Japan's firms seek help to enter Chinese market

Taiwanese and Japanese companies are increasingly working together to enter the massive Chinese market, but Taiwanese companies should develop their core values to avoid being marginalized in the long run, industry watchers said yesterday.

"Japanese companies have realized in recent years that forming alliances with Taiwanese enterprises is an effective way to enter China's market," said Ryuji Ichikawa, deputy representative of the Interchange Association (Japan) Taipei Office (日本交流協會).

Japanese small and medium enterprises generally have an edge in technology but are weak in intelligence collection capabilities and overseas experience, whereas Taiwanese companies are better able to network in China and have sufficient industry know-how.

The collaboration could help both parties tap China's market through joint marketing, original equipment manufacturing and technology cooperation, he added.

Ichikawa made the remarks at a press conference on business cooperation between Taiwan and Japan held by the Market Intelligence Center of the Institute for Information Industry (資策會).

In 2001 and 2002 combined, companies from the two countries forged 17 alliances. The number surged to 33 in 2002 and 36 last year, Ichikawa said, adding that alliances in the automobile industry grew the fastest, to eight cases last year from one in 2001.

Taiwan and Japan have had long-term business relations for decades and, as a result, Japanese companies have a high level of trust in their Taiwanese counterparts, an academic commented.

"Japanese companies have a strong edge in technology and are highly protective in this regard," said Kung Ming-hsin (龔明鑫), director of the second division on manufacturing and small and medium enterprises at the Taiwan Institute of Economic Research (台經院).

Taiwanese enterprises, Kung said, have to strengthen their core values such as dominating the distribution networks or trying to elevate their technology levels.

"Otherwise, Taiwanese companies would easily become marginalized after their Japanese counterparts familiarize themselves with China's business environment or find other local partners," he warned.

Another Japanese representative, Kenji Shimizu, the association's economic affairs director, said both countries had collaborated in several industries in the China market.

He cited examples such as Nissan Motor Co and Yulon Motor Co (裕隆汽車) in the automobile sector as well as a three-way investment by Tingyi Holding Corp (頂益控股), Asahi Breweries Ltd and Itochu Corp in the beverage sector.

The Taiwan market is also a touchstone for Japanese enterprises to expand their businesses to China and other Asian countries.

Collaboration between DDI Pocket Inc and First International Telecom (大眾電信) to launch international roaming services for Taiwanese users of Personal Handyphone System (a Japanese-developed wireless technology) phones is another example, Shimizu said.