In anticipation of a tougher global business environment, China-based Taiwanese companies should focus on their core businesses to stay competitive while expanding domestic demand in China to offset possible losses in their export markets, analysts said yesterday.
“Chinese markets now present the biggest opportunities to China-based Taiwanese businesses,” said Kenneth Cheng (鄭克家), head of the Hongkong and Shanghai Banking Corp’s (HSBC, 匯豐銀行) commercial banking.
He made the remark at the launch of Top 1,000 Taiwanese Corporations in China 2008, which was compiled by China Credit Information Services Ltd (CCIS, 中華徵信) and sponsored by HSBC.
Cheng said firms doing businesses in China will face many challenges this year.
China’s tightening credit policy has reduced the chances that China-based Taiwanese businesses will be able to secure bank loans, while rising labor and raw material costs and a cut in tax rebates from 13 percent to 5 percent threatens their survival.
“The large reduction in the tax rebates is the main reason behind the failure of some Taiwanese businesses there,” he said.
Cheng said firms should reduce capital spending by liquidating idle assets while making their China-based subsidiaries financially transparent to earn the trust of Taiwanese banks.
CCIS editor-in-chief Liu Jen (劉任) said export-oriented businesses in China should look for ways to tap China’s domestic markets. But he voiced concern about China’s ability to sustain its economic growth after the Olympics, although the company expects China to deliver an 8 percent GDP this year.
Meanwhile, CCIS general manager David Chang (張大為) praised the government’s decision to relax the cap on Taiwanese companies China-bound capital from 40 percent of their net value to 60 percent.
“Businesses know where to go and what is best for them,” Chang told a luncheon organized by the European Chamber of Commerce Taipei (ECCT).
ECCT chairman Philippe Pellegrin said the chamber was very pleased to see such policies, adding that “it was in the right direction.”
As a strategy against inflation, James Huang (黃維祝), chairman of Roma & United International Group (羅馬磁磚), said yesterday that his tile company focuses on high-end customers, allowing sales to continue to grow despite the economic slowdown.
Roma, which entered the Chinese market 15 years ago, was one of the top 1,000 Taiwanese corporations in China last year, the CCIS’ annual survey showed.
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet pod supplier to Taiwan Semiconductor Manufacturing Co (台積電), yesterday said it has trimmed its revenue growth target for this year as US tariffs are likely to depress customer demand and weigh on the whole supply chain. Gudeng’s remarks came after the US on Monday notified 14 countries, including Japan and South Korea, of new tariff rates that are set to take effect on Aug. 1. Taiwan is still negotiating for a rate lower than the 32 percent “reciprocal” tariffs announced by the US in April, which it later postponed to today. The
ELECTRONICS: Strong growth in cloud services and smart consumer electronics offset computing declines, helping the company to maintain sales momentum, Hon Hai said Hon Hai Precision Industry Co (鴻海精密) on Saturday announced that its sales for last month rose 10 percent year-on-year, driven by strong growth in cloud and networking products amid the ongoing artificial intelligence (AI) boom. The company, also known internationally as Foxconn Technology Group (富士康科技集團), reported consolidated sales of NT$540.24 billion (US$18.67 billion) for the month, the highest ever for the period, and a 10.09 percent increase from a year earlier, although it was down 12.26 percent from the previous month. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said its cloud
Video streaming giant Netflix is launching a talent cultivation program in Taiwan aimed at producing high-quality Mandarin content, the company announced in a press release on Thursday. Netflix Chinese language content head Maya Huang (黃怡玫) said that Netflix has long invested in the Taiwanese market, citing the Netflix Fund for Creative Equity launched last year as an example. The fund would continue to dedicate resources to discovering content with the potential to be developed into Chinese-language projects, she added. The financing for the new talent projects seeks to create an ecosystem for content creators and professional development programs, she said. The talent projects
APPRECIATION: The central bank stepped in to stabilize the NT dollar after a surge in foreign institutional investment, triggered by optimism about tariffs and US Fed policy Taiwan’s foreign exchange reserves hit a record high at the end of last month, as the central bank intervened in the currency market to curb the New Taiwan dollar’s appreciation against the US dollar. Foreign exchange reserves increased by US$5.48 billion from May, reaching an all-time high of US$598.43 billion, the central bank said on Friday. While the central bank did not disclose the scale of its intervention, Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民) said that the currency market remained relatively stable until the middle of last month. However, a shift occurred following the US Federal Reserve’s signal of a
RSS