Sat, Dec 26, 2009 page12

• Business leaders warn on China

  LESSON An association leader said she knew of one business owner who took his Chinese franchisees to five-star hotels to help them understand cleanliness

  • By Joyce Huang / STAFF REPORTER
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  A call by Association for Relations Across the Taiwan Strait (ARATS) Chairman Chen Yunlin (陳雲林) for cooperation between domestic small and medium-sized enterprises (SMEs) and their Chinese counterparts is well-intended, but businesspeople should proceed only on condition Taiwanese businesses are protected, business leaders said yesterday.

  “China must show its commitment to facilitating a mechanism to protect the rights of Taiwanese companies doing business there before smoothing out hurdles for possible cross-strait business cooperation,” Paul Wang (王振保), secretary-general of the National Association of Small and Medium Enterprises (中小企業協會), said by telephone.

  “We often hear of Taiwanese investors falling victim to Chinese partners, who pillage the Taiwanese-funded companies,” he said.

  Wang nevertheless threw his support behind Chen’s call for both sides to cooperate to expand export markets, saying that Chinese businesses shouldn’t necessarily be viewed as competitors.

  “If the partnership turns out to benefit and make money for both sides, why not?” he asked.

  During his trip to Taiwan, Chen on Wednesday urged Taiwanese SMEs to complement their business strength with that of their privately owned peers in Jiangsu and Zhejiang provinces before tapping into the world market.

  He encouraged Taiwanese SMEs in the traditional industries to explore business opportunities from China’s stimulus measures to spur domestic consumption, including the building of infrastructure, subsidies to the automobile sector and purchases of home appliances in rural provinces, as well as the transfer to energy-saving products such as high-tech light-emitting diode (LED) lighting products.

  Tony Cheng (鄭榮文), honorary chairman of the Taiwan Merchant Association in Shenzhen, said yesterday that few of his association’s up to 4,000 SMEs were inclined to partner with Chinese businessmen.

  “Like tying the knot in a marriage, it’s always hard to find the right [business] partner here in China who shares your business strategies, philosophy and integrity,” Cheng said by telephone.

  He nevertheless said that he didn’t rule out the possibility that Taiwanese businesses, which have an edge in research and development, quality control and management skills, can locate suitable Chinese partners to take advantage of their locally well-known brands and their knowledge about the Chinese market to create synergies for both sides.

  “It takes time to find a perfect partner and get familiar with it before initiating any cooperation,” he said, adding that any cooperation should not be hurried.

  Secretary-general of the Taiwan Chain Stores and Franchise Association (連鎖加盟促進協會) Beryl Lee (李培芬) said Taiwanese businesses have to be flexible with their Chinese partners.

  Taiwanese chain stores and franchises often need to leverage capital and talent in China when they attempt to branch into the market, she said.

  Franchising models in Taiwan do not often apply in China, she said.

  For example, a Taiwanese children’s wear chain has had a hard time asking its Chinese franchisees to keep up with its benchmark standards in service quality and store cleanness, she said.

  “The Taiwanese owner had to take his Chinese franchisees to a five-star hotel to make them understand the level of store cleanness he was looking for,” she said.

  So, interim administrators are often established in China to help manage the Chinese chains until they meet standards, something unnecessary in Taiwan, Lee said.
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