In the News

Time for Taiwan to shine

• Publication Date：05/14/2010
• Source： Economic Daily News

Half a century ago Taiwan wrote a new page in economic history, and its continuous growth, accumulated experience and development of resources and talent since that time have created a vibrant nation. Over the last 10 years or so, however, in circles both high and low, public and private, the idea has been voiced that once Taiwan gives up protectionist policies its industries will collapse without a struggle.

Having adopted this defeatist attitude, Taiwan’s opposition Democratic Progressive Party has done everything in its power to block cross-strait rapprochement, and many regular folks have voiced their support, fearing that jobs will be lost and markets handed over to others.

Less robust traditional industries, often overlooked and lacking expensive imported machinery, with no access to tax cuts or subsidies, have been singled out as being especially vulnerable to fully liberalized trade. This mindset has become the greatest hindrance to opening the island’s markets.

In light of this situation, prior to the expected signing of an economic cooperation framework agreement with mainland China, President Ma Ying-jeou met with representatives of 12 supposedly declining sectors, including towels and bedding.

Unexpectedly, however, these leaders of small and medium-sized enterprises told the president that Taiwan’s traditional industries are not lacking in competitiveness, nor are they sunset industries. All they need is a fair chance to compete.

In the course of Taiwan’s economic development, like other industries they have improved their quality control, production management and product design, and their goods are now far superior to those from neighboring undeveloped countries in quality, attention to detail, reliability and innovative design, and they are ready to compete with European and American merchandise.

These businesspeople proudly displayed their unique wares, easily distinguishable from poorly made imitations, as well as being safe, reliable, healthy and environmentally friendly. But not only are their products hard pressed to compete with much more expensive European and American items, in the domestic market they are being undermined by cheap imports, even before the easing of trade restrictions with the mainland.

Faced with a choice between low-priced imports and domestic manufactures, consumers are stymied by a paucity of information on product profiles. At the moment of purchase, it is very difficult for the average person to have all the information really needed to make a wise decision.

The market is flooded with cheap items produced by unscrupulous manufacturers, not only of poor quality but even harmful to personal health and safety. Although safety and quality cannot be guaranteed for all domestic products, overall they are leagues ahead of cut-rate imports.

If the two can be kept separate, and if price differences are within reason, the great majority of consumers would pick local products. If the island’s merchandise can also become distinctive internationally, even greater business opportunities would be created.

The problem is how to make clear distinctions. Hypermarkets, with an eye to profit margins, tend to offer budget imports, pushing domestic products out. One solution would be a certification system for local goods, setting them off from imported products, providing protection against knockoffs and making them instantly recognizable to consumers.

Widespread and convenient marketing channels, especially hypermarkets, should offer certified domestic goods a fair chance in the market place.

Although the quality of domestic products is generally high and they display dazzling creativity, their overall packaging and presentation has yet to reach the professional standards applied to high-end European and American goods, making them seem like ugly ducklings in comparison.

By investing just a tiny fraction of the money it has put into the high-tech sector, the government could bring about a sea change in this respect, putting Taiwan’s products into the domestic and international spotlight. Then there would be no cause for worry regarding such top-notch goods and industries. (THN)

(This commentary originally appeared in the Economic Daily News May 7.)

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