Sun, May 15, 2005 - Page 4 News List

Expert predicts Chinese high-tech crisis

CNA , TAIPEI

The technology sectors in Taiwan and China must seek to recreate their competitive advantage and enhance their status in the global value chain in order to sustain their growth in an era dominated by the knowledge-based economy, a local expert in technology management said Saturday.

Shih Chin-tai (史欽泰), head of National Tsing Hua University's College of Technology Management, said Taiwan's economic growth has now recovered to the 4 to 5 percent level from the negative growth recorded in 2001, but the technology sector is struggling with meager profit margins owing to global competition and soaring raw material prices.

Research and development accounts for 62 percent of the overall spending of Taiwan's technology firms, and they are spending more on the purchase of technology from abroad, causing a huge technology trade deficit. The value of Taiwan's computer hardware industry amounted to US$68.4 billion in 2004, with as much as 91.7 percent of the production conducted overseas, and 85.1 percent was in China. Therefore,Taiwan needs to better understand China's investment climate.

Shih said China's fast-growing technology sector is facing a number of potential crises, including a relatively slow infrastructure development, insufficient protection for intellectual property rights, unsatisfactory business management and fiscal transparency, as well as social unrest as a result of an unbalanced economic development.

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