Taiwan should avail itself of its many advantages in the emerging Association of Southeast Asian Nations (ASEAN) markets to increase its trade there, Premier Sean Chen said at today's political affairs meeting after being briefed by the Ministry of Economic Affairs (MOEA) on emerging market strategies.
"This trade should not be limited to traditional merchandise," he said. "Services and investment should be developed as well."
ASEAN's potential is evidenced by the International Monetary Fund's forecast that next year the nominal gross domestic product of five of the organization's nations will exceed those of the four Asian tigers (Hong Kong, Singapore, South Korea and Taiwan), noted the premier.
Chen instructed the MOEA to set up a cross-agency platform for the MOEA, Ministry of Foreign Affairs (MOFA), Overseas Chinese Affairs Council, Financial Supervisory Commission and other ministries to combine their resources and capabilities to more effectively develop Taiwanese trade there.
Stronger ties with ASEAN countries will contribute to Taiwanese participation in the planning of the Regional Comprehensive Economic Partnership and the Trans-Pacific Partnership, the premier said.
Taiwan's exports to emerging markets have grown dramatically in the past three years, Chen said, even sustaining 4 to 5 percent growth there last year despite declining in all other export markets. This number excludes export growth in mainland China, which other countries label as an emerging market.
"Business opportunities in emerging economies are better than those in developed nations," Chen said. "As a matter of course, we should first form nuclei, then radiate outward, and finally diversify. Forming nuclei means locking down important markets and gathering niche market opportunities to put down strong roots in overseas strongholds. Radiating outward signifies expanding into other promising markets in the proximity. Finally, using diverse marketing tools and integrating the strengths of the Taiwan External Trade Development Council (TAITRA), Taiwanese public associations and manufacturers, we can support businesses in every aspect of exploring and developing exports to these markets."
The MOEA has targeted 10 countries besides mainland China for such development in 2013: India, Russia, Brazil, the United Arab Emirates, Vietnam, Indonesia, the Philippines, Mexico, Turkey and Egypt.
The MOEA's report mainly focused on means like helping manufacturers participate in exhibitions and promotional activities, inviting buyers abroad to come to Taiwan for procurement, assisting businesses with developing brands and images, providing financial assistance, collecting business information and conducting personnel training.
In the first half of 2012, the MOEA implemented a plan to stimulate export orders, and subsequently from May to the end of last year it carried out the 2012 Rising Dragon Export Plan. Both were efforts to identify promising industries and help them boost exports with strategies addressing financing, branding and market characteristics.
According to Ministry of Finance statistics, in the year 2012 Taiwan's exports to emerging markets were 4.98 percent greater than in the previous year. They made up 27.9 percent of all Taiwanese exports, an increase of 1.9 percentage points over 2011. This demonstrated the government's efforts to help businesses diversify their markets and strengthen their marketing are bearing fruit, officials said.
The MOEA today also reported its progress on five objectives the premier assigned it at an October 24, 2012 Cabinet meeting:
1. The MOEA has sent the Executive Yuan a personnel training plan to overcome the issue of language barriers.
2. The ministry has set up overseas trade branches in Kuwait and St. Petersburg, Russia, and the establishment of more branches is underway.
3. There will be stronger demand for machine tools than consumer products in markets just starting their industrial development. Hence, overseas offices of the MOEA and other agencies are collecting and disseminating information on these countries' economic policies and trends to gain a better grasp of the products these industries need.
4. The MOEA will amend its performance appraisal standards for its overseas units. They will be graded on a curve, with the total import and growth rate for the country in which the base is located used to set the base's own trade and investment target.
5. Last year, the Bureau of Foreign Trade under the MOEA invited diplomatic, tourism, financial and agricultural agencies to study Taiwan's approach to expanding its market share in Islamic countries. A report and important guidelines for this task were then developed.
In response to the fourth point, Chen remarked that foreign offices in Taiwan have used Taiwan' s trade and investment figures as an important appraisal standard for their performance, and he would like the MOFA to do the same.
"The ROC is a country of only 23 million people, and international trade is its lifeline," the premier said. He told the MOFA to see trade as an important part of their work and include it in their performance evaluations.
In response to the Japanese government's announcement that it will adopt quantitative easing and expansionary monetary policies, the premier asked the Central Bank of the Republic of China to pay close attention to the effect of this policy, such as the depreciation of the yen, on Taiwanese imports and exports and on other regional economies. Other countries' responses to Japan's policy should also be noted because they could affect Taiwan as well, he added.