Yeh: The most significant reason is the easy access to supply chains for these Taiwanese manufacturers. Ninety-five percent of production materials can be locally supplied now.
Additionally, its geographical proximity to the southeastern coast is convenient for shipping.
TT: A recent survey conducted by a local business association found that the southeastern Asian region has been considered as one of the more dangerous regions for investment. What do you think ?
Yeh: At present, about 10 people in this city are in jail for alleged tax evasion; some did it on purpose, while others lacked knowledge of the complicated tax laws, violation of which is a violation of criminal laws.
As for murders reported here, I think it is more a matter of businessmen themselves lacking personal discipline. The murders reported here are mostly associated with money or love affairs.
Taiwanese businessmen should be more disciplined or avoid showing off wealth, which brings on trouble.
TT: Can you cite any successful or unsuccessful investment cases there?
Yeh: Pou Chen Corporation (寶成工業股份有限公司), which is now among the world's top shoe makers, and some electronics manufacturers, such as Delta Electronics Inc (台達電子股份有限公司) and Primax Electronics Ltd (致伸實業股份有限公司).
One of Pou Chen's factories has employees reaching more than 100,000 people in a town with a population of just 40,000.
In earlier years, many Taiwanese companies doing business with Chinese state-run firms failed because of the diverse ideologies between them.
TT: What opportunities do you see for Taiwanese businessmen after China joins the WTO?
Yeh: A significant impact of China's entry into the WTO will be on the long time rampant smuggling along the eastern coast, which proliferated based on good Guanxi (personal connections). The smuggling had discouraged other traders because they had to pay taxes and couldn't compete.
A survey indicated that general tariffs for China will decrease from the current average 24.6 percent to 9.44 percent after its accession to the WTO.
Despite new laws issued last year to allow foreign firms -- including those from Taiwan -- to invest, or even merge with Chinese state-run firms, I think it will take some time to evaluate the opportunities, because most of the state firms are in debt.
TT: Recently a local business association urged a "let-go" of local banks, allowing them to set up operations in China in order to help solve the loan problems of Taiwanese businessmen. What do you think?
Yeh: Taiwanese banks may not expect a promising business opportunity competing against Chinese or foreign banks, unless they are permitted to operate using yuan.
Chinese banks have been gradually increasing loans to foreign investors, including those from Taiwan, in order to lure opportunities that may come with the expected increase in foreign investment after China joins the WTO.
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