Most German companies in Taiwan are neutral toward the cross-strait service trade pact and the free economic pilot zones bill, but are increasingly concerned over the nation’s soaring real-estate costs, an annual survey released by the German Trade Office Taipei said yesterday.
Fifty-two percent of the German firms here viewed the trade agreement as neutral or unimportant to their business, while 65 percent said it would not affect future investment decisions and 50 percent said it would have a neutral impact on business development.
“We support liberalization measures to make the business environment in Taiwan more competitive and friendly,” trade office executive director Roland Wein said.
However, German firms do not predict concrete benefits arising from the passage of the services trade agreement or the free economic pilot zones, he said.
German companies in Taiwan are mainly engaged in sales, marketing and services with most having less than 250 employees and annual revenues of under NT$1 billion (US$33.27 million).
About 45 percent of companies perceive Taiwanese authorities as friendly or very friendly, lower than the 62 percent with similar opinions about authorities in China, the survey found. Nearly 50 percent described local authorities as neutral this year, compared with 40 percent last year.
Only 34 percent of German companies intend to increase investment this year, down from 46 percent last year, while 11 percent plan to lower investment, the survey indicated.
The planned adjustments came even though 47 percent said the economic environment is improving this year and firms expect turnover to increase by 13 percent this year, the survey said.
A quarter of the firms plan investment in new regions with the focus shifting from Taipei towards central and southern Taiwan, Wein said.
For the first time, Greater Taichung beat the capital as the favorite investment location with 23 percent, while Greater Tainan and Hsinchu gained attraction with 13 percent and 10 percent respectively, the survey indicated.
“Taipei must not take its status [as the favored investment location] as given with real estate and rental costs growing increasingly out of reach,” Robert Bosch Taiwan managing director Bernd Barkey said.
The high-speed railway and improved infrastructure facilities in central and southern Taiwan are making doing business there desirable and practical, Barkey added.
German firms are not particularly worried about the suspended construction on the nation’s Fourth Nuclear Power Plant on the grounds that energy costs in Taiwan are much lower than elsewhere.
As in previous years, finding qualified staff tops the list of challenges for German companies doing business here, as they have had difficulty recruiting experienced engineers with expertise in new technology and English proficiency, Wein said.
The survey polled 248 German firms from May 12 to June 6.
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