CCIS upbeat on exports to Southeast Asia

By Ted Chen  /  Staff reporter

Thu, Sep 06, 2018 - Page 12

China Credit Information Service Ltd (CCIS, 中華徵信所) said that it is optimistic about Taiwanese companies’ efforts to expand into Southeast Asia and that exports to the region would likely exceed 20 percent of total foreign trade in the next two to three years.

In the first seven months of this year, exports to the region increased to US$34.03 billion, or 17.7 percent of the nation’s total foreign trade of US$192.19 billion, the agency said.

The rise coincides with local firms’ growing presence in the region as they expand their investments, CCIS editor-in-chief Liu Jen (劉任) told a Taipei news conference.

From 2012 to 2016, the number of Taiwanese companies investing in Southeast Asia rose from 856 to 1,022, with revenue contribution from the region increasing from NT$1.9 trillion (US$61.68 billion at the current exchange rate) to NT$2.4 trillion over the period.

However, exports have yet to exceed 20 percent of total foreign trade, with the figure falling from 19 percent in 2012 to 18.5 percent at the end of last year, due to Taiwan’s exclusion from regional trade blocs, Liu said.

Liu said he is optimistic about growth in exports to the region, as manufacturing capacity expansions result in increased trading volume.

The US-China trade war could be an opportunity for Taiwanese firms as tariff hikes reshuffle the landscape and potentially remove rivals’ trade advantages, he said.

Firms that focus on domestic consumption in the region would face less uncertainties from the trade war, Liu added.

Taiwanese firms should pay attention to the massive domestic markets of Southeast Asian nations as they follow President Tsai Ing-wen (蔡英文) administration’s New Southbound Policy.

They should rethink their approach instead of simply trying to take advantage of lower labor costs to establish bases for export-bound manufacturing, as they did under similar policies enacted by former president Lee Teng-hui (李登輝), he said.

To succeed in Southeast Asia, firms need to familiarize themselves with local consumers, strengthen their brand appeal and seek a capable distribution partner, he said.

Taiwanese companies should establish joint ventures with local stakeholders to ensure that both sides are motivated to grow, Liu added.

CCIS has also identified 13 product classes where Taiwanese brands have high appeal, including bicycles, medical equipment, home appliances and electronics.

The biggest category for exports is mechanical, electrical and electronic products, which represented 53.67 percent of trade to the region, followed by ores, metals and textiles, the DGBAS said.

“Taiwan’s trade relations with Southeast Asia are still in their infancy and there is a lot of room for growth if exports can be shifted toward consumer products as opposed to materials used in building infrastructure,” Liu said.