Despite China's economic magnetism, Taiwan is still attractive to foreign investors with its comparatively liberal economic policies and quality high-tech workers, a Royal Philips Electronics NV executive told the Taipei Times yesterday.
"For many years, Philips is the biggest foreign investor in Taiwan in terms of investment and employee numbers," said Jan Oosterveld, Philips' chief executive officer for the Asia Pacific. Philips is one of Europe's largest consumer-electronics makers. "Even now, Taiwan is still very important to us."
Oosterveld, who arrived in Taipei earlier this week, is in town to inspect the local branch's operations. He said the impetus for Philips to make Taiwan one of its Asian bases after it entered the nation in 1966, is the open economic policy advocated by the government for many years.
"Unlike some developing econ-omies that try to protect their domestic industries, the Taiwanese government always gave strong support for foreign business ... it didn't even prevent its companies from moving to China despite the political situation," Oosterveld said.
Philips' sales figures in Taiwan are the fifth-highest among countries in the Asia Pacific region, and the volume of exports from Taiwan rank third, according to company statistics. The company refused to give the size of its investment in Taiwan this year, but revealed that it has formed partnership with several local companies.
In February Philips announced a US$20 million joint investment with BenQ Corp (明基), Taiwan's largest mobile-phone maker, on developing disk-drives for computers, said Silvia Chen (陳翠茹), a corporate communications specialist at Philips Electronics Industries (Taiwan) Ltd.
Like many multinational companies, Philips has moved part of its manufactory sectors to China in the recent past. Oosterveld said Philips' research team and divisions dealing with high value-added products will still stay in Taiwan.
According to a report issued by the UN Conference on Trade and Development (UNCTAD) issued earlier last month, FDI flow to Taiwan declined by 65 percent to US$1.4 billion last year, from US$4.1 billion the previous year. China topped the chart, with FDI rising from US$46.8 billion in 2001 to US$52.17 billion last year.
Oosterveld also addressed his concerns over the nation's intellectual property rights protection.
"We make about 3,000 patents per year, but we found that Taiwanese companies obviously are reluctant to pay for patents," he said. "However, we do see more efforts made by the government compared to its carelessness in the past 20 years."
Another key issue that has been addressed by foreign firms is the normalization of cross-strait traffic in view of the close economic ties between the two sides.
For the third quarter of the year, Philips recorded a net profit of 124 million euros, compared with a 330 million-euro loss in the same period last year after shedding more than a fifth of its workforce and moving production to countries with lower labor costs.
However, Oosterveld said Philips' investment in Taiwan, as well as in other Asian countries, will not be affected.
"About 22 percent of Philips' sales are generated in this region, and we want to double the sales in next three to five years. Of course, that means doubling the investment in the area," Oosterveld said.
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