The Bureau of Foreign Trade (BOFT) has targeted South Korea and India as important destinations for Taiwanese companies investing abroad this year, a move that is aimed to reduce risks resulting from investment concentration in certain countries such as China.
The bureau officials said the policy is to help Taiwanese businesspeople open more overseas markets, but whether the strategy will work to reduce the growing China-fever in terms of business opportunities and cost considerations is yet to be known, analysts said.
south Korea
Under the massive invasion of Korean imports such as pop culture, gaming products and electronic appliances over the past few years, the government has finally become aware of the power of its former diplomatic ally's comeback.
For the first 10 months of last year, South Korea occupied fifth position on Taiwan's trading chart with total bilateral trade of US$10.78 billion. In the same period, Taiwan ran a trade deficit with South Korea amounting to US$3.32 billion. The deficit, however, started in 1989 and grew to US$5 billion in 2000.
"We need to react to the dire imbalance in trading by increasing exports to South Korea," Huang Chih-peng (
In acknowledging that the industrial structure of the two countries is very similar, the bureau has no specific cards to play but urged local businesses to forage for as many opportunities as possible at this point.
For the first 11 months of last year, there were eight Taiwanese investments in South Korea worth US$7.24 million, up by 39 percent from the same period the previous year. The investments are mostly focused on computer peripherals and electric and electronic equipment.
"I don't think there is much chance for Taiwan to reverse the deficit, as industries in the two countries are in a competing position, not a complementary one," said David Dong (董達), a commission researcher for the Chung-hua Institution for Economic Research (中經院).
While Taiwan is proud to be the home of manufacturers of high-tech products such as semiconductors and integrated circuits, these sectors in South Korea have also taken off in recent years, Dong said.
While Taiwan has been moving its factories to low-cost China to boost competitiveness, South Korea has followed suit in northeastern provinces in China, he said.
As a result, Taiwanese businesspeople may have the opportunity of earning small margins with high-end semiconductor and computer components -- if the costs of these exports are able to decrease, Dong said.
Wu Shiang-hau (
"How can Taiwanese small or medium-sized businesses compete with large South Korean chaebols [conglomerates] in terms of cost saving?" Wu asked.
India
India, the world's second-fastest growing economy after China with a 7 percent growth in GNP last year, has already been flooded with US investors such as Coca Cola Co, Enron Corp and General Motors Corp to exploit the cheap labor and costs, while Taiwanese industries still have to get a foothold in the market of 1 billion people.
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