US-Taiwan Business Council chairman Paul Wolfowitz says Taiwan should pull out all the stops to attract international companies to put their regional headquarters in the country, adding that such an effort was more important than membership in international organizations.
“I have enormous sympathy for Taiwan’s desire to expand its international space through participation in international organizations,” Wolfowitz said in a keynote address to the American Enterprise Institute’s “Taiwan’s Potential in the Global Marketplace” conference in Washington.
However, any real movement on that issue will require agreement from China, he said.
“It’s not something that Taiwan can do much about and pretending that it can, and that it’s the responsibility of Taiwan’s government, is a mistake and is misleading to the Taiwan people,” Wolfowitz said.
“Moreover, I think that the benefits to Taiwan in participating in these organizations are more symbolic than substantive,” he said.
“What would make a real substantive difference would be if Taiwan could bring more international businesses to Taiwan. Maybe I am exaggerating here, but I think getting one major international corporation to make Taiwan the base for its regional operations would be worth more than all the possible memberships and participation in international organizations,” Wolfowitz said.
US business leaders found that Hong Kong provided a much more business-friendly environment than Taiwan, he said, despite the fact that Taiwan has major advantages over Hong Kong, including space and geography, air quality and freedom of expression, protection of intellectual property rights and the ready availability of Mandarin speakers.
Wolfowitz, a former deputy US secretary of defense and World Bank president, put enormous importance on the negotiations with China for an economic cooperation framework agreement (ECFA).
“I really hope that somehow the two political parties find a way to come together in a truly bipartisan spirit because getting an ECFA and getting it right — which means it will be sustainable even if there is a change in administrations in Taipei — is not only important to Taiwan’s economy, it is important to Taiwan’s national security,” he said.
Wolfowitz said that the World Bank’s latest Doing Business report ranks Hong Kong as the third-best place in the world to do business while Taiwan is ranked 46th.
Taiwan lags behind Hong Kong in almost every category. For ease in starting a business, Hong Kong is 18th while Taiwan is 29th; dealing with construction permits, Hong Kong, is first and Taiwan 97th; employing workers, Hong Kong 6th, Taiwan 153rd; getting credit, Hong Kong 4th and Taiwan 71st.
Hong Kong ranks 32nd in protecting investors, while Taiwan is 73rd; in ease of paying taxes and dealing with the tax authorities, Hong Kong is 3rd and Taiwan 92nd; in enforcing contracts, Hong Kong 3rd, Taiwan 90th.
Taiwan beat Hong Kong in ease of registering property, 30th compared to 75th, and ease of closing a business, with Hong Kong ranked 13th to Taiwan’s 11th.
“[The business environment] is something the Taiwanese government could do something about,” Wolfowitz said. “I would not be surprised if some Taiwanese regulations go back to Japanese occupation.”
He said that while he had painted a “gloomy picture,” there was some good news.