Direct links are economic necessity, most MNCs say

Taiwan needs to focus on improving regulatory transparency, direct links across the Taiwan Strait and governmental efficiency to retain foreign investors, according to a survey conducted by the Chinese-language Global Views Monthly (遠見雜誌) among multinational companies.

The survey found that 48.4 percent of Taiwan-based foreign companies expressed dissatisfaction that the government seems to be incapable of improving the investment environment, said Global Views Monthly's editor-in-chief, Tiao Ming-fang (刁明芳).

The survey, conducted early last month and to be published this week, polled 620 member companies from the European Chamber of Commerce Taipei (ECCT) and the American Chamber of Commerce (AmCham) in Taipei with 124 effective responses.

Some 69 percent of respondents said that Taiwan needs a simplified and transparent regulatory system and 64 percent said that direct links with China are an urgent need, while 56 percent urged the government to cut down on red tape, according to the survey.

For comparison, the magazine also polled 268 Taiwanese listed companies, which similarly prioritize direct links (67 percent), political stability (66 percent) and governmental efficiency (63 percent) as key elements to turn around the local investment environment.

From the viewpoint of regional economics, ECCT chairman Dirk Sanger said that trade, transportation and communications linkage with China will help beef up Taiwan's competitiveness.

"This will increase not only Taiwan's attractiveness as a regional logistics center, but also the efficiency of domestic as well as foreign companies operating on both sides of the Taiwan Strait," Sanger said at a press conference on Saturday.

He urged Taiwan to comply with its WTO commitments and allow imported raw material and commodities from China as soon as possible.

AmCham vice president Andrea Wu (吳王小珍), who is also general manager of United Airlines in Taiwan, stressed the importance of direct links with China, saying the issue has been of concern to the chamber for over five years.

"[The links] will add value to Taiwan, [most of whose] manufacturers have moved to China ... [Without the links] time costs and financial burdens will be put on investors," Wu said.

Sanger agreed, saying that Taiwan should strengthen its engagement with the Chinese market, where most international companies are eager to enter.

"If Taiwan and China are not engaged in an economic way, you move your entire investment to China. So Taiwan loses out 100 percent," Sanger said.

Wu hopes that President Chen Shui-bian (陳水扁) realizes his promise to facilitate the links by the end of next year, or that he will find other ways for businesses to get a greater share of the Chinese market.

According to the survey, 19 percent of responding companies said they may downsize their Taiwanese investments if the links are not implemented in two years, while two thirds will maintain their corporate scale with or without the links.

Sanger expressed concern over the increasing tendency to exclude foreign companies from bidding for major infrastructure projects.

"The result is that Taiwan is deprived of high-quality expertise ? and the chance to acquire advanced project management skills," he added.

Market forces, instead of a political agenda, should drive the nation's economy, he added.