Taiwanese companies should speed up moves to explore Southeast Asian countries like Vietnam and Malaysia so they can enjoy preferential tariffs and increase trade volume, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
“Like China, many ASEAN members depend on agricultural and industrial production to achieve economic growth, which means there is still room for these nations to grow before becoming developed economies,” TIER researcher Tristan Liu (呂曜志) told a forum.
“Given that Taiwan’s economy has already matured and become services-centered, local companies should turn to emerging markets to seek new clients and resources, which would also help boost the country’s exports,” he added.
Citing research by the institute, Liu said that the trade volume between Taiwan and ASEAN countries accounted for 15.23 percent of the nation’s total overseas trade last year, up from 12.89 percent in 2008.
Since 2010, ASEAN has replaced Japan as Taiwan’s second-largest trade partner, after China.
Bilateral trade between Taiwan and ASEAN member Singapore accounted for 4.93 percent of the former’s total trade last year, followed by fellow members Malaysia and Indonesia with 2.52 percent and 2.19 percent respectively, he added.
Liu said the bids by Vietnam and Malaysia to become members of the US-led Trans-Pacific Partnership would benefit Taiwanese investments in the ASEAN bloc in terms of tariff benefits.
Meanwhile, Taiwanese electronics manufacturers would also do well to consider selling automation equipment to Indonesia, Vietnam, the Philippines, Thailand or Vietnam, since these countries still rely heavily on labor to manufacture industrial products, he said.
“Now is the time” to enter ASEAN markets, Commerce Development Research Institute (CDRI, 商發院) associate research fellow Tai Fan-chen (戴凡真) said at the forum.
Taking the Philippines as an example, Tai said that more than 10 cities in that country have a per capita income of US$10,000.
“China has a wide income gap, so does the ASEAN bloc,” Tai said.
“It’s too late to deliberate whether to enter the ASEAN markets,” Tsai said. “Rather, it is time to carry out market research and sell Taiwan-made products to the world.”
Tai suggested that companies preparing to expand into overseas markets first gain an understanding of their potential consumers’ lifestyles and carry out market segmentation to uncover business opportunities.
Meanwhile, Council for Economic Planning and Development Minister Kuan Chung-ming (管中閔) on Tuesday said that the council plans to cooperate with the Bureau of Foreign Trade and the Taiwan External Trade Development Council to adjust the nation’s exports to boost the economy.
“National exports have declined significantly in recent months, while our competitors’ exports have grown, indicating that Taiwan’s anemic export growth was not caused solely by the weak state of the global economy,” he said.
Even though its exports to ASEAN countries rose, Taiwan is accounting for an increasingly lower proportion of the bloc’s total imports, he said.
“We need to assess which of our products are the most competitive for export,” Kuan said.
According to Kuan, Taiwan should focus more on promoting local end products by utilizing e-commerce to reach customers overseas.
Meanwhile, although Taiwan should diversify its export destinations, it should retain strong ties to its current trade partners, such as those in Europe, he said.