals to make it a reality.

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CONTENTS

July / August

台 灣 評 論

03

E DITORIAL

VIABLE PATH TO PROSPERITY The new administration’s policies promote innovation and export diversification.

S NAPSHOTS

06

News and events concerning Taiwan from the past several months

12

SPEARHEADING REFORM

I NSIGHT

Premier Lin Chuan embraces the challenge of overseeing the nation’s industrial restructuring and economic revitalization. BY OSCAR CHUNG

18

A SUSTAINABLE VISION The government seeks to harness the huge commercial potential of the country’s world-leading green energy sector. BY PAT GAO

24

INNOVATION SUPPLY CHAIN Through boosting infrastructure investment and talent collaboration, Taiwan aims to become an international center for Internet of Things research and development. BY MEG CHANG

30

INDUSTRIAL REMEDIES The nation is well positioned to take a leading role in the global biomedical and pharmaceutical sector. BY MEG CHANG

36

FORCE FOR GROWTH The new administration intends to turn the country’s national defense needs into a major driver of industrial upgrading. BY PAT GAO

42

INTELLIGENT AUTOMATION Taiwan’s cutting-edge machinery sector works to create smart technologies for the burgeoning era of Industry 4.0. BY KELLY HER

PHOTOS BY CHIN HUNG-HAO AND HUANG CHUNG-HSIN AND COURTESY OF EXECUTIVE YUAN, KU CHIN-TANG AND MINISTRY OF NATIONAL DEFENSE


C ULTURE

48

CULTURAL GATEWAY The central city of Taichung boosts its international appeal by highlighting its abundant historical structures and vibrant traditions. BY KELLY HER

54

MORE THAN JUST A THEATER Cloud Gate’s new performance venue is a hub of artistic collaboration. BY DAVID MEAD

S PORTS

60

GOING FOR GOLD Taiwan’s top athletes hone their skills ahead of the Rio Olympics. BY OSCAR CHUNG

P HOTOGRAPHY

68

ISLAND LIFE Taiping Island is a verdant jewel and thriving outpost in the heart of the South China Sea.

78

A STITCH THROUGH TIME At Nanhsin Embroidery in Taipei, Wu Shu-mei practices the dying craft of producing handmade clothing for the gods. PHOTOS BY CHEN MEI-LING

Taiwan Review PUBLISHER David Tawei Lee DIRECTOR Jeremy Liang EDITOR-IN-CHIEF Leanne Kao MANAGING EDITOR Jim Hwang EDITORS Ciaran Madden, Jason Gerock STAFF WRITERS Kelly Her, Oscar Chung, Pat Gao, Meg Chang PHOTOGRAPHERS Huang Chung-hsin, Chen Mei-ling, Chin Hung-hao ART EDITORS Lin Chain-ru, Ella Lin PRODUCTION Cheng Hsiao-yen

A noted economic reformer, Premier Lin Chuan has been charged with leading Taiwan’s industrial restructuring.

ADDRESS Kwang Hwa Publishing Co. 2 Tianjin Street, Taipei, Taiwan, Republic of China. PRINTER China Color Printing Co., Inc. 229 Baoqiao Rd., Xindian, New Taipei City, Taiwan, ROC

SUBSCRIPTION Taiwan—NT$120/copy, NT$700/yr, NT$1,300/2yrs Other areas—US$4.50/copy, US$25/yr, US$50/2yrs Taiwan residents can subscribe to Taiwan Review at post offices by completing a giro deposit form (郵政劃撥儲金存款單). The magazine’s postal account number is 0009469-4, and its Chinese title is 外交部英文台灣評論. International readers please contact Kwang Hwa Publishing Co. CONTACT INFORMATION Editorial: Tel: 886-2-3356-8015 Fax: 886-2-2351-0829 Email: taiwanreview@mofa.gov.tw Subscription: Tel: 886-2-2397-0633 Fax: 886-2-2397-0655 Email: service@taiwan-panorama.com COPYRIGHT Taiwan Review (ISSN 1725-5148) is published bimonthly by Kwang Hwa Publishing Co. 2 Tianjin Street, Taipei, Taiwan, Republic of China © 2016 by Kwang Hwa Publishing Co. All rights reserved. The magazine was published as the Free China Review from 1951, the Taipei Review from 2000 and the Taiwan Review from 2003. 中華民國40年4月1日創刊

MICROFORM REPRODUCTIONS Taiwan Review is available in microform (microfiche and 16mm and 35mm film) from National Archive Publishing Company, 300 North Zeeb Road, Ann Arbor, MI 48106. OTHER LANGUAGE EDITION Taiwan Review is also published bimonthly in Spanish. INTERNET Multimedia information about Taiwan is available at http://www.mofa.gov.tw Taiwan Review is available online at http://taiwanreview.nat.gov.tw 中華郵政台北雜字第29號

登記証登記為雜誌交寄

GPN 2004000005 The views expressed by individual authors do not necessarily reflect those of the Taiwan Review.


Health minister addresses WHA, seeks robust participation

SNAPSHOTS

台 灣 評 論

POLITICS President Tsai vows full investigation of missile incident President Tsai Ing-wen (蔡英文) said July 2 that the government will fully investigate the accidental launch the day before of an anti-ship missile by a Republic of China (Taiwan) navy corvette resulting in the death of a fishing boat captain and injuries to three crew members. “I extend my deepest condolences to the captain’s family and agree with his wife that this incident should never have happened,” Tsai said. Earlier in the day, Premier Lin Chuan (林全) announced that the matter is to be investigated by a specially convened team from the Taiwan High Prosecutor’s Office. The Ministry of National Defense (MND) must initiate talks on state compensation with the families, fully cooperate with investigators, review all aspects of the incident and publicly disclose the relevant facts on its website, Lin said. “But as this is a national security issue, the ministry should take necessary measures to ensure the nondisclosure of confidential information,” he stated, adding that investigators from the Taiwan High Prosecutor’s Office must adopt a similar approach. The premier also called on the MND to review all aspects of the incident, including military discipline, operational procedures and personnel training. 6 Taiwan Review July / August

Minister of Health and Welfare Lin Tzou-yien (林

奏延) called on the World Health Organization

(WHO) and its member states to support the country in its efforts to participate robustly in WHO meetings and activities while addressing the 69th World Health Assembly (WHA) May 25 in Geneva. In addition to attending the WHA, Taiwan’s delegates participated in several technical briefings, sharing their experiences and offering suggestions on topics of global concern including childhood obesity, malnutrition and physical activity, as well as quarantine and disease prevention. On the sidelines of the WHA, Taiwan delegates held talks with their counterparts from more than 45 countries and international organizations. Taiwan has attended the WHA, the decision-making body of WHO, as an observer every year since first invited in 2009.

TRA, 6 Assurances reaffirmed as cornerstone of

Taiwan-US relations

The Taiwan Relations Act (TRA) and Six Assurances were reaffirmed May 16 as the cornerstone of U.S.Taiwan relations following unanimous passage of House Concurrent Resolution 88 by the U.S. House of Representatives. It is the first time for the TRA and Six Assurances to appear in a resolution passed by Congress. HCR 88 follows approval April 28 by the U.S. Senate of S. 1635, a bill containing similar text in support for the TRA and Six Assurances, as well as a resolution to the same effect by the Republican National Committee during its April 20-23 spring meeting.

President Tsai wraps up Latin America visit President Tsai Ing-wen (蔡英文) returned July 2 from a nine-day official visit to Republic of China (Taiwan) diplomatic allies Panama and Paraguay. Abroad for the first time since taking office in May, Tsai led a delegation comprised of government officials, legislators and business representatives. She attended the June 26 inauguration ceremony of the Panama Canal expansion project, met with Panama President Juan Carlos Varela and toured the Colon Container

Terminal of Taipei Cityheadquartered Evergreen Marine Corp. In Paraguay she held talks with President Horacio Cartes in the capital Asuncion, addressed the

Paraguayan congress and toured joint cooperation projects. Tsai also stopped over in Miami and Los Angeles on the outbound and inbound legs of her trip, respectively.


ECONOMY Highest-capacity container ships launched in Taiwan

ROC rejects South arbitration award The award rendered by the tribunal at the Permanent Court of Arbitration in the Philippines-initiated South China Sea arbitration, which includes Taiping Island in the Nansha (Spratly) Islands, is completely unacceptable to the Republic of China (Taiwan) and not legally b i n d i n g on t h e n a t i on , according to Minister of Foreign Affairs David Tawei Lee (李大維) July 12. “There are two main reasons for this,” Lee said. “First, the ROC is referred to as ‘Taiwan Authority of China,’ an inappropriate designation that is demeaning to the status of the ROC as a sovereign state. Second, Taiping Island was not originally included in the Philippines’ submissions for arbitration. But the tribunal took it upon itself to expand its authority, declaring ROCgoverned Taiping Island, and other features in the Nansha Islands occupied by Vietnam, the Philippines and Malaysia, all to be ‘rocks’ that do not generate an exclusive economic zone.” According to the minister, the arbitral tribunal did not formally invite the ROC to participate in its proceedings, nor did it

China Sea solicit the ROC’s views. “It is beyond dispute that the ROC is entitled to all rights as per international law and the U.N. Convention on the Law of the Sea [UNCLOS] over the South China Sea islands and their relevant waters,” he said. Regarding disputes in the South China Sea, Lee urged their peaceful resolution through multilateral negotiations in the spirit of setting aside differences and promoting joint development. “The ROC is willing, through negotiations conducted on the basis of equality, to work with all states concerned to advance peace and stability in the South China Sea,” he said. Taiping Island, with an area of 0.51 square kilometers, is the largest naturally formed island in the Nansha Islands. It can sustain human habitation and an economic life of its own, and meets the criteria of an island as defined in Article 121 of UNCLOS. Therefore, the ROC enjoys full rights associated with territorial waters, a contiguous zone, an exclusive economic zone, and a continental shelf in accordance with UNCLOS.

CSBC Corporation, Taiwan (CSBC) unveiled its highestcapacity domestically developed and constructed container vessels May 5 in the southern Taiwan port city of Kaohsiung. YM Window and YM Width are 368 meters long, 51 meters wide and can carry 14,198, 20-foot equivalent units (TEUs) of containers. According to CSBC, the vessels were commissioned by Canada-based Seaspan Corp. under a fiveship lease agreement with Yang Ming Marine Transport Corp.—the world’s 10th largest fleet operator—based in the northern Taiwan port city of Keelung. CSBC expects to complete the remaining three vessels by the end of the year.

Taiwan’s EVA earns 5-star Skytrax rating EVA Airways Corp. earned for the first time in its history a five-star rating by air travel research group Skytrax, according to the Taoyuan City-based carrier June 15. EVA was rated a four-star airline for eight consecutive years, and bagged its five-star status after outperforming in many of the 800plus assessment areas such as airline lounges, airport services, cabin staff, in-flight entertainment, onboard catering and seat comfort. Skytrax’s latest annual assessment involved more than 180 carriers worldwide. Established in 1989 as Taiwan’s first privately owned

carrier, EVA is a regular winner of aviation industry and travel surveys. It ranked third in the 2016 global airline safety report by Germany-based aviation safety information provider Jet Airliner Crash Data Evaluation Centre, and has been named one of the world’s top 10 safest airlines eight times since 2004 by Germanyheadquartered airline industry magazine Aero International. 7


New Southbound Policy opens doors

for Taiwan firms

Coordinating private sector efforts in developing opportunities for Taiwan firms in emerging markets throughout Southeast Asia and beyond is a top priority for the government, according to James C. F. Huang (黃志芳),

head of the New Southbound Policy Office under the Presidential Office, May 27. “The policy has three prongs: new range, new direction and

new support,” Huang said. Under new range, the New Southbound Policy extends to six South Asian countries: Bangladesh, Bhutan, India, Nepal, Pakistan and Sri Lanka. New direction encompasses inbound investment and tourism, as well as educational exchanges. And new support involves viewing South and Southeast Asia as more than just bases for manufacturing, but as extensions of Taiwan’s domestic demand to support growth. The policy seeks to elevate the scope and diversity of Taiwan’s export economy and minimize overreliance on any single market.

Taiwan eases visa procedures for more ASEAN nations Taiwan announced June 15 it will increase the number of Association of Southeast Asian Nations member states in its streamlined visa application program from five to eight as part of efforts to expand bilateral exchanges and promote the President Tsai Ing-wen (蔡英文) administration’s New Southbound Policy. Cambodia, Laos and Myanmar will be added to the streamlined visa treatment program before Sept. 1. Citizens of these three nations can then apply online for Taiwan visas if they previously held travel visas or resident permits for Australia, New Zealand, Japan, the EU or U.S. Another measure under consideration is adding Southeast Asian countries to Taiwan’s visa-waiver program by year-end. 8 Taiwan Review July / August

Taiwan-initiated APEC workforce alliance stages 1st forum The Taiwan-initiated Skills Development Capacity Building Alliance under the Asia-Pacific Economic Cooperation (APEC) held its first forum May 26 in Taichung City, underscoring Taiwan’s ongoing efforts to boost employment and foster growth throughout the region. The three-day forum in central Taiwan featured presentations by highranking government officials and labor experts from Australia, Japan, Singapore, South Korea and Vietnam. The initiative promotes research on youth employment, as well as collaboration between vocational training professionals from alliance members. Under the initiative, the APEC Skills Development Capacity Building Park was established in Taichung. The alliance was first proposed by Taiwan in May 2015 at the annual meeting of APEC’s Human Resources Development Working Group in the Philippines.

Taiwan sows seeds of success for local firms in SE Asia A seminar on conducting teacher development programs in Southeast Asian languages was held for the first time May 6 in central Taiwan’s Nantou County by the Ministry of Education. Conducted under the ministry’s New Inhabitants Talent-Developing Project, the seminar aims to help schools provide courses in Southeast Asian languages for Taiwan’s elementary and high schoolers by 2018. It is expected that participating students, especially the nation’s 250,000 children of immigrants from Southeast Asia, will develop language skills enabling them to play a key role in growing Taiwan’s economic footprint in Southeast Asia.

Contact Taiwan launched to attract foreign professionals Contact Taiwan, the latest plank in the government’s platform for attracting highly skilled foreign talent to Taiwan, was launched June 28. The website lists jobs and information relating to visa applications, taxation and living conditions. Contact Taiwan is expected to complement government efforts in this regard such as assisting Taiwan’s small and medium enterprises in recruiting foreign students enrolled at local institutions.


SOCIETY Tzu Chi stages Buddha’s birthday ceremonies worldwide Taiwan, Brazil forge closer economic ties A memorandum of understanding on expanding two-way economic exchanges was inked June 21 in Taipei City by Taiwan External Trade Development Council (TAITRA) under the Ministry of Economic Affairs and Brazil’s Federation of Trade in Goods, Services and Tourism (Fecomercio). The pact enables the island’s firms to access more opportunities spanning enterprise partnerships, industrial cooperation and trade in Fecomercio’s home state of Santa Catarina in southern Brazil. It also underscores the growing strength of bilateral ties between Taiwan and the largest economy in Latin America. According to TAITRA, Fecomercio is the most influential trade group in the state representing 70 industry associations comprising 46,000 companies. In addition, Santa Catarina is Brazil’s sixth biggest state in terms of economic output and boasts an array of industries ranging from information and communications technology to textiles. Brazil is Taiwan’s top partner in Latin America, with bilateral trade reaching US$3.05 billion in 2015. TAITRA has signed 14 memorandums and trade pacts with Brazilian trade organizations since 1988, three of them in the first half of this year. The most recent was with Brazilian Association of Importers of Industrial Machinery and Equipment (Abimei) in May and Brazilian Trade and Investment Promotion Agency (APEX-Brasil), the Brazilian government’s trade and investment promotion agency, in March.

Taiwan’s Buddhist Compassion Relief Tzu Chi Foundation held May 8 a series of ceremonies worldwide celebrating Buddha’s birthday in conjunction with

Mother’s Day on the second Sunday of May, which has also been observed as the Global Tzu Chi Day since 1996. A total of 450 sessions were attended by an estimated 270,000 worshippers in 35 countries and territories. Established in Hualien County, eastern Taiwan in 1966 as a religious sect based on traditional Buddhist teachings by founder Dharma Master Cheng Yen (證 嚴), Tzu Chi has developed into a widely respected international organization devoted to charity, environmental protection and disaster relief works.

Changhua County joins samesex partnership recording trend

Kaohsiung hands over land to indigenous peoples Southern Taiwan’s Kaohsiung City is the latest municipality transferring official ownership of land back to indigenous peoples. Kaohsiung Mayor Chen Chu (陳菊) gave land ownership certificates for 110 plots covering 100 hectares to the representatives of 60 households during a May 28 ceremony. The move is in line with similar projects taking place in other parts of the island, notably Pingtung and Taitung counties in southernmost and southeastern Taiwan, respectively. Taiwan currently recognizes 16 tribes and has an indigenous population of around 530,000.

Changhua County in central Taiwan is offering same-sex couples the right to record their partnerships at household registration offices, reaffirming the island’s increasingly liberal approach to the lesbian, gay, bisexual and transgender (LGBT) demographic. Although the record is not legally binding, it does represent a strong step forward in raising public awareness and understanding of LGBT issues. Changhua’s commencement of the service in early April sees it join the ranks of Hsinchu County, as well as Chiayi, Kaohsiung, New Taipei, Taichung, Tainan, Taipei and Taoyuan cities—all of which implemented similar measures over the past year. To date, more than 500 same-sex couples have registered partnerships in the nine municipalities encompassing over 75 percent of Taiwan’s 23 million people. 9


CULTURE

Taiwan lauded for low casualties in explosion treatment Taiwan’s successful medical achievement in treating burn victims following the flash-fire at Formosa Fun Coast Park in June 2015 in New Taipei City won praise at a symposium on treating massive burn casualties held by the Humanitarian Aid and Civil Protection under the European Commission in Brussels in late May. The Taiwan delegation, headed by officials from the Ministry of Health and Welfare, shared the island’s experience after the incident, which left 499 injured, including more than 200 with burn areas of over 40 percent, and more than 20 with burn areas over 80 percent. Taiwan was the only non-European country invited to the conference.

Lungshan Temple listed as Taiwan’s 1st-ever CyArk cultural site Lungshan Temple is the first Taiwan cultural asset included in CyArk 500, a U.S. 3-D digital archive dedicated to the preservation of invaluable cultural sites worldwide. Situated in Changhua County’s Lukang Township, central Taiwan, the temple dates from the late 18th century and is one of the oldest and most revered Buddhist monasteries in Taiwan. Its architectural beauty and rarely seen wooden structure saw it listed in 1983 among 92 sites designated as National Monuments by the Ministry of Culture. The temple joins CyArkadmitted sites like the Leaning Tower of Pisa, Mt. Rushmore, the ancient city of Pompeii and the ruins of Thebes in Egypt.

1st veterinary blood bank launched in Taiwan Taiwan’s first veterinary blood transfusion center was launched June 13 at National Pingtung University of Science and Technology. The southern Taiwan facility will build a complete profile of donors, send its mobile blood donation unit to communities cooperating with Kaohsiung Blood Center, move toward developing dog stem cell research and build a database for expanding services to other animals like cats, cattle and goats. According to the latest statistics from the Animal Protection Department of the Council of Agriculture, Taiwan had 1.74 million pet dogs in 2013 and 1,353 veterinary clinics in 2014. 10 Taiwan Review July / August

Winners of 2016 Tang Prize unveiled in Taipei Winners of the 2016 Tang Prize were announced June 18-21 in Taipei City. Canadian jurist Louise Arbour won in the rule of law category, joining American academic William Theodore de Bar y of Columbia Universit y for Sinology, French microbiologist Emmanuelle Charpentier, American geneticist Jennifer A. Doudna and Chinese-American biologist Feng

Zhang for biopharmaceutical science and American physicist Arthur H. Rosenfeld for sustainable development. Each category provides the winners with a cash prize of US$1.24 million and research grant of US$311,000. The cash, along with cer tif icates and medals, will be presented during a ceremony at Dr. Sun Yat-sen Memorial Hall Sept. 25 in Taipei City. In addition, “Glory of Tang Prize: Laureate and Diploma Exhibition” takes place Sept. 2 to Nov. 6 in Taipei and Kaohsiung cities. Established by Taiwan entrepreneur Samuel Yin (尹 衍樑) in December 2012, the biennial prize takes its name from the Tang dynasty (618-907), a period considered the peak of ancient Chinese civilization. It was also one characterized by international exchanges and robust cultural activities. The open-mindedness exhibited by the Tang people in embracing different cultures epitomizes the core values of the prize.


Taiwan paper art stars at French design festival

New Taipei City museums embrace virtual reality Shihsanhang Museum of Archaeology in New Taipei City launched trial operations May 24 of a virtual reality ( VR) experience allowing visitors to explore the underwater environment of the historically significant Tamsui River estuary near the facility. The museum features artifacts dating back 500 to 1,800 years unearthed since at Shihsanhang Archaeological Site in the city’s Bali District. Scheduled to make its public debut in October, the VR project is part of New Taipei City Government efforts enhancing the experiences of patrons through modern technologies at its four directly administered facilities: Shihsanhang Museum of Archaeology, Yingge Ceramics Museum, Tamsui Historical Museum and Gold Museum.

Taiwan took part in the French design festival D’Days in Paris May 30 to June 5 at Museum of Decorative Arts, as well as 24b Gallery and Joseph Turenne Gallery. The “Taiwan—Unfolding” exhibition was produced by New Taipei City-based Paper Space Co. and designed by renowned French talent S ebastien Cordoleani. Among the participants were Hsin Hsin Paper Sculpture Store, owned by Chang H s u - p e i ( 張 徐 沛 ) , a n d I D E OXO b y Taipei City-headquartered Ideoso Design Consultancy Inc.

Inaugural Europe Fair hosted in Taipei City The inaugural Europe Fair wrapped up May 8 at Taipei Songshan Cultural and Creative Park as part of worldwide celebrations for May 9 Europe Day, which doubles as the EU’s birthday. Staged by the Ministry of Foreign Affairs, European Economic and Trade Office in Taipei and Taipei City Government, the three-day event attracted around 30,000 attendees and involved the representative

3rd edition of Mosaic Taiwan cements ties with North America The third edition of Mosaic Taiwan, an international youth leadership program organized by the Ministry of Foreign Affairs (MOFA), wrapped up June 24 in Taipei City. During the three-week program, 30 students and professionals aged 20-35 from top tertiary institutions in Canada and the U.S. gained in-depth knowledge of the island’s culture, economy, history and society. They took part in workshops and visited with representatives of the academic, private and public sectors. According to the MOFA, Taiwan’s ties with Canada and the U.S. have flourished over the years on the back of the shared values of democracy, freedom, peace and human rights.

Liao sworn in as president of Taiwan’s Academia Sinica offices of 13 EU states. Taipei City Mayor Ko Wen-je (柯文哲) said it is important to enhance Taiwan-EU people-to-people exchanges. “This event allows locals to experience the EU’s cultural diversity and helps Taipei become an even more internationalized city.”

All stories are sourced from Taiwan Today and can be read in full at http://www.taiwantoday.tw/

James C. Liao (廖俊智), a renowned scientist in metabolic engineering, synthetic biology and systems biology, was sworn in June 21 as the 11th president of Academia Sinica. Liao vowed to ensure Taiwan’s top research institution would continue making a tangible contribution to research and society. The president of Academia Sinica is selected by Council of Academia Sinica and appointed by the Republic of China (Taiwan) president. Photos by Central News Agency and courtesy of Buddhist Compassion Relief Tzu Chi Foundation, CSBC Corporation, Taiwan, Coast Guard Administration, New Taipei City Government, Office of the President, Taiwan External Trade Development Council and Workforce Development Agency

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O

INSIGHT

台 灣 評 論

Spearheading Reform Premier Lin Chuan is determined to add new momentum to Taiwan’s economy by cultivating innovative industries and fostering an attractive investment environment. BY OSCAR CHUNG PHOTOS BY CHANG SU-CHING, CHUANG KUNG-JU, HUANG CHUNG-HSIN, KU CHINTANG AND OSCAR CHUNG AND COURTESY OF MINISTRY OF ECONOMIC AFFAIRS

INFOGRAPHICS BY KAO SHUN-HUI

12

Taiwan Review July / August

n the morning of Sunday, May 22, two days after taking office as premier of the Republic of China (Taiwan), Lin Chuan (林全) traveled to Madou District in the southern city of Tainan to meet with local farmers. The district, a renowned pomelo-producing region, experienced heavy rainfall earlier this year, resulting in poor harvests. As he toured a pomelo orchard, Lin listened intently to the farmers’ descriptions of their economic losses. He then asked the central and local government officials in attendance to brief him on the spot about the policies enacted to assist agricultural producers, before instructing them to strengthen existing measures for helping farmers cope with excess or insufficient production. “When the premier sees a problem, he moves quickly to address it. He really empathizes with people who are suffering,” said Tainan City Mayor William Lai (賴清德), who accompanied Lin to the orchard. The national elections in January this year reshaped Taiwan’s political landscape. In the presidential race, Tsai Ing-wen (蔡英文) of the Democratic Progressive Party (DPP) emerged the clear victor, while her party claimed a substantial legislative majority. In mid-March, Tsai announced that Lin would lead the Executive Yuan, Taiwan’s Cabinet, upon her May 20 inauguration. His primary task as premier is to revitalize the nation’s economy. Lin’s trip to Madou, his first inspection tour after assuming office, reflected the new administration’s commitment to boosting economic growth and improving the livelihoods of people from all walks of life. The scale of the challenge facing the government is considerable, however. According to the Ministr y of Labor, the average starting monthly salar y for college graduates was NT$27,655 (US$850) in July 2015, slightly lower than it was in 2000. In June, Taiwan’s exports fell year-onyear for the 17th consecutive month, while the economy contracted 0.68


Premier Lin Chuan visits a pomelo orchard in Tainan City’s Madou Township on May 22, two days after assuming office. Lin traveled to the area to listen to local farmers’ concerns about agricultural losses caused by heavy rainfall.

percent in the first quarter of 2016. Furthermore, in the annual World Competitiveness Report released at the end of May by the Switzerlandbased International Institute for Management Development, Taiwan fell to 14th place in the rankings, its fourth drop in the past five years. Given the nation’s faltering exports and wage stagnation, it came as little surprise when a survey released by the Taipei-based Taiwan Thinktank in mid-May found the public listed economic development as the top priority for the new government. Tsai, who made the need for a new economic model a core component of her election campaign, selected Lin in large

part for his ability to spearhead the nation’s industrial restructuring. The premier, a 64-year-old economist with extensive public and private sector experience, has a proven track record as a reformer.

Experienced Reformer

Born and raised in southern Taiwan’s Kaohsiung City, Lin earned a master’s degree in public finance from National Chengchi University in Taipei in 1978 and a doctorate in economics from the University of Illinois at UrbanaChampaign in the U.S. in 1984. After completing his postgraduate studies, he entered academia, teaching at several universities in Taipei.

He began his political career in 1995 when then-Taipei Mayor Chen Shui-bian ( 陳水扁 ) appointed him commissioner of the city government’s Department of Finance. After Chen was elected president in 2000, Lin served as head of the DirectorateGeneral of Budget, Accounting and Statistics from 2000 to 2002 and the Ministry of Finance from 2002 to 2006. Lin’s tenure as finance minister is best remembered for the introduction of the Income Basic Tax Act. The law, which took effect in 2006, altered the nation’s tax regulations with the goals of promoting more equitable wealth distribution and consolidating the national tax base. In essence, 13


Taiwan’s Economic Growth Rate

1 Mainland China

US$10.96 billion

3.92%

3.8% 2.06%

2011

Taiwan’s Global Competitiveness Ranking

2014

2.2%

NO.6 2011

2013

2012

0.65%

NO.7 2012

NO.11 2013

2015

2014

British Overseas Territories in the Caribbean US$2.89 billion

2

NO.11

NO.13

2015

NO.14 2016

6 The Philippines

US$644 million

Taiwan’s Top Foreign Investment Destinations

IN 2015

Source: Ministry of Economic Affairs

Taiwan’s Global Competitiveness Ranking

3 United Kingdom US$1.7 billion

5 Thailand US$775 million

014

NO.6 2011

0.65%

NO.7 2012

NO.11 2013

2015

2014

4 Vietnam

NO.11

NO.13

2015

NO.14

US$1.22 billion

2016

Source: Ministry of Economic Affairs

Source: International Institute for Management Development

1. The Lanyang Museum in northeastern Taiwan’s Yilan County integrates seamlessly into its surroundings. To help boost foreign investment, the government plans to reform the nation’s environmental impact assessment procedure. 2. The premier, center, is shown the proposed site of an international talent exchange center on a model of northern Taiwan’s Taoyuan City on June 30. Under its Asian Silicon Valley industrial development initiative, the government plans to turn the northern metropolis into a center of tech innovation and entrepreneurship.

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Taiwan Review July / August

it increased the amount of taxable income for enterprises and wealthy individuals by amending the rules governing tax breaks. After leaving public office, Lin worked in a number of senior management positions in the private sector. From 2006 to 2009, he was the chairman of Vanguard International Semiconductor Corp., an 8-inch wafer manufacturer based in northern Taiwan’s Hsinchu City. He also held positions on the boards of several other enterprises, and was the chief executive officer of the New Frontier Foundation, a DPP think tank. Though not formally a member of the party, he served as a senior consultant to Tsai’s 2016 presidential election campaign. “Lin Chuan and I have established an excellent professional rapport. He has great communication skills and understands better than anyone my principles concerning governance,” Tsai said while announcing her decision to appoint him premier. “When there are

divergent views on an issue, he’s adept at clarifying the true nature of the problem and identifying a solution.”

Innovation Revolution

In his first speech after assuming the premiership on May 20, Lin stressed that innovation is the key to reinvigorating Taiwan’s economy. This is why, he added, the administration will focus its industrial development efforts on five major high-tech areas, namely biotechnology and pharmaceuticals, green technology, smart machinery, national defense, and the Asian Silicon Valley initiative. The latter project will seek to foster the Internet of Things sector as well as enhance collaboration between local and U.S.-based tech firms. By cultivating these industries, the government hopes to build the foundations of a prosperous knowledgebased economy. “These governmentinitiated innovation policies can help stimulate investment in emerging


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sectors as well as rekindle public confidence in Taiwan’s economic future,” the premier said during an interview with Formosa TV in June. In addition to enacting large-scale industrial development initiatives, the government will soon begin providing capital to innovative local companies. In late May, the National Development Council (NDC), the Cabinet’s main economic policy planning agency, announced the establishment of an equity fund totaling NT$100 billion (US$3.08 billion) under the Executive Yuan-administered National Development Fund (NDF). While the NDF has traditionally focused on assisting startups, the new fund will offer capital to existing firms, and in particular small and medium-sized enterprises. The goal is to help these companies innovate and expand in the hope they can subsequently attract investment from the private sector. More importantly, in order to achieve its goal of developing a globally competitive investment environment, the nation must first address issues related to talent recruitment and retention. According to Lin, the government plans to entice skilled foreign workers in targeted fields by offering them preferential tax treatment. “ Top professionals could help take Taiwan’s industries to the next level,” he noted during a June interview with Commercial Times, a local financial newspaper. “This in turn would help enterprises attract investment as well as increase employment opportunities and eventually boost wage levels.”

Investment Environment

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To foster the nation’s attractiveness as an investment destination, the government will have to address a number of other macroeconomic issues, among 15


1. One of the key issues facing the new government is ensuring a stable electricity supply as the country phases out nuclear power. 2. Senior officials and representatives from industry groups attend the June 28 launch of Contact Taiwan, a website to attract skilled foreign workers. 3. Taiwan plans to expand ties with South and Southeast Asian nations such as Myanmar. 4. By promoting the development of innovative sectors, the government hopes to boost the nation’s international competitiveness and raise wage levels.

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the most pressing of which is ensuring a stable electricity supply. Taiwan has deactivated two of its nuclear reactors in recent years and intends to phase out nuclear power completely by 2025. This has led to concerns in some quarters about possible electricity shortages, an issue complicated by the fact that several coal-fired power plants are scheduled to be decommissioned in the next two years. “There must be no threat of power cuts as we transition to a nuclear-free homeland. Otherwise, the legitimacy and rationality of this objective will be immediately and fiercely challenged,” the premier said during his interview with Formosa TV. Taiwan’s long-term plans, he added, are to develop renewable energy sources, promote the use of smart meters and optimize the country’s power generation structure. 16

Taiwan Review July / August

In the near term, the government is stepping up efforts to reduce electricity consumption during peak times. State-run utility Taiwan Power Co. has already expanded a project launched in May 2015 offering financial incentives to large consumers that lower electricity usage in the afternoons. Last year, the program led to savings of about 100 megawatts. The firm has set a target of 500 megawatts for this year. The premier stated the government also intends to conduct a thorough review of Taiwan’s environmental impact assessment process, which has been criticized as putting a drag on economic growth by making it overly difficult for businesses to acquire and utilize land resources. Lin hopes to simplify and speed up this procedure. He also wants companies that perform

assessments to be selected through an open bid mechanism overseen by the government, rather than chosen by developers as is the norm at present, so the public has faith in the integrity of the process. Another key facet of Taiwan’s efforts to enhance its investment environment involves boosting bilateral and multilateral economic cooperation. Tsai has repeatedly expressed the nation’s willingness to participate in the second round of negotiations for the Trans-Pacific Partnership, a U.S.led trade pact signed earlier this year by 12 Pacific Rim countries. The premier noted the government has been researching issues related to Taiwan’s entry for some time and substantial progress has already been made. The administration has also announced the New Southbound


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Policy, an initiative to expand ties between Taiwan and countries in South and Southeast Asia across a range of fields. The plan forms a crucial component of the government’s efforts to promote trade diversification. In line with this policy, the NDC will establish a public-private investment company to support Taiwan enterprises exploring business opportunities in these regions. The council said it expects the company to raise NT$10 billion (US$308 million) in funding, with the majority coming from the private sector. While the government has identified clear strategies for improving Taiwan’s international competitiveness, the effects of these efforts will not be felt overnight. For Lin, perhaps the greatest challenge will be advancing these myriad policies, in addition to a raft of others in areas ranging from pension reform to social housing, while ensuring the Cabinet remains focused on its core goal of improving the livelihoods of the people. “The job of premier is a little more taxing than I imagined,” said Lin during the Formosa TV interview. “I know Taiwan faces many tough challenges; nevertheless, my resolve to tackle them remains undiminished.”

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Five Major Industrial Development Objectives

A Sustainable Vision Taiwan is using its high-tech and manufacturing expertise to usher in an era of renewable energy.

Green Technology Industry

BY PAT GAO PHOTOS BY CENTRAL NEWS AGENCY, CHANG SU-CHING, CHEN MEI-LING AND HUANG CHUNG-HSIN

Tainan

•Build a sustainable energy technology park in Tainan City’s Shalun area •Promote electricity generation from a wide variety of renewable sources, including solar, wind, geothermal, biofuel and marine

ILLUSTRATION BY CHO YI-JU

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he Ministry of Economic Affairs (MOEA) has embarked on an ambitious clean-energ y initiative designed to boost the economy while fulfilling the new administration’s pledge of achieving a nuclear powerfree country, a core tenet of President Tsai Ing-wen’s (蔡英文) energy policy. To phase out nuclear energ y and maintain its commitment to the environment, Taiwan aims to increase the ratio of electrical power generated via renewable resources from today’s roughly 3 percent to 20 percent by

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Taiwan Review July / August

2025. This task can only be accomplished through a drastic rethinking of how the country creates, stores and utilizes electricity. “We must work on energy restructuring so as to lead Taiwan away from the dangers of nuclear power, mitigate the burden of nuclear waste storage, and reduce our reliance on imported energy sources,” Tsai said last September when naming sustainable energy as one of her five major industrial development objectives. “Green energy generation is the future, and it holds enormous commercial potential.”


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1. Wind turbines stand along the coast of Wanli District in northern New Taipei City. The government is considering the installation of offshore wind power facilities to take advantage of the substantial wind resources in the Taiwan Strait. 2. Solar panels provide much of the power for the Angel Life Pavilion at Taipei Expo Park, which was a major venue for the 2010 Taipei International Flora Exposition. 3. Solar panel arrays are mounted on the green roof of a building at Taipei Expo Park. The Executive Yuan’s Energy and Carbon Reduction Office has suggested establishing solar facilities around the nation in locations such as idle and non-arable plots of land.

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Shift to Sustainability

At present, Taiwan’s three active nuclear plants—construction on a fourth facility was halted in 2014—supply some 15 percent of the country’s electricity. Power stations running on coal, gas, oil and other fossil fuels generate the bulk of the nation’s power at approximately 80 percent, with much of the remainder coming from renewable sources such as solar, wind and hydroelectric power. S t a t i s t i c s f ro m t h e M O E A’s Bureau of Energy reveal that as of the end of April, Taiwan’s installed renewable energy capacity totaled about 4.4 gigawatts, far short of the more than 20 gigawatts needed to meet the government ’s 2025 goal. That target is ambitious yet attainable, said Yang Jing-tang ( 楊鏡堂 ), a professor in the Department of Mechanical Engineering at National Taiwan University in Taipei and CEO of the Energy and Carbon Reduction Office (ECRO), which was established in July this year under the Executive Yuan. With staff members from the MOEA, Ministry of Science and Technology and Environmental

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Taiwan Review July / August

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1. Dalin Power Plant in southern Taiwan’s Kaohsiung City burns coal, gas and oil, which are currently the primary fuels used for electricity generation in the country. 2. Employees of Lof Solar Corp. in northern Taiwan’s Hsinchu City display some of the company’s solar cell products. 3. Towers supporting electricity transmission lines stand near the Changhua Coastal Industrial Park in central Taiwan. 4. A geothermal power facility in northeastern Taiwan’s Yilan County 5. Yang Feng-shuo of the Taiwan Institute of Economic Research

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Protection Administration, the ECRO coordinates carbon-reduction efforts among government agencies at both the local and national levels. The office then evaluates the results of these efforts and offers advice on how to further reduce carbon emissions. Yang pointed out that the continued development of the green technology industry is vital to the country’s national security, economic development and environmental preservation. This view is shared by Yang Fengshuo (楊豐碩), a senior researcher at the

Taiwan Institute of Economic Research (TIER), one of the nation’s foremost think tanks. He said it is important for the administration to pursue sustainable energy technologies, but warned against moving away from traditional electricity-generating methods too quickly. “To make its vision a reality, the government must take a pragmatic, stable approach,” he said. Taiwan can anticipate rapid growth in its green energy sector over the coming decade thanks to the country’s highly developed solar energy

technologies and industrial chains. According to ECRO data, in 2015, Taiwan-made solar cells, manufactured by around 250 local companies, claimed a 16.7 percent share of the global market—second in the world behind mainland China—with a total production value of NT$200.5 billion (US$6.17 billion). In addition, there is great potential for harnessing wind power in the Taiwan Strait, where there is “a substantial amount of offshore wind,” Yang Feng-shuo said. Currently, solar and wind power each account for less than 1 percent of Taiwan’s electricity supply, though the ECRO forecasts the numbers will rise to roughly 10 percent and 5 percent, respectively, by 2025. While at present the majority of such power is generated from solar panels on rooftops and wind turbines in coastal regions, future installation projects will focus on ground-mounted solar farms and offshore wind power facilities. Currently, the nation’s roughly 330 wind turbines have a capacity of approximately 650 megawatts, or 1.5 billion kilowatt-hours a year. The ECRO has set a goal of building offshore wind facilities with a combined capacity of 3 gigawatts by 2025. “There aren’t any obstructions on the sea to interrupt the wind, and there’ll likely be less opposition from the public,” said the ECRO’s Yang. However, he pointed out that building and maintaining such facilities would require substantial marine construction, which is far costlier than the terrestrial variety. TIER’s Yang also drew attention to issues such as navigation, fishing and national defense that the government would have to consider and address if it is to construct offshore wind farms. Regarding the installation of groundmounted solar farms, he viewed land acquisition as a major problem. The ECRO has suggested that the government begin addressing this issue by 21


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conducting a survey of idle or nonarable plots of land across the country in order to find places to establish solar facilities.

Beyond Power Generation

In addition to manufacturing and utilizing renewable energy technologies, Taiwan is well placed to capitalize on 22

Taiwan Review July / August

the growth of power saving and storage devices. The country is the world’s largest manufacturer of LEDs, or lightemitting diodes, which are smaller, stronger, longer-lasting and far more energy efficient than standard incandescent light sources. According to the ECRO, Taiwan’s current annual LED production value of around NT$160 billion (US$4.92 billion) accounts for 35 percent of the global total. Also, the nation is home to a thriving lithium battery industry, which ECRO statistics reveal had a production value of NT$111.5 billion (US$3.43 billion) in 2014, mostly from battery systems for electric vehicles, smartphones, computers and various other consumer electronics products. The ECRO estimates the production value of the global lithium battery sector will reach NT$3 trillion (US$92.3 billion) by 2025, with Taiwan accounting for roughly NT$200 billion (US$6.15 billion) of this amount. Beyond the development of various system components in the green energy industry, Yang Feng-shuo highlighted the increasing significance of efficient energy management. In particular, he pointed to the problem of intermittency. “Renewable energy isn’t available all the time,” he said. “Its intermittency, especially when it accounts for 20 percent of the electricity supply, must be compensated for with energy storage facilities and an effective dispatch system.” In other words, during times when renewable energy is not available, such as when wind turbines sit idle on a calm day, stored energy and traditional generation methods must be utilized. Such problems could be overcome using a smart electrical grid, which could make automatic decisions regarding the generation and distribution of electricity. The emerging smart grid industry involves coordination among equipment suppliers and energy


1. Plants grow in a cultivation area at LED maker Solidlite Corp.’s showroom in Hsinchu County. The demonstration area exhibits special lights used for boosting plant growth. 2. Solidlite Corp.’s LED panels 3. Taiwan’s topography makes it challenging to develop hydropower resources. 4. Yang Jing-tang, CEO of the ECRO under the Executive Yuan

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service providers, as well as information and communications technology (ICT) companies. This sector is estimated by the ECRO to see its annual production value rise by a factor of five to reach NT$60 billion (US$1.85 billion) in the next decade in Taiwan. To date, the government has built 18 model smart grid systems around Taiwan and its offshore islands in such locations as local communities, office buildings and supermarkets. State-run Taiwan Power Co. (Taipower) is also working to install smart meters, which allow remote reporting of electricity consumption data, in households as part of the implementation of an advanced metering infrastructure. Taiwan’s well-established ICT research and manufacturing strength will be immensely helpful in promoting the continued development of wireless technologies crucial for smart meters, just as the nation’s semiconductor competence has boosted the growth of the LED and solar cell industries. “Taiwan’s expertise in ICT hardware and electrical technologies

forms a solid foundation for energy saving, storage and system integration efforts,” said the ECRO’s Yang, who also views the country’s geographical and climatic environment as highly favorable for generating solar, wind and geothermal energy. The ECRO plans to set up a sustainable energy technology park in the Shalun area of Tainan City near the Southern Taiwan Science Park to act as a hub for integrating research, manufacturing and talent development efforts in this field. Yang Jing-tang pointed out that while domestic demand for green energy is increasing and its cost is going down, especially for solar power, relevant policies and regulations need substantial modifications to ensure adequate progress. Of particular importance is market liberalization. Currently, Taipower dominates the country’s electricity market, controlling the vast majority of domestic electricity generation, transmission and distribution. “Taipower has played an important role in Taiwan’s history … yet its longtime monopoly has prevented new energy markets from taking

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shape to meet changing demands,” Yang Feng-shuo said. The president’s plan to drastically reshape how the country generates and utilizes electricity may take years to come to fruition. Renewable energy technology is still in its infancy and far more expensive than traditional fossil fuel-burning methods. Local firms, however, are in a position to benefit from the emerging industry given their leading role in high-tech research and manufacturing. As the nation moves away from nuclear power and the international community seeks alternatives to fossil fuels, Taiwan enterprises will be uniquely placed to provide the equipment and expertise needed to power the nation and the world. 23


Five Major Industrial Development Objectives

Innovation Supply Chain Taiwan sets its sights on becoming a global hub of tech entrepreneurship and Internet of Things research and development.

Taoyuan

BY MEG CHANG PHOTOS BY CENTRAL NEWS AGENCY, CHEN MEI-LING, CHIN HUNG-HAO, CHUANG KUNG-JU AND HUANG CHUNG-HSIN AND COURTESY OF ELITE INTERNATIONAL LOGISTICS CO., HSINCHU SCIENCE PARK ADMINISTRATION, MINISTRY OF ECONOMIC AFFAIRS, MINISTRY OF THE INTERIOR, TAIWAN SEMICONDUCTOR MANUFACTURING CO. AND TAOYUAN CITY GOVERNMENT

ILLUSTRATION BY CHO YI-JU

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Taiwan Review July / August

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Asian Silicon Valley

•Foster the growth of companies involved in producing Internet of Things technologies •Develop Taoyuan City into a smart technologies research and development hub •Enhance ties between local businesses and firms in California’s Silicon Valley

he Asian Silicon Valley i n i t i a t i v e , o n e o f fi v e major industrial development plans outlined by President Tsai Ing-wen (蔡英文), aims to transform Taiwan into a research and development (R&D) hub for the Internet of Things (IoT) sector as well as a global center of tech entrepreneurship. The project, which will be carried out primarily in the northern city of Taoyuan, will include a raft of measures to boost domestic innovation and international collaboration on cuttingedge technologies and applications.

The IoT refers to products of all varieties that can be connected and integrated using online networks and applications. As of July, the National Development Council was still drafting the implementation details for the IoT-focused Asian Silicon Valley initiative, though the government has laid out its broad strategy for creating a thriving innovation ecosystem. A top priority is to increase investment in smart city infrastructure. Under the plan, dedicated sites will be established for the development and testing of smart city technologies


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1. The Internet of Things-focused Asian Silicon Valley initiative will be carried out primarily in northern Taiwan’s Taoyuan City, which is home to the nation’s largest international gateway. 2. Under the plan, the government aims to establish dedicated sites for the development and testing of smart city technologies and applications. 3. President-elect Tsai Ing-wen visits an IoT firm in Taipei on March 8. 4. Smart logistics is one of the IoT sectors targeted for strategic promotion under the Asian Silicon Valley initiative. 5. Entrepreneurs collaborate at a co-working space run by Ching-Long Business Club in Taipei. The government hopes to transform Taiwan into a center of youth entrepreneurship.

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as well as IoT applications in the fields of health care, logistics and transportation. In addition to helping local firms enhance their competitiveness, “the approach will enable people to enjoy convenient, modern lifestyles while transforming Taiwan into a total solutions provider,” Tsai said during a speech outlining the objectives of the Asian Silicon Valley initiative at Democratic Progressive Party headquarters in Taipei on Oct. 1 last year. Another crucial aspect of the project centers on fostering links between local and foreign IoT enterprises. “We need to bolster cooperation between Taiwan businesses and their Silicon Valley counterparts. In particular, the focus will be on combining local firms’ manufacturing and R&D prowess with the creativity, capital and human resources of the U.S. high-tech hub to create a global innovation supply chain,” Tsai said. To this end, the go ver nment intends to set up a research and talent collaboration center near Taiwan Taoyuan International Airport that will maintain close ties with similar facilities in California’s Silicon Valley. There are also plans to increase the number of foreign students enrolled in local higher education institutions, and to work with the private sector to provide them with greater access to scholarships and internships. International students who wish to start their own businesses in Taiwan af ter graduation will be offered assistance in areas like fund-raising, product development and marketing strategies. Through measures such as these, the government hopes to turn the country into an initial public offering center for young entrepreneurs from across the region. The Asian Silicon Valley initiative forms a core component of the Tsai administration’s industrial restructuring program. The primary objectives 26

Taiwan Review July / August

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of this policy are to reposition the nation as an incubation base for tech startups and a global R&D center for smart applications.

Dynamic Metropolis

Taoyuan City Mayor Cheng Wentsan (鄭文燦) has welcomed the Asian Silicon Valley project, stressing the northern metropolis is the perfect location for the ambitious endeavor. “With more than 10,000 firms spanning a wide range of sectors, Taoyuan has the greatest diversity of industrial clusters in the nation,” Cheng said while speaking at a business forum in Taoyuan in

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May. “The municipality reported an industrial output of about NT$3 trillion (US$92.3 billion) in 2015, meaning it has topped all other cities and counties in Taiwan for 13 years in a row.” Taoyuan has the youngest population of the country ’s six special municipalities, while its 17 higher education institutions produce roughly 20,000 graduates annually, ensuring a steady supply of skilled workers. The city’s economic dynamism is further bolstered by its excellent transportation infrastructure. “Home to the nation’s largest international gateway, Taoyuan is only a


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1. Solar panels sit in front of the main administrative building of Hsinchu Science Park in northern Taiwan. 2 & 3. Taiwan Institute of Economic Research associate research fellows Hua Chia-cheng (left) and Lin Hung-yu 4. Engineers at Hsinchu-based Taiwan Semiconductor Manufacturing Co., the world’s leading contract chip-maker 5. A technician checks an automated machining system produced by Yeong Chin Machinery Industries Co. in central Taiwan’s Taichung City.

three-hour flight from major Asian cities like Seoul, Shanghai, Singapore and Tokyo, a great advantage when it comes to promoting cross-border exchanges,” the mayor said. “Another major plus is its close proximity to both Taipei and Hsinchu Science Park.” Hua Chia-cheng (花佳正), an associate research fellow at the Taipei Citybased Taiwan Institute of Economic Research (TIER), stated the Asian Silicon Valley initiative is essential if the country hopes to maintain its competitive edge in the global knowledgebased economy. “The key is to connect Taiwan and Silicon Valley because it’s imperative that Taiwan firms adopt the creative thinking and application development processes of U.S.-based startups,” he said. “The most pressing task is to create an environment where foreign and local talents can work together to develop cutting-edge products and services.” According to Hua, the introduction of innovation-focused foreign 27


professionals could help local workers break free from their hardware-driven thinking and aid them in cultivating the skills required to keep pace with their overseas counterparts in the IoT race. “In addition, businesses will have to offer competitive incentives to retain these top-notch foreign professionals, leading to higher wages, increased economic growth and greater employment opportunities in Taiwan,” he added.

existed between the nation and Silicon Valley. However, the two sides’ industrial development directions have been out of sync in recent years, she said. “Those connections need to be rebuilt if the government wants to ride the IoT wave by combining Taiwan’s manufacturing prowess with Silicon Valley’s worldleading application and software development capabilities.” According to Lin, in the new IoT ecosystem, local firms must identify ways to add value to their core manufacturing competence. “Taiwan

Global Connections

A key aspect of the government’s IoT initiative involves sending Taiwan entrepreneurs to the U.S. for exchanges and encouraging them to set up shop in Silicon Valley. “While the success rate of tech startups tends to be low, these entrepreneurs’ experiences, whether they’re successful or not, will prove valuable to other creative minds in Taiwan,” Hua stressed. Lin Hung-yu (林虹妤), also an associate research fellow at TIER, attributed the remarkable rise of Taiwan’s tech sector to the strong links that

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Taiwan Review July / August

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1. The IoT promises to reshape the global information technology landscape. 2. Joseph Kava, Google’s vice president of data centers, speaks at the inauguration of a Google data center in Changhua County, central Taiwan on Dec. 13, 2013. 3. Foreign exchange students attend a cultural event in Taipei on Feb. 22. The government hopes to boost the number of international students enrolled in Taiwan’s higher education institutions. 4. Chao Tsu-yu, deputy director of the Interdisciplinary Research Group at the Industrial Economics and Knowledge Center under the state-supported Industrial Technology Research Institute 5. Taiwan’s public bicycle rental system YouBike highlights the turnkey capabilities of local IoT firms.


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needs to reposition itself as a flexible, responsive manufacturing center that can churn out small batches of tailormade products in a very short period of time before the items enter the mass production phase,” she said. “This could be a great niche for Taiwan in light of local firms’ swift adaptability to market demands and the country’s complete information and communications technology supply chain.” Both Hua and Lin commended the government’s decision to focus on IoT applications in the health care, logistics and transportation sectors as these areas take into account both the nation’s industrial strengths and the needs of society. “Given the country’s rapidly aging population, high living standards and well-developed legal environment, Taiwan is an ideal test site for new IoT-based solutions in these fields,” Lin said.

IoT Potential

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Chao Tsu-yu (趙祖佑), deputy director of the Interdisciplinary Research Group at the Industrial Economics and Knowledge Center under the government-supported Industrial Technology Research Institute, said the IoT will reshape the global tech industry and Taiwan stands a good chance of carving out a significant slice of this lucrative pie. “The IoT is rewriting the rules of the game, placing more emphasis on services and application development than cost and manufacturing efficiencies—the two key factors that have enabled Taiwan to succeed for decades,” he stated. According to projections released last November by U.S.-based research firm Gartner Inc., 6.39 billion IoT units will be in use worldwide by the end of this year, up 30 percent from 2015, with the number forecast to surge 225 percent to 20.8 billion by 2020. The IoT will also support services spending totaling US$235 billion this year, up 22 percent from the previous 12 months. Since over 70 percent of IoTrelated revenues come from applications and services, an increasing number of service providers are offering wireless connectivity devices such

as smartphones and smartbands for free. “To become a serious contender in this new race, local firms need a paradigm shift in both their business models and philosophies,” Chao said. As the IoT is still a burgeoning field, he said domestic firms should start working to identify niche markets. He cited Taiwan’s public bicycle rental system YouBike as an example of local companies’ ability to implement large-scale projects in this field. “YouBike is supported by homegrown management and payment systems that cater to the unique needs and lifestyles of locals while leveraging the country’s world-leading bicycle production industry,” he said. Chao, Hua and Lin all agreed that human resources will be the determining factor in the success of Taiwan’s IoT industry. “Though the country possesses abundant talent, many gifted young people pursue employment opportunities overseas. This brain drain has to be addressed,” Hua said. Lin called attention to the importance of recruiting skilled workers from South and Southeast Asian nations. This approach is in line with the Tsai administration’s New Southbound Policy, which aims to strengthen relations across the board between Taiwan and these emerging regions. In addition to easing immigration laws, Chao urged the government to offer more employment incentives and make it easier for skilled foreign workers and their families to settle in Taiwan. It is also critical to establish a supportive, cooperative environment where Taiwan’s creative minds and foreign professionals can come together to pursue their entrepreneurial ambitions, Lin said. In the new global economic order, many groundbreaking ideas come from individuals or small groups, who typically need financial and other forms of support to kickstart their businesses. On the other hand, cash-laden corporate giants are finding it increasingly difficult to identify innovative startups. “The government can help bring these two sides together,” she said. 29


Five Major Industrial Development Objectives

Industrial Remedies A government initiative aims to place Taiwan at the forefront of the multitrilliondollar biotechnology and pharmaceutical industry. BY MEG CHANG PHOTOS BY CENTRAL NEWS AGENCY, CHEN MEI-LING, HUANG CHUNG-HSIN AND JIMMY LIN AND COURTESY OF INSTITUTE FOR BIOTECHNOLOGY AND MEDICINE INDUSTRY, MINISTRY OF ECONOMIC AFFAIRS, OBI PHARMA INC. AND UNITED DAILY NEWS

ILLUSTRATION BY CHO YI-JU

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Taiwan Review July / August

Taipei Hsinchu Taichung

Tainan Kaohsiung

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Biotech and Pharmaceutical Industry

•Bolster the research and development capabilities of firms in Taipei’s Nangang Software Park, the Hsinchu Biomedical Science Park, the Central Taiwan Science Park and the Southern Taiwan Science Park

he Republic of China (Taiwan) government has embarked on a mission to transform the country into the center of biotechnology and medical research and development (R&D) in Asia. The initiative is in line with President Tsai Ing-wen’s ( 蔡英 文) vision of an economy powered not by manufacturing, but by innovation. The administration hopes its efforts will lead to the creation of numerous high-paying jobs and improve the health of people in Taiwan and around the world.

The project is being steered by the National Development Council (NDC), the main economic policy planning body of the Executive Yuan, or Cabinet. When outlining the plan in October last year, Tsai said that, because of factors such as the world’s aging population and the potential for outbreaks of epidemic diseases, the annual global production value of the biotech and health-related sectors will likely exceed US$5 trillion in the next decade. “Biotechnology is the fastest-growing area with the most potential applications among all


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1. Taiwan is home to some of the most highly trained surgeons in the world. 2. Physicians speak with a patient at Taipei Veterans General Hospital. 3. Researchers conduct experiments at the Academia Sinica Institute of Molecular Biology in Taipei. 4. The government is targeting the development of new pharmaceuticals.

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existing technologies,” she said. “It’s been selected for strategic promotion because of its tremendous potential and significance for Taiwan’s sustainable development.” According to the latest statistics from the Ministry of Economic Affairs, the 1,631 businesses in Taiwan’s biotechnology and medicine industry had a combined production value of NT$288.6 billion (US$8.88 billion) in 2014, up 4.23 percent from the year before. Of this amount, 43 percent came from medical devices and materials, while medicine made up 29 percent and applied biotechnology the remaining 28 percent. Related e x p o r t s we re N T $ 1 0 2 . 2 b i l l i o n (US$3.14 billion) that same year, up 4.39 percent from the previous 12 months. The sector employed nearly 32

Taiwan Review July / August

74,000 individuals, an annual increase of 3.06 percent. Taiwan possesses several industrial advantages in the biomedical sector, such as decades of research experience in the fields of clinical medicine and diseases endemic to ethnic Chinese, as well as a world-class health care system supported by advanced medical facilities and highly trained staff. “These competitive edges make Taiwan an ideal place to conduct clinical trials of new pharmaceuticals and medical materials,” the president said. To e n s u re t h a t Ta i w a n s t ay s abreast of biotechnological developments worldwide, the government will promote collaboration with major biomedical R&D hubs in the U.S. like Boston, San Diego and the San Francisco Bay Area, as well as

European leaders in pharmaceuticals development, including Belgium, the Netherlands, Sweden and Switzerland. Efforts will be directed toward initiating clinical trials of new drugs and d e ve l o p i n g m e d i c a l e q u i p m e n t , materials and supplies. With regard to realigning local clusters, Tsai said the primary task is to connect existing medical facilities and research activities in northern Taiwan’s Taipei City and Hsinchu County, central Taiwan’s Taichung City and southern Taiwan’s Tainan City to create a comprehensive supply chain. Taipei’s Nangang District, home to the nation’s most prestigious research organization Academia Sinica and the planned National Biotech Research Park, is set to become an incubator for innovative biotech startups and an


R&D center for new drugs, vaccines and reagents, which are substances used in chemical experiments. The Hsinchu Biomedical Science Park, with support from the state-backed Industr ial Technolog y Research Institute based in Hsinc hu and National Health Research Institutes in northern Taiwan’s Miaoli County, will focus on the development of advanced biopharmaceuticals and medical materials. Famed for its precision machinery enterprises, Taichung’s Central Taiwan Science Park will lead R&D on cutting-edge medical instruments, while the Southern Taiwan Science Park in Tainan and Kaohsiung will focus on crafting dental and orthopedic materials and supplies.

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1. The Southern Taiwan Science Park is set to become a research and development center for dental and orthopedic materials and supplies. 2. President-elect Tsai Ing-wen, sixth left, and Vice President-elect Chen Chienjen, sixth right, meet with Institute for Biotechnology and Medicine Industry executives in Taipei City on Feb. 23. 3. Taiwan’s fast-aging population is both a challenge and opportunity for the country’s biomedical sector. 4. Academia Sinica, the nation’s most prestigious research organization, will play an important role in R&D on new drugs, vaccines and reagents.

Funding Innovation

According to NDC Deputy Minister Kung Ming-hsin ( 龔明鑫 ), it takes US$1 billion and seven years on average to develop a new drug from scratch. But most biotech firms in Taiwan are small and medium-sized enterprises and so typically lack the financial backing and human resources for such massive endeavors. The country’s limited market size and inadequate intellectual property protection measures do not offer much help in terms of sector development, either, Kung said. The deputy minister said the council is formulating six action plans to address these challenges. On top of the list is the need to build an accessible capital market for biotech startups. Plans are also in the pipeline to amend the Fundamental Science and Technology Act and Act for the Development of Biotech and New Pharmaceuticals Industry to help meet the sector’s financing needs by, for example, reducing corporate taxes on R&D investments and expanding the scope of the acts to take into account new technological developments. The

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NDC will also work with other agencies to craft new regulatory amendments governing cor porate mergers and technical stock ownership. While it may appear that Taiwan’s small market is a concern, the government is heading in the right direction by targeting biomedicine for strategic promotion, according to Julie Sun (孫 智麗 ), director of the Biotechnology Industry Study Center at the Taipeibased Taiwan Institute of Economic Research (TIER). “ The bio-based economy primarily concerns the global trade of intellectual property rights, so the size of the domestic market isn’t a problem. Actually, the sector is a perfect choice for small countries with extensive knowledge like Taiwan,” she said, citing as examples Israel’s world-leading drip irrigation technology and Denmark’s advanced research in industrial enzymes. Although Taiwan firms may not have the resources to compete head-tohead with global phar maceutic al heavyweights, Sun noted there are plenty of opportunities for smaller players with niche competency. “One feasible business model would be to acquire prototype drugs, potential treatment procedures or new medical technologies from other countries, design relevant experiments to test their properties, then conduct clinical trials in the country’s hospitals or outsource the services to contract research organizations,” she said. The most difficult challenge in the development of new drugs involves the study of their mechanisms of action to ensure safety and effectiveness, a task that requires a tremendous amount of technical know-how. Sun said she believes Taiwan possesses the right infrastructure to perform these activities, noting “the end results can be exported in the form of intellectual property rights to global pharmaceutical companies for further research, commercial production and marketing.” 34

Taiwan Review July / August

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In light of Taiwan’s current level of industrial development, it is extremely difficult for local firms to create new drugs on their own; it is not an option to continue relying on contract manufacturing, either, Sun said. “The new approach will help build Taiwan into an innovative research hub and enable local firms to move up the supply chain to a knowledge-based value-creation model.” However, since this business a p p ro ac h i nvo l ve s n o t a n g i b l e production activity and firms offering such technical services may experience cash burn for years, it will be

a challenge to the industrial sector’s manufacturing-oriented thinking, making it difficult for startups to raise the capital they need to remain a going concern. “Implementing regulatory amendments in this regard will play a crucial role in ensuring the local biotech and medical industry’s further development; so will plans to set up a national investment fund and promote angel investing in these innovative entrepreneurial ventures,” Sun said.

Private Sector Precision

Allen Wu ( 吳明發 ), chief executive officer of the Taipei-based Institute for


1. A dentist tends to his patient in Taipei. 2. Taiwan aims to become a major hub of biotech innovation. 3. Julie Sun is the director of the Biotechnology Industry Study Center at the Taiwan Institute of Economic Research. 4. The world’s first pink fluorescent angelfish, developed by a Taiwan public-private team in November 2012 using gene transfer technology

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Biotechnology and Medicine Industry (IBMI), commended the government’s decision to prioritize the promotion of medical equipment and materials such as dental implants, bone plates and fixation devices, as many Taiwan firms are well versed in such biomaterials. And while local companies have accumulated extensive manufacturing experience with medical devices like ear thermometers and blood pressure meters, they should now tap into the higher end of the market and develop precision instruments, he said. The IBMI executive stressed that for the biomedical sector to become a major contr ibutor to Taiwan’s economy, it is imperative that private enterprises play a bigger role in the implementation of the government’s industrial promotion project and other related measures, as opposed to the top-down decision-making process commonly adopted by state agencies in their strategic planning. In particular, Wu called for expanded participation by local firms in the selection of R&D topics, a concept that the NDC has included in its six action plans. “Biomedicine is a highly technical

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field and no one has more knowledge on the subject than the businesses themselves,” he said, adding that with more involvement, these firms would also have a greater incentive to invest in the chosen programs. Since the country’s biomedical industry is still in its early stages of development, Wu urged the government to offer more support for local startups. “ The most urgent issue involves securing subsidies for R&D and talent cultivation,” he said. In addition, “the government can take a more aggressive role in encouraging Taiwan companies to participate in global exhibitions and trade fairs such as Arab Health, Bio-Europe and

Health Ingredients Japan.” He said the IBMI stands ready to extend a helping hand to local firms. There will be significant obstacles for the government and domestic enterprises to overcome if they are to create a vibrant innovation-based economy. Success will depend on strong and progressive leadership from the government and a private sector willing to take the risks necessary to remain competitive in the international market. In October, Tsai acknowledged the difficulties the country will face in developing its innovative industries, as well as the potential rewards of success. “Taiwan needs to stand ready when opportunities present themselves.” 35


Five Major Industrial Development Objectives

Force for Growth Taiwan’s move toward selfsufficiency in national defense could help drive broader industrial restructuring and upgrading. BY PAT GAO PHOTOS BY CHIN HUNG-HAO AND HUANG CHUNG-HSIN AND COURTESY OF INDUSTRIAL TECHNOLOGY RESEARCH INSTITUTE, MINISTRY OF NATIONAL DEFENSE AND NATIONAL CHUNG-SHAN INSTITUTE OF SCIENCE AND TECHNOLOGY

ILLUSTRATION BY CHO YI-JU

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Taipei Taichung

National Defense Industry

•Provide support to the information security industry cluster in Taipei, the aviation industry in Taichung and the shipbuilding industry in Kaohsiung

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n early June, President Tsai Ingwen (蔡英文) visited a naval base in northeastern Taiwan’s Yilan County on one of her first military inspections since becoming commander-in-chief. During the tour, she took a brief cruise on the Tuo Jiang, the nation’s first locally built stealth missile corvette. Speaking at the base, Tsai praised the ship as an indicator of Taiwan’s “determination to achieve greater autonomy in national defense.” “ We ’ l l c o n t i n u e t o p r o m o t e domestic warship production, which will not only enhance Taiwan’s naval

combat capabilities but also foster the development of the shipbuilding and machinery sectors as well as system integration,” the president said. “Our national defense needs will become a driving force for industrial upgrading and transformation.” Commissioned in March 2015, the Tuo Jiang is the first of up to a dozen planned ships in its class. The stealth missile cor vette program reflects broader efforts to promote indigenous weapons systems development, with Taiwan also seeking to build its own diesel submarines and next-generation


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jet trainers as well as various other types of naval vessels. “Nowadays in advanced nations, defense budgets are no longer viewed simply as a drain on public resources, but are seen in terms of their overall contribution to economic growth,” said Su Tzu-yun ( 蘇紫雲 ), assistant director of the Center for Advanced Te c hn olo g y ( CAT ) at Tamkang University in New Taipei City. “The personnel employed in the sector, the production and procurement of equipment, and the associated maintenance work are considered part of a country’s economic activities.” Su is a member of the Defense Po l i c y A d v i s o r y C o m m i t t e e a t t h e Ta i p e i - b a s e d Ne w Fro n t i e r Foundation, a ruling Democratic Progressive Party think tank. The foundation published 12 Defense Policy Blue Papers between 2013 and 2015, including “Bolstering Taiwan’s Core Defense Industries” in October 2014 and “Preparing the Development

1. The Tuo Jiang, Taiwan’s first locally built stealth missile corvette, deploys chaff countermeasures during a naval drill off the coast of southern Taiwan’s Kaohsiung City in January this year. 2. The Panshi, a Taiwan-made rapid combat support vessel, participates in the exercise. 3. A Kuang Hua VI-class missile boat, front, takes part in the drill.

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of Indigenous Defense Industry” in May 2015. “The new government believes an expansion in defense sector investment will bring an array of wider societal and industrial benefits,” said Su, a coauthor of the policy papers.

Greater Autonomy

The administration’s goal of promoting greater self-sufficiency in arms development and production is in line with the National Defense Act, noted Yen Tieh-lin (閻鐵麟), secretary-general of the Taipei-based Taiwan Aerospace Industry Association (TAIA). Article 22 of the law, promulgated in 2000, calls for the establishment of “an autonomous national defense infrastructure” and stipulates that with regard to the acquisition of weapons and military equipment, the government must first explore domestic options before considering foreignmade arms and goods. The TAIA consists of more than 80 enterprises, including the recently pr ivatiz ed Aerospace Industr ial Development Corp. (AIDC), a leading aircraft, aeroengines and avionics manufacturer based in the central city of Taichung. Another prominent member of the association is the Aeronautical Systems Research Division at the National Chung-Shan Institute of Science and Technology (NCSIST) in northern Taiwan’s Taoyuan City. The institute is the primary research and development organization of the Ministry of National Defense. “Due to the difficulties the country has faced in procuring military

equipment from foreign suppliers,” said Yen, a former naval officer, referring to mainland China’s attempts to impede arms sales to Taiwan, “it’s essential we bolster local competence in sectors vital to our national defense. This is especially important considering the scale of Taiwan’s military and its limited defense budget.” The TAIA secretary-general noted d om e s t i c we a p on s d e ve l o pm e n t projects have yielded considerable results over the years, including the NCSIST’s Tien Kung and Tien Chien missiles, the AIDC’s Indigenous Defense Fighter (IDF) aircraft and AT-3 jet trainers as well as the Cheng Kung-class frigates manufactured by CSBC Corporation, Taiwan, which

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1. Hsiung Feng III supersonic anti-ship missiles were developed by the National Chung-Shan Institute of Science and Technology in northern Taiwan’s Taoyuan City. 2. A Cheng Kung-class frigate launches a Hsiung Feng III missile. 2

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is based in the southern port city of Kaohsiung. “We should continue to promote projects like these as they offer numerous benefits to the public and private sectors such as providing capital to local enterprises, fostering talent and boosting the technological upgrading of domestic industries,” he said.

Spillover Benefits

CAT’s Su similarly stressed the wider economic effects of indigenous defense projects, highlighting positive outcomes for employment, industrial growth and innovation. Looking to major Western economies, he pointed to the Eurofighter Typhoon as demonstrating the significant spillover


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3. An unmanned aerial vehicle developed by NCSIST is exhibited at an aerospace industry show in central Taiwan’s Taichung City in June this year. 4. A device for manufacturing aircraft components on display at the Taichung show 5. A turbofan aeroengine co-developed by Taichungbased Aerospace Industrial Development Corp. on show at the industry exhibition 6. Su Tzu-yun from the Center for Advanced Technology at Tamkang University in New Taipei City

benefits that weapons development programs can deliver. Beginning in the 1970s, European nations eager to possess next-generation fighters engaged in a debate about whether to develop homegrown aircraft or purchase jets from the U.S., before ultimately deciding to cooperate on creating the Eurofighter. Su said while the final budget of the project exceeded the cost of buying U.S.made fighters, the countries behind the program have since sold many billions of euros’ worth of Eurofighters to other nations in addition to reaping substantial secondary benefits such as technological upgrading in sectors like electronics and commercial avionics. “The project created about 100,000

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jobs in European Union countries and helped support roughly 400 small and medium-sized enterprises,” he stated. The Tsai administration hopes stepped-up investment in the domestic defense industry will likewise produce positive spillover effects. Over time, the government intends to raise Taiwan’s defense budget, which was NT$312.33 billion (US$9.6 billion) in 2015, from less than 2 percent to 3 percent of gross domestic product. Through increased military spending, the administration hopes to foster the growth of three major industrial clusters—the aviation industry in central Taiwan, the shipbuilding industry in Kaohsiung, and the information security sector in Taipei. According to

CAT figures, the production values of these industries stood at US$3.1 billion, US$2 billion and US$1.33 billion, respectively, in 2015. Su said the three clusters have huge potential for expansion. TAIA figures show, for instance, Taiwan’s aviation industry has experienced sizable growth over the past few decades, rising to its current level from an annual production value of just NT$6.56 billion (US$202 million) in 1991. He stressed, however, that given the limited size of the domestic defense sector, local companies must work to increase their sales in international markets. In light of Taiwan’s longestablished strengths in manufacturing and information and communications 39


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1. AIDC-made AT-3 jet trainers perform during an air show at an air force base in Kaohsiung. 2. Yen Tieh-lin, secretary-general of the Taiwan Aerospace Industry Association 3. Smart glasses developed for security personnel by the governmentsupported Industrial Technology Research Institute, headquartered in northern Taiwan’s Hsinchu County, were showcased at the 2014 Computex Taipei technology trade show. 4. AIDC-made Indigenous Defense Fighter jets prepare to take off at an air force base in Taichung. 5. Soldiers march in formation during a graduation ceremony at the Republic of China Military Academy in Kaohsiung City in June 2014.

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technology, CAT has identified locally produced cybersecurity products, functional textiles, jet trainers, naval patrol vessels, robots, rugged laptops and unmanned aerial vehicles for military use as having the greatest potential for export growth. According to Su, local firms should focus on boosting sales of non-lethal military goods, including boots, helmets, rations, computers and communications hardware, as such items form a major part of defense spending across the world. In particular, he said

the nation’s status as a global leader in high-end textile manufacturing bodes well in view of rising military demand for functional fabrics and smart fibers. The Tamkang center estimates the value of the functional fabrics market will hit US$7.7 billion globally by 2023, with defense spending expected to account for about 20 percent of the total. As a top producer of highresolution cameras and other monitoring systems, the country also possesses significant industrial advantages in the broader field of national security,


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which encompasses such areas as disaster relief and terrorism prevention.

International Partnerships

As Taiwan works to boost its domestic defense industry, it is also seeking to expand collaboration with its international partners. The U.S. is the dominant source of Taiwan’s arms imports, while U.S. companies cooperated in the development of locally made weaponry such as IDF jets and Cheng Kung frigates. The strong relationship between the two sides is evidenced by

the Taiwan Relations Act (TRA) and Six Assurances, both of which were reaffirmed by the U.S. Congress earlier this year. The TRA, signed into law in 1979 after the U.S. switched recognition from Taipei to Beijing, authorizes the continuation of substantive relations between the people of the U.S. and the people of Taiwan. In 1982, the U.S. government issued the Six Assurances, stipulating it would not set a date for ending arms sales to Taiwan; revise the TRA; consult with mainland China on

arms sales to Taiwan; mediate between Taiwan and mainland China; alter its position on the sovereignty of Taiwan or exert pressure on Taiwan to enter into talks with mainland China; or formally recognize mainland Chinese sovereignty over Taiwan. Over the past decade or so, bilateral cooperation has been boosted by the U.S.-Taiwan Defense Industry Conference. Organized annually since 2002 by the Arlington, Virginiabased U.S.-Taiwan Business Council, the event is attended by high-ranking defense officials and business representatives from both sides, with the latest edition taking place in Williamsburg, Virginia in October 2015. Yen stressed local companies should take advantage of channels like this to increase exports of military equipment and components to the U.S. Overall, Yen and Su have high expectations concerning the development of the domestic defense industry. Su noted with additional investment and government support, the sector could help deliver sustainable growth. “The defense and security industries suffer minimal effects during economic downturns,” he noted. In September last year, Tsai discussed the potential of the defense sector while addressing a meeting of local business representatives who were preparing to attend the 2015 U.S.-Taiwan Defense Industry Conference. “The domestic defense industry has already devised and produced arms and components such as the Tuo Jiang corvette and submarine cabins as well as products with civilian and military applications such as battery systems, electric vehicles and advanced jet trainers,” she said. “For the next phase of the sector’s development, we will seek to address our national defense needs in a manner that also helps foster the international competitiveness of local industries.” 41


Five Major Industrial Development Objectives

Intelligent Automation A global hub of the machinery industry, Taiwan is stepping up efforts to develop innovative smart manufacturing technologies.

Taichung

BY KELLY HER PHOTOS BY CHEN MEI-LING AND HUANG CHUNG-HSIN AND COURTESY OF COMMERCIAL TIMES, INDUSTRIAL TECHNOLOGY RESEARCH INSTITUTE AND TAIWAN ASSOCIATION OF MACHINERY INDUSTRY

ILLUSTRATION BY CHO YI-JU

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Smart Machinery Industry

•Boost the development of the smart machinery sector in Taichung by providing assistance in areas such as talent recruitment, research and development, land acquisition and marketing •Spur innovation so that every industry in Taiwan can benefit from advances in smart machinery technology

rom May 20-24 this year, about 30,000 visitors, including buyers from Asia, Europe and the U.S., flocked to the Commercial Exhibition Center in Taichung City, central Taiwan for the Automatic Machinery and Intelligent Manufacturing Exhibition. The trade show has been staged annually in Taichung for more than three decades, though this marked the first time that intelligent manufacturing was used in the title of the event. Organizer Commercial Times, one of the country’s two major

financial newspapers, opted to alter the name of the show to highlight the growing focus on this field in the nation’s globally competitive machinery sector. “This is the 32nd edition of our machinery show in Taichung. But unlike previous events, this year’s exhibition features intelligent machines to reflect the current trend in manufacturing systems development,” Chen Kuo-wei (陳國瑋), president of Commercial Times, said at the opening ceremony of the five-day event, which generated business deals totaling


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1. A dual-arm industrial robot developed by the Precision Machinery Research and Development Center in central Taiwan’s Taichung City 2. The Automatic Machinery and Intelligent Manufacturing Exhibition took place at the Commercial Exhibition Center in Taichung City from May 20-24. 3. Hiwin Technologies Corp.’s six-axis articulated robot excels at high-speed pick-and-place tasks. 4. A humanoid robot titled RENBO was showcased by the Industrial Development Bureau under the Ministry of Economic Affairs at the 2015 Taiwan Automation Intelligence and Robot Show in Taipei.

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foster innovation, boost employment and enhance the nation’s overall international competitiveness.

Mother of All Industries

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about NT$300 million (US$9.2 million). “Furthermore, the government plans to turn Taichung into a hub of the smart machinery industry by pooling resources from academia and the public and private sectors.” Intelligent automation is the integration of hardware, software and technical services to develop systems with sensing, computing and machineto-machine communication capabilities. These devices are typically safer and more efficient than traditional manufacturing machines. They can also be reprogrammed to perform different tasks, enabling companies to quickly 44

Taiwan Review July / August

respond to emerging trends and new production requirements. President Tsai Ing-wen (蔡英文), who assumed office in May, has listed the smart machinery sector among her five major industrial development objectives. According to the proposals outlined by Tsai, her administration intends to bolster the machine tool and intelligent automation industries in and around Taichung by offering support in such areas as international cooperation, land acquisition, marketing, research and development (R&D) and talent recruitment. The government hopes such measures will help

“The machinery sector is referred to as ‘the mother of all industries’ and is considered an important indicator of a country’s level of industrialization,” said Alex Ko (柯拔希), chairman of the Taipei-based Taiwan Association of Machinery Industry (TAMI). “Over the past 70 years, the local industry has evolved from producing traditional to state-of-the-art machines, focusing first on precision, then automation and now artificial intelligence.” Currently, Taiwan is home to some 13,000 machinery factories that employ about 470,000 people. Many of these facilities are located in the socalled Golden Valley, an area spanning roughly 60 kilometers around the base of Mt. Dadu in Taichung. The region boasts the highest density of machinery plants in the world. TAMI statistics show the production value of Taiwan’s machinery industry reached approximately NT$950 billion (US$29.2 billion) in 2015 and is projected to register an annual growth rate of about 5 percent this year. Taiwan is the world’s fourth-


largest exporter of machine tools, behind Germany, Japan and Italy. It is also among the top 10 exporters of rubber and plastic, textile and woodworking machinery. The government has long played an active role in the industry. According to Ko, state-supported research organizations—including the Industrial Technology Research Institute (ITRI) in Hsinchu County, northern Taiwan, Precision Machinery Research and De velopment Center (PMC) in Taichung and Taipei’s Institute for Information Industry—have helped facilitate rapid and regular technological upgrading, a key factor in the continued growth of the sector. More recently, the R&D focus has turned to advanced robotics and smart automation. Since the mid2000s, the government has introduced a range of financial assistance schemes to promote the development of cutting-edge robotics technologies. And the Ministry of Economic Affairs (MOEA), for one, has sponsored a host of projects on intelligent automation at ITRI and PMC. “Innovative technologies developed by these research institutes have helped local companies keep pace with global market trends and identify new product development objectives,” Ko said. “Meanwhile, the excellent quality of locally made machinery has been an important factor in the success of high-tech manufacturing sectors in Taiwan including semiconductors, optoelectronics and green energy.”

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1. A six-axis articulated industrial robot displayed at the 2015 Taiwan Automation Intelligence and Robot Show 2. Alex Ko, chairman of the Taiwan Association of Machinery Industry 3 & 5. The Machine Tools Technology Center under the Industrial Technology Research Institute helps local enterprises produce highspeed, high-precision manufacturing devices. 4. Ricky Sun, director of the Intelligent Machinery Technology Division at the Machine Tools Technology Center 6. ITRI displayed its innovative controller technologies at the 2015 Taipei International Machine Tool Show. 6

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Global Competitiveness

The chairman stressed the international competitiveness of Taiwan’s machinery industry is due to the high quality and reliability of its products as well as the diversity of solutions it offers. “The excellent cost-performance ratio of our precision machines is the main reason why they readily attract international buyers and are exported to more than 100 countries,” he said. “Plus, Taiwan manufacturers have the flexibility to facilitate custom or smallvolume orders, while their foreign competitors largely focus on the mass production of uniform goods.” To p r o m o t e Ta i w a n - m a d e machinery products, TAMI cooperates with the government-supported Taiwan External Trade Development Council to organize three biennial industr y exhibitions—the Taipei International Machine Tool Show, Taipei International Plastics and Rubber Industry Show, and Taipei Manufacturing Technology Show. In addition, using subsidies provided by the MOEA’s Bureau of Foreign Trade, the association arranges for local manufacturers to attend about 50 overseas trade shows each year to help them diversify their export markets. Ko said the industr y can help deliver long-term sustainable growth in Taiwan, noting it uses less water and electricity and produces less pollution than many other large-scale manufacturing sectors. However, since roughly 70 percent of Taiwan’s machinery goods are exported, he emphasized the government must work to address unfavorable conditions in international markets. Taiwan’s machinery products were traditionally about 30 to 40 percent cheaper than those made in Japan, though the sharp depreciation of the yen in the past several years has offset that price advantage. Furthermore, 46

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1. A delta robot developed by Hiwin 2. Michael Kuo, president of Advantech-LNC Technology Co., showcases controllers produced by his company for the industrial robotics sector. 3. Collaborative robots developed by PMC 4 & 5. Robotic medical devices used in patient rehabilitation and surgical procedures

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Taiwan has struggled to participate in the burgeoning global network of free trade agreements and as a result local manufacturers now face higher tariffs than their overseas competitors in some markets. The Tsai administration has stated it aims to address the latter issue by expanding bilateral and multilateral economic cooperation as well as seeking participation in negotiations for the Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership. “ We hope the government can respond to the currency depreciation policies launched by Taiwan’s main rivals, as well as strive to join regional trade pacts like the TPP. These actions are necessary if the nation is to compete on a level playing field,” Ko said.

two fields that are among Taiwan’s greatest strengths,” he said, adding “Taiwan companies are better positioned to create intelligent cyberphysical systems” than their German and Japanese counterparts. TAMI has been vigorously promoting smart machinery by holding forums to keep manufacturers abreast of the latest technologies. The association has also established a committee consisting of representatives from industry, research institutes and universities to guide the development of intelligent machines. “Our collaborative efforts aim to equip young talents with the skill sets and competencies required to succeed in the Industry 4.0 era,” the chairman said. Ricky Sun (孫金柱), director of the Intelligent Machinery Technology Division at the Taichung-based Machine Tools Technology Center under ITRI, said the high levels of efficiency provided by Taiwan’s extensive machinery supply chain offer local firms a great advantage in the burgeoning smart automation sector. “ITRI has already invested considerable resources in the R&D of industrial robots and related software with the goal of helping domestic companies produce highspeed, high-precision manufacturing devices,” he added. To date, the applied research organization has succeeded in developing

Industry 4.0

Looking ahead, the TAMI chairman said Taiwan is well placed to develop innovative products for the fourth industrial revolution, also dubbed Industry 4.0, an impending era of digitally connected manufacturing that will see technologies such as artificial intelligence, big data management, smart automation and the Internet of Things incorporated into production processes. “S uccess in Industr y 4.0 will require expertise in sophisticated machinery development and information and communications technology,

several varieties of advanced robotics systems, including delta robots, which consist of three arms connected to a single end effector and are used in precision manufacturing; Selective Compliance Assembly Robot Arm machines, which mimic the functions of a human arm; and six-axis articulated robots, which can reach almost any point within their work envelope. Furthermore, as local firms must currently import key parts like controllers and sensors, the institute is focusing on producing advanced robotics components. Controllers function like the brain of a smart machine, monitoring inputs and outputs and making logic-based decisions. ITRI has produced a series of increasingly advanced computer numerical control (CNC) controllers, and recently developed multi-axis motion controllers that feature built-in central processing units, wireless Internet connectivity and user interfaces. The institute has already transferred CNC controllers and robotics technologies to more than 20 local firms, including Advantech-LNC Technology Co., Delta Electronics and Hiwin Technologies Corp. It also offers consulting, matchmaking and networking services to help local companies cultivate business opportunities and bolster their product development. “Advanced countries the world over are exploring Industry 4.0 technologies in an effort to tackle labor shortages, boost productivity and conserve energy, so it’s great to see our government has incorporated smart machinery into its national development plans,” Ko said. “Through close collaboration between industry, academia and the government, Taiwan manufacturers will be able to seize the value-creation and growth opportunities offered by smart machines and gain a strong foothold in this emerging global market.” 47


A

C U LT U R E

台 灣 評 論

Cultural Gateway Taichung City broadens its tourism appeal by organizing diverse festivals and promoting the adaptive reuse of historic buildings. BY KELLY HER PHOTOS BY HUANG CHUNG-HSIN AND COURTESY OF ROSE HOUSE GROUP AND CULTURAL AFFAIRS BUREAU OF TAICHUNG CITY GOVERNMENT

ILLUSTRATION BY KAO SHUN-HUI

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fter two years of renovations, the historic Taichung Shiyakusho building in central Taiwan’s Taichung City reopened in February as a cafe and arts center. Built in 1911 and used as a municipal office during the Japanese colonial period (1895-1945), the three-story Baroque-style structure was the first iron-reinforced concrete building in the city. An iconic landmark in Taichung’s old downtown area, it has welcomed large crowds since being granted a new lease on life, with long lines of customers often waiting outside to be seated in Café 1911 on its first floor. “We’re a bit surprised to see our establishment drawing so many customers from home and abroad just a few months after its launch,” said Daisy Chang ( 張千瑩 ), manager of the cafe. “We attribute our runaway success to our efforts to offer an elevated dining experience in a classic setting.” Café 1911 is operated by Rose House Group, Taiwan’s largest British tea shop chain. Only the first floor of the building is used for commercial purposes. The company has turned the second and third stories into an arts center that regularly hosts free exhibitions in fields such as photography, sculpture and installation arts. “Our main objectives are to promote the aesthetic and historical value of this


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1. The historic Taichung Shiyakusho building in central Taiwan’s Taichung City has been converted into a cafe and arts center. 2. The Taichung Broadcasting Bureau, established in 1935 as a relay station, is now a cultural and creative center. 3. The Natural Way Six Arts Cultural Center was built in 1937 as a martial arts compound. 4. An outdoor space at the Taichung Literature Museum, a former police dormitory complex constructed in 1934 5. Wang Chih-cheng, director-general of the Taichung City Government’s Cultural Affairs Bureau

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1. An illustration depicting some of Taichung’s most popular attractions 2. The National Taichung Theater, designed by Pritzker Prize-winning architect Toyo Ito, will be inaugurated in September. 3. Taichung Cultural and Creative Industries Park in the city’s South District 4. Tang Kuo-jung, director of the Taichung City Government’s Cultural Heritage Department

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century-old building and spotlight local art,” Chang said. Th e Ta ic hung S hiyakusho is among the 102 historic buildings under the jurisdiction of the Taichung City Government. Municipal authorities oversee a further 48 monuments and five cultural landscapes. The city is also home to two national monuments, which are administered by the central government. In recent years, local authorities have made great efforts to renovate historic structures and promote their adaptive reuse through public-private partnerships, such as the arrangement at the Taichung Shiyakusho. “Our mission is to conserve and revitalize historic sites in order to safeguard our region’s cultural assets,” said Tang Kuo-jung ( 湯國榮 ), director of the city government’s Cultural Heritage Department. “Adaptive reuse programs can ensure the maintenance and long-term protection of historic buildings as well as boost the local tourism industry.” Other buildings that have been renovated and repurposed include the Taichung Literature Museum, a former police dormitory complex completed

in 1934; the Taichung Broadcasting Bureau, established in 1935 as a relay station and now a cultural and creative center; and the Natural Way Six Arts Cultural Center, built in 1937 as a martial arts compound. Tang said his department has been able to renovate these and other historical structures thanks to financial support from the Ministry of Culture (MOC) and city government. He noted that, wherever possible, the buildings are restored to their original states using traditional materials and methods. “Through our renovation program, old structures have been given new life as commercial venues, workshops, or performance, exhibition and event spaces,” he said. “The buildings also provide a concrete connection to the past as they feature introductory materials, photos and guided tours that examine their history and architectural characteristics.”

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Tourism Appeal

Citing the results of a 2014 survey conducted by the Tourism Bureau under the Ministry of Transportation and Communications, Tang said cultural and historical attractions are among

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the top reasons people choose to vacation in Taiwan, with tours of historic sites ranking third behind shopping and trips to night markets as the most popular activities among visitors. “Cultural tourism, traveling for the purpose of experiencing the art, heritage and unique character of a place, has become increasingly popular,” the director said. “As Taichung is endowed with rich cultural resources, we have an excellent opportunity to expand this form of tourism to our city. We’re committed to helping visitors explore local culture in a manner that is at once educational and enjoyable.” Wa n g C h i h - c h e n g ( 王 志 誠 ) , director-general of the Taichung City Government’s Cultural Affairs Bureau, said the city has abundant intangible cultural assets such as traditional crafts, festivals, rituals and performing arts, in addition to its physical attractions. These resources, he noted, are playing an important role in enhancing the city’s international appeal and visibility. “The trend toward globalization is irreversible. However, before pursuing globalization, it’s important to emphasize localization, to identify and highlight a region’s unique cultural characteristics,” he said. As part of its efforts to showcase the region’s artistic environment and heritage, the Cultural Affairs Bureau organizes a variety of festivals throughout the year. “These events can help revive local traditions while building community pride,” Wang said. “They’re an economically, socially and environmentally sustainable form of tourism promotion.” A n n u a l e v e n t s o r g a n i z e d by the bureau include the Taichung Traditional Arts Festival in February; the Taichung Mazu International Festival from March to May; the Taichung Light Festival in June and July; the Rock in Taichung Festival in 52

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September; the Taichung Jazz Festival in October; and the Taichung Arts Festival in November. Though they focus on different fields, these occasions all typically feature live performances, bazaars, interactive activities, firework displays and parades. More than half of the troupes and musical acts that perform at the festivals are based in Taichung. By promoting the participation of local groups, the city government hopes to foster their artistic development and improve their chances of gaining international recognition.

Faith and Artistry

Among the most celebrated of the city’s annual events is the Taichung Mazu

International Festival. Mazu, known as the Goddess of the Sea or the Queen of Heaven, is the most revered deity in Taiwan. There are estimated to be more than 10 million Mazu worshippers and 2,300 temples dedicated to the goddess around the nation. The highlight of the festival is a nine-day pilgrimage held in celebration of the goddess’ birthday. The procession starts and ends at Taichung’s Dajia Jenn Lann Temple, which organizes the pilgrimage, and draws millions of participants every year. One of the largest annual religious events in the world, it was listed in 2008 as a national intangible cultural heritage by the Council for Cultural Affairs, now the MOC.


can foster international understanding of time-honored local traditions.

Diverse Facilities

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1. The Fulfillment Amphitheater in Nantun District 2. The Taichung Light Festival is held at historic sites throughout the city in June and July. 3. Spectators watch traditional performances in front of Fusing Temple in the city’s Dali District during the Taichung Mazu International Festival. 4. Award-winning designs from Taichung’s Mazuthemed figurine-making competition 5. Officials and guests attend the opening of the 2015 Taichung Arts Festival.

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To help visitors explore the long history and diversity of Mazu worship in Taichung, the city government organizes a wide variety of activities around the procession. Twelve of the Mazu temples in Taichung are more than 100 years old, among them Dajia Jenn Lann Temple. To highlight these historic sites, the Cultural Affairs Bureau stages an event called A Century of Magnificent Mazu Temples, a series of traditional

performances in genres ranging from Taiwanese opera to folk drumming at the 12 places of worship. The city government also hosts activities and competitions to encourage public engagement in local customs and cultivate the city’s cultural and creative sector. These include Mazu-themed figurine-making, painting and writing contests, with the Cultural Affairs Bureau offering funding to the winners of the figurine competition to help them commercialize their designs. “Mazu worship is not simply a religion but a blend of various cultural beliefs and economic activities,” the director-general said. “ W ith huge numbers of people gathering in celebration, the festival brings abundant commercial opportunities for businesses such as hotels, food vendors and producers of Mazu-related cultural and creative products.” The Mazu festival, he added, excellently demonstrates how cultural tourism

Wang emphasized the city government is committed to promoting equitable access to cultural resources. “We believe that all residents, including those living in remote areas, should be able to enjoy artistic and cultural activities. As such, we stage festivals in districts across the city,” he said. “By doing so, we hope to cultivate public interest in art and culture as well as boost local production and consumption of cultural goods and services.” The municipal government operates a variety of cultural facilities throughout the city. These include four arts and cultural centers—Dadun Cultural Center in West District; Huludun Cultural Center in Fengyuan Distr ict; S eapor t Ar t Center in Qingshui District; and Tun District Art Center in Taiping District—as well as the Asia University Museum of Modern Art in Wufeng District and Fulfillment Amphitheater in Nantun District. Furthermore, the stunning new National Taichung Theater, located in Xitun District and designed by Japan’s 2013 Pritzker Prize-winning architect Toyo Ito, will be officially inaugurated in September. Wang said the scale and diversity of the city government’s arts and heritage programs highlight its commitment to transforming Taichung into a major cultural destination. “A growing number of tourists want to explore local cultures and support small businesses through attending festivals, sampling regional cuisines, visiting historic sites and participating in educational events,” he said. “Taichung is home to numerous historical attractions and dynamic festivals. Our hope is that the city can become a gateway into Taiwan culture for international visitors.” 53


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More Than Just a Theater Home to Taiwan’s most celebrated dance company, the Cloud Gate Theater is a popular visitor attraction and vibrant cultural center. BY DAVID MEAD Copyright © 2016 by David Mead PHOTOS COURTESY OF LIU CHEN-HSIANG, WU CHIA-RONG AND CLOUD GATE CULTURE AND ARTS FOUNDATION

verlooking the Tamsui River, the elegant Cloud Gate Theater nestles into the hillside between Huwei Fort, built in 1886, and the almost century-old Taiwan Golf and Country Club. The main building, which officially opened to the public in April 2015, is surrounded by greenery and houses a state-of-the-art 450-seat theater, two studios that can be easily converted into black box theaters, and a third, smaller studio. The site also has a 1,500-capacity outdoor event space. Located in New Taipei City ’s Tamsui District, the multifunctional cultural complex is home to Cloud Gate, Taiwan’s leading dance company. It was born out of necessity after a 2008 blaze destroyed the troupe’s old rehearsal studio, archives and offices across the river in Bali District. Cloud Gate Culture and Arts Foundation Executive Director Yeh Wen-wen (葉 芠芠) recalled that she and other senior Cloud Gate staff first visited what would become their new home, then an abandoned Central Radio Station facility, three days after the fire. “We’d looked at so many different sites. It was the last visit of that day,” she said. “We didn’t hope for too much, but the setting was beautiful. It was a bit like our old home.” W hile the two-stor y building needed a lot of renovation work, the company’s directors were impressed by

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the structure and surroundings. “It was almost like a miracle; high ceilings, no pillars,” said Cloud Gate Dance Theatre Artistic Director Lin Hwai-min (林 懷民). “Wen-wen and I looked at each other in a way that said it all.” Initially, Yeh explained, they simply intended to build a new rehearsal space, but after seeing the site in Tamsui decided to add a theater, an exhibition venue and enough archive, office and rehearsal space for the company’s two touring groups and support staff. “It’s the first time in our 40 years that Cloud Gate, Cloud Gate 2, and the administrative and technical staff have been together as one group,” she said. “The dream became very big.” The next step was gaining permission to use the site. After lengthy discussions, Cloud Gate signed a build-operate-transfer contract with the New Taipei City Government that gives the modern dance company the right to renovate and manage the site for 40 years provided no public funds are involved. At the end of the term, the complex transfers back to the city. Remarkably, there was no fundraising campaign to finance the project, though unsolicited donations soon started arriving, ranging from NT$100 (US$3) contributions from local schoolchildren to a US$5 million gift from the Chicago-based Alphawood Foundation. The names of all the donors are now carved into a wooden wall at the entrance to


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the theater, a reminder of the debt owed to supporters large and small. Paraphrasing Tennessee Williams, Lin said: “We really live on the mercy of strangers.”

Architectural Innovation

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1. The Cloud Gate Theater was formally an abandoned Central Radio Station facility. 2. A rehearsal for the show “Moon Water” 3. The theater was designed by architect Huang Sheng-yuan.

The Cloud Gate Theater has quickly become a visitor attraction in its own right. The main building was designed by celebrated architect Huang Shengyuan (黃聲遠), whose firm, Fieldoffice Architects, is based in northeastern Taiwan’s Yilan County. Yeh praised Huang f or his abilit y to br idge the old and the new, both in design and materials. Theater auditoriums are usually dark places, but Huang was keen to admit lots of natural light. The outcome is an innovative design that sees the stage backed by huge windows. “For rehearsals, we can open the back curtain and you see this beautiful golf course, and for performances you have the curtain down and everything becomes dark,” Yeh said. “With it up, it almost seems like you’re sitting outdoors.” Some outside troupes who have staged shows at the theater have asked to perform with the curtain open so the 55


audience can see their production in natural light. They might also see birds flying and people swinging golf clubs. But with the curtain up, performances have to possess much more power, Yeh noted. “You’re fighting against nature, and the outdoors is always more appealing,” she said. Since the design called for a 450seat theater, the building had to be tall. This brought with it the danger that the structure would dominate the landscape. To help make the building part of its surroundings, an additional 200 trees were planted around the site. “I wanted to erase the concrete, erase the steel, those hard things,” Lin said, adding that he loves the site best during summer, when the trees are all in leaf and hide the theater completely. “The space puts us in touch with nature and the ocean. It’s fabulous; the layers, the steps, the lawn, the cliff, and then far away there is the ocean.” The oddly shaped roof invariably causes comment among visitors. Made from copper, it is already turning green and blending with the environment. “Some people say it’s a mushroom, some think it ’s a UFO, and some say it’s a cloud,” Lin noted. Another notion is that it was designed to reflect the outline of Guanyinshan, or Mt. Guanyin, on the opposite side of the Tamsui River. “The architect never revealed its meaning,” Yeh said. “It’s whatever you want it to be.”

Center of Collaboration

The new theater is about more than Cloud Gate. The two Cloud Gate companies are on tour for between 150 and 200 days a year, during which time other groups are allowed to use the facilities to rehearse, perform and conduct technical tryouts. “It’s of benefit to both sides,” Yeh said. “We’re learning a lot about how to present different 56

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companies and how to collaborate with different artists.” A Cloud Gate Art Makers Project has been launched using money from a prize Lin won last year, offering grants to creative talents younger than 35. Presently, the program is open only to dance presentations, but the plan is to extend it to theatrical works. “Choreographers will use the space for free, and we’re going to pay their dancers for rehearsals,” Lin explained. While there is no formal mentoring, Cloud Gate’s artistic director said he is more than happy to observe and discuss work if asked. The choreographers may give a studio performance at the end of their time, but it is not compulsory. “We are not going to squeeze them or push them,” he emphasized.

The kind of spirit that saw Cloud Gate Dance Theatre and now Cloud Gate 2 perform on campuses and in rural areas across Taiwan is being carried on through the site. Art is for everyone, Lin stressed, adding he wants to transform the troupe’s new home into a cultural center for the community. One of the ways the company is achieving this is by hosting a diverse variety of events and performances. Last fall, the Migration Music Festival, an annual gathering of folk musicians from around the world, moved to the site. And the Golden Bough Theatre performed its classic “Troy, Troy… Taiwan,” a modern drama rooted in traditional Taiwanese opera, at the site’s outdoor space.


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Besides dance, indoor shows have included a six-hour comedy marathon from the Tainaner Ensemble; puppet theater by the Flying Group Theatre of Taiwan; and various concerts. Meanwhile, the ongoing Cloud Gate Forum series presents conversations with well-known figures. Upcoming speakers include documentary filmmaker Yang Li-chou ( 楊力州 ) and author Wu Ming-yi (吳明益).

Cultural Destination

Yeh admitted there was initially a concern that the location of the theater, which is over 20 kilometers from central Taipei, would put people off coming, but the site welcomed more than 80,000 visitors in its first 10 months. For performances, a free shuttle bus that people can sign up for online runs to and from Tamsui Metro Station. “That helps a lot,” she said. There does not need to be a performance for people to visit the center, however. “There is no door. The grounds are always open,” Yeh said. Visitors can simply walk around the site, explore the bookstore or sample

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1. The new rehearsal room on the second floor of the facility 2. The second floor space before being renovated 3. Cloud Gate dancer Wang Yeu-kwn rehearses in the second floor studio. 4. Cloud Gate Dance Theatre Artistic Director Lin Hwai-min, left, offers guidance during a rehearsal.

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some of the delights in the cafe. Dotted around outside are sculptures by noted Taiwan artist Ju Ming ( 朱 銘). Inside, a small gallery houses “In Between the Moments: Cloud Gate in a Photographer’s Memory,” a display of photographs by Liu Chenhsiang (劉振祥). The Cloud Gate Art Gallery hosts temporary exhibitions, with this summer’s being “Cut-outs and Alive” by Jam Wu (吳耿禎), a series of intricate large paper cut-outs. “I want to have things like this that are accessible to everyone,” Lin said. “We’re not going into avant-garde things.” In discussing Yeh, his longtime colleague, Lin recalled that he “first met Wen-wen in 1983 when I started the dance department at what was then the National Institute of the Arts [now Taipei National University of the Arts]. I was looking for an assistant. I was impressed and hired her straight

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away. Over a cup of tea, I asked her, ‘What’s your dream?’ She said, ‘I’ve always wanted to have a theater.’ So after this place opened, during another meeting over another cup of tea, I said, ‘Wen-wen, you have your theater.’” The Cloud Gate Theater is much more than just a performance venue, however. “The four seasons are very clear here,” Yeh said. “In the springtime you hear the birds and smell the flowers; in the summer it is very hot, of course; and winter is freezing; but it’s always beautiful.” Lin agreed, adding that it is “bigger, better and more beautiful than I ever expected.” But he emphasized what is most important is that it is a place for the future.

1. The main stage of the theater is backed by large windows, offering troupes the opportunity to rehearse and perform in natural light. 2. The exterior of the theater in the evening 3. Local musical group Trio Zilla performs at the Cloud Gate Theater. 4. A statue on the grounds of the theater depicts Lo Man-fei, a famed Cloud Gate dancer and co-founder of Cloud Gate 2 who passed away in 2006.

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David Mead is a dance critic, choreographer and teacher with a particular interest in Taiwan. He is the editor of SeeingDance.com and writes extensively for Dancing Times and other international publications.

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SPORTS

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Going for Gold Boosted by professional support, new training facilities and financial incentives, Taiwan’s athletes are gearing up to test their mettle at the 2016 Olympic Games. BY OSCAR CHUNG PHOTOS BY CHIN HUNG-HAO AND COURTESY OF NATIONAL SPORTS TRAINING CENTER

INFOGRAPHICS BY CHO YI-JU AND KAO SHUN-HUI

n April 27, the nation’s top athletes gathered at the National Sports Training Center (NSTC) in Zuoying District of southern Taiwan’s Kaohsiung City for a ceremony marking 100 days until the start of the 2016 Olympic Games. A palpable excitement permeated the event as the sportspeople discussed their upcoming journeys to Rio de Janeiro, Brazil and their prospects of winning glory for their country. “I’ve been dreaming about competing in the Olympics since I started to wrestle seven years ago. Finally, I’ve got the chance, so I’m going to give it my all,” said Chen Wen-ling (陳玟陵), who has earned the right to represent her country in women’s wrestling at the Rio Olympics. Competing under the name Chinese Taipei, Taiwan earned its first gold medals at the 2004 Olympic Games in Athens, Greece. In the Games that followed in 2008 and 2012, Taiwan competitors earned a combined six medals, including a further gold won by weighlifter Hsu Shu-ching (許淑淨), who will be defending her title in Brazil. The two athletes who gained top honors in Athens, taekwondo champions Chen Shih-hsin (陳詩欣) and Chu Mu-yen (朱 木炎), were among the guests of honor at the event in Kaohsiung.

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Wide World of Sports

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The NSTC, which is funded and overseen by the Ministry of Education’s Sports Administration, has been responsible for training athletes for the Olympics and other international sports events since 1976. The government’s target this year is for at least 50 local athletes to compete in Rio and for these sportspeople to win a minimum of three gold medals, two silvers and one bronze. Such a performance would be a vast improvement from the London Olympics in 2012, when Taiwan netted one gold and one bronze. The nation’s goal has already been partially achieved since 58 athletes have qualified to compete in Rio. The vast majority of these future Olympians train at the NSTC, along with more than 400 other athletes preparing for upcoming events like the 2017 Summer

Taiwan’s Olympic Medals by Event Source: Chinese Taipei Olympic Committee

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Baseball

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Weightlifting

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Table Tennis

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Women's Hurdles

1. Lee Chih-kai practices on a pommel horse at the National Sports Training Center in Kaohsiung City. He will be the first local athlete to compete in artistic gymnastics at the Olympics since the 2000 Games in Sydney, Australia. 2. Taekwondo practitioner Huang Huai-hsuan, right, is one of Taiwan’s Olympic gold medal hopefuls this year. 3. Chen Nien-chin, right, will be the first-ever Taiwanese to compete in women’s boxing at the Olympics.

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Universiade in Taipei City and 2018 Asian Games in Jakarta, Indonesia. “People will be surprised at the diversity of our Olympic lineup, which illustrates the growth of Taiwan’s athletic talent pool,” NSTC Executive Director Chiu Ping-kun ( 邱炳坤 ) said. For example, this year Taiwan has competitors vying for medals in women’s boxing, women’s wrestling and equestrian individual jumping for the first time. But gymnast Lee Chih-kai’s ( 李智凱) inclusion on the Olympic team will perhaps attract the most attention. Eleven years ago, the young man, who is now 20 years old, was on the gymnastics team of a primary school in northeastern Taiwan’s Yilan County that was featured in the award-winning documentary “Jump! Boys.” Lee will be the first person to represent Taiwan in Olympic artistic gymnastics since 2000. Though a good number of the nation’s athletes have a solid chance of medaling in this upcoming edition of the quadrennial event, many see the competitors in taekwondo and weightlifting as offering the greatest hope for glory. Since 1960, 14 of the 21 total medals won by Taiwan have been in these two sports.

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National Endeavor

Liu Wei-ting (劉威廷) is tall and lean, his long limbs and sturdy frame ideal for an athlete competing in his chosen sport, taekwondo. The 21-year-old will be fighting in Rio in the 68-80 kilogram category, which puts him up against some of the fastest and most versatile martial artists in the world. He seemed at ease with this prospect as he explained his training strategy: “I’m following my coaches’ instructions to build my strength and muscles, and to be more aggressive in my fighting style,” he said. “I’ll need to improve if I want to stand a chance of winning against my main rivals, who are mostly from the West.” Another athlete taking her coach’s advice to heart is Tan Ya-ting (譚雅婷), an archer training under the tutelage of Koo Ja-chung from South Korea. Koo is no stranger to victory, having coached

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the South Korean national team that dominated the women’s team archery category at the Beijing Games in 2008. According to Tan, her training has become more mental than physical in the months leading up to the Olympics. “I’m learning how to control my heart rate through breathing exercises,” she said. “And the whole archery team meditates for 10 to 15 minutes before every practice session to help calm our minds. This is especially important in archery.” Taiwan’s athletes are benefiting from the modern training equipment and facilities housed at a pair of government-built sports complexes opened in May 2015 at the NSTC. “The substantial investment—roughly NT$2.3 billion (US$71 million)—in these new sports centers reflects the government’s continued efforts to develop worldclass competitive athletes,” Chiu said. “The new taekwondo training hall was designed to be as similar to a real competition venue as possible,” said Lee Chia-jung (李佳融), head coach of

1960 1968 1984 1992

Taiwan’s Olympic Medals by Year Source: Chinese Taipei Olympic Committee

1996 2000 2004 2008 2012

1. Officials and athletes attend a ceremony at the NSTC on April 27 marking 100 days until the start of 2016 Olympic Games. 2. Taiwan’s 2016 Olympic taekwondo team consists of three athletes, from left to right, Chuang Chiachia, Huang Huai-hsuan and Liu Wei-ting. 3. The NSTC in Kaohsiung has two new complexes that opened just over a year ago with facilities designed for high-level training in many sports.

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1. Two banners in the NSTC read, from left, “Compete against the world to become champions” and “Expect the most from yourself.” 2. Lee Chia-jung, head coach of Taiwan’s Olympic taekwondo team 3. Tsai Wen-yi, head coach of Taiwan’s Olympic weightlifting team 4. Chiu Ping-kun, executive director of the NSTC 5. Olympic gold medal-winning weightlifter Hsu Shu-ching, left, receives a massage. 6. Athletes lift weights in the NSTC.

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Taiwan’s national taekwondo team. “It’s complete with the most modern equipment, including state-of-the-art and rather expensive head gear with electronic sensors,” he noted, adding that the government usually approves the team’s requisition orders without hesitation. To help keep athletes in peak condition, the NSTC has enlisted the help of scores of specialists in areas such as nutrition and sports psychology. “Training top athletes is a very sophisticated matter today, compared with when I trained for the Olympics in the 1980s. There was no such thing as sports science back then. You just trained hard for hours and hours every single day,” said Tsai Wen-yi ( 蔡溫 義), head coach of Taiwan’s Olympic weightlifting team. “Now we’re very serious about health management, which helps athletes train exactly as much as they should; no more, no less.” Seven individuals will compete for Taiwan in weightlifting at the 2016 Olympic Games. According to Tsai, who won bronze in men’s 60 kg-class weightlifting at the 1984 Olympics in Los Angeles, four of them are gold medal hopefuls, including Hsu Shuching and Lin Tzu-chi (林子琦), world record holders in women’s 53 kg and 63 kg-class weightlifting, respectively.

The Fruits of Victory 6

Olympians who bring home medals have always been rewarded with 65


pride and prestige, standing out among the athletes of the world as champions. Of course, landing an advertising contract with a major sports brand would be nice, too. For Taiwan’s athletes, there are added incentives for victory. Thanks to a September 2015 amendment to the Regulations Governing the Issuance of Guo Guang Athletic Medals and Scholarships, which provides the basis for rewarding Taiwan’s top-performing competitors, winners of gold medals at the Olympics will receive NT$20 million (US$615,390) in cash, up from NT$12 million (US$369,230), whereas the prizes for silver and bronze medalists remain unchanged at NT$7 million (US$215,390) and NT$5 million (US$153,850), respectively. Alternatively, they can opt to receive monthly payments totaling NT$125,000 (US$3,850), NT$38,000 (US$1,170) and NT$24,000 (US$740), respectively, for the rest of their lives. The prizes are 50 percent greater for those competing in athletics, swimming and gymnastics in order to increase the popularity of those sports. To further nurture the nation’s athletic talent, the Sports Administration launched the Rising Tide Program in 2012. The scheme is paid for by the Sports Development Fund, which is financed by revenues from the sports lottery. Established in 2007, the sports lottery allows members of the public to place bets on sporting events. The development fund targets young athletes, providing financial aid to cover expenses associated with training and overseas travel to attend contests. In 2015, 1,335 young athletes and several hundred coaches received NT$140 million (US$4.31 million) in grants through the program. “ This initiative enables young athletes to quickly pick up the baton from their predecessors,” said Hung 66

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Chih-chang (洪志昌), director of the Sports Administration’s Competitive Athletics Division. He noted that all of the 48 Taiwan athletes who participated in the 2014 Youth Olympic Games in Nanjing, mainland China were beneficiaries of the program. Chiu said he understands how difficult it will be for Taiwan to achieve its goal of three gold medals at this year’s Olympics. The government is doing its part by supporting the nation’s athletes with coaches, financial incentives, training facilities and more, but the NSTC chief knows that all the preparation in the world does not guarantee an Olympian a place on top of the podium. In the end, it comes down to that single moment when athletes must choose whether to push beyond what they thought possible. Weightlifter Hsu Shu-ching experienced such a moment at the 2014 Asian Games in Incheon, South Korea. In order to tie for gold, she had to lift 127 kilograms in the Clean & Jerk portion of the event. On her first attempt, she lifted 124 kg. On her second try, she achieved the 127 kg needed to tie for the gold, but she still had one lift to go. Summoning all her strength, she reached for the barbell at her feet and lifted the whopping 132 kg above her head, setting a new world record. “That was the most unforgettable contest for me. At the time, I didn’t know how I could possibly lift all that weight,” she said. “I’d never been capable of doing that during practice sessions.” It is that same determination Taiwan’s athletes must summon if they want to return home as Olympic champions.

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1. Tan Ya-ting, one of Taiwan’s top archers, lets loose an arrow while practicing a technique to steady her heart rate. 2. South Korean Koo Ja-chung is the head coach of Taiwan’s Olympic archery team.


ROC Embassies,

Consulates and Missions

The Ministry of Foreign Affairs of the Republic of China (Taiwan) operates 119 embassies, consulates and representative offices across the globe. To learn more about these missions and the services they provide, scan the QR code or visit www.taiwanembassy.org.

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PHOTOGRAPHY

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Island Life

Taiping Island possesses modern health care and scientific facilities as well as a lush natural environment. PHOTOS BY CENTRAL NEWS AGENCY AND COURTESY OF COAST GUARD ADMINISTRATION, MINISTRY OF NATIONAL DEFENSE AND MINISTRY OF THE INTERIOR

An aerial image of Taiping Island taken by DigitalGlobe’s WorldView-3 satellite

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The Taiping Island Lighthouse was inaugurated in December 2015.

ocated about 1,600 kilometers south of Taiwan proper, Taiping Island is the largest of the naturally formed islands in the Nansha (Spratly) Islands in the South China Sea. Part of the sovereign territory of the Republic of China (Taiwan), it spans 0.51 square kilometers and has a hospital, lighthouse, port, post office, runway, temple and weather station as well as agricultural, power generation and satellite facilities. ROC citizens have been stationed on Taiping Island for more than 50 years. At present, the population, which totals more than 200 people, consists mostly of ROC Coast Guard personnel as well as some medical staff and scientists. Over the decades, Taiwan has turned the island into a thriving outpost. In addition to raising chickens and goats, personnel living there have used the island’s fresh water to set up an agricultural garden that produces a wide variety of fruits and vegetables, ranging from corn and okra to pears and sweet potatoes. Taiping Island possesses a diverse ecosystem, including trees that are more than three centuries old. Coconuts, papayas, plantains and other crops grow wild there. Taiwan has taken special care to preserve the natural environment, ensuring Taiping Island and its surrounding waters remain prime feeding areas for seabirds. The government has also enacted measures to safeguard the local beaches, which serve as nesting grounds for green turtles and other protected species. For some of the staff stationed on Taiping Island, it has become much more than a distant workplace. Over the course of months and years serving there, personnel such as nurse Chu Mei-ling (初美玲), who transferred her household registration to the island, have come to view this rare lush outpost in the blue expanse of the South China Sea as their home. —by Ciaran Madden

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1 & 2. Chickens and goats are raised on Taiping Island. 3 & 4. A wide variety of crops are cultivated in the vegetable garden.

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1. Taiping Island’s diverse ecosystem includes trees that are more than 300 years old. 2. Personnel stationed on the island use its fresh water for drinking, cooking and irrigation. 3. In addition to meeting residents’ medical needs, Nansha Hospital on Taiping Island offers humanitarian assistance to fishermen of all nationalities operating in the region. 4. Chu Mei-ling, right, a nurse stationed at Nansha Hospital, transferred her household registration to the island.

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1. A monument erected by the Ministry of the Interior highlights the island’s status as part of the ROC’s sovereign territory. 2. Huang Chiu-lung, an associate professor at Yuan Ze University in Taoyuan City, northern Taiwan, sent postcards home from Taiping during a visit to the island. Postal services were launched on Taiping Island in 1960. 3. University students attend a flag-raising ceremony during a two-day visit to Taiping in June this year. The government arranged the trip to help raise awareness of the island among Taiwan’s young people.

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A Stitch through Time

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In an era of mass-produced goods and cheap imports, the craft of handmade religious embroidery is hanging on by a thread. PHOTOS BY CHEN MEI-LING

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he area around Lungshan Temple in Taipei’s Wanhua District is filled with stores selling all kinds of Buddhist and Taoist items, from statues of gods to incense burners. There is, however, only one shop, Nanhsin Embroidery, that offers hand-embroidered items for temples, such as flags and robes for deities. The shop was established by Lin Rong-guan (林榕官) more than 70 years ago and is now run by his daughter-in-law Wu Shu-mei (吳淑美), who has been in the trade since she married into the family in 1977. Wu said embroidering religious pieces is different from creating artistic ones, in that the latter is based on individual creativity while the former requires adherence to strict rules. For example, dragon patterns only adorn robes for male deities while female gods wear phoenix patterns; the God of War is dressed in green and the Goddess of the Sea orange. Both religious and artistic embroidery, however, require substantial patience as it can take months to complete a piece. At the peak of the trade, there were many embroidery stores in the area and each employed dozens of craftspeople. The number of local artists, as well as the shops in which they worked, shrank as hand embroidery gave way to computer-designed products and cheap imports. Since her father-in-law passed away and her mother-in-law retired a few years ago, Wu has been operating the shop singlehandedly. In an attempt to preserve the craft, Wu has taken on a few apprentices over the years. However, all of them quit after a few months of endless stitching. She taught embroidery at community colleges for a period of time, only to realize that a few hours of instruction a week might improve the technique of hobby embroiderers but is not enough to turn anyone into a professional. So at Nanhsin, Wu sits alone with her latest project. As her needle speedily pierces the fabric, a dragon slowly forms. —by Jim Hwang

Wu Shu-mei’s hand-embroidered works often feature dragon and phoenix patterns.

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1. Outlines of patterns created by Nanhsin Embroidery founder Lin Rong-guan 2. A design drawn onto a piece of fabric 3. The store’s seasoned embroidery frame is still going strong, but the craft is fading. 4 – 6. Hand embroidery requires patience as it can take months to complete a single piece.

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1. The demand for hand-embroidered pieces is not what it once was. Today, most religious embroidery is computer-designed and machine-made. 2. Deities in a local Earth God temple dressed in works by Nanhsin Embroidery

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