Wed, May 03, 2006 - Page 11 News List

CEOs worry about China

CORPORATE VIEW The chief executives of the nation's top firms said China was the biggest challenge facing their operations and called for the opening of direct links

By Jason Tan  /  STAFF REPORTER

Cross-strait tensions and the rise of China's economy remain the two biggest challenges for domestic enterprises intending to take their businesses to the next level, according to a poll of the nation's top CEOs released yesterday.

More than 70 percent of Taiwanese firms said tensions between Taiwan and China would be the biggest concern for their business operations over the next three years, according to the survey conducted by the Chinese-language Commonwealth biweekly magazine, which questioned the CEO's of the nation's top 1,000 enterprises.

Sixty-seven percent of respondents said that the emergence of China's domestic vendors to compete internationally was also set to pose another threat.

Lenovo Group Ltd (聯想), the Chinese PC giant which acquired the US-based IBM Corp's ailing PC unit in May last year, is an example.

In view of the looming hurdles, domestic firms called for the government to speed up the opening of direct links and better manage relations with China, the survey said.

These issues have become vital as 56 percent of the firms that responded to the survey have already made investments in China, and nearly 44 percent of financial institutions are eyeing similar moves in the next five years.

However, rushing to China may not guarantee a positive result.

Late last year reports said that Dbtel Inc (大霸電子), a leading local mobile phone vendor, was exiting the Chinese cellphone market temporarily in order to stay afloat, as excess capacity had pushed its Chinese unit into the red.

The glory days of 2000, when the company beat local rivals to gain Beijing's approval to sell its own-brand handsets in the world's largest market, appeared to have ended.

The survey's results also indicated that a quarter of respondents are mulling listing their companies overseas.

Fifty-seven percent said Hong Kong was the most ideal overseas destination for a public listing.

If this figure is combined with the 16 percent of firms considering listings in other places in China, up to 73 percent of firms here would opt for China for a listing, despite the potential risks, according to the magazine.

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