Meanwhile in Hong Kong

Politics International Politics
2212

It’s great at manufacturing chips and other hardware, no doubt about that. But that’s all relatively low margin stuff. The profit that TSMC makes on each individual chip is relatively small, but they make a lot of them. Also a lot of the chips they make are actually designed by others…they basically are doing contract manufacturing.

A country waiting to become an IT centre needs to encompass much more than that. Software and services are where the wider opportunities are, and that means lots of software development skills, UI design, knowledge of business process optimisation and management, system security skills and so on. Are there any examples of Taiwanese companies which compete internationally in any of these areas?

Just look at the websites of leading companies in Taiwan. Many still seem to be stuck with an aesthetic from the early 2000s (or even earlier, judging by some bank websites).

I don’t agree that finance is zero sum. There’s a lot more to it that just trading stocks. It brings with it a lot of ancillary services, such as legal, accounting and administration. Additionally, having an active finance industry means it’s also easier for people to raise money for new ventures.

Finance is demanding and attracts high achievers and people with international mindsets. Go to Hong Kong, Singapore, New York (and even London) and you’ll find plenty of Taiwanese working in those financial centres, having left Taiwan because they couldn’t find interesting and challenging work here.

Same with IT…there’s a reason that the likes of Yahoo,Youtube and others were started by Taiwanese in the US rather than in Taiwan. It’s easier to create a startup company, get finance, and basically just take a risk over there.

Singapore and Hong Kong have been improving in these too areas over the past 5-10 years. You can get companies set up within an hour or two, all electronically - you don’t even need to be there physically. There are non-traditional banking options for startups, which you can get opened within a day - without needing any visit to a branch. The processes are very streamlined and improving all the time.

As for biomedical being low margin, Moderna, BNT and Pfizer might disagree with you! The problem with biomedical here is that the Taiwan FDA is painfully conservative. It’s virtually impossible to get approval for anything medical-related here, unless it has already been approved by somewhere else, such as the US FDA or has European CE approval. That means that any local biomedical development hits a brick wall when they want to create a product. In most countries, you develop a new product and first sell it to your domestic market to gain experience, and maybe fine-tune it, and then use that experience to take it international. But if your local agency won’t approve it in the first place, then you’re stuck :man_shrugging:

2213

That’s not true at all.

TSMC’s gross margins are about 40% which is insane for a manufacturing company. A chip is the hardest thing to make in an electronic product. Taiwan also leads in Mini- and Micro-LED technology, also difficult to make.

image
image1296×716 47.5 KB

That’s technically correct but also mistaken. TSMC owns all the IP to their process.

I also misunderstood this at first, until my EE PhD cousin explained it to me. Design is merely component selection. The manufacturing is where the chip is made more powerful, putting more and more circuits into the chip.

Design is dominated by Americans, although Mediatek has emerged as the market leader for phone chip design.

Also, most of the major American tech giants, namely Google, Amazon, MS, and IBM, have their largest regional AI R&D centers in Taiwan.

Taiwanese people don’t pay attention to aesthetics any more than they have to, I agree with you on that. That’s not that important.

Software is an area where Taiwan is historically weak, but that might be changing. Taida has launched a dozen Web3 millionaires already.

2214

Wow that’s a big edit.

Legal is DEFINITELY zero sum. The higher your lawyer-engineer ratio is, the slower your economy grows.

Yes I know, that’s called flushing your talent down the toilet. Bad for your economy. https://scholar.harvard.edu/files/shleifer/files/allocation_talent.pdf

2215

Yes, I accidentally pressed send while I was still composing.

Anyway, the original question was whether Taiwan could attract those international financial, legal and other businesses which might be leaving Hong Kong.

You seem to be saying that everything is fine and Taiwan doesn’t need these kinds of businesses?

I disagree. HK and Singapore have benefited hugely from being the preferred locations for international organisations to base their regional HQs. Their average wages are 2-3 times higher than Taiwan, they have more entrepreneurial environments, and they can offer interesting and challenging work for their younger generations. Additionally whole ecosystems of smaller companies have developed around those big businesses, operating in areas such as software development, design, marketing, research, consumer financial services, architecture, property management, coffee shops, restaurants etc etc.

So I think Taiwan would also benefit if it was able to attract these kinds of international businesses. If a number of them moved their regional headquarters here, it would help begin the improvement of working practices generally, lift wages, and help reduce the brain drain.

Once you get a few, more would follow. By introducing some higher quality competition for jobs, that should also encourage local companies to up their game too (if they want to keep their staff).

But in the end, I think the barriers are too high for these kinds of international organisations to move here.

2216

An interesting article published by the European Chamber of Commerce which gives some ideas of what Taiwan needs to do in order to attract companies from Hong Kong and Singapore:

2217

But changes do happen, usually from necessity or opportunity. In this case, I think Taiwan has both. But time is running out if it hasn’t already. I’m not optimistic that change can happen, just saying that there was an opportunity. You point out reasons why it has been squandered, sure.

Without reading it, I think companies already set up in Singapore have little reason to relocate. While companies leaving Hong Kong might have considered Taiwan, now I think is too late for Taiwan to do enough to attract them. The Taiwanese government would have had to make greater efforts to overcome the challenges @marco has pointed out well before December 2021. Now, most of the money and talent will go elsewhere (even HK friends I know are having difficulty with the paperwork to stay in Taiwan, and are looking at trying Canada/UK/Australia).

Perhaps if omicron wipes out a lot of older voters who are holding back change and keeping rents high, there will be time to modernize, streamline, and otherwise open up. Hopefully, Ukraine has been a bit of a warning that reliance on Chinese markets and indifference towards western institutions is probably not a long-term strategy that keeps Taiwan independent.

1 Like
2218

Of course it will be great, it’s just not that big of a deal.

2219

Lemme guess, your EE PhD cousin works on the manufacturing side? That’s like as saying designing an engine is merely specifying components… say you want 8 cylinders of 500cc each, fuel injectors capable of 35lb/hr flow rate, etc etc, and you think you have an engine “design”? Not. Close. the design includes actually making those components work together, and ideally getting them to work efficiently together (to maximize power, minimize energy usage, etc). Manufacturing is a necessary component of it working well together and making more powerful chips, but not close to the only requirement.

2220

John Lee—the single pro-Beijing candidate with a security background (i.e. smashing protests)—has been “elected” as HK’s next Chief Executive.

The always thoughtful columnist Joseph Lee explains why this appointment will not solve HK’s crises of governance.

Guy

2 Likes
2221

What the f&ck!

Guy

1 Like
2222

Will the Pope say something against Beijing or will he keep kissing their asses?

2223

And at least one high-profile debacle. But Web3 aside, I agree, Taiwan’s software industry has been changing for a while now, and the current wave of big companies setting up or expanding here will continue that trend, with rising salaries helping retain young talent and encourage more senior people to come back.

I’m less optimistic about finance. The FSCs Fintech sandbox demonstrated how unwilling both the banks and the regulators are to even try anything slightly new.

2224

Meanwhile in HK “education”:

Guy

2225

More details on this radical revisionist version of history appear here in this piece from Bloomberg, accessed here via today’s Taipei Times.

In case anyone is still dreaming otherwise, we’re dealing here with a regime for whom international agreements, international law, and basic facts can and will be thrown into the trash when it suits them. Our eyes should be wide open to this situation as we in Taiwan are—in this regime’s imperialist imagination—next in line.

Wed, June 15, 2022 page 1

  • Textbook to say HK never part of UK

    • Bloomberg

New schoolbooks in Hong Kong will teach students that the territory was never a British colony, the South China Morning Post reported, as Beijing seeks to tighten its control over the territory.

The four sets of textbooks for a class on citizenship say the Chinese government never recognized the 19th-century treaties that handed Britain control of Hong Kong, the report said.

Textbook publishers are responsible for choosing the appropriate materials for schoolbooks in accordance with official guidelines, the Hong Kong Education Bureau said in a statement.

# Workers set up a giant poster celebrating the territory’s return to China on the side of a building in Hong Kong on Monday.

Photo: EPA-EFE

The Chinese Communist Party refers to agreements signed by the Qing Dynasty and later governments that made concessions to foreign governments, such as land control, as “unequal treaties.”

Beijing’s refusal to recognize them informs its belief that Hong Kong matters are strictly domestic.

Some in China also hold the view that admitting Hong Kong was ever a colony would open the door to its independence, a demand of some demonstrators.

Britain took Hong Kong Island during the First Opium War (1839-1842) and later signed a treaty that gave it control over the adjoining New Territories for 99 years. That agreement ended on July 1, 1997, an anniversary that is marked every year in the territory.

This year’s event might be attended by Chinese President Xi Jinping (習近平), whose government has expanded control over Hong Kong through measures including a revamp of the electoral system.

Yesterday at her final weekly news briefing, Hong Kong Chief Executive Carrie Lam (林鄭月娥) would not confirm whether her administration has created the conditions needed for a visit from Xi.

“We, of course, would like to have a cheerful atmosphere to celebrate the reunification,” she said.

Beijing has blamed, in part, the territory’s schools for fostering dissent that fueled 2019 protests against the Chinese Communist Party’s increasing influence.

Since that unrest, sweeping changes to the curriculum have seen children taught to memorize offenses criminalized by the National Security Law, a National Security Education Day launched in schools and teachers advised to report on children who breach the law.

Source: Textbook to say HK never part of UK - Taipei Times

Guy

1 Like
2226

one of the many reasons I could no longer stay there, a city I loved. They are relentlessly dismantling bit by bit all the aspects which made HK HK. Indeed when I left I wasn’t sad to be leaving HK, since HK left us all some time ago, I would say 2019. I was leaving XiangGang, a medium size Chinese city in south GuangDong Province. Nothing more. I was lucky to have experienced some of the old HK, a great place, I will treasure those memories forever, they are very precious to me.

8 Likes
2227

image
image960×720 123 KB

3 Likes
2228

I think that sign may be overstating the role of “the Queen” in accomplishing what HK accomplished.

Guy

2229

The queen is the head of state of the UK and commonwealth realms. It can be analogous to the government in a way we similarly use the crown.

2 Likes
2230

I’d rather properly credit the hard work of the people of HK than a distant monarch. That and a tight rule of law system—and again as far as I know Elizabeth was not responsible for that either.

Guy

1 Like
2231

And the people in Hong Kong are responsible for what is happening now?