[LINK] "Taiwan seeks a new path to economic success"

[rfmcdonald]

The Globe and Mail's Mark MacKinnon writes about how, in the aftermath of the particularly severe local manifestation of the global crash and with growing competition from China, Taiwan is going to have to shift its economy from one based on manufacturing to one based more on brand names and higher value added products

“Before now, we never had to worry about unemployment problems. People are starting to become nervous,” said Yang Chia-yen, an economist at the Taiwan Institute of Economic Research. “If we don't lower our wage rates, there will be none of these job opportunities. Unless we do something different.”

To Mr. Yang, that something different would be building on “Made in Taiwan” to develop the cachet of “Designed in Taiwan” and “Educated in Taiwan.” Taiwan, he said, is well positioned to become the research and development centre for companies looking to expand in Asia and who are keen to use China as a manufacturing hub without being headquartered in the People's Republic.

One key, Mr. Yang said, will be liberalizing Taiwan's strict immigration policies in order to allow the island's companies and universities to attract more high-end talent from around the world.

Many also believe Taiwan needs to learn from South Korea's experience in developing such globally recognized companies as Daewoo, Samsung, Hyundai and Kia. Taiwan-based China Steel Corp. is one of the world's largest steel producers, but unlike South Korea, Taiwan has no domestic auto makers or shipbuilders.

“Right now, China is the manufacturing base for the globe. But some of those ‘Made in China' products are actually made by Taiwanese companies. Taiwan needs to develop our brand names,” said Cheng Cheng-mount, an economist with Citibank Taiwan.

Taiwan already makes about 80 per cent of the world's laptop computers and 40 per cent of the liquid crystal displays (LCDs) used in flat-screen televisions, but outside of perhaps Acer Inc., the world's second-largest maker of laptop computers, few of its companies are known worldwide. Firms such as Foxconn, which makes the Apple iPod and iPhone as well as computer motherboards for Intel Corp., and Quanta Computer, which produces computers for Compaq, Dell, Hewlett-Packard and other customers, play a major but largely invisible role in the computer industry, though both now do nearly all of their manufacturing in mainland China.