Sun, Jun 16, 2019 - Page 3 News List

INTERVIEW: ‘Planning key to supporting returning firms’

With Taiwanese businesses returning to Taiwan due to the US-China trade dispute, industrial and commercial representatives are concerned about how the national power grid will hold up. Industrial Technology Research Institute president Edwin Liu said in an interview with ‘Liberty Times’ (sister newspaper of the ‘Taipei Times’) staff reporter Hung Yu-fang that good management and ‘smart usage’ would take care of any problems

Industrial Technology Research Institute president Edwin Liu speaks during an interview with the Liberty Times (the Taipei Times’ sister newspaper) on June 8.

Photo: Hung Yu-fang, Taipei Times

Liberty Times (LT): Having lived in the US for 35 years, what are your thoughts on the US-China trade dispute?

Edwin Liu (劉文雄): I think that [US president Donald] Trump is very smart. He might seem crazy to others, but he is a businessman and his actions toward China could be the result of meticulous planning.

Now it is about who can keep it up longer. The common consensus is that the US will be able to hold out longer and China will eventually have to give in.

This view is based on the comparatively healthy structure of the US economy. The Chinese industry is structured with lower unit pricing in mind, and the major industries are state-owned and not driven by the capitalist market.

Over the short term, the trade dispute should cause China — and the world — to suffer a downturn in economic performance, but it could provide China an opportunity to change its industry on a structural level.

This is not necessarily a bad thing for China, or the rest of the world.

The US has hiked tariffs on US$200 billion of Chinese imports by 25 percent, which China met with tariffs on US$60 billion of US imports. The ban on Huawei [Technology Co] is a move in a trade negotiation.

My guess is that the US is eyeing when to go easy on China. The tariff hikes on US goods in China will not prevent the Chinese from buying those goods. Those who can afford to buy US products could circumvent the tariffs by buying the goods in Japan and bringing them back to China.

The US knows that its products’ value lies in their branding.

On the other hand, Chinese goods are only considered because of their comparatively cheaper price, and could be replaced with products from other countries, such as Mexico, Southeast Asia or Vietnam.

LT: The trade dispute has caused many Taiwanese businesses to return to Taiwan. Could there be a shortage of power?

Liu: Having power reserves is like financial planning, which depends on the form expenditures take and the effectiveness of management. If you spend a lot and badly, you will run out.

Taiwan imports 99 percent of its energy supply. Maintaining a stable balance regarding the supply and demand of power is the responsibility of everybody, from those generating power and distributing it, to the end-users. The government, businesses and each citizen share a measure of responsibility.

The crunch period for Taiwan’s energy supply is the summer. With operating or safety reserves running low, a malfunctioning power plant — big or small — could spark a power crisis.

For cost effectiveness, Taiwan should not prioritize new power plants. Instead, the focus should be on reducing the power load during summer’s peak periods, which increases operating reserves.

This could be achieved by something as simple as turning off the appliances that use the most energy.

With its limited resources, Taiwan should come to a consensus on how to use energy in a smart way. Saving electricity saves money.

People should know and implement common-sense practices, such as keeping the doors and windows of air-conditioned rooms closed, turning off lights when leaving a room, and unplugging computers and devices that are not in use, which goes a long way toward saving energy.

Take California as an example: Its policy is for renewables to make up 33 percent of its energy supply by 2020. By the end of last year, renewables already made up 34 percent. Why is it ahead of schedule? Because the entire population was committed and the government had made subsidies and incentives available for things such as rooftop solar panels for households.

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