The outbreak of severe acute respiratory syndrome (SARS) has demonstrated the risks for Taiwan businesses that invest heavily in China, and shows the need to rethink such investment strategies, a Taiwan business leader said in the Sankei Shimbun yesterday.
The Japanese daily ran its interview of Huang Mao-hsiung (黃茂雄), chairman of the Chinese National Association of Industry and Commerce in which he said that the SARS epidemic in mainland China has "made us reassess the tremendous amount of investment in [China]."
Though the diversification of investments in many countries will increase costs, he said that such an approach is crucial in terms of crisis management, adding that economic growth in mainland China is bound to suffer due to the impact of SARS in the short term.
He noted that the mainland, with its cheap labor force and huge consumer market, has attracted investment from various countries with a nearly magnetic effect. But he said that businesses should also carefully observe Beijing's policies and measures against the widening of outbreaks of SARS.
For President Chen Shui-bian, SARS will also be a crucial test if he wants to win re-election as president in 2004, Huang said.
On Taiwan's ban of direct trade, postal and transportation links with mainland China, Huang said that the ban is actually beneficial since it protects Taiwan from the potentially deadly flu-like pneumonia.
SARS, believed to have originated from Guangdong province, mainland China, has spread to many countries, but mainland China remains the most seriously affected area, with around 4,800 probable cases and 230 deaths.