In fact, the annual Taiwan Business Alliance conference held in October to promote investment drew 1,500 attendees from 33 countries, double the number of participants expected. Executives from 15 foreign companies, including 3M, Alibaba.com (a Chinese e-commerce company), Audi, Bayer, Corning, and Siemens signed letters of intent to further expand business and invest in Taiwan over the next several years. Of them, 10 will increase existing investments and five will make first-time investments, totaling $200 million.
Where Opportunity Lies
International companies that have the capacity to invest now can position themselves for growth in Taiwan when the economy rebounds. The opportunities span a number of industries. In tourism, for example, Starwood Hotels and Resorts Worldwide (which owns the Westin and W chains), InterContinental Hotels Group (which owns Holiday Inn), and Accor (which owns Novotel) have already built new hotels or are planning to do so. In addition, the government announced a four-year, $605 million construction plan for major tourist sites that includes the building and renovation of scenic spots, cable cars, and roads. The tourism industry is set to generate more than $52 billion in revenue over the next four years, according to the government Council for Economic Planning and Development.
Logistics is another fertile area. DHL Taiwan is planning talks with China Airlines and EVA Airways about using their cargo space for the new cross-strait express delivery market. Stuart Whiting, general manager of DHL Express Taiwan, was quoted in an AmCham publication as saying that the company plans to invest $31.3 million by 2012 in employee-training and logistics facilities, as well as system upgrades.
Other expansions are taking place in the banking sector. A June 2008 agreement between Taiwan and China allowed Chinese mainland investment in Taiwan for the first time, starting in October, and also allowed mainland investors to invest in the Taipei stock exchange. Banking officials hope that the future will bring expanded financial links between Taiwan and the mainland. HSBC announced at the Taiwan Business Alliance conference that it will continue to expand in Taiwan despite the global financial crisis. Standard Chartered Bank acquired Taiwan’s Asia Trust and Investment Corporation in October, expanding its presence on the island from 88 to 95 branches. “Taiwan is a key market for Standard Chartered, and core to our Greater China strategy,” said Jaspal Bindra, CEO of Standard Chartered Asia. “This acquisition allows us to strengthen our network in Taipei, home to the most affluent bank customers in Taiwan.” Citibank and UBS also opened wealth management branches in an upscale Taipei suburb this year.
Infrastructure is also providing investment opportunities for foreign companies. A key part of the Ma administration’s plan to keep Taiwan’s economy growing is to boost public spending through the “ i-Taiwan 12 Major Infrastructure Projects.” (The “i,” according to the government, represents the Chinese word for “love,” ai, and stands for investment, infrastructure, intelligent, and international.) Investment totaling $120 billion, one-third of it contracted from the private sector, is planned over the next eight years. It includes an eco-port and free trade zone in the southern port of Kaohsiung, which has huge plans for expansion under the new direct-shipping agreement with China, as well as an island-wide, coordinated rapid-transit network. Additional plans include desalinization plants, a world-class Internet backbone to bolster the communications industry, and expansion of the island’s freeway network.
Ma also announced a separate $4 billion in public construction investment as part of an economic-stimulus package, adding that he hoped “companies from countries throughout the world will invest in Taiwan’s infrastructure development projects.”
Telecom has potential for foreign investors, as well. At the Taiwan Business Alliance conference, Kurt Hellström, former CEO of the Ericsson Group, said that there are huge opportunities to enhance Taiwan’s broadband capabilities. In addition, because the telecommunications industry is responsible for 14 percent of global greenhouse gas emissions and is working to improve energy efficiency, Hellström said, Taiwan should take the initiative to produce more efficient and less environmentally harmful products.