April 2014 Taiwan Business TOPICS by AmCham Taipei

www.amcham.com.tw THE AMERICAN CHAMBER OF COMMERCE IN TAIPEI

Taiwan Business

Topics

TAIWAN BUSINESS TOPICS

Enjoying What Taipei has to Offer

(p.15)

愛上台北

April 2014 | Vol. 44 | Issue 4 中華郵政北台字第號執照登記為雜誌交寄 5000 4_2014_Cover.indd 1

Robotics (p. 32) Industry Focus on Services (p. 39) April 2014 | Vol. 44 | Issue 4

NT$150

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Published by the American Chamber Of Commerce In Taipei

2014/4/8 5:27:29 PM

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The American Chamber of Commerce in Taipei One of the largest international chambers in Taipei with over 500 company and more than 1,000 individual members. Our benefits include: Business Networking Industry Information C

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CONTENTS NEWS AND VIEWS

6 Editorial A p ril 2 0 1 4

Learning from the Crisis

vOlumE 44, N umbEr 4 一○三年四月號

記取危機的教訓

7 Taiwan Briefs Publisher

ByTimothy Ferry

發行人

Andrea Wu

11 Issues

吳王小珍

Editor-in-Chief

總編輯

Don Shapiro

Revisiting the Regulation of Supplements; Labor Dispatch and Competitiveness; A Government Software Procurement Crisis

沙蕩

Associate Editor

副主編

Timothy Ferry

法緹姆美術主任 /

Art Director/ Production Coordinator

後製統籌

Katia Chen

陳國梅

重新檢視膳食補充品的管理機制；勞動派遣與競爭力；政府軟體採購危機

Manager, Publications Sales & Marketing 廣告行銷經理

Caroline Lee

By Don Shapiro

李佳紋

Translation

翻譯

Yichun Chen, Sonia Tsai 陳宜君,蔡函岑

American Chamber of Commerce in Taipei 129 MinSheng East Road, Section 3, 7F, Suite 706, Taipei 10596, Taiwan P.O. Box 17-277, Taipei, 10419 Taiwan Tel: 2718-8226 Fax: 2718-8182 e-mail: amcham@amcham.com.tw website: http://www.amcham.com.tw 名稱：台北市美國商會工商雜誌發行所：台北市美國商會臺北市10596民生東路三段129號七樓706室電話：2718-8226 傳真：2718-8182 Taiwan Business TOPICS is a publication of the American Chamber of Commerce in Taipei, ROC. Contents are independent of and do not necessarily reflect the views of the Officers, Board of Governors, Supervisors or members. © Copyright 2014 by the American Chamber of Commerce in Taipei, ROC. All rights reserved. Permission to reprint original material must be requested in writing from AmCham. Production done in-house, Printing by Farn Mei Printing Co., Ltd. 登記字號：台誌第一零九六九號印刷所：帆美印刷股份有限公司經銷商：台灣英文雜誌社台北市108台北市萬華區長沙街二段66號發行日期：中華民國一○三年四月中華郵政北台字第5000號執照登記為雜誌交寄 ISSN 1818-1961

Chairman/ Thomas Fann Vice Chairmen/ Scott Meikle / William J. Farrell Treasurer: Cosmas Lu Secretary: Fupei Wang 2013-2014 Governors: Thomas Fann, William Farrell, Ajit Nayak, Neal Stovicek, Stephen Tan, Fupei Wang, Bill Wiseman. 2014-2015 Governors: William E. Bryson Jr., Sean Chao, Rodney Van Dooren, Douglas Klein, Cosmas Lu, Scott Meikle, Dan Silver, Ken Wu.

2014 Supervisors: Anita Chen, Midee Chen, Joseph Lin, Louis Ruggiere, Vincent Shih. COMMITTEES: Agro-Chemical/ Melody Wang; Asset Management/ Christine Jih, Derek Yung; Banking/ Victor Kuan; Capital Markets/ Miranda Liaw, C.P. Liu, Shirley Tsai; Chemical Manufacturers/ John Tsai, Michael Wong; CSR/ Lume Liao, Fupei Wang; Customs & International Trade/ Stephen Tan; Education & Training/ Robert Lin, William Zyzo; Greater China Business/ Helen Chou, Cosmas Lu; Human Resources/ Richard Lin, Seraphim Mar; Infrastructure/ L.C. Chen, Paul Lee; Insurance/ Joseph Day, Dan Ting, Lee Wood; Intellectual Property & Licensing/ Jason Chen, Peter Dernbach, Jeffrey Harris, Vincent Shih; Manufacturing/ Thomas Fan, Hans Huang; Marketing & Distribution/ Wei Hsiang, Gordon Stewart; Medical Devices/ Susan Chang, Tse-Mau Ng, Dan Silver; Pharmaceutical/ Margaret E. Driscoll, David Lin, Jun Hong Park; Private Equity/ William Bryson; Public Health/ Jeffrey Chen, Dennis Lin; Real Estate/ Tony Chao; Retail/ Prudence Jang, Douglas Klein, Ajit Nayak; Sustainable Development/ Kenny Jeng, Kernel Wang; Tax/ Cheli Liaw, Jenny Lin, Josephine Peng; Technology/ Revital Golan, Scott Meikle, Jeanne Wang; Telecommunications & Media/ Thomas Ee, Joanne Tsai, Ken Wu; Transportation/ Michael Chu; Travel & Tourism/ Anita Chen, Pauline Leung, Achim v. Hake.

COVER SECTION

15 Enjoying What Taipei has to Offer

愛上台北 By Jane Rickards

Living conditions in Taiwan’s capital city – including traffic and transportation, air quality, and the availability of recreational opportunities – have improved tremendously in recent decades. By those standards, as well the cost of living, the international educational institutions, and the friendliness of the people, foreign residents now rank Taipei favorably against most of the other major cities in the region. Although there is still significant room for improvement, Taipei’s reputation is growing as a safe and comfortable place to live and work.

25 We Bike on YouBike

TAIWAN BUSINESS

28 Taiwan as the Western Pacific Cargo Hub?

The logistics industry sees big opportunities for growth in the years ahead. By Jens Kastner

TECHNOLOGY

32 Taiwan’s Aspirations in Robotics

The global market is expanding and Taiwan is looking to get a larger slice of the action. By Timothy Ferry

taiwan business topics • april 2014

4 Contents.indd 4

2014/4/9 2:58:13 PM

apri l 2014 • Volume 44 n umber 4

LAW

iSSuE Sp ONSOr

36 Ridding the World of Patent Trolls

Citi: Taiwan’s Banking Leader

Improving the quality of the overall patent system is the best way to reduce unwarranted lawsuits. By Glenn W. Rhodes

iNDuSTrY

CuS

Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi is proud to have had a strong presence in Taiwan since 1965. Being the leader in Taiwan’s banking industry, Citibank Taiwan Limited (CTL) has been recognized as the Best Foreign Commercial Bank in Taiwan for the past 17 consecutive years by FinanceAsia and as the Most Admired Bank in Taiwan for 19 consecutive years by CommonWealth Magazine.

A Report on the Service Sector Growing role in the Economy

40 Aiming to Go International

But the first step, ratification of a crossStrait agreement, is running into obstacles.

CTL's Institutional Clients Group provides top-tier corporations with a full range of value-added local and cross-border products and services.

By Philip Liu

Leveraging Citi’s world-class banking platform, CTL acts as clients’ partner to support and grow their businesses to the next level by delivering cost effective solutions with a flexibility that is unmatched by Citi’s competitors.

44 The Breadth of Services

Profiles of nine companies: ABS, Amadeus, ERM, GIBSIN Engineers, ISS World, Oh! Study, Recall Taiwan, StevenLeach, and Towers Watson

CTL’s Consumer Banking leads the market by pioneering Wealth Management banking service, providing wealth advisory service, local and multi-currency deposits to premium accounts, OBU products and services and a variety of mutual funds, bonds, HK and U.S. stocks. By providing customers with value-added services, CTL’s Cards business enjoys high customer satisfaction and strong brand recognition in the market.

By Timothy Ferry, Jens Kastner, Don Shapiro, and Catherine Shu

52 AMCHAM EVENT 2014 Hsieh Nien Fan

Citi aims to become the world’s digital bank. In addition to introducing smart banking branches in 2010 and launching advanced mobile banking services in 2011 that include location-based offers, premium search, and Facebook check-in, Citi possesses the innovative culture that positions it to lead the digital trend and deliver more effective, dynamic, and convenient approaches to better serve clients.

taiwan business topics • april 2014

4 Contents.indd 5

Citi believes strongly in its responsibility to both Taiwan and the global community. Since 1995, CTL has been actively involved in educating the next generation, community care, financial education, and environment protection in Taiwan. Over the past 19 years, the CitiUnited Way Fundraising Campaign has benefited more than one million disadvantaged people in Taiwan.

2014/4/8 6:46:00 PM

Learning from the Crisis

he dramatic events of recent weeks – the bitter political deadlock over the Cross-Strait Service Trade Agreement (CSSTA), student occupation of the Legislative Yuan chamber, and massive protest demonstrations – have presented Taiwan’s young democracy with one of the most serious tests it has ever faced. But assuming, as everyone hopes, that the crisis eventually comes to a peaceful conclusion, the incident may also have its positive aspects. Certainly it may be beneficial that so many citizens – including young people who had tended to be politically apathetic – are showing such a keen interest in public affairs and concern about their nation’s future. Although much misinformation has been bandied about, recent events have still provided an unprecedented opportunity for broad public discourse about crucial issues. The crisis has also brought some valuable lessons. Perhaps foremost is the need for government officials to engage in more public education and to communicate more skillfully. It is not sufficient to hold public hearings and post documents on official websites, and more effective means will need to be found to get the government’s case across to an often skeptical public. Recent developments have also revealed the depth of public apprehension about the prospect of domination by China. AmCham Taipei, although it has supported crossStrait economic opening over the years, has also cautioned about the risks of over-dependence on any market, especially one involving all the political uncertainties that surround the cross-Strait relationship. But rather than Taiwan’s forsaking

business opportunities by restricting economic activity with China, the Chamber urges greater attention to diversifying trade and investment ties with other major markets. Particularly important – in fact, vital for Taiwan’s future prosperity – will be gaining entry into the emerging Trans-Pacific Partnership (TPP) trade grouping to assure continued access to key markets and provide an effective counterweight to the pull from China. But how can Taiwan achieve that acceptance and avoid economic marginalization? An unfortunate reality is that the rise of China causes many other countries to shy away from any actions that might irritate Beijing. Without an Economic Cooperation Framework Agreement (ECFA) having been put in place with China, Taiwan would have had no chance to sign free trade agreements with New Zealand and Singapore, and it would not be mentioned so prominently as a candidate for second-round TPP membership. Scuttling the CSSTA would discourage other countries from responding to overtures from Taiwan that would widen Taiwan’s network of free-trade partners. So would instituting an overly rigorous system for legislative review of trade pacts. No country will wish to commit the time and manpower to enter into the grueling process of trade negotiations unless there is a high degree of assurance that the agreed-upon provisions can be put into effect. It would be most ironic if the protestors’ concern about cross-Strait trade agreements led to a situation in which Taiwan becomes even more economically reliant on the mainland.

記取危機的教訓

最

近幾週以來的重大事件，也就是海峽兩岸服務貿

北市美國商會並非主張台灣應限制與中國的經貿往來，放

易協議所引發的嚴重政治僵局、學生占領立法院

棄商機，而是敦促台灣多注意分散市場，加強與其他主要

議場以及大規模抗議示威，使台灣年輕的民主社

市場的貿易與投資關係。尤其重要的，是要加入跨太平洋

會面臨歷來最嚴峻的考驗之一。然而，若這場危機最後能夠像大家所期望的和平落幕，這次事件可能也有其正面意義。眾多公民走上街頭（其中

夥伴協定（TPP）的新興貿易集團，以確保能持續進入主要市場，並有效抵消中國市場強大的吸引力。事實上，這也攸關台灣未來經濟能否持續繁榮。

有不乏向來對政治冷感的年輕族群），展現對公眾事務的

然而，台灣要如何打入國際，避免台灣的經濟被邊緣

的高度興趣，表達對國家前景的關心，當然有其益處。雖

化？一個不幸的事實是，中國崛起使得許多國家不願採取

然有許多錯誤資訊四處流傳，近期的事件也提供了前所未

任何可能觸怒中國政府的行動。正因為兩岸簽訂經濟合作

有的機會，讓關鍵議題在大眾之間廣泛獲得討論。

架構協議（ECFA），促成台灣有機會與紐西蘭和新加坡

這場危機也帶來了一些寶貴的教訓。其中最重要的一課，或許是政府官員需要花更多心力向大眾有效的說明政

簽署自由貿易協定，也會被納入TPP 第二輪談判的主要候選名單。

策。只是舉辦聽證會、在部會官網發佈文件是不夠的；需

兩岸服貿協議如果無法通過，將使其他國家不願回應台

要找到更有效的作法，讓抱持懷疑的民眾清楚了解政府的

灣，擴充自由貿易夥伴的要求。制定過度嚴峻的兩岸協議

理念。

監督機制，也會有同樣的負面效果。若不是很有把握雙方

近期的事件發展，也顯示出台灣民眾對於可能遭到中國

同意的自貿條款能夠生效，沒有一個國家會願意投入大量

主宰的憂慮程度。台北市美國商會多年來支持兩岸經貿自

的時間與人力進行艱辛的貿易談判。如果抗議人士對兩岸

由化，

經貿協訂的疑慮，反而導致台灣在經濟上更加依賴中國市

但也點出了過度依賴單一市場的風險，尤其它是

一個會受到兩岸關係任何政治不確定性牽動的市場。但台 6

場，那將是適得其反。

taiwan business topics • april 2014

4_Editorial.indd 6

2014/4/8 5:28:24 PM

— by TI M O TH y F E RRy —

eter of the health of the manufacturing sector, based on new orders, inventory levels, production, supplier deliveries, and the employment environment. A score above 50 indicates growth, and while the PMI dropped 3.8% in February, it remains in the growth zone at 50.3. The drop is attributed mostly to a 13.1% fall in production. Despite the lower PMI, manufacturers remain optimistic, and the six-month outlook index points to a growth trend. Leading chipmakers Taiwan Semiconductor Manufacturing Co. (TSMC) and United Microelectronics Corp. (UMC) are expected to benefit from the growing tablet computers sector and the introduction of a new iPhone, which is expected to lift domestic semiconductor foundry output by 3-4% in 2014, up from 2013’s 2% rise. Although economists see a fairly strong performance for the first quarter of this year on strong demand from developed markets, they question how long this trend will continue, citing China’s slowdown, the slumping demand in emerging markets, and increased competition for exports from other newly industrialized nations. Business Monitor International (BMI) also

MACROECONOMICS feb. fiGUres bODe weLL bUt HeaDwinDs LOOM Economists are cautiously optimistic about Taiwan’s economy despite softening demand from China and a lackluster first two months in 2014. In yearly comparisons, Ministry of Finance figures show that exports and imports in February rose 7.9% and 4.9% respectively, but this reflects the lengthy Chinese New Year’s holiday in 2013. A cumulative view of January/February reveals a much smaller increase in exports at .4%, down from the 1.8% achieved in Q4 of 2013, while imports declined by 6.6%. Analysts attribute the flat exports to a 3% drop in demand from China. Developed markets have somewhat compensated for that dip, however, with exports to the United States up 4.7% and to Europe up 2.9%. Total exports for the first two months totaled US$45.6 billion, while imports came in at US$41.05 billion, for a US$4.5 billion favorable trade balance. Ta i w a n ’s m a n u f a c t u r i n g s e c t o r r e m a i n s h e a l t h y, a c c o r d i n g t o t h e National Development Council’s PMI (Purchasing Manager’s Index), a barom-

TAIWAN'S JAN.-Feb. 2014 TRADe FIGUReS (YeAR- ON-YeAR COMPARISON)

ASEAN

4.06 4.82

4.66 4.29

4.62 4.41

Europe

2013

2014

2013

2014

Imports

8.7

2014

4.55 4.6

U.S.

2013

CROSS-STRAIT 41.05 45.59

2014

4.74

8.7

2013

4.74

6.96

6.55

2014

6.14

17.52 6.84

2013

TOTAL

43.96 45.4

Japan

17.72

HK/China

Exports

cites possible “corrections” in the local property market as downside risks. BMI has downgraded its estimate for GDP growth from 4% to 3.5% for the year. The International Monetary Fund foresees 3.8% growth for Taiwan, but most other projections hover around 3%. Taiwan’s Directorate General of Budgeting, Accounting and Statistics (DGBAS) and the Yuanta Polaris Research Institute are looking at 2.82% and 2.88% respectively, while the private Taiwan Institute of Economic Research (TIER) and state-funded Chung-Hua Institution for Economic Research (CIER) come in at 3.17% and 3.03% respectively. Exports continue to be drivers of growth, but domestic consumption is also seen as a positive factor. Falling prices coupled with wages rising at the end of last year by some 3% in annual comparisons resulted in year-end private consumption gains of 3.28%, and analysts see private consumption inching upwards by 2.5% for the year. At the same time, a depreciating currency might impact prices for imports as the Taiwan dollar is down 3% against the US dollar since October 2013. The TAIEX was down .8% monthon-month in February, but up 7.1% year-on-year. Securities firm CLSA notes that Taiwan’s financial sector reported a 29.2% rise in profits in the first two months compared with the same period last year.

2013

2014

Unit: US$BN Source: BOFT

seisMiC, MeteOrOLOGiCaL aGreeMents siGneD Chairman Lin Join-sane of Taiwan’s Straits Exchange Foundation (SEF) and his Chinese counterpart Chen Deming of the Association for the Relations Across the Taiwan Straits (ARATS) in late February signed two cooperation agreements on seismic and meteorological monitoring. In light of the increase in

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extreme weather in the region, the pacts are viewed as a way to help minimize the loss of life and property stemming from natural disasters. SEF and ARATS are nominally private organizations that act on behalf of their respective governments. The pacts are the latest in a string of agreements hammered out between them since 2008, including accords on direct flights and shipping, food-safety management, and healthcare issues. However, another of the pacts signed between the two organizations – the Cross-Strait Services Trade Agreement – is creating seismic tremors of another sort and is now the focus of an intense protest in Taipei [see below].

UneXPeCteD riDe fOr COast GUarDsMen Last month, a Taiwanese Coast Guard patrol vessel was called in to resolve a dispute between a Chinese fishing boat and a Taiwanese craft near Pengjia Islet, 30 kilometers north of Keelung – and along with the Diaoyutais a point of contention in the East China Sea among rivals China, Japan, and Taiwan. Five guardsmen boarded the Chinese vessel, the Zheliangyu 09088, and requested that the captain follow them to Keelung. Instead, the captain allegedly switched on the autopilot and set a course for the vessel’s home province of Zhejiang, with the Taiwanese coast guardsmen trapped aboard. Armed only with stun guns and batons, the five guardsmen were able neither to assert authority over the fishing crew nor disable the ship’s autopilot. Their fellow guardsmen aboard the patrol vessel gave chase and called in another five ROC Coast Guard boats. Nevertheless, four hours and 40 nautical miles (74 kilometers) passed before the Coast Guard was able to stop and board the Zheliangyu 09088. The 260-ton vessel was escorted to Keelung where its captain and eight crewmen face fines of NT$250,000 (about US$8,300) for unauthorized entry into Taiwanese

waters. The Coast Guard is also forwarding the case to prosecutors for possible obstruction-of-justice charges for allegedly taking the guardsmen hostage.

DOMESTIC POLITICAL taiwan MiLitarY Gets new weaPOns sYsteMs The ROC military last month took delivery of two new weapons systems intended to deter an invasion by superior Chinese forces. One of the new additions was the third installment of six Boeing Apache AH-64E attack helicopters. Taiwan’s is the first military outside of the United States to obtain this most advanced iteration of the Apache, featuring improved digital connectivity, more powerful engines, new composite rotor blades, and the capability to control u n m a n n e d a e r i a l v e h i c l e s ( U AV s ) . Taiwan is due to take a total of 30 of the aircraft at a total cost of US$2 billion (NT$60.93 billion). Taiwan also received the first of what is expected to be a dozen stealth “carrier killer” attack ships. The 500-ton, twinhull corvette Tuo River was christened in Suao last month, the first vessel to be

delivered under the Hsun Hai (“Swift Sea”) program approved by the Legislative Yuan in 2011 at a cost of NT$24.98 billion (US$853.4 million). The Tuo River is 60 meters long by 14 meters wide and carries a crew of 40. Built employing radar deflecting materials and capable of speeds as fast as 38 knots (70 kph), the Hsun Hai ships will be able to get in close to enemy vessels to deliver their weapons packages of Hsiung Feng II and Hsiung Feng III anti-ship missiles. Experts note that the locally built ships bear a striking resemblance to the U.S. Navy’s advanced Littoral Combat Ship (LCS), and reflect Taiwan’s need for fast, stealthy weapons systems capable of asymmetrical warfare in the face of what has become China’s growing military superiority across the Taiwan Strait.

anOtHer PresiDent faCes MassiVe PrOtests It’s déjà vu all over again. Two years into his second term, having pushed policies towards China that enraged the opposition party, and facing allegations of malfeasance and incompetence, Taiwan’s unpopular president confronts widespread protests that threaten to

OCCUPY PARLIAMENT — Student protestors took over the Legislative Yuan chamber to demand reconsideration of the proposed services trade agreement with China. photo : ap/ wally santana

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MASS MOBILIZATION — More than 100,000 demonstrators took to Ketagalan Boulevard near the Presidential Office Building on March 30 to challenge the government’s policy of liberalizing trade with China. photo : ap /wally santana

derail his presidency and taint his legacy. Sound familiar? The president referred to above, though, is Chen Shuibian, who faced massive protests in 2006 against allegations of corruption but also an opposition furious with his policies towards China. Mark Twain is reputed to have said, “History doesn’t repeat itself, but it does rhyme.” And so six years into his tenure, President Ma Ying-jeou faces widespread protest demonstrations. On March 18, the Legislative Yuan was occupied by students objecting to what they consider the summary passage of the Cross-Strait Services Trade Agreement (CSSTA). The protestors allege that the agreement will likely benefit only wealthy owners of large companies while exposing smaller businesses to the full brunt of Chinese competition. The protest escalated Sunday night/Monday morning (March 23/24) to include the seizure of the Executive Yuan, which prompted the use of force by police to clear the building. A large-scale rally took place on March 30 in the plaza in front of the Presidential Office Building, with initial estimates putting the number of demonstrators at over 100,000. Major differences separate Chen and

Ma, of course. After leaving office, Chen was convicted on corruption charges and is now serving a 20-year prison sentence for embezzlement, while Ma has mainly been criticized for poor leadership. The parallels between the two situations, though, include single-digit approval ratings, cabinets dogged by scandal, and policies towards China that have angered a good portion of the populace. Chen sought greater distance from Beijing, moves that the then-opposition Kuomintang (KMT) saw as cutting Taiwan off from huge opportunities presented by China’s surging economy. Ma, by contrast, has pursued greater economic integration with China, an approach which the opposition Democratic Progressive Party (DPP) contends will leave Taiwan overly dependent on China and ultimately open a back door to unification. The demands of the protestors, who continue to occupy the Legislative Yuan, have evolved over the duration of the action. Initially, the group demanded that the CSSTA be reviewed line-by-line by both parties, as per understandings reached between the two parties last September. According to media reports, however, when an attempt was made

to review the pact, the opposition DPP lawmakers occupied the podium to prevent the very debate that they had demanded. In response, KMT legislator Chang Ching-chung, chair of the Internal Administrative Committee, declared the debate over and sent the pact to a plenary session for a final vote. That decision prompted the student takeover of the legislative chamber. Leaders of the protest, dubbed the “Sunflower Movement” by the press, have since demanded wholesale rejection of the CSSTA and the creation of a civic oversight committee to approve all pacts with China. Although President Ma has voiced support for a legislative oversight mechanism to operate in the future, he also stated that the CSSTA cannot be subject to such oversight retroactively. And so the protests continue, with some questioning whether either side has an exit strategy. Ma contends that the pact is vital not only to Taiwan’s economy now but also to future trade pacts. In a press conference on March 23, he told reporters: “If we sign and don’t pass (a trade deal), it will have a grave impact on our international image. It will hurt us if we want to negotiate with other countries.”

I N T E R N AT I O N A L PHiLiPPines inDiCts 8 in sHOOtinG inCiDent The Philippines Department of Justice (DOJ) indicted eight Philippines Coast Guard (PCG) members for the shooting death of a Taiwanese fisherman eight months ago in an incident that rocked relations between the two nations. Last May, the PCG patrol vessel MCS-3001 attempted to stop and search the Taiwanese fishing vessel Guang Da Xing No. 28 on suspicion of illegal fishing near Balintang Channel, an area where the two countries’ exclusive economic zones (EEZs) overlap. In the ensuing confrontation, the PCG patrol ship opened fire, sending more than 40

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rounds into the Taiwanese fishing boat and killing its captain, Hung Shih-cheng. The Philippines DOJ rejected the claim that the Taiwanese boat posed an imminent danger to the much larger PCG patrol vessel, and further stated that the PCG commander and servicemen “exceeded the performance of lawful duty” in the confrontation. The indictment satisfies the last of Taiwan’s demands for bringing a close to an incident that temporarily caused a serious rift between the two neighbors.

BUSINESS aCer sPOKesMan, OtHers in insiDer traDinG CHarGes With a plummeting share price, years of losses, and instability within its executive ranks, Acer probably has enough on its plate. But now “criminal investigation” can be added to the list. On March 16, agents from the New Taipei City prosecutor’s office and Investigation Bureau raided Acer’s Xizhi headquarters along with 13 other sites, including employees’ homes, searching for evidence of insider trading. Company spokesman Henry Wang was arrested and will be held in the probe for up to two months along with stockbroker Lo Fang-yin. Six others were arrested and released on bail while a seventh refused to answer a police summons and another agreed to cooperate with investigators.

T h e c a s e t r a c e s b a c k t o A c e r ’s announcement November 5, 2013 of Q3 losses amounting to NT$13.1 billion (US$430 million) and the consequent resignation of then-CEO J.T. Wang. Investigators allege that the 10 suspects knew of the announcement beforehand and sold their shares the day before for profits of roughly NT$5 million (US$164,000). The suspects face possible prison terms of up to 10 years and fines of NT$200 million each. Acer has slipped from second to fourth place among the world’s largest PC makers. Founder Stan Shih has returned to the role of chairman and, along with current president and CEO Jason Chen, is trying and turn around the fortunes of Taiwan’s flagship PC maker.

bUsiness as UsUaL DesPite tHe PrOtests In the days following the seizure of the Legislative Yuan by mostly student demonstrators in protests over the CSSTA, trade groups and industry associations predicted dire consequences. The General Chamber of Commerce of the Republic of China (ROCCOC) told reporters that 85% of its members would be impacted by failure to ratify the pact and forecasted that Taiwan would become isolated from international trade. The local TAIEX index dived 42 points on March 19 to 8,689.46 and a further 92.13 points

eCONOMIC INDICATORS Unit: US$ billion Current Account Balance (Q4 2013)

17.14

12.30

Foreign Trade Balance (Jan.)

2.97

0.51

New Export Orders (Feb.)

30.7

29.0

418.0

404.1

Foreign Exchange Reserves (end Feb.) Unemployment (Jan.)

4.02%

4.16%

Discount Rate (Feb.)

1.875%

2.95%

3.85%

-1.78%

19.06%

0.76%

1.12%

Economic Growth Rate (Q4 2013)f Annual Change in Industrial Output (Jan.)p Annual Change in Consumer Price Index (Jan.) note: p=preliMinary F= Final

Year Earlier

sources: Moea, DGbas, cbc, boFt

TAIWAN STOCk exChANGe INDex & vAlUe

THE RED LINE SHOWS CHANGES IN TURNOVER AND THE SHADED AREA CHANGES IN THE TAIEX INDEX.

8750

145

8500

130

8250

115

8000

100

7750

7500

7250

7000

6750

6500

February Data source: tw se

unit: nt$ billion

to 8,597.33 on March 20. Meanwhile National Central University’s Research Center for Taiwan Economic Development reported that its consumer confidence index had dropped to 80.96, its lowest level since April 2010. But as the protests have dragged on, the immediate impact seems to be muted. The TAIEX has since regained all its lost ground and then some, closing at 8,774.64 on March 28, and the consumer confidence index, while lower than usual, is still considered to be within an acceptable range. Meanwhile, the National Development Council assigned a positive green light to the monthly business indicators. It listed the U.S. tapering of Quantitative Easing and the slowdown in China as possible risks, but said little about the protests. Under the CSSTA, China is to open up 80 of its service sectors to Taiwanese competition, while Taiwan only needs to open up 64 sectors. Securities analysts note that the CSSTA gives Taiwan equal or better terms than those received by Hong Kong in its Closer Economic Partnership Arrangement (CEPA) pact with China. Sectors expected to benefit the most from CSSTA are e-commerce, online gaming, culture and creative businesses, shipping, tourism, and financial services.

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Issues

Revisiting the Regulation of Supplements Global trends call for vitamin products to be treated as a separate classification.

efore 2012, multivitamin products were regulated in Taiwan as over-the-counter (OTC) drugs. In May of that year, the system was changed to treat them as general food items. Both of those approaches, however, run counter to the international trend among developed countries to classify these products within their own regulatory category distinct from either foods or medicines. At a time when the Taiwan government is making a determined effort to align its overall regulatory regime with global standards in order to demonstrate this country’s readiness to join various multilateral trade pacts now being organized, manufacturers believe it would be advisable for Taiwan to ensure that its policy governing supplements is also in line with international practice. The group of products in question includes vitamins, minerals, amino acids, fatty acids, enzymes, probiotics, bioactive substances, and substances derived from natural sources (such as animal, mineral, and botanical materials in the form of extracts). The global trend has been clear. Since passage of the Dietary Supplement Health and Education Act (DSHEA) in 1994, for example, the United States has treated supplements differently from foods and drugs, and has permitted products in this grouping to be marketed without prior approval from the U.S. Food and Drug Administration (FDA). In Australia, supplements are classified as “Complementary Medicines,” and in Canada they come under a distinct set of regulations governing “Natural Health Products.” In the European Union, the Food Supplements Directive was established to differentiate supplements from general foods. Following this trend, ASEAN is now developing specific guidelines for “Traditional Medicines and Health Supplements.” Establishing a separate category for supplements would align Taiwan’s system with international standards such as those of Codex Alimentarius affiliated with the World Health Organization and United Nations. Consequently it would help to further ensure product quality, as well as to make more information available to Taiwanese consumers to help them in managing their own health. “Supplements such as vitamins and minerals are not conventional foods,” says Suneet Varma, Asia-Pacific regional president for Pfizer Consumer Healthcare (PCH), which manufactures Centrum and Caltrate. “After considering the local regulatory environment and using the experience of other advanced countries as reference, we recommend that supplements be regulated as an independent category separate from general foods.” Pfizer operates world-class manufacturing facilities in Taiwan to supply supplements and pharmaceutical products to the local market and for export, the only American company to do so. “It’s necessary to have a robust regulatory framework to govern the supplements category, and that framework should include clear

重新檢視膳食補充品的管理機制應順應國際趨勢, 建立獨立類別管理維生素產品

在

2012 年之前，主管機關將低劑量維生素產品列為非處方藥 (OTC) 管理。政府在該年五月之後改變機制，將這類產品列為一般食品。然而不論是O T C或是一般食品, 這兩種方式皆不同於已開發國家的趨勢－應將這類產品設立專屬類別，有別於食品或藥品。政府近年來為了展現加入各項多邊貿易協議的決心，不斷使國內的整體管理制度朝著與全球標準接軌的方向努力。業者相信台灣亦應確保其膳食補充品之相關政策符合國際規範，才是完善之舉。所謂的膳食補充品包括維生素、礦物質、胺基酸、脂肪酸、酵素、益生菌、生物活性物質(bioactive substances)以及自然來源衍生的物質（例如動物、礦物與植物的萃取物）。全球在這方面的管理趨勢是相當明確的。例如，自從「膳食補充品健康與教育法」(DSHEA) 在 1994 年獲得通過之後，美國已將膳食補充品視為不同於食品與藥品的產品，並允許業者直接行銷這類產品，不必事先取得美國食品藥物管理局 (F D A) 的許可。澳洲將膳食補充品歸類為「補充性藥品」，加拿大則將其列為「天然保健產品」，並以一套獨立的法規加以管理。為了區分膳食補充品與一般食品，歐盟已制定食物補充品管理方針 (F o o d Supplements Directive)。東南亞國協順應此一趨勢，目前正針對「傳統藥品與保健補充品」研擬準則。若能為膳食補充品增設獨立類別，台灣的管理機制便將符合國際標準，例如世界衛生組織及聯合國下的「國際食品法典」(Codex Alimentarius)。此舉或將有助於進一步確保產品的品質無虞，並為台灣消費者提供更多資訊，協助他們管理自身的健康。輝瑞消費保健事業部 (P C H) 負責製造暨銷售善存 (Centrum)、挺立 (Caltrate) 等產品，該事業部的亞太地區總裁 Suneet Varma 表示：「維生素、礦物質等膳食補充品並非傳統食品。在考量當地法規環境並參考其他先進國家的經驗之後，我們建議政府在管理膳食補充品時, 將其視為有別於一般食品的類別。」輝瑞在台灣營運世界級的生產製造設施，同時供應當地以及出口膳食補充品與藥品，也是目前在台灣唯一仍擁有製造廠的美商藥廠。

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Issues guidelines for claims, the maximum allowable levels of vitamins and minerals using upper levels of safety, and requirements regarding stability, GMP [Good Manufacturing Practice], and labeling,” says Varma. “In addition, regulations over supplements should not be based only on the form of dosage. Rather, supplements of various forms should be classified as a whole to achieve comprehensive management of this category. Moving to a separate framework will allow the category to develop in ways that best meet the needs of consumers, while also supporting very high standards of quality.” Varma recommends that the level of regulatory requirements should be based upon a robust benefit-risk analysis. “It is recognized that supplements pose a low level of risk,” he notes. “Australia and Canada have efficient guidelines that balance the need to protect consumers with the appropriate level of regulation.” The approach taken in those and other developed markets can serve as useful reference for Taiwan. —– By Don Shapiro

Labor Dispatch and Competitiveness Flexibility in the use of temporary personnel is an important consideration for many investors.

he draft of a proposed Dispatch Labor Protection Law was recently forwarded by the Ministry of Labor to the Executive Yuan for review. Labor dispatch refers to the common practice among businesses to contract with a manpower agency to supply personnel to work at their company for a given period while still being considered employees of the agency. Many businesses depend on the use of this system to cope with temporary increases in the volume of their workload. The necessity might be seasonal, as with the surge in demand during the preChristmas rush, or it might reflect the need for extra manpower to complete a particular project. Companies wish to avoid adding to their regular headcount, only to have to resort to layoffs – with all the complications and hardships they entail – when business returns to normal levels. For management, labor dispatch provides an essential degree of flexibility in meeting HR needs. At the same time, labor unions and government authorities understandably wish to ensure that this option is not abused – that the basic rights of workers are protected, and that companies are utilizing labor dispatch out of a real need for flexibility and not simply to reduce production costs. With those objectives in mind, the government for some time has been working on revisions to the LSL to set new rules for labor dispatch procedures. Each year since 2010, in fact, the HR section of AmCham Taipei’s Taiwan White Paper has offered feedback regarding provisions under consideration by the labor-affairs authorities, suggesting certain modifications to make the implementation process more practical and efficient. 12

Varma 表示：「建議應以健全的法規架構管理膳食補充品，該架構應包括產品宣稱的明確準則，依據較審慎的安全考量制定維生素與礦物質許可含量上限，以及產品的安定性和優良製造規範 (GMP) 及標示方面的規定。此外，膳食補充品的相關法規不應僅以產品劑型作為根據。各種形式的膳食補充品應當歸為一類，如此一來該類產品才能獲得完善的管理。若能改採獨立的法規架構，業者便能以最符合消費者需求的方式研發該類別的產品，同時遵行極高的品質標準。」 Varma 建議政府依據完善的風險效益分析決定法規管制程度：「膳食補充品的安全風險很低，已是公認的事實。澳洲與加拿大皆已制定效率卓著的準則，在保護消費者的必要性與適度管制之間取得平衡。」這些國家與其他已開發市場的做法，皆可供台灣作為借鏡。 — 撰文／沙蕩

勞動派遣與競爭力臨時人員的運用彈性是許多投資者的重要考量。

「

勞動派遣」為勞動部最近提交行政院審查的一系列勞基法修正案之一。勞動派遣是企業常見用工方式之一，由簽約的人力派遣機構在規定期間內提供人員到企業工作，同時這些人仍是派遣機構員工。許多企業都倚賴派遣系統來因應臨時增加的工作量。某些公司人力需求有淡旺季之分（例如耶誕旺季前的需求激增），抑或可能需要額外人力來完成某項特定計畫。當業務回歸正常水準時，企業希望避免正規編制擴大，就唯有訴諸裁員，但須承擔一切糾紛和難題。就管理而言，勞動派遣提供滿足人力需求所不可或缺的用工彈性。同時可想見工會和政府主管單位會希望確保勞動派遣不會遭到濫用―勞工的基本權益受到保障，企業利用勞動派遣實因需要彈性，而非純粹要降低生產成本。基於這些目標，台灣政府進行勞基法修法已有一段時間，希望訂定新的勞動派遣程序規定。其實自2010年起，台北市美國商會在每年的《台灣白皮書》人力資源章節中，都針對勞工事務當局研議中的條款提出意見回饋及建議做出某些修改，讓執行過程更加可行、有效率。對部分建議被列入修改中的草案，本商會人力資源委員會表示感謝。不過現已提交行政院的該法案仍有一些問題，在近期國家發展委員會(國發會)為協助處理部分仍未解決的重大《白皮書》議題所召開的會議上被提出討論。商會人力資源委員會和勞動部都派代表與會，討論中提出的說明不但紓解業界的部分疑慮，也為台灣政府未來考慮修改其它條款留下可能的機會。其中一項獲得釐清的議題，就是派遣工申請轉任

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Issues AmCham’s HR Committee has expressed appreciation that some of those recommendations were adopted as the proposed bill underwent revisions. Yet some questions remained about the bill that has now proceeded to the Executive Yuan. These points were recently taken up at a meeting called by the government’s National Development Council (NDC), with participation from the HR Committee and Ministry of Labor (MOL), as part of its effort to help address selected significant, outstanding White Paper issues. The discussion brought clarification that eased some of industry’s concerns, and left the door open to further government consideration on other provisions. One issue that was clarified was whether a dispatch worker who applies for regular employment with the company, but is rejected, would be able to continue in a dispatch capacity or would have to cease serving at the company. Although that point was left vague in the draft law, an MOL representative at the NDC meeting agreed that a worker turned down for regular employment should be able to retain dispatch status. In addition, it was confirmed that a satisfactory transition period would be provided for industry to prepare for compliance with the new law. With regard to another central point, the MOL said that it was too late to make changes in the draft law at the Ministry level, but that revisions could still occur during the Executive Yuan’s review of the bill or at the legislative stage. The issue is whether the current provision in the draft bill limiting labor dispatch to 3% of a company’s workforce is reasonable. The MOL reportedly set the cap after conducting a survey that shows the current level of labor dispatch as 1.79% of the total workforce, 2.34% in manufacturing, and a high of 4.58% for the Information Technology (IT) industry. As the Committee pointed out, an across-the-board 3% limit may therefore pose no inconvenience for most industries, but it could handicap the IT sector that is so crucial for the Taiwan economy. The size of companies also needs to be accounted for. For a small-scale operation, taking just a few dispatch laborers could quickly add up to a big percentage of total employment. A final question was whether companies would be barred under the new law from asking that a particular individual be assigned to them as part of their labor dispatch request. The consensus from the NDC discussion appeared to be that company management should not be involved in the first-round selection – to underscore that the workers are in fact dispatch labor and not their employees – but that companies could ask for the return of specified good-performing individuals at the close of their initial term of service. The HR Committee regarded the meeting as a highly positive opportunity for communication. It was also a chance to remind government that labor-dispatch policy is among the various factors that determine Taiwan’s economic competitiveness. Multinational companies that are considering Taiwan as the location for a new project may instead shift the site to another country if Taiwan is unable to offer sufficient flexibility regarding manpower for the project. —– By Don Shapiro

A Government Software Procurement Crisis The Joint Procurement Platform run by the Bank of Taiwan has ground to a halt.

企業編制內員工遭拒後，能否繼續擔任派遣職務，抑或須停止在該企業服務。另一項議題則是修正案通過後是否會准予適度的過渡期，讓企業有時間進行調整。人力資源委員會認為前述兩項問題在草案中的規定仍不明確。不過勞動部代表在國發會會議中證實，日後制定的施行細則將會：一、具體規定派遣工被拒絕轉任編制內員工後，仍可維持派遣身分；二、規定符合需求的過渡期，以利企業遵守新法。至於另一項主要議題，目前的草案條文對派遣勞工不得超過企業全體員工 3%的限制是否合理。勞動部表示草案已來不及在部會層級進行修改，但在行政院審查期間或立法階段仍可進行修訂。據報導，勞動部調查發現目前派遣工在整體勞動力的佔比為1.79%，製造業為 2.34%，資訊業則高達4.58%後設定此一上限。人力資源委員會指出，全面性限制3% 對大部分產業可能不會構成不便，卻會妨礙對台灣經濟至關重要的資訊業。另企業規模也需列入考量。對小規模運作的業者來說，只要幾位派遣工，很快就會在整體編制中占去很大的比例。最後一個問題是，新法是否禁止企業在提出勞動派遣需求時要求派遣特定個人。國發會會議討論中達成的共識，似乎是企業管理階層不應涉入第一輪遴選（藉此強調這些勞工是派遣工，而非企業員工），但企業在初次派遣期間結束時，可要求表現良好的特定個人重返崗位。本商會人力資源委員會將國發會會議視為高度正面的溝通機會，同時也希望能透過此機會提醒台灣政府，勞動派遣政策是決定台灣經濟競爭力的因素之一。若台灣無法提供跨國企業規畫中所需的人力彈性，那麼考慮在台灣進行投資的企業可能會轉往其它國家。

— 撰文／沙蕩

rdinarily the Taiwan government each year purchases some US$130 million worth of package software. The prices for each type of product are first set through a tender run by the state-owned Bank of Taiwan, and then each individual government agency can place its orders accordingly through that joint platform. Since July 2013, however, the government software procurement system has practically come to a halt. The Bank of Taiwan did manage to hold a partial tender last

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Issues November, but it covered only 263 out of a total of 659 items – nearly all of them for the educational sector. All the other 396 items either became embroiled in a dispute process or were cancelled without any resolution. An attempt by the Bank of Taiwan to reopen the bid in January ended in another cancellation. According to increasingly frustrated industry sources, high-level government officials have so far been unwilling to intervene, accepting assurances from the Bank of Taiwan that preparations for a tender are continuing. But with time running out in the current fiscal year and with no definite solution yet in place, representatives from both multinational and domestic software companies are concerned about the heavy impact on their business. Already the drought in orders has reportedly caused one multinational company to disband its Taiwan public-sector team and was among the factors prompting another company to close its Taipei office. To determine the overall loss from the dry-up in orders, industry sources note that the US$130 million figure should be multiplied numerous times to reflect the value of applications software, maintenance, and other add-on business. Monetary considerations aside, the situation reflects poorly on government efficiency, something the Ma administration has been trying to improve. Even more critical is the potential intellectual property rights issue. Although the valid software licenses may have expired or been superseded by updated versions, government offices are presumably continuing to operate or purchase their personal computers. Since coming off the U.S. government’s Special 301 Watch List in 2009, Taiwan has carefully guarded its reputation for IPR compliance. Given the Taiwan government’s current aspiration to join the Trans-Pacific Partnership (TPP) trade grouping, a new IPR controversy would certainly be unwelcome. The crux of the problem appears to be the absence of a government authority with overall responsibility for government procurement (the Public Construction Commission considers that it is responsible for the government procurement law but not its implementation), as well as the lack of interest at the Bank of Taiwan for operating the joint procurement platform, which it regards as far removed from its core business. The bank’s role is a legacy of the government’s financial-reform program of 2007 that sought to reduce the number of state-owned financial institutions through mergers. As part of the program, Taiwan’s state-owned Central Trust of China – one of whose functions was to oversee government procurement activity – was folded into the Bank of Taiwan. Long-term, the government may wish to find a more suitable agency than the Bank of Taiwan to handle IT procurement. But to solve the immediate problem, saving Taiwan’s software business and its IPR reputation, industry representatives are urging the government to act now to choose one of two alternatives. Either instruct the Bank of Taiwan to reschedule – and complete – a tender as soon as possible, or else advise the various government agencies to carry out their own individual software procurement programs. — By Don Shapiro

政府軟體採購危機臺灣銀行電腦軟體共同採購平台停擺

台

灣政府平常每年採購價值約1億3,000萬美元的套裝軟體。每一類產品的價格，先透過公營臺灣銀行所負責的招標案訂定，之後各政府部門再根據決標價格在共同採購的平台上下單採購。但自去年七月以來，上述軟體採購平台陷入停擺狀態。儘管臺銀去年十一月曾一度開標，但總共659品項中僅有263個決標，且主要都是教育軟體。其餘396個政府軟體採購品項則因執行程序有疑義而造成廠商被迫進入申訴程序或被宣布廢標。今年一月臺銀試圖重新開標，後來又再一次取消，以至於迄今為止，政府需用單位都沒有簽訂任何軟體採購合約。越來越感到挫折的業界人士說，高層政府官員到目前都不願意插手，只是接受臺銀的說法，也就是招標工作持續在準備當中。但眼看會計年度不久就要結束，問題如何解決卻還沒有明確答案，跨國公司和台灣本地軟體公司的代表都擔心業務會受到嚴重衝擊。由於政府訂單遲遲不來，據說有一家跨國公司已經解散負責台灣公部門業務的單位，而另一家跨國公司決定關閉在台北的辦事處，可能跟此事也有關聯。業界人士指出，政府不下訂單對業者所造成的整體損失，是1億3,000萬美元的好幾倍，因為整體金額包括應用軟體、維護和其他附加業務在內。除了造成業務損失，出現這個狀況也反映出政府效率的問題，而馬英九總統所領導的行政團隊一直在努力提升政府的效能。更重要的是，這個狀況可能衍生出潛在的智慧財產權問題。在各政府機關仍然必須繼續使用或採購新電腦的情況下，有效的軟體使用授權可能已經到期或被更新版所取代。台灣在2009年從美國政府的特別301觀察名單中除名之後，一直很珍惜台灣尊重智慧財產權的好名聲。而且，台灣政府目前希望加入跨太平洋夥伴協議，肯定不會樂於見到再出現涉及智慧財產權的爭議。問題的關鍵，在於台灣政府沒有一個全權負責政府採購的部門（公共工程委員會僅負責政府採購的相關法律，但不負責政府採購案的執行），而且臺灣銀行對於負責共同採購平台一事看來興趣缺缺，因為政府採購與臺銀的核心業務幾乎沒有關聯性。臺銀被賦予辦理共同採購任務的歷史緣由，是因為政府在2007年推動金融改革時，透過整併減少公營金融機構的家數。政府採購原本是國有中央信託局的業務之一，但在金改行動中，中信局被併入臺灣銀行。長期來說，政府可能會想要找個比臺銀更適合的機構來負責資訊軟體採購的業務。但業界人士認為，要解決眼前迫切的問題，政府應該指示臺銀儘快重新辦理並且完成招標，或指示由各級機關自行啟動辦理相關軟體的採購程序，如此才能挽救台灣的軟體業和彰顯台灣重視智慧財產權的聲譽。

— 撰文/ 沙蕩

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Cover story

Living Conditions

Enjoying What taipEi has to offEr 愛上台北 BY JANE RICKARDS

撰文 / 李可珍

photo : taiwan tourism bureau

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R Living conditions in Taiwan’s capital city – including traffic and transportation, air quality, and the availability of recreational opportunities – have improved tremendously in recent decades. By those standards, as well the cost of living, the international educational institutions, and the friendliness of the people, foreign residents now rank Taipei favorably against most of the other major cities in the region. Although there is still significant room for improvement, Taipei’s reputation is growing as a safe and comfortable place to live and work.

台灣首都的生活條件，包括交通運輸、空氣品質和休閒便利性等，數十年來已有極大的進步。就這些標準及生活費用、國際教育機構、民眾友善程度來說，台北在外國居民心中的排名，現已超過大部分的亞洲主要城市。台北雖然還有很大的改善空間，但越來越多人肯定它是安全舒適的居住與工作地點。

將

以色列和歐洲科技創新引介給台灣業者的亞蒙國際管理顧問公司董事總經理葛瑞棻回想數年前她和丈夫做出被她稱為「勇敢」的決定。當時這對以色列夫婦的優渥海外工作合約即將到期，他們並未離開台灣，而是決定留在台北渡過一生。擁有兩個學齡期孩子的葛瑞棻說：「我和家人曾在新加坡、首爾、香港與台北生活和工作。」「就選擇最適合我家人的地方而言，我給台灣第一名，主要原因是方便、安全、民眾友善、生活費用不貴、易於享有健保、環境清潔，而且有事可做。」葛瑞棻的例子凸顯台北過去數十年來所發生的深遠改變。台北曾飽受霾害所苦，交通堵塞更是惡名昭彰。外國人會囤積在台北買不到的東西，包括到香港旅行時會帶回許多在藥房採購的產品。在老一輩的記憶中，還沒有有線電視的時代很難在電視上看到任何英語節目。不過現在，至少就舒適度、生活費用和環境而言，台北正不斷超越新加坡、香港和上海等亞 16

evital Shpangental Golan, managing director of Anemone Ventures, a consulting firm that introduces Israeli and European technology innovations to Taiwanese companies, recalls how several years ago she and her husband made what she terms a “courageous” decision. The Israeli couple’s plush expatriate professional packages were coming to an end, and rather than depart, the Golans decided to spend their lives in Taipei instead. “I have lived and worked with my family in Singapore, Seoul, Hong Kong, and Taipei,” says Golan, who has two school-age children. “My rating for Taiwan would be number one in terms of a place for my family, the main factors being convenience, safety, friendliness, cost of living, healthcare accessibility, cleanliness, and things to do.” Golan’s story highlights profound changes that have taken place in Taipei over the past few decades. Taipei was once beset with smog, and the traffic congestion was notorious. Foreigners would stock up on unavailable items including many drugstore products on trips to Hong Kong. And old-timers recall the precable era when hardly any English-language programs could be found on television. But now – at least in terms of comfort, living costs, and environment – Taipei is outdoing rival cities in the region such as Singapore, Hong Kong, and Shanghai. The quality of life

洲對手城市。從教育、公共運輸、醫療、免費上網、異國主題餐廳到休閒便利性等等，生活品質都大幅改善。本篇報導採訪的外籍人士表示，台北仍須加強的少數重要領域，包括政府的過度繁文縟節，還有缺乏英文的政府和商業文件，都不利打造經商環境。不過整體而言，台北在他們眼中是適合外國企業高層的地方，尤其是有家眷的人，不論他們到台灣主要是來耕耘本地市場，抑或希望把台灣當作在亞洲區做生意的基地。台北的魅力往往不為人知，部分原因是政府不擅長向世界其它地區自我行銷。太古可口可樂公司負責業務開發的總經理柯萊恩表示：「聽到要外派台北，你會哭。聽到即將離開這裡，你會哭得更厲害。」他在香港和台灣都居住超過十年。即使是以西方標準來看，鄰近的亞洲城市物價現在都相當昂貴。專長商業研究、預測和分析的經濟學人資訊社（Economist Intelligence Unit，簡稱EIU）今年將新加坡列為全球生活費用最昂貴的城市。東京失去第1名的傳統地位，下滑至第

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Living Conditions

has improved enormously in areas ranging from education to public transport, from medical treatment to free internet access, from the range of exotic restaurants to the accessibility of recreational opportunities. Among the few but important areas still in need of improvement, say expatriates interviewed for this report, is a business climate impaired by excessive governmental red tape and the deficiency of English in government and commercial documents. Overall, however, Taipei is described as a good place for expatriate executives, especially those with families, whether they are involved chiefly in the domestic market or wish to use Taiwan as a base for doing business within the region. Taipei’s attractiveness tends to be an untold story, in part because the government has been so unskillful at telling it to the rest of the world. “When you hear you will be posted to Taipei, you will cry. When you hear you are going to leave, you will cry a lot more,” says Douglas Klein, general manager of business development for Swire Beverages, who has lived in both Hong Kong and Taipei for over a decade. Neighboring Asian cities are now pricey, even by Western standards.

The Economist Intelligence Unit (EIU), which specializes in business research, forecasting, and analysis, this year ranked Singapore as the world’s most expensive city. Tokyo was knocked off its traditional place at number one and was ranked sixth, while Hong Kong came in 13th globally and the fifth most expensive city in Asia. Shanghai, in 21st

place, was deemed to be more expensive than New York. But economical Taipei was way down in 60th place on the list, with only Bangkok, Kuala Lumpur, and a handful of lesser Chinese cities such as Guangzhou and Tianjin ranked behind it. The most expensive element of Taipei living, expatriates say, is rent, but even in that regard

The Taipei Botanical Gardens (shown here) and numerous parks provide oases of greenery and quiet amid the bustle of urban life.

6。香港在全球排名第13，在亞洲則是第5名。全球排名第21名的上海，被評為比紐約還昂貴。不過生活費用相當經濟的台北降至第60名，排名僅高於曼谷、吉隆坡，以及廣州、天津等物價更低廉的少數中國城市。外籍人士表示，在台北生活最昂貴的部分就是房租，但即使如此，也比其他亞洲城市便宜。全球人力資源顧問公司美世（Mercer）針對外國人士在首爾、東京、上海、香港和台北租賃酒店式公寓的平均費用進行研究調查，發現台北最低廉，只要 4540美元，再來是上海的5190美元。 E I U也讚揚台北適合居住。該社在去年發表的《全球適合居住城市排名報告（Global Livability and R a n k i n g R e p o r t）》中，針對犯罪、健保、文化環境、教育和基礎設施等因素評估各城市，結果墨爾本獲得全世界最適合居住城市的殊榮。澳洲、加拿大和歐洲的一些城市包辦前10名。不過EIU特別將排名第 61的台北，列入過去5年來適合居住程度改善最多的 10座城市之一。經常前往中國的帕米爾法律集團首席資深顧問陳文俊表示，在中國的朋友都「相當忌妒」派到台北工作

photo : taiwan tourism bureau

的人享有較好的工作和居住環境。他說：「許多希望被重新派回台北的同業都跑來找我。」他和其他受訪者都認為，公園、花園和路邊的景觀美化措施為台灣首都增添綠意，更不用說很容易就能前往離市區很近的地方欣賞更自然的景色。葛瑞棻指出，都市化的香港和新加坡都沒有任何野外地區，從首爾前往野外也要好幾小時車程，不過在台北只要15分鐘車程就可以進行森林徒步。

環保覺醒台灣過去數十年來逐漸民主化的同時，台北居民的環保意識也越來越強，例如資源回收現在被視為重要事務。台北市副市長丁庭宇表示，在市府採取隨袋徵收小額垃圾費政策的輔助下，台北市家庭垃圾量過去十年來減少67%。美世保險經紀人公司總經理李俠恩說：「我認為就整體而言，每個人心中都有環保概念，政府在這方面做得不錯。」丁庭宇還指出，台北市的下水道用戶接管率已提升至72.3%。他表示，「這方面近年來有長足進步」，

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Cover story Taipei is less costly than other Asian cities. Research by Mercer, the global human resources consulting firm, of the average cost of a service apartment for expats in Seoul, Tokyo, Shanghai, Hong Kong, and Taipei found that Taipei was the lowest at US$4,540, followed by Shanghai at US$5,190. The EIU also praises Taipei for its livability. In its Global Livability and Ranking Report, released last year – assessing cities on such factors as crime, healthcare, cultural environment, education, and infrastructure – Melbourne took the honors as the world’s most livable city. A number of Australasian, Canadian, and European cities rounded out the top 10. But Taipei, with a ranking of 61, was singled out by the EIU as one of 10 cities with the most improved livability scores over the past five years. Nicholas V. Chen, managing partner of the Pamir Law Group and a frequent traveler to China, says friends there are “quite jealous” of those located in Taipei for its better working and living environment. “I’ve been approached by so many people in my industry who want to relocate back to Taiwan,” he says. He and others cite the parks, gardens, and roadside landscaping that have left Taiwan’s capital dotted with greenery, not to

mention the easy accessibility of even more pristine scenery just a short distance from the city. Golan notes that urbanized Hong Kong and Singapore lack any wilderness areas, and that it can take many hours by car to get to wilderness from Seoul. But in Taipei, forest hiking is just a 15-minute car trip away.

Environmental consciousness As Taiwan gradually democratized over the past few decades, environmental awareness among Taipei residents has increased. Recycling, for example, is now viewed as important. Deputy Mayor of Taipei Tim Ting says that over the past 10 years the volume of household waste in Taipei has been reduced by 67%, aided by the government’s policy of charging a small fee for garbage bags. “I think overall environmental protection is on everyone’s minds, and the government is doing good work in this area,” says Arthur Lee, managing director of Mercer (Taiwan). Deputy Mayor Ting adds that the household connection rate for sewerage has been brought up to 72.3%. “This has improved a lot in recent years,” he notes. It’s also safe to drink tap water, he says. Some interviewees, such as Golan and Chen, consider air pollution in Taipei

而且直接飲用自來水也相當安全。葛瑞棻、陳文俊在內的部分受訪者認為，台北的空氣污染一直是個問題，陳文俊還表示曾在淡水和基隆河看到充滿泡沫的工業廢水。不過相較於空污程度達到世界衛生組織（W H O）安全標準40倍的北京和其它城市，受訪者普遍給予台北環境相當高的評價。太古可口可樂的柯萊恩還針對交通阻塞和空氣品質提出看法：「台北不斷改善，香港卻倒退。」台北交通大幅改善的一個主要原因是近年捷運陸續通車。北市府表示，現在每天有174萬人次搭乘捷運，較7年前增加8%。第一條高運量系統路線是南北向的淡水線，在1997年開始營運。此後捷運網不斷擴大，連接許多市區和郊區。最新加入的信義線在去年12月通車，沿線有7個新站，連接北端的淡水和東南端的台北101大樓周遭地區。丁庭宇承諾，市府在今年底前會讓松山線通車，這是全長8.5公里的東西向路線，連接松山機場，行經南京東路時主要是在地下通行。連接桃園國際機場和台北火車站的捷運機場線，也將在明年底完工。美世的李俠恩指出，相較於香港地鐵，在台北捷運搭乘長途距離，車資約為新台幣30元，算是便 18

to be a continuing problem. Chen also mentions the soapy industrial waste he has seen in the Danshui and Keelung Rivers. But generally Taipei’s environment was given high marks compared to cities such as Beijing, where air pollution has hit 40 times the level decreed safe by the World Health Organization. Swire Beverage’s Klein adds that in terms of traffic congestion and air quality, “Taipei keeps improving while Hong Kong has gone backwards.” A main reason why Taipei’s traffic has greatly improved is the proliferation of Mass Rapid Transit (MRT) lines over the years. The Taipei City Government says that 1.74 million people now ride the MRT daily, an increase of 8% over seven years ago. The first high-capacity MRT line, the north-south Tamsui Line, began operations in 1997. Since then, the network has grown to connect many city and suburban areas. The latest addition, the Xinyi Line that opened in December, includes seven new stations and connects Tamsui in the north with areas surrounding Taipei 101 in the southeast. Ting promises that by the end of the year the city government will open the Songshan Line, an 8.5 kilometer eastwest line that offers a link to the Songshan Airport and mainly runs under-

宜。受訪者也認為台灣的計程車費相對而言並不昂貴，在2007年底通車的高鐵則可在1.5小時內從台北抵達南部的高雄。此外，2008年開辦的兩岸直航，讓松山機場恢復原有的國際機場角色，透過航班連結台北和亞洲其它地區，不只可飛往中國（每天有 118個航班飛往大陸各地），還可前往日本和南韓的城市。就環保思維而言，丁庭宇指出，台灣目前有58% 的公車使用對生態環境友善的柴油。他說：「透過捷運、環保公車、步行或騎自行車等方式，我們希望在2020年時達成70%是綠色運輸。」多位受訪者表示，香港、上海和北京的交通堵塞比台北嚴重許多，不過李俠恩指出，台北仍會塞車，部分地區的交通動線其實可以加強規劃，他以連接淡水和台北的唯一主要道路為例，經常塞滿汽車。淡水是台灣北岸的台北衛星城市之一。受訪者認為需要進一步改進的另一個領域和行人有關。葛瑞棻表示，她一直擔心兩個孩子過馬路時會被汽車或摩托車撞到。不過丁庭宇表示，有報導說單車騎士最怕年長的行人。北市府計畫針對單車

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neath Nanjing East Road. The airport line connecting the Taoyuan International Airport with Taipei Main Station is also due to be completed by the end of next year. At around NT$30 (US$1) for a lengthy ride, Taipei’s MRT is cheap compared to Hong Kong’s Metro, notes Mercer’s Lee. Taiwanese taxis are also considered relatively inexpensive, and the High Speed Rail, which opened at the end of 2007, now makes it possible to get from Taipei to Kaohsiung in the south in an hour and a half or less. In addition, the opening of direct flights with China in 2008 has enabled Songshan Airport to transform itself back to its original role as an international airport. It now connects Taipei with the rest of the region through flights not only to China (118 daily flights to destinations all over the mainland) but also to Japanese and Korean cities. In terms of environment-mindedness, Ting notes that 58% of Taiwan’s buses now use eco-friendly diesel. “By 2020 we want to reach 70% green transportation, either by MRT, eco-friendly buses, or walking or cycling,” he says. While traffic congestion is much worse in Hong Kong, Shanghai, and Beijing than in Taipei, interviewees says, Lee of Mercer notes that traffic jams still occur in Taipei and

The expanding Taipei MRT network has provided a fast and efficient means of getting around the city and its environs. The chart also shows Taipei's bike paths. photo : taipei city GoVernment

騎士實施新規定，例如要求他們行經小學周遭500公尺的區域時，必須下車牽著自行車前進。外國人士對台北生活極力讚揚的一大特色，就是便利。葛瑞棻以住在天母的人為例，想要在山區騎自行車、接受醫療或牙齒保健、看電影、送小孩上國際學校，或是跑步，都可以在方圓一、兩公里內的區域進行。其他受訪者則提及到處林立的便利商店所提供的服務，可以繳交水電費或停車費，而且幾乎各種票券都可以在擁有觸控螢幕的機器上購買。陳文俊指出：「我們在這裡享有、在中國卻缺乏的東西，就是有效運作的公私夥伴關係，政府和便利商店的民間業者分工合作，得以克服官僚主義。」另一種形式的便利就是使用悠遊卡。北市府的丁庭宇指出，悠遊卡自2002年推出以來，已發行4200 萬張。它最早是在捷運使用的「一碰就走」非接觸式智慧卡，現在則可儲值不超過1萬元台幣，在貓空纜車、公車、停車場、台鐵、微笑單車（Ubike）出租點、市立圖書館使用，還可在特約商店購買小額商品。台灣的上網服務也備受肯定，不過美世的李俠恩

表示，台北的上網速度仍落香港、首爾等其他亞洲城市，南韓正規劃2020年前在全國各地推出5G無線上網服務，能在1秒間就下載一部電影。丁庭宇表示，台北公眾區免費無線上網服務是住在台北的福利之一。登記用戶可透過全市各公共場所的4500多個熱點免費上網。

優質的教育機構學校品質向來是在台外籍人士的重要考量，而台北的兩大國際學校在辦學方面一向很受好評。其中台北美國學校（TAS）設備現代化，共有250名教職員（許多擁有碩士學位），學生總數2,232人，一直是本區域最優質的國際學校之一。柯萊恩最小的兒子四年前從台北美國學校畢業。他讚揚該校提供的國際文憑預科課程說：「學生有機會選修預科項目是一大優點，如此一來，學生就不需受限於美國的學制。」部分不願透露姓名的受訪者，還是批評台北美國學校過於強調進入美國一流大學這個目標，卻犧牲了學生的個人發展。台北歐洲學校（TES）有1,300多名學生，來自大

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Cover story that traffic flows could be better planned in some areas. As an example, he refers to the single main road – frequently packed with cars – connecting the north-coast city of Tamsui with Taipei. Another area cited as needing further improvement is respect for pedestrians. Golan says she is always worried about her children being hit by cars and scooters when they cross a road, while Ting points to reports of cyclists scaring elderly pedestrians. The city government plans to implement new rules for cyclists, for example requiring them to walk their bikes within 500 meters’ distance from elementary schools. One major element of life in Taipei that expatriates rave about is its convenience. Golan notes that for someone living in Tianmu, for instance, it is possible within a radius of one or two kilometers to go cycling in the mountains, receive medical or dental care, go to the movies, take the children to an international school, or go for a run. Others point to the services offered by the ubiquitous convenience stores, where one can pay utility bills or parking fees, and purchase nearly any kind of ticket on touch-screen kiosks. “What we have here, which we don’t have in China, is a working private-public partnership, where the

government and private industry – that is the convenience stores – have shared roles to make it possible to cut through bureaucracy,” notes Nicholas Chen. Another form of convenience is the use of EasyCards. Ting of the Taipei City Government notes that 42 million such cards have been issued since their launch in 2002. First used as a “touch and go” IC ticket on the MRT, the card can now take deposits of up to NT$10,000 and be used for the Maokong Gondola, buses, parking lots, Taiwan Railways, Youbike rentals, public libraries, and in contracted shops for buying small retail items. Taiwan’s internet connectivity was also praised, although Mercer’s Lee says the speed of internet access still lags behind that of some Asian cities, such as Hong Kong and Seoul, where Korea is planning nationwide 5G wireless services that by 2020 could enable the downloading of a movie in one second. Ting points to Taipei Free Public Wifi access as one of the benefits of living in Taipei. Customers who register can access free internet services at over 4,500 hotspots in various public areas in the city.

Good educational institutions Schooling is always a prime consider-

約50個國家。該校施行三語教育，課程比照法國、英國及德國。跟台北美國學校一樣，台北歐洲學校也獲得國際文憑組織的授權，可教授國際文憑預科課程。此外，台北歐洲學校並提供英國國際中等教育文憑（IGSCE）。葛瑞棻說：「我喜歡台北歐洲學校的地方，在於學生國籍相當多元、環境舒適，並且有專業的教學品質。」她11歲和14歲的孩子都在該校就讀。台北的外籍人士普遍認為，這兩所學校的學費低於區域內的其他國際學校。但從學校網站的資訊來看，情況未必如此。以高中部而言，台北美國學校每年學雜費約新台幣626,310元（相當於20,500多美元），遠比中國的國際學校實惠，但卻高於香港美國學校的學雜費（港幣119, 080，略高於15,300美元）。帕米爾顧問公司的陳文俊指出：「一般而言，在中國和台灣都住過的外籍家庭認為，中國的國際學校硬體設備一流，但教學品質參差不齊，老師的流動率也高。中國國際學校的老師變動較大，課程規劃也不是那麼完善。」批評者指出，問題之一在於台北的國際學校不收 20

ation for foreign residents, and Taipei’s two main international schools are both rated highly for their academic excellence. For example, the Taipei American School (TAS), with its modern facilities, 250-member faculty (many holding Master’s degrees), and 2,232 students, enjoys a reputation as one of the best international schools in the region. Klein, whose youngest son graduated from TAS four years ago, praises it for offering an International Baccalaureate program. “The fact that you are given a choice is a big positive. You do not have to follow the U.S. system,” he says. Some interviewees who asked to remain anonymous criticized TAS, however, for over-emphasizing entry into leading U.S. universities at the expense of students’ personal development. The Taipei European School, with over 1,300 students from around 50 nations, offers trilingual education, with French, English, and German national curricula. Like TAS, TES is authorized by the International Baccalaureate Organization to deliver its diploma program. It also offers an International General Certificate of Education (IGSCE) “What I love about TES is the diversity of nationalities, the coziness, and the professional quality of the teaching, says Golan, whose children

中國或香港公民的子女。台北國際社區廣播電台總經理及台北歐洲商會生活品質委員會共同主席白健文（Tim Berge）表示，有跡象顯示，台灣的教育部正在考慮調整將陸生、港生視為本國學生而非國際學生的現行政策。來自香港的李俠恩說：「台灣學校的課程安排和香港差不多，但英語是個例外。英語課程落後香港同年齡學生至少二到三年。」帕米爾顧問公司的陳文俊補充說，本地學校的素質在提升當中，因此有越來越多外籍人士選擇讓孩子就讀本地學校，讓他們從小培養中文能力，但這樣的外籍家庭仍占少數。外籍人士一定會考量的另一個層面則是稅收制度。勤業眾信聯合會計師事務所合夥人廖哲莉指出，在台外籍人士的個人綜合所得稅率「相當於其他各國標準」。然而問題是，相較於同樣努力爭取國際人才的新加坡和香港，台灣的所得稅率缺乏競爭力。廖哲莉表示，新加坡居民的個人總所得稅率上限為20%，非長期居留人士稅率上限為15%；而台灣政府對於月所得新台幣40萬元以上〈相當於年收入

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aged 11 and 14 attend the school. Fees for these schools are widely believed within the Taipei expatriate community to be cheaper than other international schools in the region. But information on school websites reveals that this may not always be the case. With annual tuition and fees of NT$626,310 or a little over US$20,500 for senior high school students, TAS is significantly cheaper than international schools in China but more expensive than the Hong Kong American International School at HK$119, 080 or just over US$15,300. “Generally families that have lived on both sides of the Taiwan Strait have found that the hardware at international schools in China is very good, but there’s not much consistency and continuity in teachers,” notes Pamir’s Chen. “Teachers are more transient in China and the curriculums are not so well-developed.” One point of criticism is that the children of mainland or Hong Kong passportholders have not been permitted to attend the international schools. Tim Berge, general manager of radio station ICRT and co-chair of the European Chamber of Commerce Better Living Committee, says there are signs that the Ministry of Education is reconsidering its policy that

Taipei American School has gained a reputation as one of the most respected international schools around the region.

14.1萬美元以上〉的居民課徵40% 稅率，如果是非長期居留人士，稅率為18% 〈非長期居留的定義是一年在台停留時間少於183天〉。政府正研議要將淨所得 1,000萬元以上的稅率上限調高至45%。若正式施行，台灣稅制與新加坡和香港的差異有可能使優秀專業人才不願來台工作。此外，新加坡和香港僅就當地所得課稅，而台灣的替代式最低稅制則可就海外所得課徵約20%的稅率。廖哲莉說，另一方面，台灣外籍散戶投資人證券交易所得稅率（資本利得稅）為15%，低於亞太地區其他國家。廖哲莉指出，中國的個人所得稅率高達45%，然而彈性大得多。在中國工作五年以下的外籍人士屬於非長期居留人士，僅依在中國的所得課稅。廖哲莉說，許多外籍人士審慎規劃在亞太地區各城市的停留時間，藉此將所得稅降到最低。身兼台北美國商會稅務委員會共同主席的廖哲莉表示，委員會已建請國家發展委員會仿效中國稅務系統，將居住不滿五年的外籍人士歸類為非長期居留者，以便吸引更多外籍專業人士來台工作。如此一來，在台工作未滿五年的外籍專業人士，所得稅率為

photo : tas

18%，讓台灣的所得稅率符合其他亞太主要城市的水準。廖哲莉指出，台灣現行的稅賦制度對外籍高階主管衝擊最大；然而，對於月收入約新台幣20萬元的中級主管與工程師來說，情況還不算太差。廖哲莉說，目前政府已有許多優惠及減免制度，例如公務車輛不課稅，就是其他地方沒有的優惠。若中階主管能夠將在台停留時間控制在一年少於183天，最多就只需要繳 18%的所得稅。如此，台灣的稅制對這類外籍專業人士來說，仍具有競爭力。

熱情好客的態度台灣友善而且安全的氣氛，也受到稱讚。葛瑞棻說，台灣人「讓你真正感到賓至如歸」。可口可樂的柯萊恩形容，台灣人的友善是「一大優點」。他說，香港人一般比較專業、有效率，英語說得比較好，但他們對外人的態度遠遠不如台灣民眾。柯萊恩說，他在香港一共住了11年，從來沒有當地人請他到家裡做客。這跟他在台灣的經驗大不相同。帕米爾公司的陳文俊說，他每次有大陸訪客，都會被他帶去搭捷運，

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Cover story such students need to be treated like local rather than international ones. Lee of Mercer, who is from Hong Kong, says “the syllabus of local schools is roughly the same as in Hong Kong, except for English-language teaching, which is at least two to three years behind Hong Kong children at the same grade.” Chen of Pamir adds that local schools are improving, leading a growing minority of expatriates to choose to send their children to local schools to develop their Chinese-language skills. As to tax practices, inevitably another area of concern for expatriates, Taiwan’s personal income tax rates for foreigners are “quite in line with international practice,” says Cheli Liaw, a partner with Deloitte and Touche. The rub is that those rates are not competitive when compared against Taipei’s chief rivals for attracting international talent, Singapore and Hong Kong. Liaw says Singapore’s upper limit for taxing gross personal income is 20% for residents and 15% for non-residents. In contrast, in Taiwan the tax rate is 40% on income over roughly NT$400,000 a month (over US$141,000 a year) and 18% for non-residents, defined as those staying here less than 183 days in the year. The government is proposing to

raise the upper limit to 45% for net income of NT$10 million or more. The differential with Singapore and Hong Kong can deter highly qualified professionals from working here. In addition, Singapore and Hong Kong tax only income earned locally, while Taiwan’s alternative minimum tax system can tax offshore income at around 20%, Liaw says. On the other hand, the capital gains tax in Taiwan for foreign individual investors, at 15%, compares well with the rest of the region, she says. While China has a high personal income tax rate of up to 45%, the situation there is much more flexible, Liaw notes. Expats who work there for less than five years are classed as non-residents and taxed on China-earned income only. Liaw notes that many expats in the region carefully plan trips among cities in different Asian nations to minimize tax payments. L i a w, w h o i s a l s o a c o - c h a i r o f AmCham’s Tax Committee, says the committee has suggested to Taiwan’s National Development Council that it copy China’s system – classifying expats who live here for less than five years as non-residents – in order to help attract more professional talent to the island. The result would be to tax foreign profes-

photo : taiwan tourism bureau

sionals working here for less than five years at 18%, putting Taipei in line with other Asian regional hubs. As it is, Liaw notes, top executives are hit hardest under Taiwan’s current taxation system, although the situation is not so bad for mid-level executives and engineers earning salaries of roughly NT$200,000 monthly. She says that various incentives and deductions are in place – for example, a company car is not taxed in Taiwan, unlike other places. And if the mid-level executives can control the length of their stay, residing less than 183 days in a year and thus qualify for an 18% tax rate, then the Taiwanese taxation system is competitive for them.

A welcoming attitude Taiwan’s friendly and safety atmosphere also came in for praise. The Ta i w a n e s e “ r e a l l y m a k e y o u f e e l welcome,” says Golan. Describing the friendliness of Taiwan’s people as “a big plus,” Klein of Swire notes that Hong Kongers tend to be more professional and efficient and speak better English, but they are not nearly as welcoming as Taiwanese. During his total of 11 years living in Hong Kong, Klein says, he was never once asked to visit the home of

目的是要讓他們看看台灣民眾對其他乘客的禮讓態度。車廂上為老人和身障人士設置的博愛座，很少會被一般乘客占用，而且通勤族碰到孕婦都會讓位。葛瑞棻強調，入夜後走在台灣的街道上，一般都很安全。在台灣的外籍人士，也肯定台灣的醫療和健保制度。他們說，這是在台灣成立辦公室的重要理由。外國人在台灣只要有工作許可，就可以加入健保，而且費用非常低廉。但美世的李俠恩指出，健保長期面臨財務壓力，導致醫生和護士過勞的情況相當嚴重，「醫療服務的品質也引發關切」。台北生活的另一個特點，在於它已逐漸成為饕客天堂。柯萊恩最早是在1987年來到台灣。他說，在台北要吃中國各地菜餚一直都很方便，但要找到好的歐美餐館，在過去並不容易。在 1980和1990年代，台北市美僑協會的西式自助餐廳時常大排長龍，如今生意大不如前，原因是台北現在有許多道地的歐美餐館。過去台北也很少見到印度或泰國的亞太餐廳，但現在不但有很多家，菜色也很道地。但一連串的食品安全問

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a Hong Kong Chinese, quite unlike his experiences in Taiwan. Pamir’s Chen says he makes a point of taking mainland visitors for a ride on the MRT to show them how polite Taiwanese are in their treatment of fellow passengers. Priority seats for the elderly and handicapped are rarely occupied by others, and commuters offer their seats to pregnant women. Golan stresses the general safety of walking on the streets at night. Ta i w a n ’s m e d i c a l s e r v i c e s a n d National Health Insurance system were also touted by expats as a good reason for setting up base in Taiwan. The system covers foreign residents who have work permits, and it is incredibly cheap. But the system is under constant financial pressure, notes Mercer’s Lee, and the squeeze is felt by doctors and nurses, who are becoming highly overworked, causing concern about the ongoing quality of medical services, Lee says. Another aspect of the lifestyle is that Taipei has been becoming a haven for foodies. Klein, who first came to Taiwan in 1987, notes that while Taipei always had an abundance of Chinese regional cuisines, good Western food was once hard to find. But now there are so many authentic Western restaurants that the American Club, which saw hordes of

photo : taiwan tourism bureau

customers line up for its Western-style buffet in the 1980s and 1990s, is seeing its Western restaurant clientele dwindle significantly. Other regional cuisines, such as Indian and Thai, were once rarely found in Taipei, but now are plentiful and authentic. The food scene, however, has been scarred by a series of food scares. In the latest one, a cooking oil scandal, lower-quality and in some case adulterated products were passed off as high-end olive oils and grape seed oils by unscrupulous producers. The cultural scene in Taipei is yet

題，使得台灣美食的名聲受到影響。最新一起食安問題，是無良廠商把品質較差的油品以及摻有其他成分的油當成高價位的橄欖油和葡萄籽油出售。台北的藝文生活是另一項優點，但有些受訪者指出，台北能用來舉辦文化和表演活動的場地不足。葛瑞棻說，許多外國表演團體，例如外百老匯（offB r o a d w a y）的節目，來亞洲時會到新加坡和香港演出，但卻不來台北。白健文補充說，台北藝文圈其實很活躍也很前衛，但政府沒有給予足夠的支持，也沒有推廣，不是在台灣長住的外國人因此很難取得相關活動的資訊。他說：「沒有人一下飛機就知道Red Room是什麼。」Red Room是台北市大安區一個很受歡迎的前衛表演和交流的空間。白健文並說，台北中正文化中心適合舉辦古典音樂會，但座位有限。女神卡卡幾年前曾在世貿中心南港展覽館辦過演唱會，但據說這個場地音效不佳，聲音偏金屬味。白健文說：「設施的品質趕不上門票價格。」他並說，松山菸廠舊址正在興建的巨蛋體育館音效品質是否會比較好，要以後才知道。他指出：「要有大型演出造成轟動，才能讓比較小型的節目可以持續下去。」

another asset, although some interviewees note the insufficiency of facilities to host cultural events and performances. Golan observes that many international performing troupes, such as off-Broadway productions, might include places like Singapore and Hong Kong on their tour but give Taipei a miss. Berge adds that while Taipei in fact has a dynamic and avant-garde art community, it does not receive enough support or promotion from the government, making it hard for foreigners who are just passing to be aware of the opportunities. “Nobody

在台北的外國人心目中最大的問題是語言障礙。這個問題使得不太會說中文的外國人，難以享受台北上述的若干優點。李俠恩說，無論是政府機關或民間公司的表格，包括開立銀行帳戶和申請手機的表格，一般都需要懂中文才有辦法填寫。如果你有飲食方面的偏好或忌諱，例如因為宗教原因不吃豬肉，在餐廳點菜可能會有困難，因為許多菜單只有中文。剛到台灣的外國人連要找路可能都覺得很麻煩。柯萊恩說，因此不習慣亞洲生活的人剛到台北，往往很不適應。他說：「需要6個月到12個月來適應。如果你撐過去，就會很喜歡這裡。」他指出，舉家遷來台北，最辛苦的往往是隨行的配偶。此外，台灣各地方的英文標示很不一致。台北市政府採用漢語拼音，把中文地名根據發音用英文字母拼出來，但台北以外的地方不用漢語拼音（特別是由在野黨主政的縣市）。他們大都因為政治考量不採用漢語拼音，因為那是中國大陸採行的制度。台北市附近的板橋區，英文拼音有Banciao, Banqiao和Panchiao三種，而這個現象會讓不懂中文的外國人一頭霧水。受訪者指出，台灣的負面因素還包括經濟環境不佳。台灣經濟仰賴出口，目前景氣不佳的現象有很

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Cover story would jump off a plane and know about Red Room,” notes Berge, referring to a popular avant-garde performance space and community. Berge also notes that while the Chiang Kai-shek Memorial Hall is suitable for hosting classical music performances, the seating is limited. Acoustics at the Taipei World Trade Center Nankang Exhibition Hall, a venue for rock performances where Lady Gaga sang a few years ago, are said to be poor, with a “tinny” sound. “The facilities do not support the price of tickets,” says Berge, adding that it remains to be seen whether the domed stadium currently under construction on the site of the old Songshan tobacco factory will be better. “You need big acts to help create buzz to enable the smaller acts to carry on,” he notes. The number one shortcoming that foreigners find in Taipei is the language problem, making many of the benefits of living in Taipei listed above inaccessible to those without much Chinese ability. Chinese is generally needed to fill out forms in both the public and private sector, including applications for bank accounts and mobile phones, notes Lee. Ordering food in restaurants is difficult for people with certain dietary preferences or restrictions, for example those

who do not eat pork for religious reasons, as many menus are in Chinese only. It can even be difficult for newly arrived foreigners simply to find their way around. As a result, says Klein, Taipei is often very hard at first for those unused to Asia. “It takes six to 12 months and if you get over that, you really enjoy it,” he says, noting that a move to Taipei is often hardest on trailing spouses. In addition, the nation suffers from inconsistent signage. The Taipei City government has adopted the Hanyu Pinyin system of rendering Chinese place names in the Latin alphabet, but often this method is not used outside Taipei (especially in cities and counties controlled by the opposition party, which tends to reject Hanyu Pinyin for political reasons, associating it with mainland China). The inconsistency in spellings – for example, one Taipei suburb may variously appear as Banciao, Banqiao, or Panchiao – can be quite confusing for foreigners who do not understand Chinese. On the less positive side, respondents also cited a sluggish business environment. To a large degree, the poor economic conditions in export-dependent Taiwan are due to global problems. But there are also factors specific to Taiwan that can affect Taipei’s attractiveness as a

大程度是因為全球經濟的大環境並不理想，但柯萊恩說，台灣本身也有些問題，可能影響它成為企業區域總部的條件。比方說，台灣的市場相對較小，而且相當分散，利潤一般又低於其他地方。柯萊恩說，跨國公司面對的另一個問題在於難以找到足夠的人才。他指出，台灣的薪資已經10年沒有成長，許多資質好的人紛紛到海外另謀高就。他說：「人才外流是一大問題。」受訪者也提到，有時會因為台灣的制度和法規沒有考慮到外國人的需求而感到挫折。白健文說，外國人在台居留證的證號格式跟台灣民眾的國民身分證不一樣，以致於許多商業和政府網站無法受理外國人提出的申請。他舉例說，外國人原本無法在網路上購買火車票，這個現象不久前才改善。最近他想要上網預購電影票，但因為同樣的問題，交易無法完成。白健文並說，政府網站的英文網頁更新速度通常都很慢，提供的資訊也往往不夠完整。葛瑞棻是在2002年初次到台灣。她說，她在5年前成立公司以來，就經常與政府的繁文縟節搏鬥。她說：「外國人要創業是個麻煩事。即使是現在，要辦個公司登記都沒法直接了當。」馬英九總統希望 24

base for a regional office, says Klein. The market is relatively small and fragmented, for example, and profit margins are typically lower than elsewhere. Another problem a multinational would face, Klein says, is finding enough support staff. Klein notes that because salaries in Taiwan have stagnated for a decade, many bright people have left for better jobs overseas. “One of the big negatives is the brain drain,” he notes. Respondents also refer to the occasional annoyance of encountering domestic systems or regulations that fail to take foreign residents into account. Berge notes that the ID numbers on alien resident certificates are not formatted the same way as Taiwanese identification card numbers, with the result that online applications from foreigners cannot be accepted by many commercial or government websites. Giving examples, he says that until recently foreigners could not buy train tickets online, and when he recently tried to buy advance tickets for a film, he found that his application was rejected for this reason. Berge adds that the English-language pages of government websites frequently are not updated sufficiently and the information is often incomplete. Golan, who first came to Taiwan in

讓台灣成為國際企業營運中心，但葛瑞棻認為，他和其他台灣領導人所提到的宏遠目標，跟工作階層的公務員實際的做法有很大落差。官僚體系的基層往往吹毛求疵，而且傾向保護本國的業者。她說，她最近想把在台辦公室的地位從辦事處升格為分公司。這表示她的公司有意願擴大在台業務，但她說，承辦的公務員列出很瑣碎的障礙，而且每個關卡的人都問她為何要升格。升格手續的規定之一，是要在台灣的一個銀行帳戶裡存3,000美元，她存了3,500美元，但政府官員說，這樣不行，數字一定要剛好3,000。正式文件必須送到國外請台灣駐外單位公證蓋章，也讓她「非常頭痛」。葛瑞棻說，她成立自己的公司之前，曾為另外兩家公司辦過同樣的手續。她自認為已經是老手，但她說：「還是很不容易。如果我是個剛到台灣的外國人，就會打退堂鼓。」由於在台灣生活和工作有各種便利，她希望當局設法降低外國商人前來台灣的門檻。她的結論是：「如果你看到台灣的潛力和好處，愛上了台灣，那就一切OK，但如果你對這裡不熟悉，就會覺得這裡障礙太多。」

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Living Conditions

2002, says she has faced a constant struggle with government red tape since setting up her company five years ago. “Being an entrepreneur as a foreigner is not easy,” says Golan. “Even now registering a company is not straightforward.” She sees a big gap between the visionary aims expressed by Taiwanese leaders, such as President Ma Ying-jeou, who wish to make Taiwan an international business hub, and the actual behavior of workinglevel bureaucrats who frequently tend to be picky and protectionist. She recounts her recent experience in trying to upgrade her company from a representative office to a branch. Even

though this change demonstrated greater business commitment to Taiwan, she says, bureaucrats presented petty obstacles and every step of the way questioned why she wanted to make the change. As part of the process Golan was required to wire US$3,000 to a Taiwanese bank account, but after she transferred US$3,500, government officers said that was unacceptable, as the sum needed to be exactly US$3,000. There was also the “big headache” of having to get official documents from abroad notarized and stamped by a Taiwanese consular office overseas. Golan says she set up her company in Taiwan after already having gone through

the procedure for two other companies she was formerly associated with. Although she thought she knew the ins and outs, “it was still not easy,” she says. “If I was someone who had just landed here, I would have given up.” Given all the positive aspects of living and working in Taiwan, she says she hopes the authorities will find ways to lower the entry barriers for foreign businesspeople. “If you have seen the potential and the beauty of Taiwan and have the Taiwan bug, it is fine,” she concludes. “But if you don’t know your way around, there are currently too many obstacles.”

We Bike on YouBike

nspired by the experience of London and Paris, the Taipei City Government just over a year ago launched an urban bicyclerenting program known as YouBike. Now some 50,000 YouBikes are rented on an average day, and the city government reports citizen satisfaction ratings of 93%. The popularity of the system is an indicator of how attuned the city is becoming to green issues, says Deputy Taipei Mayor Tim Ting. The government believes that creating public bicycle lanes with bike station services will encourage Taipei citizens to use forms of transport that use less energy and create less pollution. “We feel that there still are too many cars, motorcycles, and buses,” Ting says. “We want to provide alternatives.” More than 5,200 YouBikes, available from over 120 electronically monitored stations, can be rented with a credit card or with the use of a cell phone and EasyCard at nearby kiosks. Bicycles can be rented from one station and returned to another The system, which the government operates in partnership with Taiwan’s Giant Bicycles, a world leader, is effectively a subsystem of the Mass Rapid Transit service, YouBike’s website says. Many city dwellers, notes Ting, are renting bicycles for the last leg of their trip home from work after first taking the MRT. The city government first launched a pilot program in the Xinyi District in 2008, before YouBike kicked off for Taipei as a whole in 2012 Bicycles are available 24-hours a day throughout the year (unless there are special circumstances such as typhoons). The first half hour is free. Then users are charged NT$10 every half hour for the first four hours, and NT$20 every half hour up to a total of eight hours. For even longer usage, the rate is NT$40 per half hour. The bicycles have an anti-theft design, making it hard for them to be disassembled, and can be tracked by reference numbers, control chips, and an identification system operated by RFID technology. The YouBike program helped Taipei win the rights to host the 2016 Velo-city, one of the world’s top cycling conferences, organized by the European Cycling Federation. It will be the first time

for the event to be held in Asia since its founding in Bremen in 1980. “The commitments of Taipei city and also from the federal political level of Taiwan are strong, with a powerful support of the bicycle industry,” says Manfred Neun, the Federation’s president. Wikipedia describes Velo-city as “one of the world's primary forums for the exchange of bicycling expertise” and notes that it gives the host city the opportunity to show off its efforts to promote cycling. — By Jane Rickards

photo : robyn lee https://www.flickr.com/photos/roboppy/

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advertorial

a Message from the international research-based Pharmaceutical Manufacturers association (irPMa)

The Problem of “Low, Low, Slow”

hrough various channels including the annual Pharmaceutical Innovation & Drug Policy Workshop sponsored by IRPMA together with the National Health Insurance Administration (NHIA), AmCham Taipei’s Pharmaceutical Committee, and other organizations, members of the multinational research-based drug industry have had increased opportunity to engage in effective communication with the healthcare authorities and other key stakeholders over the past several years. The result has been steadily improved mutual understanding. Nevertheless, some outstanding regulatory issues continue to constrain the ability of physicians and patients in Taiwan to benefit from numerous new and innovative treatments that are available in many other markets. Currently the industry’s primary concerns can be summed up – borrowing a golfing term – as the phenomenon of “low, low, and slow.” The first “low” refers to the depressed reimbursement prices given to new drugs by NHIA. Those prices have dropped sharply over the years compared with other markets, and are now among the world’s lowest. Whereas new drugs in Taiwan were reimbursed in 1995 at 89% of the median price among the A-10 benchmark countries, by the first three quarters of last year the level had fallen to only 42.3%. Contributing to the decline in new-drug pricing has been NHIA’s policy of carrying out periodic Price Volume Surveys leading to cuts in reimbursement levels for products already in the market. When applications are received for new-drug reimbursement, NHIA in most cases sets the price after referring to “local comparators” – existing drugs performing a similar function. But since those comparators have already gone through numerous rounds of price cuts, using them for reference unfairly pulls down the price offered to a new entrant. Another factor is the composition of the Pharmaceutical Benefit Reimbursement System (PBRS) committee that ultimately decides on the reimbursement price to be offered. The committee membership is dominated by hospital administrators, who tend to focus on holding down drug expenditures to make a larger portion of their fixed budget available for other hospital services. Representatives of consumer and patient groups also have seats on the PBRS committee, but they usually lack the medical background to buttress their arguments on the merits of new and innovative treatments in saving and extending lives, and improving the overall state of health and well-being of Taiwan’s fast-aging population. IRPMA is preparing to work with NHIA to help the patient representatives enhance their ability to voice their concerns effectively within the committee. The industry is also urging NHIA to make appropriate use 26

of mechanisms already in place that are intended to reward innovation but which in practice have been utilized infrequently. For example, products deemed “breakthrough” drugs or those that have gone through local clinical trials or PE (pharmacoeconomic) studies are eligible for higher reimbursement prices as incentives. Over the past four years, however, only six drugs have been recognized as “breakthrough” products, and only two of them were accorded the A-10 median price that was supposed to be provided as a reward. In addition, during that time span only one drug received the 10% price mark-up for clinical trials and only three for having conducted PE studies. Other qualified products were passed over. In IPRMA’s view, a more generous implementation of these existing incentives would help to correct the serious problem of overly low prices for new drugs. The second “low” refers to the disappointing rate of approval when manufacturers apply for new drugs to be accepted for reimbursement. The final decision is made by the above-mentioned PBRS committee. Of the 16 cases that came to the committee for discussion between February and October last year, nine (56%) were rejected and only six (38%) approved, with one case held over for later review. Once again, considerations about the impact on hospital budgets appear to be driving the decision-making process, to the detriment of optimal patient care. “Slow” is an apt description of the reimbursement process, which has become more complicated since the start of the Second Generation National Health Insurance program last year. Reimbursement approval is now a twostep process, with cases going first to an internal meeting of experts, followed by the PBRS committee meeting once every two months (in alternate months, PBRS deals with medical devices rather than pharmaceutical cases). Under the former system, there was just a single stage – the monthly meeting of the precursor to PBRS. The average time needed for a drug to obtain reimbursement pricing has now increased to 475 calendar days, compared with an already long 360 calendar days previously. For oncology drugs, the amount of time needed has reached 867 days. To help accelerate the process, enabling drugs to reach patients and physicians faster, IRPMA suggests resumption of a monthly PBRS meeting schedule for pharmaceutical cases, as well as the institution of a case-tracking system to permit monitoring of the status of each application. As stated above, IRPMA is grateful for the effective channels of communication that have been forged between industry and the healthcare authorities. We are confident that with the good will on both sides to find the best solutions for Taiwan patients, ways can be found to make the current phenomenon of “low, low, slow” a thing of the past.

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advertorial

來自中華民國開發性製藥研究協會的消息

「低、低、慢」的新藥政策

過

去幾年來，跨國開發性製藥產業透過不同的管

頗低的獎勵創新措施。舉例來說，目前為療效有明顯「突

道，有更多機會與衛生主管機關以及其他主要利

破」的創新新藥，以及執行過本土臨床試驗或藥物經濟學

益關係人進行有效溝通，好比每年一度由中華民

研究的新藥，提供加算給付價格的獎勵。然而，過去四年

國開發性製藥研究協會（IRPMA）與衛生福利部中央健

之間，只有六種新藥讓主管機關視為「突破」藥品，其中

康保險署、台北市美國商會製藥委員會等單位共同主辦的

也只有兩種能夠依「十國藥價中位數」核價以資獎勵。此

「創新藥品政策研討會」。其結果是持續加深對彼此立場

外，過去四年間，獲獎勵加算百分之十藥價的案例很少，

的認識。

只有一種藥品因為在國內實施臨床試驗而加算，而因為在

不過，一些政策法規議題尚待解決，這也持續阻礙台

國內執行藥物經濟學研究加算藥價者僅三種。其他合格應

灣的醫師和病人使用許多在其他國家已可使用的創新藥

該接受獎勵的藥品則未獲加價。IRPMA認為，以現有獎勵

品。現在製藥業界最擔憂的問題，若套句高爾夫球用語來

機制為基礎，從寬執行，應可幫助矯正目前新藥給付價格

形容，就是「低、低、慢」（low, low and slow）的現

過低的嚴重問題。

象。

第二個「低」指的是藥廠提出新藥建議收載案時令人失

第一個「低」，指的是健保署給新藥的給付價格過

望的核准率。這也是由前述共同擬訂會議來做最終決定。

低。與其他市場相比，台灣的新藥給付價格已經連續好幾

去年二月至十月間進入共同擬訂會議議程的十六個案子

年嚴重下滑，如今屬於世界各國當中最低價格之一。在

中，九案（56％）遭否決，僅六案（38％）獲核准，另有

一九九五年，台灣新藥給付價格約為「十大經濟已開發國

一案留待稍後審查。這再度顯示，對於醫院預算衝擊的考

家」(A-10)藥價中位數之89％，而二○一三年前三季資料

量似乎主導了整個決策過程，這對於病人照護品質恐有負

顯示，台灣新藥給付價格僅占十國藥價中位數的42.3％。

面影響。

健保署定期採行的「價量調查」政策，使市場上現有藥

用「慢」這個字來形容新藥給付審查程序相當貼切，自

品給付水準降低，是造成新藥給付價格嚴重下滑的因素之

從去年二代健保施行，這個過程變得更加複雜。目前新藥

一。健保署收到藥廠提出的新藥申請案後，大都會先與國

給付建議案的核准過程有兩個階段，案子會先交由一個專

內參考品（有類似功能的現有藥品）做比較再核定價格。

家諮詢會議討論，之後再由隔月舉行的共同擬訂會議審查

但是由於這些現有藥品已經歷過幾次砍價，把它們當作核

（在不審查藥品案件的月份，共同擬訂會議會討論醫療器

價參考指標，勢必會把新引進市場的藥品給付價格拉低，

材案件）。過去的審查制度裡只有一個階段，就是共同擬

頗不公平。

訂會議成立之前的每月會議。

另一個有關因素是「全民健康保險藥物給付項目及支

目前，每個新藥從申請納入給付，到給付生效日期，

付標準共同擬訂會議」（PBRS）的組成。共同擬訂會議

平均要經歷四百七十五個日曆天，比過去已經很費時的

會對新藥給付價格做出最終決定。而目前出席此會議的代

三百六十個日曆天還要久。對癌症用藥來說，新藥給付從

表有許多是醫院經營者，他們比較關心如何把藥品費用降

申請到最後生效所需時間已經達到八百六十七天。為了加

低，讓醫院編列預算中的其他服務支出項目獲得更多財務

快這個流程，讓新藥及早供病患及醫師使用，IRPMA建

支持。

議，討論藥品案件的共同擬訂會議宜改回每月舉行，也應

共同擬訂會議裡面也有消費者與病友團體代表席位，但這幾位代表通常缺乏醫藥專業背景，較難從創新藥品可挽

設置一個案件審核追蹤機制，以利監督每一個申請案的最新狀況。

救、延長病人壽命，幫助急遽老化的台灣人口提升整體健

綜上所述，開發性製藥產業與衛生主管機關之間能夠建

康福祉的觀點闡明意見。IRPMA目前準備與健保署合作，

立有效的溝通管道，IRPMA深表感謝。正因為雙方都有誠

一同幫助病友團體代表提升能力，在共同擬訂會議裡頭清

意為台灣病人尋求解決問題的最佳作法，我們有信心最終

楚有效地說明自己關切的問題。

能求得解答，讓現在新藥政策「低、低、慢」的現象成為

開發性製藥產業也鼓勵健保署善加使用目前被利用率

過去式。

想了解更多資訊，請透過以下方式與我們聯絡：中華民國開發性製藥研究協會

For more information, please contact: International Research-based Pharmaceutical Manufacturers Association (IRPMA) 台北市南京東路五段188號9樓之八

9F-8, 188 Nanjing E. Rd., Sec. 5, Taipei 10571, Taiwan Tel: +886-2-2767-5661Fax: +886-2-2746-8575 www.irpmn.org.tw taiwan business topics • april 2014

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2014/4/8 5:42:47 PM

TAIWAN busINess

Taiwan as the Western Pacific Cargo Hub? The logistics industry sees big opportunities for growth in the years ahead.

BY JENS KASTNER

ast year the Port of Kaohsiung ranked 13th internationally in terms of container throughput, a drop of 10 places in just about as many years. Although the volume was still substantial – just under 10 million TEU (twenty-foot equivalent units, the standard measure of container traffic), the decline in the ranking is largely attributable to the relocation of many Taiwanese manufacturing facilities to China, as well as successive governments’ emphasis on developing the IT industry with comparatively little attention paid to the logistics sector. But lately there has been growing optimism that Taiwan can more effectively leverage its strategic geographic position in between China (the “world’s factory”), the United States, the Association of Southeast Asian Nations or ASEAN (set to become the world’s biggest common market in 2015), as well as other dynamic APEC member countries. The primary beneficiaries of a potential cargo boom, however, would be Taiwan’s supporting industries, such as freight forwarders, warehouses, and custom brokers, and not necessarily the island’s shipping lines and airlines. “Our business has been fine despite the weak global economy, but that of the shipping lines less so because demand and supply are unbalanced,” says Michael Tai, chairman of the International Ocean Freight Forwarders & Logistics Association, Taiwan’s biggest logistics industry association. “They have lost big money in the past three years because they focused on enlarging capacity by building ever bigger vessels, with the global economy then not doing as well as they had expected.” Tai is founder and CEO of Tai-

pei-based Transworld Transportation, which he describes as the second-largest logistics company in trans-Pacific trade after Expeditors International of the United States. While Taiwan’s major container shipping lines – Evergreen, Yangming, and Wanhai – thus largely face a challenge of overcapacity for their port-to-port services, logistics companies benefit from increasing requests from importers and exporters for additional services, such as trucking. Cargo has to be picked up at the factory, moved to the port, and then handled by a customs broker before being shipped out. On the other end, after it again clears customs, it is stored in a warehouse and eventually distributed to retailers. In industries such as consumer electronics, where products come in ever greater varieties and colors, and with thousands of spare parts involved, these processes have become so complicated that neither seller nor buyer nor shipping line could possibly take on the task with just their own resources, even if they had the necessary licenses. According to Tai, the Taiwan government’s new plan to develop Free Economic Pilot Zones (FEPZs) – to include Taoyuan International Airport and the six major ports of Kaohsiung, Keelung, Taipei, Taichung, Anping, and Suao – may greatly boost demand for these types of services, provided that authorities remove regulatory hurdles as promised. “Singapore, South Korea, and Hong Kong have been clearing cargo electronically for more than 10 years, but here the law hasn’t been changed in the past three decades,” he says. “While all that the regional competitors require is a single code, every shipment coming into Taiwan for transit still has

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TAIWAN busINes s

POTENTIAL RESURGANCE — Kaohsiung, Taiwan's largest harbor, is expected to benefit from its new status as a delivery port for the London Metal Exchange, as well as its selection as the site for one of the Free Economic Pilot Zones. photo : i nternational ocean Freight Forwarders & logistics a ssociation, taiwan

to submit import documents, which then have to be changed into other documents for export.” If the effort to simplify procedures in the FEPZs is successful, for example, a company operating in one of the zones could repair smartphones and send them back on the same day or the next, a crucial ability if the Taiwan zones want to compete with other regional zones. Stage 1 of the FEPZs began last year. Stage 2 requires legislative approval, and the necessary bill has not yet been enacted by the Legislative Yuan. “We have been lobbying hard for many years for easier customs clearance, but now it is 90% through [with respect to the FEPZs], and President Ma Yingjeou is strongly supportive of the issue,” Tai notes. “Once the law is changed, it will be very helpful for the Taiwanese economy since cargo to Shanghai from different Western countries can all be combined together with Taiwan export cargo in the same container in our FEPZs,” he says. Given the exodus of so much manufacturing from the island, Tai considers that the only option for Taiwan’s economy to improve is to further develop its trading and transportation capabilities.

Labor conditions ease Bert Lim, president of the Taipei-based World Economics Society think tank and an economic advisor to President Ma, notes the quiet elimination in recent years of a major obstacle preventing FEPZ ports from becoming attractive to logistic companies: labor conditions at the ports. “Taiwan had in the 1990s already tried its luck with free trade port pilot mea-

sures, but the labor recruitment situation in the ports used to be very unattractive for investors due to the ‘heritage system,’” Lim says. “Taiwanese port jobs were handed down from father to son with few exceptions, and that was a major hindrance, particularly to foreign companies who wanted to efficiently repackage their goods before reshipment to other places, such as China.” In effect, the heritage system meant that companies could not handle their own port-area operations with personnel chosen on merit alone. The scrapping of this heritage system was facilitated by a reorganization in 2012 that brought about the establishment of the Maritime and Port Bureau (under the Ministry of Transportation and Communications) and the Taiwan International Ports Corp. The former is now the government body in charge of all maritime- and port-related public administration, while the latter is an independent, though still government-owned company in charge of harbor management and development. Previously, the four port authorities of Keelung, Taichung, Kaohsiung and Hualien were separate jurisdictions. The revised organizational structure provided an opportunity to change various operational practices, including the heritage system. Lim adds, however, that a large question mark still hangs over the future potential of Taiwan’s ports. In China, transportation-related departments had shown interest in expanding cooperation with Taiwanese harbors, and the cross-Strait Service Trade Agreement signed last year was intended to provide a framework under which the two sides could enter into further agreements on shipping cargo

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TAIWAN busINes s

services. But objections from the opposition Democratic Progressive Party have kept the agreement bottled up in the Legislative Yuan. “Because the pact remains stalled in the legislature,” says Lim, “we don’t know how service charges, regulations, and monitoring mechanisms between cross-Strait authorities might eventually work out.” Nevertheless, port officials on the two sides of the Strait are diligently upgrading their relations at the working level. According to Port of Kaohsiung Harbormaster David Cheng, Taiwan port officials have been traveling to China on a monthly basis to inspect ports, including river ports located far inland. “We’re still in the stage of introducing ourselves to one another and signing MOUs [memorandums of understanding],” he says. “This is good for both sides. The overall idea is that in the future smaller Chinese vessels can carry cargo from China to the Taiwanese ports for further trans-Pacific shipment on vessels operated by Taiwan’s shipping lines, which are reliable and efficient,” Cheng says. He adds that without much fanfare the Port of Kaohsiung late last year already took a step toward restoring its old glory. Cheng is referring to a decision by the London Metal Exchange, the world’s largest non-ferrous metals exchange, to designate Kaohsiung as one of its delivery ports in this region. Following its inclusion in the network, various types of metal mainly destined for China will go through Kaohsiung Port, greatly boosting the warehouse business there. None of China’s own ports are designated as a delivery location, even though China is among the world’s largest metal importers. (Shanghai reportedly turned down the opportunity because it would have necessitated some operational changes). “A new port area to accommodate the warehouses in Kaohsiung will be completed in Q3,” Cheng says. “Automatically, the financial industry will pay more attention to us, as they are very interested to invest in this field.” As to the prospects of the other FEPZ ports, Chiu Rong-her, professor of shipping and transportation management at National Taiwan Ocean University, predicts that the Port of Taipei will draw substantial vessel traffic from the Port of Keelung, which is too small, and that the Port of Taichung, originally designed for bulk cargo, will reorganize its container terminal. “Meanwhile, the Port of Hualien, which is not to become an FEPZ port, may launch roll-on/roll-off ferries for passengers, cars, and trucks, connecting it to China, focusing primarily on tourism,” he says.

Aviation sector Generally, Taiwan’s airlines make good money on passenger business but take a loss on the cargo side. One reason is that computers and mobile phones, which in the past were virtually all shipped by air, are not being replaced by consumers as frequently as they used to be, meaning rapid delivery by air freight has become less important than the cost advantage of shipping by sea. “A few years ago, if you had the money, you got yourself a new cell phone every three months,” says Tai. “But nowadays I am still happy with my iPhone 4 and don’t 30

In its cargo business, China Airlines is paying increased attention to emerging markets such as Vietnam, Indonesia, and Latin America. photo : china airlines

see why iPhone 5 is so significantly better.” Besides the continuing relocation of Taiwanese electronic production facilities to China and Southeast Asia, another factor in the decrease in the cargo business is that 3C products are getting smaller and lighter, which erodes carriers’ margins because cargo is charged by weight. The size of aircraft has also been increasing, aggravating the oversupply problem. “On the demand side, air trade showed only slight growth in 2013,” says Anita Wang of China Airlines’ Media Affairs office, adding that CAL’s forecast is in line with those of the International Monetary Fund, International Aviation Transport Association (IATA), and Boeing that world air-cargo volume will see 3% to 4% growth in 2014. “But on the supply side, growth in global wide-body belly capacity is predicted to remain at around 5% in 2014, which will result in capacity continuously outpacing global demand.” In terms of strategy for 2014, the Taiwanese flag-carrier will focus on cargo revenue management, which aims to optimize revenue through “re-mixing,” cargo origins and destinations, cargo products, and customers, Wang says. The company plans to introduce more temperature-controlled containers to enhance its “cool chain” service, and to pay increased attention to emerging markets such as Vietnam, Indonesia, and Latin America. Moreover, CAL will seek to gain a firmer foothold in the booming cross-Strait and global e-commerce business and express mail service (EMS), she says. “China Airlines carried 4,854 million ton-kilometers of cargo in 2013, up 6.9% in tonnage from the previous year,” Wang notes. “But given the combination of slow global economic recovery, overcapacity, and volatile oil prices, achieving air cargo growth will remain challenging in coming years.” While CAL for the time being expects to stick with the 18 B747-400F freighters it currently has in service, EVA Airways, Taiwan’s second-biggest carrier, announced in late 2013 that it will reduce its freighter fleet by more than a third in the face of overcapacity.

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TECHNOLOGY

Taiwan’s Aspirations in Robotics The global market is expanding and Taiwan is looking to get a larger slice of the action.

BY TIMOTHY FERRY

obotics technology has made tremendous advances in recent years, led by Boston Dynamics of the United States with its startling quadruped “Big Dog” robot and Japan’s Honda with its humanoid ASIMO robot. These machines exhibit considerable autonomy and dexterity of movement, which will likely one day give them pervasive roles in the service sector, military, and disaster relief. For now, though, what’s exciting for investors is the multibillion dollar market for flexible, intelligent industrial robots that better meet the needs of modern manufacturing. And while the industry is currently dominated by Japanese, German, and U.S. firms, Taiwan is looking to gain a larger share of the global robotics value chain by leveraging its technological strengths and proximity to the Chinese manufacturing powerhouse. Taiwan’s robotics industry is still in its early days but has “a lot of potential,” says Hu Jwu-sheng, head of the robotics program at Taiwan’s Industrial Technology Research Institute (ITRI). He notes that Taiwan excels

in servomotors, sensors, and software algorithms, putting the island in “a good position for providing those parts.” The industrial robotics industry is certainly big enough to attract attention. The 2013 global market was valued at US$9.25 billion by market analytics firm Research in China. That figure represents a 17% year-on-year decline, with the drop attributed both to a falling yen (a reflection of Japanese firms’ domination of the industry) and to the increasingly widespread use of robotics technology, which is driving down prices. At the same time, the International Federation of Robotics (IFR) estimates that 168,000 industrial robots were installed in 2013, a 5% increase over 2012. It also calculates that inclusion of the cost of software, peripherals, and systems engineering triples the value of the robotics sector last year to about US$26 billion. Last October, the ROBO-STOX Global Robotics and Automation exchange-traded fund (ETF) debuted on the NASDAQ, tracking the performance of 77 robotics-related firms.

Five Taiwanese firms are included in the ETF – AirTac International Group, Delta Electronics, Foxconn Technology, HiWin Technology, and Teco Electric and Machine Co. – comprising 6.5% of the total value of the fund.

Taiwan’s advantages Taiwan has a number of key advantage s that may give i t a l eg up as manufacturers seek a greater share of the robotics market. Foremost is Taiwan’s proximity to China, where a disproportionate amount of global growth is expected to be concentrated. IFR forecasts compound annual growth rates for robotics in the Asia-Pacific of 8%, compared with 6% globally and 4% for Europe and the United States. Most of the Asia-Pacific growth is attributed to China. The PRC is already one of the largest markets for automation technology including industrial robots, and as the cost of logistics and labor continue to rise, the demand will only grow larger. “Labor costs are increasing dramatically in China, and more and more

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TECHNOLOGY

Aurotek's production site in Taoyuan County. Most industrial robots built in Taiwan are bought by Taiwanese customers for their factories located in China. photo : toBIE opENShAW

customers are coming to us for automation solutions than ever before,” says Mark Chen, head of international sales for Alfa Robot, a subsidiary of Taiwanese firm Alfa Auto Machinery Co. Factory wages rose 14% in 2012, according to China’s National Bureau of Statistics, and economists expect double-digit increases to continue. The International Monetary Fund forecasts that China will experience labor shortages as early as 2020. Chen notes that the company sells about 15,000 robots and other automation products a year, with 90% of their product going to China. “With the expectation that the Chinese economy will remain one of the fast-growing markets in the world, the investment on equipment will grow as well,” he wrote in an email communication. “The market potential is enormous.” Technological advances are also playing to Taiwan’s strengths. Taiwan has a huge industrial base in consumer electronics and semiconductors, and Taiwanese companies have invested vast sums in China’s electronics manufacturing infrastructure, but these

industries are not nearly as auto mated as industries like auto-making. A number of factors have contributed to the lack of automation in elec tronics manufacturing, not least the low cost of Chinese labor that minimized the competitiveness of robotics solutions. Another factor was the inability of robotics technology to master the demands of electronics manufacturing, which involves manipulating small, fragile components at high speeds and with very high degrees of precision. More recently, though, robotics technology has progressed to the point where it can increasingly handle the challenges of electronics manufacturing even as costs decline, making robotics an increasingly attractive option for electronics manufacturers. Opportunities look even better when the close relations between Taiwanese robotics makers and electronics companies are factored in. A significant swathe of China’s electronics industry is owned by Taiwan-based firms, including Hon Hai (Foxconn), Pegatron, and Tatung, comprising a vast and ready-made market for

Taiwanese robotics. One of those companies, Aurotek Corp., estimates that while about 80% of its customers are Taiwanese, the vast majority of their robots are actually installed in China. These close relations also allow Taiwanese robotics makers to provide customized robot solutions to their clients along with training and aftermarket service. “Our customers are Taiwanese. We are very close to them and they are willing to tell us their needs so we can develop robot technology precisely for their needs,” says ITRI’s Hu. Hu says the late surge of interest in robot solutions for the electronics and semiconductor industry provides a welcome opportunity for Taiwan to catch up with robot-making powerhouses like Japan and Germany. With respect to electronics, he says “for robot-enabled automation we stand at equal competiveness with other players.” Industrial robots became big business in the 1980s, but Taiwan’s push into the industry started towards the middle of the past decade. Chang Nai-wen, robotics project manager

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TECHNOLOGY

Aurotek's HEXA600-CATTA industrial robot has 6-axes of movement along with a simple interface that improves ease of use and efficiency. photo : toBIE opENSh AW

for Taiwan’s public/private Precision Machinery Research and Development Center (PMC), says that government officials visited the 2005 World Expo in Aichi, Japan and came away very impressed with the state of Japan’s robotics industry. “They decided we have to do something similar,” he says, after which the government expanded PMC’s role from promoting machine tool technology to also encompassing robotics. Originally, PMC’s efforts focused on humanoid robots intended to work in service functions, for example as receptionists, but with costs remaining high and market conditions declining in the wake of the global financial crisis of 2009, the government decided that the return on investment in service robots was inadequate and changed direction towards industrial robots. Taiwan already has a strong presence in machine tools and other industrial machines and as technology advances, the line between a robot and an industrial machine is blurring. But robots differ from machine tools in important ways. According to the American National Standards Institute, ISO 8373, an industrial robot is “an automatically 34

controlled, reprogrammable, multipurpose manipulator programmable in three or more axes, which may be either fixed in place or mobile for use in industrial automation applications.” Robots have more axes of freedom than industrial machines, giving them greater dexterity to perform more functions. For example, delta robots consist of three robot arms attached to an overhead base, while SCARA robots have four axes of movement that allow them to do complex functions such as clearing a pallet of goods in a warehouse.

Why robots? Robots also have sensory feedback and intelligent software that allows them to adapt to changes in their environment. ITRI’s Hu says adaptability is essential in today’s arena of shorter product life cycles and more customized manufacturing. Reconfiguring a conventional production line is costly and time consuming. “When production cycles used to be once a year, maybe you could afford one month to reconfigure the line, but if the production cycle is only three months, you only have a week, maybe less,” says Hu.

He says that replacing industrial machines with adaptable industrial robots with sensory feedback and intelligent software allows manufacturers to more quickly reconfigure their production lines to meet changes in the market. And while software still needs to be rewritten to prepare robots for major changes in the production line, advances such as touch screens and graphics interfaces allow robot operators to more easily change robot behavior. While Taiwan is making strides in robot technology, Japan remains the gold standard with more than half of the global market share, followed by Germany with 21%, according to Research in China. Aurotek produces industrial robots for the China market, but manufactures them from Japanese components, chiefly from Panasonic. “There are Taiwanese makers of servomotors and other robotic parts, but if you want higher accuracy, you have to have Japanese or European brands,” admits Liu Yu-yen, chief supervisor of Aurotek’s automation R&D. (In an effort to overcome that weakness, however, PMC is working on developing improved robot components such as servomotors and controllers to help Taiwanese manufacturers move up the robot value chain.) Despite their reputation for excellence, though, Japanese makers have experienced difficulties expanding into China, says Aurotek’s Liu. He explains that Japanese robots often exceed Chinese market expectations both in capability and price. “Customers don’t want to spend so much for a machine that they won’t fully use to the extent of its capability,” he says. This situation provides an opening for Taiwanese makers to provide more cost-effective solutions for manufacturers based in China. Because R&D funding is a chronic issue for Taiwan’s SMEs, research centers such as PMI and ITRI help to fill the gap. ITRI is developing eight different kinds of robots, including SCARA and delta types, and works closely with local manufacturers to provide solutions to problems they face. For example, ITRI’s Hu says that the

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TECHNOLOGY

institute is developing a solution for a metal-industry manufacturer that combines the attributes of a metal bender – a machine tool – with a robot’s intelligence and sensory feedback. The company’s customers “are asking for a total solution,” he says, “so we need to develop a robot so that they can sell the whole thing to their customers to make

a total production line.” ITRI is also working on an Open Architecture Controller based on a PC using either Windows or Linux software. Hu says that the controller will allow local developers to “easily add their own programs and their own value to the system.” Such developments are crucial for Taiwanese firms to

develop their own value, he adds. ITRI’s Hu admits that Taiwan faces an uphill battle in the global robotics industry. “The industrial robotics industry is pretty mature – we have a lot of competitors,” he says. Nevertheless, he foresees that within five years, robots will become commonplace in Taiwan’s production plants.

A Growing Role in the Schools

What’s even more impressive is that hile Taiwan’s manufacturthe surge into robotics was student drivers and research centers are en. TAS science teachers say that students busy expanding into industrial approached the faculty with the idea of robots, universities and even high schools competing in the Robocup competition. here are pushing the parameters of robot The science faculty agreed, and the protechnology and gaining accolades in intergram snowballed from there. national robotics contests. Taiwanese universities have excelled in The robotics lab at Taipei American their own right with a number of chamSchool (TAS) is filled with industrial equippionships in robot competitions. A team ment such as heavy-duty drill presses from National Chung Hsing University and lathes, much like an ordinary shop won the gold medal at the World Robot classroom in any American high school. Olympiad global competition in Jakarta But on the floor sits a squat machine fitted with wheels and made of steel sup- This humanoid robot from Tamkang Uni- last year. National Taiwan University ’s ports, motors, and wires – a robot that versity has won competitions for shooting International Center of Excellence in Intelligent Robotics and Automation students are building to enter into an baskets and climbing obstacles. photo : tiM othY FerrY Research (iCeiRA) won its fifth coninternational competition. Although no secutive victory at the 2013 International class is in session, students have come to Robot Hands-on Competition & Sympothe lab anyway during their free time. The sium in Taipei last December. And Tamkang University last year students “are here every second the lab is open – this is kind of won gold at the 18th Federation of International Robot-Soccer their home because they love working here,” says instructor Matt Association (FIRA) World Cup Robot Tournament held in MalayFagen. “They really just want to make good robots.” sia, beating out more than 50 teams from 12 countries. TAS is at the forefront of a radical revision in science and techTamkang University assistant professor Cheng Chi-tai says that nology education that emphasizes robotics as a way to promote the robot competitions are important for a number of reasons, learning. The school now requires students to take classes in not least because they make “robotics seem cool.” For example, either robotics or computer science as part of the curriculum, the university’s championship basketball-playing robot has an and a number of award-winning robots have been developed arm with 22 joints – far more than a typical robot with only four in the lab. TAS robotics clubs participate in four different comto six joints. Developing control systems to effectively manage petitions every year, including Robocup Junior, in which robots this much dexterity presents a huge challenge for the students. compete in a soccer-like tournament, and the First Robotics Basketball-playing robots also require sophisticated image proCompetition, where teams must demonstrate not only technical cessing and software to control the amount of force expended, skills but business acumen by developing a business plan for their which pushes students’ creative and problem-solving abilities. ideas and even community outreach. TAS now has one of the “Robotics is an integrated skill,” Cheng says. “Students learn how most wide-ranging robotics programs in Taiwan, permeating the to design a circuit, how to do mechanical designs, how to write a elementary and high school levels and even bringing kindergarteners in on the act through toy robots that teach the basics of program.” computer logic. — By Timothy Ferry

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law

Ridding the World of Patent Trolls Improving the quality of the overall patent system is the best way to reduce unwarranted lawsuits.

BY GLENN W. RHODES

athy loved arriving early in the morning to ready her coffee shop for opening. Although small and barely profitable, the shop was now frequented by a growing number of loyal customers. She turned on the lights and readied the coffee machines for the day’s operations. The bakery truck arrived and the shop’s display cases were stocked with fresh, warm pastries and muffins. The smell of brewing coffee and fresh baked goods filled the shop and Cathy wondered how anything could ever ruin a day that started like this. With 30 minutes to spare before ope ni ng , sh e tu r n ed to a s ta c k o f unopened mail on the desk in her small office. The second letter she opened was from a law firm. She started reading, and as she read, she experienced a growing sense of dread and disbelief. The letter claimed that by providing Wi-Fi to her customers, her shop was liable for patent infringement. To avoid litigation, the letter demanded

4 law.indd 36

US$3,000 to settle the dispute. Her shop was just starting to turn a profit. How could she afford to pay? Could she afford not to? Is the above a made-up story? Yes. Is it far from the truth? Not at all. In a now infamous case, a patent troll sent 13,000 similar such letters to a variety of small business owners, including coffee shops. Some quick arithmetic tells the story. The individually negligible demand of $3,000 provides no economic motivation to engage in expensive patent litigation. But if all 13,000 businesses settled for $3,000, it would net the lucky troll close to $40 million. Yes, it is a lot of stamps to lick, but not a bad return on the effort. The “coffee shop” stories became part of the recent outrage focused on so-called “patent trolls” that target companies and their customers worldwide. President Obama lambasted trolls as entities that “don’t actually produce anything themselves,” but engage in “essentially trying to leverage and hijack

somebody else’s idea and see if they can extort some money out of them.” The Chief Judge of the U.S. Court of Appeals for the Federal Circuit, the court that hears all patent appeals from the district courts and the U.S. Patent & Trademark Office, co-authored an article that appeared in the June 4, 2013 edition of the New York Times entitled “Make Patent Trolls Pay in Court.” Specifically pointing the finger at patent trolls, the article concludes that too much troll litigation is clogging the court system, slowing down new product development and increasing costs for both businesses and consumers. The article cites the “troll business plan,” stating that trolls “make money by threatening companies with expensive lawsuits and then using that cudgel, rather than the merits of the case, to extract a financial settlement.” Although the figure is subject to some debate, the article notes that trolls filed most of the estimated 4,700 patent suits in the United States in 2012.

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law

The U.S. Congress also is looking at troll litigation. Last September, the Chairman of the House Judiciary Committee released a second discussion draft of legislation that takes direct aim at trolls and troll litigation. The discussion draft’s proposed provisions include substantially increasing the pleading requirements in patent cases and awarding attorney fees to the prevailing party mandatory unless the non-prevailing party can demonstrate that its position was “substantially justified.” The bottom line: trolls are to blame for abusing the patent system, chilling innovation, inhibiting the creation of new start-up companies, and slowing job growth. Clearly, a healthy patent system is essential to the world economy. When the United States was founded, innovation was considered so important to the new country’s development that the basis for patent protection was written into the U.S. Constitution, which provides that in order to “promote the progress of science and the useful arts,” Congress can secure for “limited times to authors and inventors the exclusive right to their respective writings and discoveries.” A white paper issued by the U.S. Department of Commerce in April 2010, stated that “all major stands of economic thought now recognize that technological change is the primary driver of growth.” The paper concludes that “modern economic theory holds that without technological innovation, accumulation of wealth could not be sustained and per capita growth would trend to zero.” That is a startling conclusion that underscores the need for innovation and a healthy patent system that protects and rewards innovation and innovators. But are patent trolls really responsible for threatening the foundation of worldwide economic growth? Hardly. The coinage of the term “patent troll” is attributed to one or more persons at Intel Corp. in the late 1990s. Unfortunately, it instigated a debate that has done more to move the development of patent law sideways than almost any other issue in the last 20

years. The problem of focusing on “trolls” is that the label is misaligned with the problem. The attention given to the label and what entities belong under the label distorts the issues, causing companies, judges, and lawmakers to focus on the symptoms of an ailing system, rather than on the root causes. It has also lead to a misapprehension of the patent system and what action is necessary to ensure the system’s health. When the patent system was established over 200 years ago, the founding fathers could not foresee the patent world of today. Now, far from tinkerers in garages and backyard mechanics creating new inventions, innovation is big business and patents themselves are big business, capable of generating billions in annual revenue for their owners. Patents have become a kind of currency, capable of being bought, sold, licensed, and traded. Companies that have developed extensive patent portfolios through research and development now find they have patents that they don’t use, but which can be licensed or sold to others. This inevitably lead to the formation of companies that acquire, aggregate, and enforce patents for the sole purpose of generating revenues from damage awards and licensing royalties. These companies are labeled with various names: patent trolls, non-practicing entities (NPEs),

patent monetization entities (PMEs), and patent assertion entities (PAEs). But the criticism aimed at these entities somehow became confused with one of their common characteris tics, which is that they do not conduct R&D or make products. It has created a misperception that such entities “hijack other people’s ideas,” and that because they did not invent what they are attempting to enforce, these entities somehow are not entitled to compensation for the use of property rights that they own. There is nothing fundamentally wrong with acquiring and enforcing a patent, however. A valid patent that is being infringed on and is being enforced in good faith is serving a valid and healthy purpose in our system. It enables the owner of the patent to receive compensation from those who wish to use the patented technology, spurring the development of new technology through design-arounds and the creation of newer, alternative technologies. It also allows for small companies and individuals to enforce patent rights that they otherwise would be unable to finance on their own. The fact that a patent owner conducts no R&D, or makes no products, does not detract from the right of a patent owner to assert a valid patent in good faith and to be compensated accordingly. Focusing on “trolls” misses the

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issue. The culprit is frivolous or bad faith litigation, which is nothing new and is not limited to so-called “trolls.” All too often, patent litigation is brought in bad faith – that is, the assertion of a claim that is untethered from any real merit as a means of extracting unwarranted compensation or disrupting a competitor’s or potential competitor’s business. Such meritless claims are brought with the knowledge that resolving the issue of whether a patent is valid and infringed is borne in large part by the party against whom the patent is asserted. Taking a license or paying a nominal amount of damages is often the most cost-efficient method of resolving the dispute, regardless of the patent’s validity or the merits of the case. In some cases, meritless litigation can be used to force a company out of business because the cost of engaging in a patent dispute is simply too expensive. Bad faith litigation has always been around, but the recent increase in bad faith patent litigation is a symptom of an ailing system, not the root cause. The root causes are two-fold: a patent system that issues too many unwarranted patents, and a patent system that makes it prohibitively expensive to resolve patent disputes on the merits. Eliminating invalid patents gets at the root of the problem. The number of patent applications and patent grants has exploded over the last 30 years. This explosion has strained the patent application examination system and created a backlog that promotes rapid examinations and the allowance of patents that are marginally valid at best, or overly broad in scope. As part of recently enacted patent reform legislation, the U.S. Patent & Trademark Office created a new Patent Trial & Appeal Board (PTAB) composed of administrative law judges hired largely from among highly experienced IP specialists who were formerly in private practice. The PTAB offers an alternative to more expensive district court litigation to challenge patent validity. It is a step in the right direction, but it is still an expensive proposition and fails to directly address the overall quality 38

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of the examination process that issues marginal and overly broad patents in the first place. The second issue is the expense of patent litigation itself. Patent litigation is often referred to as the “sport of kings.” And it is in the shadow of patent litigation’s extreme expense that bad faith litigators thrive, because determining whether an action is brought in bad faith can by itself be challenging and expensive. The technologies at issue are often complex, and patent law is complicated and difficult to apply. Drawing the line between a good faith assertion of a patent right and a frivolous action can be difficult. Drawing the line too far on either side of the issue can have a negative impact on the legitimate rights of patent owners and the legitimate rights of wrongly accused infringers. There is no easy cure, but the most effective way to reduce the expense of patent litigation, weed out frivolous litigation, and enhance the health of the U.S. patent system is the creation of specialized IP courts or dedicated IP district court judges that have the requisite background and experience to handle and resolve patent disputes. Unlike many countries, such as Taiwan, the United States lacks such specialized IP courts and judges. U.S. district court judges are judges of general jurisdiction. They hear criminal cases as well as a plethora of civil actions, including patent cases. Their dockets are overcrowded, and almost without exception, district court judges hate patent litigations. Patent litigations are fact intensive, time consuming, and involve complex technology and complex laws. Add into the mix the unpredictability of patent jury trials where the burden of resolving complex issues of law and technology is placed on people that are largely unqualified by expertise and experience to resolve such issues, and it is easy to see why bad faith litigation is difficult to eliminate. Attempts to legislate a solution are not the answer. The current proposed legislation being considered by Congress, which focuses on increased pleading requirements and fee shifting

provisions, is off-target. First, the emphasis on trolls has clouded the issues and, consequently, the proposed legislation. Although the legislation targets so-called trolls, the changes apply to everyone and would add to, rather than curtail, patent litigation expense. Second, the patent law already provides for the award of attorney fees and costs in “exceptional cases,” which include frivolous suits and litigation misconduct. The Federal Circuit is encouraging district court judges to make more use of these current provisions to rid the system of frivolous patent suits, and the Supreme Court also is weighing in on how the current law is applied. Give the same current tools to a dedicated specialized IP court or a set of specialized IP judges that have the background and experience to handle such complex cases and issues, and the system will have taken a giant stride towards renewed health. There is no way to ensure a compl e t e ly f ai r s ys te m t ha t p re cl u des unwarranted suits against small entities, such as coffee shops, while promoting economic growth and protecting legitimate patent rights. However, focusing on the real issues and addressing them realistically is required to maintain a healthy patent system. Do that, and the trolls will disappear back into the land of myths and legends.

— Glenn W. Rhodes is co-owner of the law firm of Rhodes Attorneys at Law P.C. based in San Francisco and Taipei.

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A Report on the Service Sector

Growing Role in the Economy

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Aiming to Go International But the first step, ratification of a cross-Strait agreement, is running into obstacles.

IN THIS SURVEY

BY PHILIP LIU

• Aiming to Go International

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• The Breadth of Services

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s its economy matures and dependence on manufacturing recedes, Taiwan is shifting the focus of its economic development to the service sector. While this transformation will provide opportunities for some, it will also inevitably entail painful transitional adjustment for others – as reflected by the current stormy controversy over the cross-Strait Trade in Services Agreement. After being signed on June 21 last year, the service trade agreement was forwarded for ratification on September 17 by the Executive Yuan to the legislature, where stiff objections by the opposition parties have kept the issue bottled up ever since. In an attempt to iron out the stark differences among legislators, the Legislative Yuan held 16 public hearings to solicit opinions from various industry and trade union representatives. But takeover of the legislative chamber in mid-March by student protestors [see the Briefs section for more details] has brought all lawmaking processes to a halt and triggered a nationwide debate on the

merits of the service trade agreement as well as the proper functioning of democracy. The service trade agreement was negotiated under the umbrella of the cross-Strait Economic Cooperation Framework Agreement (ECFA) signed in 2010. The proposed pact calls for the mutual opening up of service markets, initially to include 80 types of service businesses in China for Taiwanese investors and 64 in Taiwan for Chinese investors. Although opponents of the agreement are concerned about Taiwan’s growing economic reliance on China, which has never renounced the right to use force against what it considers to be a breakaway province, the government considers the pact to be critically important for Taiwan’s future prosperity. Without it, proponents argue, Taiwan will miss out on the fast-expanding potential of China’s service market and concede these business opportunities to others, particularly Hong Kong. The entry of Hong Kong businesses into China’s service market is being facilitated by supplementary provisions of the

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A Report on the Service Sector

Closer Economic Partnership Arrangement (CEPA) between China and Hong Kong that took effect on January 1. Government officials also worry that the stalling of the service trade agreement will affect other market-opening agreements under ECFA, including a merchandise trade agreement whose contents have already been about two-thirds determined through cross-Strait negotiations. In addition, failure to act on the service trade agreement could call Taiwan’s commitment to market opening into question in the eyes of trading partners, jeopardizing the chances for Taiwan to join regional economic cooperative arrangements, notably the Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP). Deputy Minister Lin Chu-chia of the government’s Mainland Affairs Council stresses that the service trade agreement will enable Taiwanese enterprises to greatly enhance their presence in the Chinese service market, expanding both their business scale and the need for high-end Taiwanese talent on the mainland. The domestic business community has been largely supportive of the service trade agreement, especially those sectors covered under the agreement, such as the movie industry, information technology (IT) services, and exhibitions. The huge population of movie-goers in China offers a vast market for Taiwanese films, and already 21 such films

have played in China in recent years, grossing NT$3 billion (US$100 million) at the box office. In addition, China turns out 800 motion pictures a year, presenting attractive opportunities for Taiwanese companies in the post-production end of the film business. Because of the benefits of a shared language and culture, China is the most important overseas market for Taiwan’s IT service industry, which has been working hard to expand exports in recent years. The sector covers such activities as package software, turnkey systems, systems integration, data processing, and internet-related services. According to China’s Ministry of Industry and Information Technology (MIIT), the value of China’s IT service market exceeded the equivalent of NT$11 trillion (US$377 billion) in 2013. Taiwanese exhibition organizers and ancillary service providers such as booth construction and decoration companies are also eagerly eyeing the Chinese market, as the service trade agreement will permit them to operate in China – at the first stage in Guangdong, Fujian, and Shanghai.

A path to internationalization Hsu Chung-jen, CEO of PxMart, Taiwan’s leading supermarket chain and former managing director of President Chain Store (7-Eleven Taiwan), points

out that in view of the limited domestic market, the best way for Taiwan’s service industry to grow is to internationalize its operations and tap overseas markets, especially China for geographic, linguistic, and cultural reasons. He expresses confidence in the Taiwanese service companies’ competitiveness in the Chinese market, citing their ability to hold their own against leading foreign brands on the domestic front and the excellent performance of such Taiwanese brands as 7-Eleven Taiwan, RT-MART, Daphne, and Les Enphants in China in recent years. In Hsu’s view, competition spurs progress, so that further opening of the domestic market will contribute to stimulating the development of the local service industry and bring better quality services to local consumers. Kuo Shan-hui, chairman of the Association of Taiwan Investment Enterprises on the Mainland, stresses that the entrée Taiwanese service businesses will gain to the large market in China through the service trade agreement will make it easier for them to develop into international brands. At the same time, Chinese enterprises entering the Taiwan market will create more job opportunities. The agreement offers Taiwan a rare opportunity that will disappear quickly if Taiwan

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hesitates, says Kuo. “Taiwanese enterprises are more afraid of the absence of a stage on which to perform, rather than competition,” he adds. Despite the macroeconomic arguments, numerous local service sectors still oppose the service trade agreement. Many small-scale operators fear the impact of Chinese competition, saying the similarities in language and culture give Chinese firms an advantage over other foreign competitors. For the smaller players, the heightened competition they may face in the domestic market is not offset by opportunities in China, since most of them lack the expertise and financial resources to operate on the mainland. Overall, however, the service trade agreement remains the keystone of the government’s policy of relying on internationalization to develop the service industry. In recent years, the Ministry of Economic Affairs (MOEA), for instance, has assisted over 200 information service firms to gain a foothold in markets in the United States, Japan, China, and Southeast Asia, gaining some NT$280 million (US$9.3 million) in initial orders, with potential follow-up orders amounting to NT$1.5 billion (US$50 million). One of the Ministry’s practices has been to help domestic firms form alliances to promote overseas business together. MOEA is also planning to assist

those alliances in creating marketing channels in five countries in Asia and the Middle East, with the aim of enabling five information-service products to rank among the top three in market share in those countries. The target set by MOEA calls for the value of information service exports to rise from this year’s projected US$1.7 billion to US$2.3 billion in 2020. MOEA is also encouraging domestic chain restaurants to open branches overseas, following the successful experiences of such brands as Gourmet Master (85° C.), Ecoffe, La Kaffa, Chatime, and Mongo Chacha, each of which already runs hundreds of overseas stores. Another embodiment of the government’s internationalization policy is the Free Economic Pilot Zone (FEPZ) plan. This program aims to promote the development of five potential service businesses – namely financial services, innovative education, smart logistics, international healthcare, and value-added agriculture – by relaxing current regulatory restrictions for companies registered in designated zones. These zones will initially include the existing five free-port areas of Taipei, Keelung, Suao, Taichung, and Kaohsiung Harbors, as well as Taoyuan International Airport and the Pingtung Agricultural Biotechnology Park. The FEPZ project is expected to greatly boost Taiwan’s effectiveness as a center for international medical treat-

ment – a business that has already been growing even before the FEPZ system has been fully instituted. Taiwan’s medical facilities served over 170,000 foreign visitors in the first 10 months of 2013, generating revenue of NT$11.3 billion (US$376 million). That compares with the same number of patients and NT$9.3 billion (US$310 million) for all of 2012. The Ministry of Health and Welfare is upbeat about Taiwan’s prospects in providing international medical treatment services, citing this country’s advantages of reasonable cost, advanced medical skills, cutting-edge facilities, and convenient access to medical service. In addition, the government aims to develop various international service businesses – including cultural innovation, film/TV production, exhibitions, and education/incubation – in the Taoyuan Aviation City Project, dubbed “Aerotropolis,” near the Taoyuan International Airport. Several international firms, including Du Pont and Siemens, have joined domestic investors in signing letters of intent to engage in strategic partnership in the project with the Taoyuan County government. Moreover, for the further internationalization of the service industry, the Taiwan government is taking part in current plurilateral talks in Geneva that are expected to lead to a “Trade in Services Agreement (TiSA).” Spurred by the stagnation of the broader Doha Round under the World Trade Organization (WTO), the TiSA talk kicked off in early 2012, thanks to the vigorous promotion of the United States and Australia. Most of the 23 WTO members who are participating were part of an unofficial WTO subgroup dubbed the “Really Good Friends of Services (RGF).” The combined trade in services of the 23 economies accounts for over 70% of the global total. MOEA notes that after taking effect, TiSA will consolidate the linkage of Taiwan’s service industry with the world market, boosting both foreign investment and foreign trade.

Key role in the economy photo : taiwan tourism bureau

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The government’s internationalization policy to stimulate the development of

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A Report on the Service Sector

the service industry reflects the growing importance of services in Taiwan’s economy. Services now account for 70% of Taiwan’s GDP and 60% of employment. In October 2009, the Presidential Office’s financial and economic advisory panel recommended 10 service sectors for priority development on the basis of their export competitiveness, ability to create jobs, and growth potential. These sectors include international medicine, international logistics, music and digital content, conventions and exhibitions, internationalized cuisine, urban renewal, WiMAX, Chinese-language e-commerce, education, and financial services. In accordance with these suggestions, for instance, MOEA has been vigorously pushing the development of the exhibition and convention industry in recent years, boosting the total sales of exhibition space by 33.6% in the period of 2010 to 2013. The total output value of the exhibition and convention industry topped NT$33.8 billion (US$1.1 billion) in 2013. Meanwhile, ample market opportunities have emerged in various other service sectors, attracting participation from local enterprises. The tourism industry, for example, has been thriving in recent years thanks to the influx of Chinese travelers. The number of foreign visitors is expected to hit 9 million this year, up from 8 million in 2013 and 7.3 mil-

lion in 2012. One-third of the visitors now come from China. The huge demand has sparked a surge in hotel construction, and industry insiders estimate that some 460 new hotels will open in the next four years, creating 12,000 jobs. An even more appealing business segment is the “silver market” of senior citizens that has emerged with the advent of an aged society. The Commerce Development Research Institute points out that in 2012, those aged 50 and above accounted for 31.6% of the Taiwan population. With ongoing medical progress and increasing life expectancy, the elderly population will continue to rise over the next 20 years, fostering huge business opportunities associated with the care of senior citizens. The institute forecasts that the silver market will reach NT$3.6 trillion (US$120 billion) by 2015. Numerous local enterprises have recently been jumping onto the service bandwagon, including many manufacturing enterprises that ran into bottlenecks in further developing their existing businesses due to problems of market saturation or environmental restrictions. Confronted with constraints on domestic steel production, for example, Kaohsiung-based E United Group, Taiwan’s leading private steel maker, has been shifting its steel production abroad while investing heavily in the domestic service sector. Their investments now

include a hotel, theme park (E Da Theme Park), university, and a hospital. The group is now investing a further NT$30 billion in the service sector, including NT$8.5 billion in a cancer hospital and the multi-use Asia Plaza, and NT$21 billion in a large complex that will include a shopping center, hotel, and 196,272 square-foot office building. E Da has also budgeted another NT$13 billion for expansion of the theme park. Hon Hai Group, the world’s leading EMS (electronic manufacturing service) provider, is making a foray into telecom services after winning an LTE (Long-Term Evolution) 4G license with a NT$9.18 billion bid in October last year. The 4G venture is part of Hon Hai’s overall development strategy of combining the group’s established strengths in manufacturing electronic devices with new departures into telecom and cloud computing. The company, also known as Foxconn, plans to develop various smart 3C products and medical-care systems for linkage through 4G or even more advanced network services. Hon Hai Chairman Terry Gou says that for its 4G service the group will focus on data transmission, mainly for graphics and videos, with customers receiving free service for voice communication and text messages. According to Gou, Hon Hai aims to eventually expand beyond the Taiwan market into the international arena for 4G services.

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The Breadth of Services Below Taiwan Business TOPICS profiles nine AmCham Taipei member companies from the service sector to underscore the diversity of service functions, including many that are not widely known to the public.

ABS A leading marine and offshore classification society.

r e v i o u s l y k n o w n globally as the American Bureau of Shipping, ABS may have the distinction of being the U.S. business organization with the longest connection with Taiwan. When President Chiang Kai-shek withdrew from the China mainland in 1949, an ABS surveyor was aboard the flotilla that carried him across the Taiwan Strait. Over the decades, ABS has maintained a close relationship with Taiwan’s shipping community. Robert D. Somerville, who held top management positions (president, then CEO, then chairman) from 1993 until his retirement last year, headed the Taiwan office in the 1980s and always retained a strong interest in the island. A not-for-profit organization founded in 1862 in New York and now headquartered in Houston, ABS undertakes surveying and certification work on behalf of shipowners around the world through a network of offices in 70 countries. In Taiwan, the 20-some personnel are divided about equally between an administrative office in Taipei and a field staff based in Kaohsiung. “Our major clients in Taiwan are the large fleet owners like Evergreen, Yang Ming, and the Formosa Plastics Group,” explains Bradley M. Achorn, a Taipeibased regional vice president. “These are significant international players – Evergreen, for example, is currently the fourth largest container line in the world.

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ABS surveyors inspect a vessel under construction.

Because they know their business so well, Taiwan clients are demanding and drive their suppliers to be very efficient.” Much of the work of the Taipei office is to provide support to the clients whenever needed, calling on the global ABS network for assistance. “In case of a grounding, Coast Guard boarding, collision, or other problem anywhere in the world, we’re available to help 24 hours a day, 365 days a year,” says Achorn. The job of the field staff is to assure that vessels are in compliance with relevant technical rules and regulations throughout its lifecycle – “from drawing board to scrapyard,” as ABS puts it.

photo : abs

“Our surveyors go to the shipyards and monitor the welding during shipbuilding, and they also go to the steel mills and the factories making the machinery components,” says Achorn. A surveyor will even be on board the ship when it undergoes sea trials, and if all is in order, ABS issues certificates of classification to assure ship owners, insurers, and statutory bodies that the required technical standards have been met. “The ships coming out of Taiwan yards have sound designs and perform very well in service,” says Achorn. “It’s a pleasure to work here.” — By Don Shapiro

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A Report on the Service Sector

Amadeus IT Group SA Technology to help make the travel industry more efficient.

ith a 17-year presence in Taiwan, the last six as a fully owned subsidiary, Madrid-headquartered Amadeus operates with a two-part business model. One is its Global Distribution System (GDS), which facilitates travel agencies’ communications with airlines, hotels, car rental companies, and other tourist organization by providing search, pricing, booking, ticketing, and other services. The second is its Amadeus Altéa Suite, through which airlines can outsource their Passenger Service System (PSS) supporting such important activities as reservations, inventory management, and departure control. The company operates in 195 markets. The Taiwan subsidiary deals mainly with local airlines and travel agencies. “I go out and tell travel agencies and hotels about the unique benefits of our two-sided business model,” says Daver Lau, Amadeus Taiwan’s general manager. He emphasizes to them that “this GDS system is the same technology as used by over 140 airlines,” and notes that “Altéa was chosen in 2012 by EVA Air because it is the community IT platform of the STAR Alliance, which EVA is a member of.” As Amadeus’ services are paid for per transaction, the

Environmental Resources Management (ERM) A consultancy helping clients reach sustainability goals.

p e r a t i n g a Ta i w a n s u b s i d iary since 1999, Environmental Resources Management (ERM) is a London-headquartered global provider of environmental, health, safety, risk, and social consulting services. It maintains over 150 offices in 40 countries and territories, employing more than 5,000 people. The consultancy’s services include contaminated-site management; environmental due-diligence assessments; environmental, health, and safety compliance audits; as well as environmental impact assessments and planning services. In Taiwan, ERM clients are local and multinational companies covering a wide range of sectors, including petrochemicals, high-tech, other manufacturing, and property development. “If a client has soil or water contamination on a site he owns or is considering buying, we help investigate the extent of the pollution,” explains James Leu, ERM

opening of direct cross-Strait flights in recent years initially caused a drop in business. Travelers from Taiwan previously needed to go to China through another destination, usually Hong Kong or Macao, meaning it then required two flights instead of the one it takes now. But Lau says this setback was short-lived due to the boom in cross-Strait tourism, leading to a steady expansion in the number of flights. In addition, “since the start of direct flights, the number of travel agencies in Taiwan has now increased to 3,000,” he says. “And the growing number of low-cost carriers also helps, with 12 of them now serving Taiwan. That has encouraged people who previously did not fly to also hop on a plane.” In regulatory terms, Taiwan has always been rather open, according to Lau, but the business environment in the travel industry – in Taiwan as everywhere else – is inherently complex, as much depends on relationships. Taiwan benefited by embracing electronic services earlier than other APEC members, he adds, but once a certain plateau was reached, “people here thought they had done all the work already, so there was little upgrading for a while.” This lull is about to end, Lau says, as new players – such as the low-cost carriers and U.S. internet travel giant Expedia – are coming in, which will greatly stimulate the Taiwan travel market. — Jens Kastner

Taiwan’s managing director. “We design and implement remediation programs to help them clean up the site, so that they can continue operation, develop the property, sell it, or make it fit for other use.” Leu adds that as the environmental advisor in M&A deals, ERM sends auditors to target sites in order to assess the potential environmental liability, risk, and pollution. If the M&A negotiations are affected by the result, it may follow up with recommendations and a cost estimate for a possible cleanup. He also notes that many of the environmental impact assessments and planning services carried out by ERM Taiwan are related to outbound investment cases. Leu, who previously worked for Taiwan’s Environmental Protection Administration (EPA), considers that the Taiwanese environmental regulatory framework is rather advanced within the Asia Pacific because when the EPA sets up new regulations, “they always reference U.S. or EU regulations and standards.” But he urges the authorities to adopt a step-by-step approach with reasonable grace periods when implementing new regulations, instead of trying to

photo : erm

introduce the most stringent policies and allowing only short notice. “On the one hand Taiwan needs environmental protection, but we also need economic growth, and competition from other Asian countries is strong,” he says. In an observation regarding Taiwan’s business culture, Leu says that local companies are only gradually coming to recognize that consultancy service is something that is worth spending money on. “Traditionally, they were only willing to pay for something you can see, touch, and use,” he notes. “Now there is an evolving trend toward more sophistication, but it’s not happening that fast.” — By Jens Kastner

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GIBSIN Engineers Ltd. Specialists in the design and construction of power plants.

IBSIN Engineers Ltd. was established in 1979 as the brainchild of then-Premier Y.S. Sun, considered to be one of the architects of Taiwan’s economic development. A joint venture between local state-owned engineering firm Sinotech and Gibbs & Hill Engineering of the United States, the company was created with the specific purpose of training Taiwanese engineers to design and build their own power plants. The company has fulfilled that mandate admirably, currently operating with a staff of 400 professionals in civil, electrical, mechanical, chemical, and environmental engineering, as well as project management. GIBSIN has worked with the governmentowned Taiwan Power Co. (Taipower) as well as Independent Power Producers (IPP) such as the Formosa Plastic Group in designing more than two-thirds of Taiwan’s installed energy supply. GIBSIN’s role in building a power plant “starts from scratch,” often with feasibility studies, says Chairman L.C. Chen. He explains that a utility will call on GIBSIN to assess a multitude of factors: “What is the most suitable location? What size of plant? Should it be coal or gas? If coal, do we need a

coal harbor? What will the cost be? And after the power plant is built, what does the financial picture look like? Does it even make sense to build it?” Once the green light is given, the firm’s duties extend to preparing the bidding documents for contractors, procurement of equipment, and even land acquisition (often through reclamation). Chen stresses that GIBSIN does none of the actual construction. “We don't use machines – we use drawings and do lots of calculations,” he explains. “The computer is our machine.” While GIBSIN’s services have proved vital to Taiwan’s development, Chen says the company early on recognized the dangers of being overlay reliant on a single customer such as Taipower or even on a single market. That realization was fortunate, as Taiwan hasn’t begun a new power project in four years and the energy industry has been constrained by increasing public concern in Taiwan with environmental considerations. Instead, GIBSIN has branched out into other industries, including mass transit, where it was responsible for half of Taipei’s new Xinyi Line as well as the Kaohsiung MRT project. It has also expanded internationally, having completed energy projects throughout Southeast Asia, North and South America, and Europe. The firm now obtains 50% of its revenue overseas. — By Timothy Ferry

ISS World Providing integrated services for buildings of all types.

SS World provides all-inclusive services designed to make life easier for property owners and tenants, including building maintenance, cleaning, and security. Based in Copenhagen, ISS World launched its Taiwan business in 2006 by acquiring a property management company here. At the time, the integrated facility services market was still relatively undeveloped, says country manager Peter Trampe. A building’s landlord and tenants would have to deal with a wide array of individual service providers: landscapers, cleaning staff, electricians, security guards, and so on. ISS offers all those services, with the added benefit of guaranteeing consistency of quality. “Providing this service has a big economic benefit for clients,” says Trampe. “When we opened up in 2006 the market was very immature, but more and more customers are coming to us and saying that they like the concept in terms of cost

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Obtaining integrated services covering all of a building's functions can be a big benefit to both landlord and tenants. photo : iss

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A Report on the Service Sector

and service.” ISS’s customers here are divided into four main categories: commercial, residential, retail, and hospitals. The commercial segment covers office buildings and banks, especially for major multinational clients such as HP, HSBC, and Citibank. The residential segment serves apartment complexes in cities throughout Taiwan, while retail clients include Sogo and other upscale shopping centers. Often ISS’s contract with the headquarters of an international company covers the company’s facilities in each

country in which it operates, which m a k e s i t e a s i e r t o m a n a g e p r o p e rties. One of the ways ISS motivates its employees to deliver high standards of service is by making it possible for them to pursue a long-term upward career path within the company. For example, even if people start out as a cleaner, they can eventually work their way up to a managerial position. Taiwan is good fit for ISS for several reasons, says Trampe. There are a relatively high number of luxury residences and retailers here compared with the rest of the Asia. Taiwan also has a large

number of manufacturing operations that require specialized cleaning and maintenance services. “The requirements in Taiwan are very high. When you go to a Sogo store, it has to be spotless, safe, with the temperature just right,” says Trampe. “In manufacturing, Taiwan is definitely at the forefront of the semiconductor and pharmaceutical industries, which need environments that are almost completely dust- and bacteria-free.” — By Catherine Shu

Oh! Study Opening international vistas for Taiwanese students.

ince its establishment almost two decades ago (originally under the name Oh! Canada), Oh! Study has helped some 30,000 Taiwanese students pursue educational opportunities abroad. Founder Brian Hockertz originally came to Taiwan in 1990 to set up the Canadian Educational Center for the Canadian government, then staying on when his term was over to promote overseas study as a business. Although the United States and Canada account for 80% of the volume, the company now also promotes study in Australia, New Zealand, the United Kingdom, and the rest of Europe. The field of international education in Taiwan is intensely competitive, Hockertz notes, with the result that “we have to reinvent ourselves every year.” In the early years, he recalls, “just having a brochure was a value, and we could charge a fee for helping students apply to schools.” Now the Taiwan consumer has become savvier and more demanding, revenue comes exclusively from the schools, and Oh! Study depends on constant innovation to differentiate itself from its competitors. “To survive, we’ve had to become extremely efficient at what we do – for example, we developed our own data-management system from scratch

photo : oh! study

to integrate every aspect of our business,” says Hockertz. “We’ve also had to increase our volume and expand our presence. Whereas we handled just 200 or so cases a year in the beginning, now we need well over 1,000 to break even.” Twice a year the company organizes education fairs in Taipei, Taichung, and Kaohsiung, with participation from up to 100 foreign schools. It has also put a great deal of effort into providing online information and services. The latest project is the Oh! Job Bank, a platform introduced last year to put prospective employers in touch with Taiwanese who have studied abroad. “This is the next logical extension of our activity,” says Hockertz. “The main reason people come to us in the first place

is that they want to prepare themselves for a good job and career.” Currently the system includes about 300 companies and 1,500 job-seekers. The target is to increase those numbers to 1,000 and 10,000 respectively by the end of the year. The project is a CSR activity and is free of charge for both employers and job seekers. In promoting overseas study, “what we are really selling is an aspiration to a better lifestyle,” says Hockertz. He therefore locates his well-designed offices in prime business districts, invests heavily into staff training, and is a stickler for a clean, scripted, and professional presentation in all aspects of his business. — By Don Shapiro

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Recall Taiwan Integrated information management solutions.

mechanical engineer by education, with previous experience in the pharmaceutical-biotech industry, James Chan has been general manager of Recall Taiwan for just five months. He says he is still impressed on a daily basis with the technological and managerial expertise that the company is able to provide in helping clients protect their confidential documents, whether physically or digitally. Recall operates three large warehouses, which it calls Information Centers, all in Taoyuan County’s Luzhu Township. Stored there are one million cartons, each the size of a box of A4 paper, kept safe from theft or damage from the elements, fire, and insects. For some clients, the centers also store video tapes in temperature- and humidity-controlled vaults. Since passage of Taiwan’s strict Personal Information Protection Act in 2012, many companies have paid heightened attention to management of their data. Should a customer wish to retrieve certain material, “we can locate the aisle and row on the computer with our innovative use of RFID technology” says

Chan. “A barcode is scanned whenever the carton goes in or out of the premises, and when it is loaded on a Recall truck for delivery. GPS systems on Recall trucks enable the office to monitor not only the location of the truck, but also its speed, direction, and current activity.” Formerly part of the Brambles group, Recall last year was spun off as an independent company, publicly listed in Australia but headquartered in Atlanta, Georgia. In Taiwan, Recall’s main customers are banks, insurance companies, and other financial institutions, as well as accounting and legal firms. Currently a fast-growing source of business is patient files, especially from hospitals in urban areas with high land costs. An area of future potential growth is expected to be research papers and confidential disclosure agreements from the pharmaceutical/ biotech sector. Some documents need to be stored in perpetuity. Under Taiwan law, financial service companies are required to retain documents for seven years, and research papers must be kept for 15 years. At the end of the lifecycle, Recall also assures that the documents are securely and properly destroyed, with the shredded bits sent for recycling to uphold environmental standards. “With the growth of digitization, we have seen a shift towards a hybrid infor-

mation management approach from our customers,” notes Chan. “While the demand for records management is still high, Recall offers and continues to develop new and innovative solutions that integrate and secure our customers’ physical and digital information.” — By Don Shapiro

Recall prides itself on fast, efficient, and secure service. photo : recall

StevenLeach Designing and constructing interiors across East Asia.

stablished in the early 1970s in Hong Kong and operating since 1990 in Taipei, StevenLeach maintains commercial interior-design consultancies in nine East Asian cities, with a strong focus on green buildings that are both healthy for humans and good for the planet. StevenLeach’s clients in Taiwan previously were mainly multinationals, but the number of local enterprises also wanting to present themselves as being of international standard is rapidly rising, the company says. In describing the Taiwan market, David Pipkin, Group Director of StevenLeach Taiwan, explains that both multinational and local companies in Taiwan generally spend reasonable but modest amounts on their facilities, unlike China where successful companies tend to wish to show off and adopt higher budgets. “At the same time, there also is a lot of liquidity in

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Taiwan, and residential developers have begun hiring iconic architects such as Norman Foster and Richard Rogers,” he notes. Pipkin considers that the influence of a few outstanding new buildings has helped raise the general quality level of design in Taiwan to the benefit of upmarket design consultancies. Complementing this trends has been a wave of public projects won by foreign architects. As examples he cites the Taoyuan International Airport’s Terminal 1 revamping and the Sun Moon Lake Visitor Center by Japan’s Dan Norihiko and the Taipei Performing Arts Center by Europeans Rem Koohaas, David Gianotten, and Ole Scheeren. Pipkin, who divides his time between Shanghai and Taipei, notes that very much unlike China, doing business in Taiwan is straightforward and government regulations are reasonable. “In China, all our senior staff are Taiwanese, and if I could hire all my China staff from Taiwan, I would because the Taiwanese are reliable, loyal, and have long-term vision,” he says. “But other companies think like that, too, so that finding good people here is now getting more difficult.”

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A Report on the Service Sector

On the other hand, the brain drain also brings some benefit to StevenLeach. “As companies in Taiwan realize that their main asset is their staff, they provide better working environments because otherwise the people leave,” Pipkin notes. In 2008, StevenLeach Taiwan established a Sustainable Design Division, which has since completed 26 projects certified under the Leadership in Energy and Environmental Design (LEED) standard developed by the U.S. Green Buildings Council. Its LEED projects include TAIPEI 101, Taiwan Semiconductor Manufacturing Co. (TSMC) plants, hospitals, hotels, and corporate offices for Citibank and DBS, among others. — By Jens Kastner

Towers Watson Expertise in human resource management and investment consulting.

or the last 25 years, Towers Watson has provided companies in Taiwan with a wide array of professional services, including consulting, technology, and solutions in the areas of benefits, talent management, rewards, and risk and capital management. Headquartered in New York City, Towers Watson currently has offices in 36 countries. Its Taipei branch opened

The Zurich insurance offices

in October 1989 and now serves most of the top 20 companies in Taiwan’s financial industry, as well as about one-third of Taiwan’s biggest tech companies, says managing consultant Charles Wang. At first, Towers Watson’s Taipei office focused on providing local branches of overseas firms with pension valuation and compensation survey services. As Taiwan’s economy grew, it began to add domestic companies to its client list. Now the dollar value of the services it provides is split 70-30 between Taiwanese companies and foreign multinationals operating in Taiwan, says Wang. The turning point

photo : stevenleach

was in the 2002 when the first of Taiwan’s two financial reform programs impacted the country’s financial industry, causing domestic firms to begin turning to Towers Watson for advice. After the global financial crisis in 2008, Taiwanese companies that needed to make structural changes also looked to Towers Watson for talent assessment, management, and career consulting services. Towers Watson currently offers a broad range of corporate services. Investment consulting is done in tandem with the company’s offices in Hong Kong and Shanghai. On the human resources side, it designs compensation and incentive programs, as well as performance management systems, and helps companies assess candidates for executive positions. In recent years, Towers Watson has also developed proprietary software to support its HR services. One of the ways Towers Watson helps Taiwanese multinational companies is by giving them an outside perspective on their hiring practices, Wang says. Many businesses tend to develop their talent in-house, which can present challenges. Towers Watson helps its local clients figure out how to train existing staffers or acquire new employees in different countries. “When you are undergoing a lot of change, you need to have people who can think differently and that can be a challenge,” says Wang. — By Catherine Shu

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s e e i n g ta i w a n

Spotlighting Overlooked Locations in Taipei

aiwan has been enjoying a tourism boom. Last year, a record 8.02 million international visitors arrived, more than triple the annual totals recorded in the late 1990s. Growth has been far from even, however. The most prominent attractions, such as Taipei 101, the National Palace Museum, and Taroko Gorge, now receive thousands of sightseers per day. Other places, relatively speaking, remain undiscovered. A s p a r t o f t h e Ta i w a n To u r i s m Bureau’s efforts to impress upon tourists and potential tourists how much Taiwan has to offer, the International Spotlight program aims to draw the eyes of discerning travelers beyond the obvious. In the history-rich neighborhoods and bucolic villages showcased by the Spotlight, tourists can sample local delicacies, appreciate traditional crafts, and savor unique scenes. Tour descriptions and special offers can be found on the International Spotlight’s trilingual (Chinese-JapaneseEnglish) website: http://intlspotlight. taiwan.net.tw . Of the five regional programs, two focus on the Taipei area. This would come as no surprise for those who already know that the metropolis is a delightful city in which to spend time. With a population of 2.7 million, it

is far from daunting in size, yet big enough to contain everything a discerning visitor could require, be it a broad range of quality cuisine (both domestic and international), diverse shopping opportunities, and numerous cultural facilities and events. Getting from one part of the city to another is quick and easy thanks to an ultra-efficient MRT (metro), buses, and inexpensive taxis. There is plenty to see and do: excellent museums, inspiring places of worship, enticing shopping districts, and a ring of mountains where hikers can find hot springs and fabulous birdlife. The Northern Region I program highlights the Chengzhong, Dadaocheng, Da’an, and Beitou districts of Taipei. All but Beitou are in the heart of the city. In fact, Chengzhong means “the area within the city walls.” (Taipei’s walls were demolished at the end of the 19th century to make space for urban development.) Also in the late 19th century, when Taiwanese oolong tea was in great demand, Dadaocheng’s merchants grew prosperous supplying buyers as far afield as New York. Tea merchants still do business in the area, but it is now the picturesque shops along Dihua Street that best embody this riverside neighborhood’s traditional character.

Dadaocheng’s single most impressive building is devoted to religion rather than commerce. Bao’an Temple, a 200-year-old shrine dedicated to the god of healing, is a treasure-house of art. The quality of its 1995-2002 restoration work received honorable mention in the 2003 UNESCO AsiaPacific Heritage Awards for Culture Conservation. If possible, a visit to the temple should be timed to coincide with the Baosheng Cultural Festival held each spring. A few minutes’ walk away, Taipei Confucius Temple is an excellent place to learn about the philosophy that underpins the ancient culture of Taiwan’s Han Chinese majority. For well over a century, the Chengzhong district has been dominated by government offices. But like Westminster in London, between the ministries lie hot spots of culinary splendor, an abundance of bookstores, and architectural-historic gems such as the Futai Street Mansion, Taipei’s old North Gate, and Zhongshan Hall. The hall, built in the mid-1930s by the Japanese colonial authorities then ruling Taiwan to honor their young emperor, is now a concert venue bearing the honorific name of Dr. Sun Yat-sen, founding father of the Republic of China (Taiwan’s official title). Tourists with a fondness for color and bustle will adore nearby Ximending (the West Gate area), where the young go to see and be seen. Da’an District, two kilometers to the east, is noticeably more modern. Packed to the gills with stores and restaurants, Da’an’s Zhongxiao East Road

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s e e i n g ta i w a n

most likely is Taiwan’s busiest shopping zone. Many of the best places for eating out are in the compact “Kang Qing Long” neighborhood, so called because it encompasses Yongkang, Qingtian and Longquan Streets. Here the streets are narrow and the buildings lowrise. Around every corner is an inviting teahouse or secondhand bookstore. A branch of acclaimed dumpling restaurant Din Tai Fung can be found a few meters from the northern end of Yongkang Street. The restaurant is a stone’s throw from the Dongmen MRT Station, a recent addition to Taipei’s rapid-transit network. Beitou is also best reached by MRT.

The name of the area is derived from the language of the Ketagalan people, an Austronesian tribe that dominated the Taipei basin until the 18th century. They called this area “Paktaaw,” meaning “witch,” perhaps because of the spooky clouds of steam that rise from the area’s geothermal springs. Invigorating hot springs can be enjoyed in more than a score of hotels in Beitou and neighboring Xinbeitou, from the easily affordable to the super-luxurious. For an inexpensive hot-spring experience, head to Long-

nai Tang, a Japanese-era bungalow with two small indoor pools (one for men, one for women). Senior citizens soak here on winter afternoons; office workers come just before dinner.

To l e a r n a b o u t t h e g e o l o g i c a l processes that created these spas, visit the Beitou Hot Springs Museum. The design of this hundred-year-old building was based on one of Japan’s most famous bathhouses, and the original bathing pool (no longer used) can be seen downstairs. It is one of very few buildings in Taiwan with stained-glass windows. The Northern Region I program also embraces Taipei’s Zhongshan and Datong districts, which offer superb shopping opportunities, a splendid array of restaurants, and such attractions as the Taipei Museum of Fine Arts, the Museum of Contemporary Art Taipei, and the Lin Liu-hsin Puppet Theater Museum.

However, it is the further-flung elements of the program that will likely cause potential tourists to take the most notice. In the hills of Xizhi, part of New Taipei City, visitors can enjoy a special meal at the Shi-Yang Culture Restaurant. “Creative Taiwanese cuisine meets rustic tranquility” is how the Taipei Times summed up this revered establishment. The report noted that “the lush forest grounds…look more like a quiet spiritual retreat” than the setting for a restaurant. Those who feel intimidated by the sheer variety of eating options in Taipei will welcome the chance to surrender to the expertise of Shi-Yang’s chefs. Scrutinizing the availability and quality of fresh ingredients, they design multicourse set meals, then deliver dishes at a pace sure to satisfy the most ardent advocates of “slow food.” The mountain scenery surrounding the restaurant is equally enjoyable.

In Muzha, which lies within Taipei City and includes the capital’s everpopular zoo and Maokong Gondola, U-Theatre Ensemble performs at a hilltop venue reachable only by a steep footpath. This internationally acclaimed troupe has won rave reviews for mesmerizing drum-centered performances magnified by the natural setting. For information about U-Theatre shows and other cultural events, plus all kinds of travel information, visit the Tourism Bureau’s website (www.taiwan. net.tw) or call the 24-hour tourist information hotline 0800-011-765 (toll free within the country). taiwan business topics • april 2014

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A Record Hsieh Nien Fan

T SPONSORS Platinum

Wine & Liquor

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he 2014 Hsieh Nien Fan, the 46th annual banquet of the American Chamber of Commerce in Taipei, drew a record 680 members and guests – including more than 100 government officials and other special dignitaries – to the Grand Ballroom of the Grand Hyatt Hotel on the evening of March 11. As has been his habit, President Ma Ying-jeou once again not only served as the keynote speaker, but remained for dinner and to greet and toast each table. Acting Director Brent Christensen of the American Institute in Taiwan (AIT) also delivered remarks. After being introduced by Master of Ceremonies Peter Dernbach, AmCham Taipei Chairman Thomas Fann announced that this year’s Hsieh Nien Fan was in part a celebration of the Chamber’s having passed the 1,000-member mark for the first time. But he explained that the main purpose of the evening is to thank Taiwan government officials for the “excellent access and cooperation we have received from so many government agencies in the past year.” He also thanked AIT for its “consistent, outstanding support and cooperation.” Fann noted President Ma’s repeatedly stated commitment to promote economic reform to enable Taiwan to avoid trade marginalization by joining the Trans-Pacific Partnership (TPP). He described the past several months as a time of “perhaps unprecedented attention to our White Paper issues,” leading to progress on “one after another of these issues.” In his keynote address, President Ma thanked AmCham for its contribution to Taiwan’s economic development over the past 63 years, mentioning that his government frequently turns to AmCham’s Taiwan White Paper when making policy decisions. He also cited the Chamber’s monthly publication, Taiwan Business TOPICS. In addition, the speech reiterated the government’s determination to “further liberalize and internationalize” the economy and to “negotiate more free trade agreements with our major trading partners.” AIT Acting Director Christensen’s remarks acknowledged “the countless contributions of AmCham and its members to the U.S.-Taiwan relationship,” and outlined the various ways in which that “vibrant friendship” has

been strengthened in the past several years, including the granting of Visa Waiver privileges to Taiwan travelers to the United States and the resumption of annual bilateral talks under the Trade and Investment Framework Agreement (TIFA). Besides the President, other high-level dignitaries in attendance included former Vice President Vincent Siew, Presidential Office Secretary-General Timothy Yang, National Security Council Secretary-General Jason Yuan, Minister of State Jaclyn Tsai, Foreign Minister David Lin, National Development Council Minister Kuan Chung-ming, Environmental Protection Administration Minister Wei Kuo-yen, Council of Agriculture Minister Chen Bao-ji, and various vice ministers and department directors-general. Attendees enjoyed a sumptuous meal featuring a choice of roasted U.S. beef fillet or cod fillet, accompanied by Jacob’s Creek Sparkling Chardonnay Pinot Noir, Jacob’s Creek Shiraz Cabernet, Jacob’s Creek Chardonnay, and Royal Salute 21-Year-old Blended Scotch Whisky. Making the event possible was the generosity of the Hsieh Nien Fan sponsors: Platinum Sponsor Citibank; Wine & Liquor Sponsor Royal Salute Scotch Whisky by Pernod Ricard; Gold Sponsors Corning Display, Franklin Templeton Investments, and Standard Chartered Bank; Silver Sponsors 3M, HSBC, JTI, and Micron; Bronze Sponsors Air Products, Alcatel-Lucent, American Express, Baker & McKenzie, K&L Gates, Philip Morris, Siemens, and Synopsys; General Sponsors Audi, Dun & Bradstreet, Ford Lio Ho, Grand Hyatt Taipei, Morgan Stanley, Procter & Gamble, Samsung, and the Tobacco Institute of the Republic of China.

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taiwan business topics â&#x20AC;˘ april 2013

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