Taiwan News: Premier Lai Urges China Businesses Home as Trade War Deepens

Taiwan News: Premier Lai Urges China Businesses Home as Trade War Deepens
Credit: Reuters / TPG
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Premier William Lai (賴德請) said Monday that the government is actively encouraging Taiwanese businesses operating in China to relocate their production facilities to Taiwan amid the ongoing trade battle between the United States and China.

He spoke at an annual meeting organized by the Monte Jade Science and Technology Association, an association of technology company executives in Taiwan.

Lai said the government sees the U.S.-China trade dispute as an opportunity for Taiwan's economic development, and he urges Taiwanese businesses in China to seriously consider moving back home.

He added that the government will try to clear obstacles to investment to help companies return home, such as continuing to promote tax breaks, relaxing regulations and introducing proposals to resolve the "five shortages".

The five shortages refer to land, water, electricity, skilled workers and manpower, a lack of which has long plagued the industrial sector. As an example, Lai pointed to the government's support of local technology development. Next year's technology budget will increase by 5.1 percent year-on-year to NT$116.3 billion (US$3.8 billion).

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The Mainland Affairs Council (MAC) said relations between the United States and China will face more issues of conflict than of cooperation.

The MAC has held a meeting to look at the challenges faced by Taiwanese businesses operating in China amid an escalating trade battle.

Participants said the relationship between the world's two superpowers has evolved from conflict on trade to conflict in other areas, including over strategy, technology and security.

The U.S.-China trade war will not likely end in the short term, they said, and in view of the radical changes in China's business environment in recent years, they urged the government to help China-based Taiwanese businesses develop and carry out plans to move their factories out of China.

Arguing that some Association of Southeast Asian Nations members face talent shortages and lack industrial technologies, some feel the government should find ways to strengthen vocational training for professionals, migrant workers and new immigrants from ASEAN countries currently residing in Taiwan.

Some experts also suggest that Taiwan pursue opportunities to work with South Korea and Japan in venturing into Southeast Asia.

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A Tainan-based drone manufacturer will is pioneering smart agricultural technology overseas by bringing services to oil palm fields in Malaysia.

Lo Cheng-fang (羅正方), founder of GEOSAT Aerospace & Technology Inc., said GEOSAT entered Malaysia about two years ago and later partnered with All Cosmos Bio-Tech, a Malaysia-based investment holding company established by Taiwanese investors, to provide smart agriculture services using drones.

Explaining some of the capabilities of the drones, Lo said the devices are very efficient at spraying pesticides as they can cover up to nearly 40 hectares of land per day, more than 60 times the coverage of manual spraying.

The drones can also accurately analyze the growth of crops, improve the efficiency of spraying and fertilizing, and greatly increase their yield.

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Shares of United Renewable Energy Co., a new solar energy company, came under pressure Monday morning as concerns over a global supply glut dampened buying interest.

Market sentiment was also affected by plans for layoff at other solar energy companies as they remained unprofitable under the current unfavorable market conditions.

As of 12:03 a.m. Monday, shares of UREC had dropped 2.86 percent to NT$10.20, with 13.92 million shares changing hands on the first day of the new company's listing on the Taiwan Stock Exchange. The weighted index was up 0.37 percent at 11,047.29 points.

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Photo Credit: Reuters / TPG
An Evergreen Marine container ship is seen at Kaohsiung Port.

Taiwan International Ports Corporation is planning to setup a joint venture with local companies to target markets under the government's New Southbound policy.

TIPC, which is under the Ministry of Transportation and Communications and supervises port operations in Taiwan, says it will team up with four Taiwanese firms to establish the new company.

These include Yang Ming Marine Transport Corporation, Taiwan Navigation Company, T.S. Lines Company, and the Chunghwa Post.

A TIPC spokesperson said the new enterprise will be established in mid-October and be registered in Singapore, after which it will open an office in Taipei.

He said that in the initial stage, the joint venture will have paid-in-capital of US$10 million with TIPC and Yang Ming Marine taking a 35 percent stake each, and the other three companies owning the remaining 30 percent.

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Rising trade friction between the United States and China has taken a toll on Taiwan's manufacturing activity.

The Chung-Hua Institution of Economic Research said that the Purchasing Managers' Index was down 2.1 points in September.

According to CIER, it now stands at 53.9 after declines in the indexes for production and employment during the month.

The September figure is the lowest since January last year, when the PMI stood at 53.2. In the service sector, the non-manufacturing index in September also fell 1.8 points from a month earlier to 50.8.

Despite the falls in the PMI and NMI, the two indexes remained in expansion as both are higher than the 50-point level that marks the difference between contraction and expansion.

The acting president of CIER said the ongoing trade skirmish between Washington and Beijing has had an adverse effect on Taiwanese manufacturers in certain sectors, such as the chemical, raw material and machinery industries

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Taiwan's CPC Corp. will soon benefit from one of its investments in overseas oil exploration.

An executive with the state-run oil refiner said production from its oil field in Chad is expected to start in late 2019.

He said the Chad project received a 25-year permit for oilfield development in 2011. CPC said it made a discovery that it estimated would yield outputs of 9,800 barrels of crude oil and 35,000 cubic meters of natural gas a day.

The executive said the Taiwanese oil giant has invested in oil exploration and production in 12 sites in five foreign countries -- Australia, Ecuador, Chad, Niger and the United States -- to diversify its sources of supply.

A site in Niger is expected to begin production next year as well, and one in Australia started in July this year.

After production at these sites begins, CPC will satisfy more oil demand from its own sites, which could have a stabilizing effect on Taiwan's energy prices.

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President Tsai Ing-wen (蔡英文) is encouraging senior foreign missionaries to apply for Taiwanese citizenship.

Her messages comes now that the government has amended regulations to allow foreign nationals with special contributions to the country to apply for naturalization without having to surrender their original citizenship.

The president said Catholic priests have made great contributions to Taiwan's society over the years, including providing health care, education, and other social services, particularly to women, seniors and those with physical or mental disabilities.

She added that she could not possibly list the contributions of all Catholic missionaries in Taiwan given the time constraints, but Tsai said she has the highest respect for them.

Many foreign missionaries came to Taiwan to support the country when economic development was still in its fledgling stage, and Tsai believes it is time for Taiwan to pay them back for their many decades of service.

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Credit: Reuters / TPG
US Navy frigate USS Taylor sets sail in the Bosphorus, on its way to the Black Sea in Istanbul April 22, 2014.

Next month, the Navy will commission two Perry-class guided missile frigates it bought from the United States.

Navy Chief of Staff Vice Admiral Lee Tsung-hsiao (李宗孝) said training and preparations are underway for the commissioning of the two vessels into the Navy sometime in November.

On the question of how the new ships will help improve the nation's defense capability, Lee said they are Perry-class vessels, which means they have much better anti-submarine capabilities than the Navy's existing eight Chengkung-class frigates.

The two military vessels, built in the 1980s and named the USS Taylor and USS Gary in the U.S. Navy, were delivered on May of last year.

Now renamed Ming Chuan and Feng Chia, the Navy said they will join the Taiwan Navy's 146th fleet based in the outlying island of Penghu and will be deployed to patrol the Taiwan Strait.

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It has just become more expensive to fly.

The Civil Aeronautics Administration said it has approved an application by airlines to increase their fuel charges, after the cost of aviation fuel went up.

Aviation fuel has hit US$100 a barrel on the international market.

Under the CAA-approved plan, airlines will now be able to charge an additional NT$400 for long flights, and an extra NT$150 for short flights.

The fuel surcharge had already been increased in May, when international fuel costs rose from US$80 to US$90 a barrel.

Aviation fuel prices have gone up about by about a third over the past year.

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Taiwan is getting a new direct flight to Bangkok, Thailand.

Thai Vietjet, which is a subsidiary of Vietnamese low-cost airline Vietjet Air, will launch the new air route connecting Bangkok and Taichung, with services set to begin on Nov. 3.

The company said there will be one round-trip flight between the two cities every Monday, Wednesday, Friday, Saturday and Sunday.

Vietjet Air currently operates a total of 57 flights a week between Vietnam and Taiwan, with flights from Ho Chi Minh City to Taoyuan, Tainan, Taichung and Kaohsiung, as well as from Hanoi to Taoyuan, Taichung and Kaohsiung.

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This news bulletin was provided courtesy of International Community Radio Taipei (ICRT), Taiwan’s leading English-language broadcaster.

Editor: David Green (@DavidPeterGreen)

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