Taiwan's Troubles

[quote]Taiwan’s troubles
By Guy de Jonquières
Published: May 29 2006 19:29 | Last updated: May 29 2006 19:29

When the world’s tallest building opened in Taipei 18 months ago it seemed a bold statement of confidence in the future. Today, it looks more like a forlorn reminder of Taiwan’s isolation. The vast lobby is near deserted, one-third of the floors are still vacant and the financial trading rooms they were designed to house remain a property developer’s fantasy.

The building is an apt metaphor for the hollowing-out of the island’s economy over the past decade. Its once vibrant manufacturing base has imploded as thousands of factories and managers have decamped to China. That has left Taiwan increasingly dependent on low-wage service industries and a dwindling community of corporate head offices and multinational companies.[/quote]

That was from the Financial Times…I didn’t register so I could not read the rest of the article…

Is the economic future of Taiwan so bleak? A “hollowing out” of the island’s economy?


US too.

My brother-inlaw is the poster boy for this phenomenon: a young and talented engineer working on a three months in Beijing and three months in Taipei rotation, and now with a Chinese girlfriend… his Ma in Gao Xiong is not happy.

I don’t think so.

It might be the case for service industry, where Taiwan doesn’t have the critical mass to be successfull (due to its low population). The strength of Taiwan is, and has always has been, in the manufacturing.

Certainly there has to be a shift towards high tech and competing edge, low tech is going to China (this is the same challenge for all industrial nations)

But at least in the electronic industry, Taiwan has developed leading edge technology, and is successfully competing China (proved by a lot of new investments in China). Despite the hype in mainland over the last years there are no companies in China really playing in the first league, such as TSMC, UMC, AUO, ChiMei or others. Certainly this has to do with the Taiwan’s government restrictions for investment in China and it might be tough to keep this advantage, but if you compare currently the competence of Taiwan manpower against mainlands, Taiwan is still 5-10 years ahead.

101 was an unadequate statement and has nothing to do with the capability of Taiwanese economy, if they focus on their strength.

This hollowing out process has been going on for YEARS! It’s hardly news anymore.

I first heard about visavis hong kong in the early nineties as business shifted across the border to China.

What is a concern is that the govt. really hasn’t articulated a vision for the industry that is left behind. Nor has it tried to take the most advantage out of the shift.

It has slowed cross-strait investement, tightened companies dealings across the strait, diverted attention away from China, to what end?


“Dont need a weatherman…”

It took me while to catch on, saw it first hand when I owned my own business 4 years ago.

There are areas where Taiwan can compete, and there are areas where they can’t.

The main issue is that the latter is increasing. i see more and more competition from the Chinese side of the strait coming up across the board.

That’s not aproblem in itself, if the Taiwanese keep on improving.

Some do, most don’t.

i think another thing we have to keep in mind is that the hollwoing out or losing competitive edge in ‘tradtional’ areas is something all economies go through when transitioning from a developing to developed economy. it happened to japan, is happening the taiwan and will happen to china at some point in the future.

taiwans trick is that it needs to wake up to this and realise that we aint in the 70s anymore. we also cant blame the govt. i think there are a lot of smart people here doing smart stuff and as mr he alluded to its about recognising the need to improve.

I disagree. When politicians and civil servants try to come up with any sort of “vision” for the economy, they usually come up with something based on the past. They’ll throw jillions at yesterday’s, or at best today’s winning horse. Government’s role should only be to maintain an environment that is friendly to ALL business, not an environment that gives preference to one sector over another and not an environment that allows protection for industries that should be allowed to die off or move away. The government should not be looking for a next big industry to subsidize because government usually chooses badly. The government should be looking at ways to make it cheaper to do any and all sorts of business. This means improving the legal system so contracts can be enforced at reasonable cost. This means getting rid of gray areas in the law or any other institutionalized procedures that provide the opportunity for bribes to be offered or solicited. I shudder when politicians or civil servants talk as if they know what the future should be for the economy.