2017 Taiwan Business Climate Survey Full Report
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Transcript of 2017 Taiwan Business Climate Survey Full Report
2017 TaiwanBusiness Climate Survey
Full Results
Copyright © 2017 Independent Marketing & Research Limited. All Rights Reserved.
For the last seven consecutive years, we have conducted a survey of business leaders in Taiwan.
We intentionally measure many of the same issues year after year; to track changes over time. However, each year we also delete -issues when they become no longer relevant - and add new ones.
This year’s report has several new areas which we explored and has many more opinions directly quoted.
We would like to sincerely thank all those who participated in the study for their time, insights and views.
We hope you find the following report of interest and help.
Please feel free to contact us if you would like any further information or elaboration.
Sincerely,
Gordon StewartIndependent Marketing & Research Limited.
Section 1Executive Summary
Section 2 Detailed Findings
Section 3About the sample
Financial Indicators & Trends
Business Focus Who, When and How
Profitability HQ & Management locations
Industry Classifications
Forecasts Taiwan as a Regional HQ? Type of Legal entities
Employment Current Profitability Time established in Taiwan
Issues with impact Short-term Investment Number of FTEE
Most regressed issue Five-year Outlook Statistical testing
Mergers & Acquisitions Employment & Talent Enquiry/Contact
Support for Trade Deals Mergers & Acquisitions
Quality of Talent Impacts, Issues & Progress
Quality of Living Taiwan Government
Municipal Government
U.S. Government
Trade Agreements
Quality of living
Table of Contents
4
Section 1:Executive Summary
Key Financial Indicators & Trends
In order to track changes and detect trends, for the past 7 years we have asked identical questions relating to Taiwan enterprises’ current and forecast financial performance.
This year’s results are similar to last year’s levels – with no statistically significant changes in the four key indicators of profitability, near-term growth, investment and longer-term growth.
However, the latest five-year trends show a general decline, with only current profitability being maintained.
74%72%
81%
54%
81%
66%
59%
43%
70%
65%69%
52%56%
67%
61%
50%
60%
67%
54%
43%47%
56%
45%49%
Profitable Current Year Forecast for Revenue & ProfitGrowth
Increased Investment Forecast Optimistic about 5-Year BusinessOutlook
Key Financial Indicators
2010 2011 2012 2013 2014 2015 2016 2017
A statistically
significant change
in 2016 vs. 2015
66% 65%
69%67% 67%
2012 2013 2014 2015 2016
CURRENT PROFITABILITY69%
63%61%
54%56%
2013 2014 2015 2016 2017
FORECAST FOR REVENUE & PROFIT GROWTH
52%
48%50%
43%45%
2013 2014 2015 2016 2017
FORECAST INVESTMENT
56% 54%
60%
47%49%
2013 2014 2015 2016 2017
5 YEAR BUSINESS OUTLOOK
Key Indicators: Latest 5-year trend
Key Takeaways: Profitability
Current profitability remains in the “Relatively” to “Very Profitable” zone for more than two-thirds of our companies. This has been the case for seven consecutive years.
Key Takeaways: Forecast
Forecasts for 2017 Revenue & Profitability, Investment, and Business Outlook growth, have stabilized in the past two years. However, the 5-year trend line is still pointing in the wrong direction.
Key Takeaways: Employment
47% of all companies surveyed increased their employment numbers either “slightly” or “significantly”, during 2016. Whilst less than 2015’s increase, it’s still an encouraging reflection of our respondents’ businesses.And, they plan to hire still more in 2017.
Key Takeaways: Issues with Impact
The top issues adversely impacting our business leaders are:
1. Governmental bureaucracy
2. China-Taiwan government relations
3. Lack of clarity in labor laws
4. Inconsistent regulatory interpretation
5. Political turmoil in Taiwan.
Top 10 Impacts on Business
IssueImpact Ranking
SeverityProgressRegress
Recommendation
Governmental Bureaucracy 1
Make the Foreign Investment Approval (FIA) process simpler, clearer and more predictable; make application process for special licenses simpler and clearer; reorganize environmental impact assessment process.
China-Taiwan Government Relations 2
Most regress
Find areas in which Taipei and Beijing can cooperate successfully, e.g., prosecution of violent crimes, prosecution of drug trafficking and money laundering, disaster relief, etc.
Lack of clarity in labor laws 3
Revise labor regulations so rules designed for factories are not forced inappropriately onto other sectors of the economy.
Inconsistent regulatory interpretation 4
Instruct local authorities to document and share their decisions on matters left to their regulatory discretion.
Political turmoil in Taiwan 5
Encourage political groups to express their views through notice and comment on new laws and regulations and at public hearings; discourage physical violence in the Legislative Yuan.
Top 10 Impacts on Business (continued)
IssueImpact Ranking
SeverityProgressRegress
Recommendation
Inconsistent application of the Rule of Law
6
Make FIA process simpler, clearer and more predictable; assure that local authorities do not investigate or punish minor infractions only against foreign-owned companies.
inadequate/outdated laws 7
Most severe impact
Instruct ministries to review regulations routinely after a specified sunset period has passed.
Ability to recruit appropriate personnel 8
Further liberalize the availability of work permits for foreign white collar professionals.
Differences between local and internationally accepted standards
9
Instruct ministries to research regulatory regimes of other major jurisdictions before drafting significant new regulations.
Insufficient notice before changes to regulations or laws are introduced
10 Enforce the Executive Yuan's new
‘notice and comment’ procedures.
Key Takeaways: The Issue that has regressed the most
This year’s survey has seen a drastic reversal of the progress in China-Taiwan government relations.Last year, this rated the third best issue for progress (rated 38 out of 40 in a lack of progress).This year, it rates first out of 45 issues for lack of progress. A concerning trend.
Key Takeaways:Mergers & Acquisitions (M&A)
On average, 1 in 8 of our surveyed companies is involved in M&A each year. The reasons for seeking M&A and for failing to complete the deals are also consistent.
Additionally, 1 in 5 companies every year, “consider” M&A.
Key Takeaways: Support for Trade Deals
There are strong positive attitudes towards and support for: TIFA (the high-level talks between the USA and Taiwan governments); the China-Taiwan Cross-Strait Service Trade Agreement (CSSTA) and its ratification; and the establishment of a USA-Taiwan Bilateral Investment Agreement (BIA).
Key Takeaways:Quality of Talent
.
As in past years, the survey-takers praised the caliber of the Taiwan workforce as being hard-working, trustworthy and well-educated, but found deficiencies in their degree of creativity, initiative, and innovativeness.
Key Takeaways:Quality of Living
Business leaders consider Taiwan to be a safe, nice and easy place to live, with a good healthcare system. The main negative occurred around the safety of pedestrian (Zebra) crossings, and as in previous years, the lack of an English-friendly environment and poor air quality.
19
Section 2:Detailed Findings
Business Focus
The business leaders surveyed in 2017 are clearly focused on Taiwan; as the primary goal of most entities is to supply the Taiwan market with goods or services.
As in prior studies, this makes their comments and observations especially pertinent to the Taiwan government.
Taiwan64%
Greater China2%
Export to the U.S.A.3%
Markets other than Greater China or USA
1%
Multiple markets including Taiwan and Greater China
25%
Other markets or combinations
5%
Business’ primary goal in Taiwan to provide/source goods or services for:
Unfortunately, or realistically…
Taiwan is generally viewed as “Not a high priority” at the global head office level – with less than half of our member companies saying it is in their top ten priority markets. Of those who do rank Taiwan in their top ten, the majority are Taiwan-headquartered companies.
This year we have seen a statistically significant change in the composition of respondents; with fewer saying it is not a high priority. However, this is offset by a significant increase in those saying they “Don’t know/ Can’t say”.
10%
3%
54%
11%10%
7%5%
10%
3%
46%
15%
7%
10% 10%
10%
4%
45%
13%10% 9% 8%
10%
5%
48%
10%7%
10% 10%
11%
1%
48%
12%8%
10% 10%
6% 5%
51%
10%
6%
14%
9%
14%
2%
38%
15%
3%
13%14%
Don't know/can'tsay
Looking to disinvest Not a high priority In the top 10 In the top 5 In the top 3 #1 Priority
How does Taiwan fit into your global entity’s investment plans?
2010 2011 2012 2013 2014 2015 2016
Ownership & Management of Taiwan Entities
Most of our respondent companies have their corporate headquarters in the U.S. (50%), with Taiwan being the second most frequent location at 24%.
For non-Taiwanese companies, the direct supervisor of the Taiwan entity is more likely to be located in: Mainland China (20%), Hong Kong (20%), Singapore (13%), and then the USA (10%), indicating that most managers report into a Regional office rather than directly to the HQ.
In which country is your …Located?
Corporate HQ Direct Supervisor
USA 49.7% 10.1%
Taiwan 24.0% 31.4%
Country in Europe 12.9% 1.8%
Hong Kong 4.1% 19.5%
UK 2.4% 1.2%
Australia 1.7% -
Canada 1.7% -
Japan 1.7% 1.2%
Singapore 1.2% 13.0%
Other 0.6% -
South Korea - 2.4%
China (Excluding HK) - 19.5%
Would Taiwan be a good place for a regional HQ?
When asked to rate Taiwan as a good (or potentially good) place for a regional headquarters, on a scale of
0-100 the average score was only 49.
However, there were very strong and divergent views on this issue, with 10% scoring it a zero, to more than 8% scoring it 90 or greater.
10.0%
2.5% 2.5%
1.9%
5.0%
3.1%
3.8%
7.5%
3.8%
6.9%
6.3%
6.9%
3.1%
3.8%
3.1%
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100
Freq
uen
cy
Score
Do you believe Taiwan is, or could be, a good place to have a regional headquarters? (Score from 0 to 100)
2016: Another Profitable Year for Business
The majority (67%), of our business leaders, experienced either a “relatively” or “very profitable” year in 2016. A very similar result to prior years. The drop in the proportion who answered “Very Profitable” compared to last year into the ”Relatively profitable” group, is not statistically significant.
Directionally, it seems that most are growing their profitability over 2015.
0%3%
24%
53%
21%
1%3%
24%
58%
14%
1%3%
31%
56%
10%
0% 1%
34%
54%
11%
0%2%
28%
56%
14%
0%3%
29%
52%
15%
1%3%
29%
58%
9%
Very Large Loss Relatively Large Loss Break-even or smallProfit/Loss
Relatively Profitable Very Profitable
How would you characterize your Taiwan business' financial performance in 2016?
2010 2011 2012 2013 2014 2015 2016
5%
21%
30%
35%
9%
Substantial decline
Modest decline
No change in profitability
Modest growth
Substantial growth
0% 5% 10% 15% 20% 25% 30% 35% 40%
How would you characterize your Taiwan business’ profitability this year (2016) versus 2015?
2017: Business similar to 2016
In relation to their 2016 result, the majority of our business leaders are forecasting growth in their revenues and profits, albeit at a more modest level.
0%
6%8%
54%
17%
1%
10%
23%
46%
11%
1%
6%
19%
53%
13%
1%
6%
16%
53%
11%
1%
9%
18%
50%
11%
2%
11%
22%
39%
15%
2%
8%
20%
47%
9%
Substantial decline in bothRevenues & Profits
Modest decline in bothRevenues & Profits
Remain the same Modest growth in bothRevenues & Profits
Substantial growth in bothRevenues & Profits
What is your Taiwan business’ Revenue & Profits forecast for 2017 compared to 2016? (Top responses only)
2011 2012 2013 2014 2015 2016 2017
Short-term investment : Stable
Forecasted levels of investment are likely to remain unchanged from 2016.
1%
3%
20%
36%38%
16%
2% 2%
13%
41%
33%
10%
1% 2%
6%
39%
42%
11%
2%1%
4%
44%
41%
7%
1%2%
5%
42%40%
10%
2%4%
7%
44%
37%
7%
2% 2%5%
46%
40%
5%
Don't know/can't say Substantial decrease Slight decrease No Change Slight increase Substantial increase
What is likely to happen to your entity’s level of investment in Taiwan over the next 12 months?
2011 2012 2013 2014 2015 2016 2017
Looking forward five years…
After a fairly consistent and optimistic outlook over recent years, last year saw a significant (statistically) decline in the level of positivity. This year’s 5-year prediction is very similar to last, with just under 50% of our members saying they are either “slightly” or “optimistic” about the next 5 years of business in Taiwan. This sluggish result should be a major cause for concern for the government.
How would you describe your five-year business outlook for Taiwan?
3%
10%
7%
52%
29%
1%
7%
22%
43%
28%
3%
16%
26%
37%
19%
4%
14%
29%
37%
17%
2%
14%
24%
42%
18%
5%
19%
29%
34%
13%
3%
16%
32%
38%
11%
Pessimistic Slightly Pessimistic Neutral Slightly Optimistic Optimistic
How would you describe your five-year business outlook for Taiwan?
2011 2012 2013 2014 2015 2016 2017
Comments on Outlook
For the first time, we asked our respondents if they would like to comment on their forecasts; just under half chose to. Of these, those expressing optimistic sentiments (42%), narrowly outstripped those with negative (40%). Neutral comments were made by 18%.
Some examples of most frequently used words and representative quotes, follow.
Example Comments on 5-year Outlook
Positive Neutral Negative
“The consumer sector in Taiwan is still on comparable basis very interesting. A consumer that is interested in new products and ideas, and also expects companies to innovate. In certain sectors the relative spending in relation to their disposable income is still on international very low level and I expect those sectors to grow relatively their share whilst at the same time no expectation on overall disposable income to be increased significantly. In other words - a redistribution of the wallet.”
“New areas of business we plan to enter.”
”It was hoped the new administration would bring about greater leadership to develop talent and position Taiwan on a path the greater international presence and develop economic opportunities. To date we have not seen this leadership and as such it would be difficult to offer much more than a neutral outlook.”
“ The business outlook depends on government policy direction and how fast and complete new policies are implemented. At this point it is still too early to tell.”
”1) Uncertainty in infrastructure availability at low costs. 2) Talent loss to mainland China 3) IP and Trade secret protection gap.”
“Uncertainty surrounding the political landscape in Taiwan, both domestically and internationally. The Tsai government drastically needs to improve their game and start implementing sensible and beneficial (to both the broad economy and the Taiwanese people), policies.”
Full Time Equivalent Employees(FTEE)
Full-Time Equivalent Employees (FTEE) are defined by counting part-time employees as a half an employee and adding them to the number of full-time employees.
As in past years, our respondent businesses show continuing growth in employee numbers.
During 2016…
• Almost half (48%) of the companies increased their FTEE numbers either “significantly” or “slightly” during 2016
• 38% maintained their numbers of employees.
• 14% decreased their numbers either slightly or significantly, compared to 17% in 2015
1%
16%
39%
36%
7%
1%
12%
32%
48%
7%
2%
15%
32%
43%
8%
1%
13%
38%
43%
5%
Decreased significantly Decreased slightly No change Increased slightly Increased significantly
Actual Changes in FTEE
2013 Actual 2014 Actual 2015 Actual 2016 Actual
When decreases are taken away from increases in FTEE, and then numerically weighted to take into account the degrees of change, we see that in 2016 there was a net gain in FTEE numbers of 36%. This compares to gains of 38%, 47% and 33% in 2015, 2014 and 2013, respectively.
During 2016…
2013
2014
20152016
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Actual Net Increases in FTEE (weighted)
Hiring forecast to increase in 2017
• 41% of these business establishments plan to increase their headcount during 2017
• 49%, will maintain their 2016 levels
• Only 8% anticipate reducing headcount.
1%
16%
39%
36%
7%
1% 0%
8%
49%
39%
2%1% 2%
7%
42%
45%
4%1%
2%
9%
46%
37%
4%3%
1%
7%
49%
38%
3%
Don't know/Can't say Decrease significantly Decrease slightly No change Increase slightly Increase significantly
Forecast Changes in FTEE
2013 Actual 2014 Forecast 2015 Forecast 2016 Forecast 2017 Forecast
On a numerically weighted basis, 34% of our business leaders are forecasting an increase in employment numbers. This compares with last year’s forecast of 31%.
Forecast growth in 2017
2014
2015
2016
2017
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Businesses forecasting a net increase in FTEE in 2017 (weighted)
Most growth in Full-Time Equivalent Employees forecast for 2017 is reported as coming from SME companies with between 51 and 100 employees. Entities with 6 to 50 employees are also forecasting net growth for 2017.
Large, and even Micro (less than 5 employees), companies are also forecasting growth in employment.
Forecast FTEE
0 5 10 15
5 or less6-20
21-5051-100
101-150151-200201-250251-300301-350351-400401-450451-500501-550551-600601-650651-700701-750751-800801-850851-900901-950
951-1,0001,001-1,5001,501-2,0002,001-3,000
3001-4000More than 4,000
Net forecast increase in FTE for 2017 by number of employees
Industries most likely to be increasing headcount in 2017 (Top 9 Ranked)
Medical Devices
Pharmaceuticals
Management Consulting Services
Health Care Services
Human Resource Consulting
Insurance
Chemicals
Computer Software Programming Services
Engineering and Technical Services
Industries likely to see a reduction in FTEE during 2017
Semiconductor and Other Electronic Component Manufacturing
Retail Trade
Defense
Human Resources
A lack of quality human resources is one of the major risk factors seen as confronting businesses in the future.
We asked our corporate leaders to give us their impressions of the quality of available human capital in Taiwan.
Taiwanese Human Talent are seen as…
Hard-working, very trustworthy, extremely well-educated, easy to develop or train, very loyal, highly productive, generally showing a high degree of emotional intelligence quotient (EQ), and generally well-rounded. A very positive profile of the workforce.
Understandably, no major changes were seen in this year’s survey compared to prior years.
However…
They are also perceived as not displaying a great deal of creativity, not of a ‘World-class’ standard, not being innovative, and not showing a great deal of initiative.
These have been enduring perceptions over the seven years of these studies.
-50 0 50 100 150 200
Shows a great deal of creativity
Of 'world class' standard
Innovative
Show a great deal of initiative
Good English language skills (if required)
Easy to recruit
Easy to retain
Well-rounded
Show a high degree of Emotional Intelligence (EQ)
Highly productive
Very loyal
Easy to develop/train
Extremely well-educated
Very trustworthy
Hard-working
Net Perceptions of Human Resources in Taiwan - 2017
Human Capital - Overall perceptions
Whilst the preceding chart shows the net differences in scores of positive and negatives perceptions, it should be remembered that there are mixed views on the same criterion. The next chart shows these in full.
-50 0 50 100 150 200
Good English language skills (if required for role and/or promotion)
Of 'world class' standard
Show a great deal of initiative
Show a great deal of creativity
Easy to recruit
Innovative
Show a high degree of Emotional Intelligence (EQ)
Well-rounded
Easy to retain
Easy to develop/train
Highly productive
Very trustworthy
Extremely well-educated
Very loyal
Hard-working
Perceptions of Human Capital in Taiwan
Strongly Agree
Agree
Disagree
Strongly Disagree
Some additional comments from our business leaders…
“English skills lagging behind in Asia region.”
“Too many university students with high ambitions leading to lack of skilled workers. Taiwan focus is obviously making university degree easily
achievable, but at the cost of quality. Not every student is well advised to study and some would be great contributors with a more work focused
education.”
“The Taiwanese culture impedes individual thought and creativity. The hierarchical approach to relationships suppresses ideas and non-linear
approaches to the work. Although the Taiwanese are well educated, there is often a lack of ‘street smarts’. There is a tendency for ‘group think’ and
consensus rather than challenging the norm in a positive and productive manner.”
Merger & Acquisition (M&A) Activity
As economic indicators go, merger and acquisition activity has long been a sign of a maturing equity market and as a general indicator of economic activity. From our survey over the last 7 years, Taiwan appears to have a relatively low, but consistent level of M&A activity.
Merger & Acquisition (M&A) Activity
Over the past seven years, around 12% of our companies engaged in merger and acquisition (M&A) activity of a Taiwanese entity, each year.
This year, as in previous years, some tried and failed (3%), and some considered M&A but didn’t pursue it (19%). However, for the vast majority of business leaders (69%), M&A, understandably, simply isn’t on their radar, in any given year.
61%
23%
4%
7%5%
71%
17%
4% 4% 4%
71%
18%
2%5% 5%
72%
17%
3% 4% 3%
68%
21%
3%5%
3%
69%
20%
5%3% 4%
69%
19%
3%7%
2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Did not pursue or consider Considered, but didn'tpursue
Pursued, but not successful Pursued, and still in theprocess
Pursued and completeddeal
Did your entity pursue, or consider, a merger with or acquisition of a Taiwanese entity in the past 12 months?
2010 2011 2012 2013 2014 2015 2016
When it happens, there are sound business reasons for M&A
While only a few companies did attempt the M&A route in the past 12 months, their reasons for doing so, as in previous years, show sound business logic such as: To gain synergies (by reducing costs and improving profits), enlarge customer base, increase local market access; and to acquire capacity or technology . These, as they have been in past years, are the major drivers behind M&A.
0 2 4 6 8 10 12
To gain taxation advantages
To gain access to Mainland market
To improve IPO possibility
A defensive move to counter competitor(s)
To acquire key supplier(s)
To acquire key local brand(s)
To acquire business license in a restricted industry
To acquire management team
To acquire technology
To eliminate competition
To gain greater local market access
To enlarge customer base
To acquire capacity
Ability to gain synergies (reduce costs - improve profits)
Top Objectives of M&A during 2016
Primary Secondary Tertiary
Major challenges to M&A in 2016
Negotiating the valuation gap was the greatest challenge in 2016. Followed by finding an appropriate target, post-deal restructuring, and conducting due diligence.
We note that a lack of transparency, and inconsistency of interpretation, in government regulations, list prominently in the challenges to be overcome in mergers and acquisitions.
0 2 4 6 8 10 12 14
Negotiating the letter of intent
Obtaining permission for target to be sold
Inconsistent regulatory interpretations
Obtaining government approvals
Transparency of regulations
Language issues
Cultural issues
Financial issues
Conducting due diligence
Post-deal restructuring
Finding an appropriate target
Negotiation of valuation gap
Major Challenges of M&A During 2016
Major Challenge Second Third
One-in-five interested in M&A
On average over the past 4 years, 19% of businesses consistently claim they would “definitely” or “possibly” consider M&A in the next 12 months.
5%
13%
22%
24%
22%
14%
4%
15%
21%
27%
20%
13%
5%
14%
25%
23%23%
11%
5%
14%
28%
26%
17%
9%
7%
16%
22%
27%
17%
11%
5%
17%18%
28%
19%
13%
7%
22%
20%20%21%
11%
Definitely consider M&Aactivity in next 12
months
Possibly consider M&Aactivity in next 12
months
Unlikely to considerM&A in next 12 months
Definitely not considerM&A activity in next 12
months
Don't knowPrefer not to answer
Likelihood to consider M&A in the next 12 months
2017
2016
2015
2014
2013
2012
2011
What impacts their business?
Governmental Bureaucracy, China-Taiwan relations, Labor laws, inconsistent regulatory interpretation and Political turmoil, have topped the list of greatest negative impacts on our members’ businesses.
Which of the following impacts your operation in Taiwan? 2017 Ranking
Issue 2017 2016 2015 2014 2013 2012 2011
Governmental Bureaucracy 1 4 3 1 3 4 2
China-Taiwan government relations 2 12 11 16 13 7 8
Lack of clarity in labor laws 3 New in 2017
Inconsistent regulatory interpretation 4 2 1 2 2 2 3
Political turmoil in Taiwan 5 11 10 13 New in 2014
Inconsistent application of the Rule of Law 6 6 5 4 New in 2014
Inadequate/Out-dated laws 7 1 4 5 4 6 5
Ability to recruit appropriate new personnel 8 7 6 9 5 3 4
Differences between local and internationally accepted standards
9 8 7 7 New in 2014
Insufficient notice before changes to regulations or laws are introduced
10 5 8 6 6 New in 2013
Which of the following impacts your operation in Taiwan? 2017 Ranking - Continued
Issue 2017 2016 2015 2014 2013 2012 2011
Changes in local demand 11 3 2 3 1 1 1
Government reform/restructuring 12 17 17 17 10 New in 2013
Lack of transparency 13 10 9 8 9 10 10
Currency Exchange rate fluctuations 14 9 16 12 7 5 7
Domestic protectionism 16 16 15 11 12 12 12
Changes in employment expenses 17 13 13 10 8 8 9
Personal Taxation levels 18 18 18 18 18 22 6*
Intellectual Property Rights infringements 19 19 23 21 14 15 15
Government procurement procedures 20 25 28 26 27 26 25
Financial Industry reform 21 24 29 31 20 23 23
Which of the following impacts your operation in Taiwan? 2017 Ranking - Continued
Issue 2017 2016 2015 2014 2013 2012 2011
Ability of PRC personnel to travel to Taiwan 22 28 34 33 New in 2014
Import & Export procedures 23 New in 2017 Replaces "Customs & Trade regulations"
Changes in overseas demand 24 21 22 20 16 21 18
Import Duties 25 New in 2017 Replaces "Customs & Trade regulations"
Prohibitions or restrictions on foreign investment into Taiwan
26 New in 2017
Changes in Raw Material costs 27 31 31 32 24 25 26
Inadequate Infrastructure (Power, Water, Telecommunications, Transport, etc.)
28 23 30 29 26 27 21
Direct flights to/from Mainland 29 22 21 22 17 14 28
The Economic Cooperation Framework Agreement (ECFA)
30 26 24 30 28 18 14
Restrictions on imports from China 31 New in 2017
Which of the following impacts your operation in Taiwan? 2017 Ranking - Continued
Issue 2017 2016 2015 2014 2013 2012 2011
Corruption 32 29 19 24 19 17 22
Corporate Taxation levels 33 15 14 15 11 9 6*
Changes in Energy costs 34 27 25 19 New in 2014
EU - Taiwan government relations 35 34 33 35 29 28 27
Changes in Tariffs 36 30 26 27 21 20 24
Difficulties or uncertainties concerning foreign investment approvals (FIA)
37 New in 2017
Ability of PRC personnel to work in Taiwan 38 35 36 36 New in 2014
Ability to raise capital, locally 39 39 38 38 New in 2014
Illegal imports 40 36 35 34 30 29 29
Changes in Financing costs 41 33 32 28 23 24New in 2012
0 10 20 30 40 50 60 70
Insufficient notice before changes to regulations or laws areintroduced
Differences between local and Internationally accepted standards
Ability to recruit appropriate new personnel
Inadequate/outdated laws
Inconsistent application of the rule of law (i.e., well-established andclearly written rules, regulations, and legal principles)
Political turmoil in Taiwan
Inconsistent regulatory interpretation
Lack of clarity in labor laws
China - Taiwan government relations
Governmental bureaucracy
Top 10 Issues that impact their business and how much
Some Impact Significant impact Extreme impact
0 10 20 30 40 50 60 70
Government procurement procedures
Intellectual property rights infringements
Personal taxation levels
Changes in employment expenses
Domestic protectionism
Protection of local industries
Currency exchange rate fluctuations
Lack of transparency
Governmental reform/restructuring
Changes in local demand
Issues 11-20 that impact their business and how much
Some Impact Significant impact Extreme impact
0 10 20 30 40 50 60 70
The Economic Cooperation Framework Agreement (ECFA)
Inadequate infrastructure (Power, Water, Telecommunications,Transport, etc.)
Direct flights to/from China
Changes in raw material costs
Import Duties
Prohibitions or restrictions on foreign investment into Taiwan
Changes in overseas demand
Import & Export procedures
Ability of PRC personnel to travel to Taiwan
Financial industry reform
Issues 21-30 that impact their business and how much
Some Impact Significant impact Extreme impact
0 10 20 30 40 50 60 70
Illegal imports
Ability of PRC personnel to work in Taiwan
Ability to raise capital, locally
Difficulties or uncertainties concerning foreign investment approvals(FIA)
Changes in tariffs
EU - Taiwan government relations
Changes in energy costs
Corporate taxation levels
Corruption
Restrictions on imports from China
Issues 31-40 that impact their business and how much
Some Impact Significant impact Extreme impact
0 10 20 30 40 50 60 70
Access to private equity financing
Slow processing of PRC personnel work permits
Changes in transport costs
Exchange controls
Ability to secure credit, locally
Difficulty of finding appropriately zoned land at reasonable prices
Changes in financing costs
The remaining issues that impact their business
Some Impact Significant impact Extreme impact
“The introduction of the New Labor Standard Act. Insufficient notice is received before changes to the
regulations”
“MNCs perception of the business environment and macroeconomic outlook”
“Budget and Decision making driven by Asia HQ in PRC”
What impacts their business?Other Direct Quotations
“Extremely counter-productive labor regulations, including 'grade-school-type' of regulation of
overtime”
“High personal income tax, compared to other countries”
What impacts their business?Other Direct Quotations
“Recent labor laws concerning employee working times and overtime payment regulations are regressive and should be repealed. They might be suitable for hourly paid industries, but not for high-end service, management and consulting industries where work completion rather than hours of physical presence is important. It is a system that promotes the absence of personal responsibility and creates friction between employees and employers -- it creates a punch-card mentality. The regulations are regressive and not at all suitable for an economy that is trying to move away basic hourly paid work to high-end service sector economy.”
What impacts their business?Other Direct Quotations
When we view the issues that have made progress over the period 2008-2016 time horizon, some good strides were made – especially in connection with China. Unfortunately, there has recently been a major reversal in the progress of government relations between China and Taiwan.
In the following lists, those items in green have shown progress and all other issues have either regressed or stagnated.
Progress and the lack of it on Key Issues
Areas which regressed, or had little progress, in the past 3 years. Worst to Best ranking
Issue2014-2016
2013-2015
2012-2014
2011-2013
2010-2012
2009-2011
2008-2010
China-Taiwan Government Relations 1 38 37 38 28 28 27
Clarity in labor laws 2
Political turmoil in Taiwan 3 1 1 1
Reducing Personal Taxation levels (*combined with Corporate in 2010)
4 2 2 15 11 9 26*
Reducing Governmental Bureaucracy 5 8 5 6 4 11 11
Changes in Employment expenses 6 10 8 4 5 1 2
Changes in Local Demand 7 3 16 3 3 20 20
Continuing The Economic Cooperation Framework Agreement (ECFA)
8 24 30 27 27 27 28
Governmental reform/restructuring 9 4 15 11 15 19 18
Inconsistent application of the Rule of Law (i.e., well-established and clearly written rules, regulations, and legal
principles)10 6 7 9
Areas which regressed, or had little progress, in the past 3 years. Worst to Best ranking
Issue2014-2016
2013-2015
2012-2014
2011-2013
2010-2012
2009-2011
2008-2010
Reducing domestic protectionism 11 11 3 10 6 3 7
Changes in Overseas Demand 12 13 26 19 12 16 24
Finding appropriately zoned land at reasonable prices 13
Reducing protection of local industries 14
Simplifying government procurement procedures 15 14 6 16 9 7 9
Reducing inadequate/Out-dated laws 16 12 11 12 14 9 5
Consistency in regulatory interpretations 17 7 10 7 2 2 1
Changes in Energy costs 18 27 4 2
Reducing Corporate Taxation levels 19 25 14 32 21 26 26*
Financial Industry Reform 20 28 28 21 13 13 13
Issue 2014-2016
2013-2015
2012-2014
2011-2013
2010-2012
2009-2011
2008-2010
Currency Exchange rate fluctuations 21 29 32 24 17 14 14
Changes in Raw Material costs 22 26 9 14 7 4 4
Lessening restrictions on imports from China 23
Changes in Transport costs 24 21 20 13 8 6 12
Changes in Tariffs 25 18 18 31 19 18 16
Changes in Financing costs 26 15 21 20 10 8 8
Ability of PRC personnel to work in Taiwan 27 35 34 35
Processing of PRC personnel work permits 28 34
Ability to Recruit Appropriate New Personnel 29 5 13 5 1 5 3
Lessening prohibitions or restrictions on foreign investment into Taiwan
30
Areas which regressed, or had little progress, in the past 3 years. Worst to Best ranking
Issue 2014-2016
2013-2015
2012-2014
2011-2013
2010-2012
2009-2011
2008-2010
Reducing Differences between local and Internationally accepted standards
31 23 27 28
Access to Private Equity financing 32 22 17 25
Improving Transparency 33 17 24 18 18 15 15
Improving Customs and Trade regulations 34 20 25 26 22 17 17
Ability to raise capital, locally 35 30 19 22
Ability to secure credit, locally 36 19 29 23
Loosening Exchange Controls 37
Infrastructure (Power, Water, Telecommunications, Transport, etc.)
38 32 36 29 23 25 22
EU - Taiwan government relations 39 33 31 30 24 23 25
Sufficiency of notice before changes to regulations or laws are introduced
40 9 12 8
Areas which regressed, or had little progress, in the past 3 years. Worst to Best ranking
Issue 2014-2016
2013-2015
2012-2014
2011-2013
2010-2012
2009-2011
2008-2010
Reducing Corruption 41 31 22 17 20 24 19
Ability of PRC personnel to travel to Taiwan 42 39 38 37
Reducing Illegal imports 43 16 23 27 16 12 10
Reducing Intellectual Property rights infringements 44 36 33 33 25 22 23
Increasing Direct flights to/from the Mainland (Consistently, for the past 7 years, the most progressive issue)
45 40 39 39 29 29 29
USA - Taiwan government relationsNot
asked37 35 34 26 21 21
Areas which regressed, or had little progress, in the past 3 years.
Worst to Best ranking
The major risks confronting business
A downturn or slowdown in Taiwan’s domestic consumption is of greatest concern for our business leaders. In a similar vein, the potential for a slowdown in the global economy is also a fear.
Concerns about government interference and the future of China-Taiwan relations, lead the other major worries confronting business, in 2017.
0% 10% 20% 30% 40% 50% 60% 70%
Increased imports
Other
Taiwan unemployment rising
Cyber security risks to your enterprise
Enactment of TPP without Taiwan as a member
Decreased exports
Instability in the South China Sea
Taiwan dollar (TWD) appreciation
Energy shortage in Taiwan
Economic slowdown in Europe
Taiwan Inflation rising
Taiwan dollar (TWD) depreciation
Economic slowdown in China
Increased domestic political unrest
Economic slowdown in the USA
Lack of human resources
Change or uncertainty in Taiwan's policy towards China
Change or uncertainty in China's policy towards Taiwan
Increased governmental interference
Global economic slowdown
Economic slowdown in Taiwan's domestic consumption
The major risks facing their entity in coming years
Top 10 things Taiwan Government Could do to Help
Issue 2017 2016 2015 2014 2013 2012 2011
Consistent application of the Rule of Law 1 8 7 4
Reduce Political Turmoil in Taiwan 2 2 1 1
Provide sufficient notice before changes to regulations or laws are introduced.
3 6 8 8
Remove differences between local & internationally accepted standards
4 7 4 5
Simplify Government Bureaucracy 5 1 2 2 1 1 1
Resolve Inadequate/Out-dated laws 6 3 3 7
Reduce Personal Taxation 7 4 5 6 3 3 2
Devise plan to stimulate local demand 8 5 6 3
Clarify labor laws 9 New in 2017
Improve Government procurement procedures 10 19 22
More things Taiwan Government Could do to Help (Ranked)
Issue 2017 2016 2015 2014 2013 2012 2011
Improve Research & Development incentives 11 9 15
Educate civil servants on international regulatory best-practices
12 11 27
Increase Direct Foreign Investment incentives 13 12 14
Tighten enforcement of Intellectual Property rights 14 20 23
Provide adequate transition or grace period when implementing new laws and regulations
15 25
Ratify the China-Taiwan Service Trade Pact (CSSTA) 16 26
Negotiate and sign more bilateral trade deals with other (non-US) countries
17 14 18
Reduce domestic protectionism 18 10 9 11
Reduce Employment expenses 19 28 11 24
Liberalize the Labour market 20 16 13 23 5 5 10
Even more things Taiwan Government Could do to Help
Issue 2017 2016 2015 2014 2013 2012 2011
Reduce Corruption 21 24 16
Remove or loosen prohibitions or restrictions on foreign investment into Taiwan
22
Improve Inadequate Infrastructure (Power, Water, Telecommunications, Transport, etc.)
23 17 25
Devise plan to stimulate Overseas Demand (e.g. exports, tourism)
24 15 30
Implement Financial Industry Reform 25 13 26
Broaden ECFA 26 22 10 9 10 7 7
Introduce stronger corporate governance 27
Not in top 30 in prior yearsMaintain reasonable and stable energy costs 28
Allow PRC personnel to travel to Taiwan 29
Loosen restrictions on imports from China 30
How else could Taiwan government help?Additional suggestions
“…improving government procedures, selling off all government owned company shares and eliminating
direct and indirect subsidies to them, open labor imports and eliminate the broker system”.
How is President Tsai’s government performing so far?
For the first time, we asked for feedback on the new Tsai government. We expressly asked about her five priority areas and how clearly this has been communicated to our business community, the progress the government is making, and how relevant these five areas are to them. Given that we launched the survey only 5 months after the government commenced power and we concluded it 7 months into their term - it is still early days.
-37
-22-18
-33 -32
-100
-80
-60
-40
-20
0
20
40
Has President Tsai’s Government…Clearly communicated what this involves?
(Those saying President has, minus those saying the President has not)
Transforming the nation's economic structure Improving the social safety net
Social fairness and justice Regional peace and stability and cross-strait relations
Addressing the diplomatic and global challenges Taiwan faces
-74
-52
-38
-82
-73
-100
-80
-60
-40
-20
0
20
40
Is President Tsai’s Government…Making Good Progress?
(Those saying President has, minus those saying not making progress, or too slow)
Transforming the nation's economic structure Improving the social safety net
Social fairness and justice Regional peace and stability and cross-strait relations
Addressing the diplomatic and global challenges Taiwan faces
33
4
-20
84
-100
-80
-60
-40
-20
0
20
40
How do President Tsai’s five priority areas…Directly impact my business
(Does directly impact my business minus those who say it doesn’t)
Transforming the nation's economic structure Improving the social safety net
Social fairness and justice Regional peace and stability and cross-strait relations
Addressing the diplomatic and global challenges Taiwan faces
“Regional peace and transformation of nation’s
economic structure: the ‘what’ has been
addressed, the ‘how’ is mostly missing”
“[President]Tsai has not had much time to talk
about Taiwan's position because it appears she is
trying to avoid the appearance of saying what Beijing is trying to insist she
says. I think she's doing about as well as she could
be doing for now.”
Other comments
“Five core Industries”
The Tsai government has outlined “five core industries” that they wish to focus on and promote. We asked how relevant to their businesses these were.Overall, the Internet of Things (IoT) and biotechnology were the areas of greatest relevance to the companies responding.
-120
-100
-80
-60
-40
-20
0
20
40
60
80
Ne
t R
elev
ance
The Tsai government outlined "five core industries“How relevant to your business are these?
(Relevant minus irrelevant)
The Internet of Things (IoT) Smart machinery New Energy Biotechnology Defense
Local Government: The six special municipalities
We asked about the interaction and impact the six special municipalities of Kaohsiung, New Taipei, Taichung, Tainan, Taipei & Taoyuan, and specifically, if they directly impacted their businesses. More than a quarter of businesses (27%) claimed that they did.
Yes27%
No52%
Don't know/Can't say21%
In addition to the national government, is your organization directly and significantly impacted by any, or
all, of the 6 special municipalities?
Impact of the 6 special municipalities
When asked which one(s) impacted their businesses, of those who indicated that they were directly and significantly impacted, almost one in three claimed “All six” and unsurprisingly, Taipei municipality received the most mentions.
12%
16%
18%
18%
24%
53%
31%
0% 10% 20% 30% 40% 50% 60%
Tainan
New Taipei
Kaohsiung
Taoyuan
Taichung
Taipei
All six
% OF THOSE WHO SAID THEY WERE DIRECTLY AND SIGNIFICANTLY IMPACTED NB MULTIPLE RESPONSES
The special municipal governments that directly and significantly impact their business
6 negatives associated with the 6 special municipalities
1. Their interpretation of National rules and regulations is NOT clear and consistent
2. Municipal rules exist which are either contradictory to National laws or, exist in areas where no National rules exist
3. They DON’T facilitate and assist my business in their area.
6 negatives associated with the 6 special municipalities
4. Municipal officials appear to be encouraged by their leaders to raise revenue by fining/penalising companies.
5. Municipal officers appear to intentionally avoid consultation with National officials in order to generate fines for their area.
6. They DON’T treat foreign companies fairly and the same as Taiwanese companies.
Only one ‘positive’ statement was mentioned and that is that “They encourage investment in their area.”
-0.70 -0.50 -0.30 -0.10 0.10 0.30 0.50 0.70
Their interpretation of National rules and regulations is clear andconsistent
They facilitate and assist my business in their area
They treat foreign companies fairly and the same as Taiwanesecompanies
Municipal officers appear to intentionally avoid consultation withNational officials in order to generate fines for their area
Municipal officials appear to be encouraged by their leaders to raiserevenue by fining/penalising companies
Municipal rules exist which are either contradictory to National lawsor, exist in areas where no National rules exist
They encourage investment in their area
WEIGHTED AVERAGE AGREEMENT/DISAGREEMENT
Do you agree or disagree with the following statements about the six special municipal governments?
“On municipal level, the interpretation of national laws or regulations requires communication and alignment
between national and municipal offices. Achieving this alignment requires support by Taiwan government
agencies (such as InvestTaiwan), however, we did not encounter an unwillingness on the municipal side. More a
kind of hesitation and avoidance of personal risk of the involved municipal bureaucrats, which requires building "bridges". We could obtain alignment, but it took time, however, we never had the feeling of unwillingness or
looking to place traps to fine our company.”
Direct quotation regarding the 6 special municipalities
“We were surprised to find out that American and other foreign clients were being penalized for not granting national holidays that have not normally been taken by companies for many years now. One client was fined for 5 years of not granting holidays
for "Retrocession Day," "Chiang Kai Shek's Birthday," "Constitution Day," etc. -- holidays that were not
normally given as days off ever since the government itself moved from a 6-day work week to a 5-day work
week.”
Direct quotation regarding the 6 special municipalities
Main things USA Government Could do to Help our Businesses (Ranked)
Issue 2017 2016 2015 2014
Continue to liaise with Taiwan on USA experience regarding regulatory coherence 1 4
Support Taiwan's admission into the TPP 2 1
Assist Taiwan to prepare for accession to TPP 3 2 1
Help establish cooperative exchanges between US and Taiwan regulatory agencies 4 5
Send more senior US Government officials to visit Taiwan 5 7 4 5
Negotiate and sign a Bilateral Investment Agreement with Taiwan 6 3 2 1
Reduce Personal Taxation 7 6 6 4
Reduce Corporate Taxation 8 9 5 3
Ensure that regular meetings are held with Taiwan under the TIFA process 9 8
Repeal or re-evaluate the Foreign Account Tax Compliance Act (FACTA) 10 10 7
Negotiate and sign a bilateral tax agreement with Taiwan 11
Resolve Agricultural disputes with Taiwan 12 11 9
Negotiate and finalize an Extradition Treaty with Taiwan 13 12 8 6
The American Institute in Taiwan (AIT), provides commercial services and agricultural sales for American interests.
For the first time, we decided to find out how many of the surveyed companies had ever used AIT services to assist their business. The majority had not; even those whose corporate HQ is in the USA.
The American Institute in Taiwan
Yes19%
No62%
Don't know/Can't say19%
Has your organisation ever used AIT’s services
Yes24%
No59%
Don't know/Can't
say17%
Only those with a U.S. Corporate HQ
Yes13%
No67%
Don't know/Can't
say20%
Only those Non-U.S. Corporate HQ
“Canada has an excellent trade promotion group in Taiwan. AIT seems too bureaucratic and not aggressive.
There is too much consideration of US-China policies. The few times we have contacted AIT in recent years have not resulted in any support unlike the days when David Dean,
Jim Lily, Charles Cross strongly supported American businesses here. Many of the others seemed more
concerned with not letting Taiwan issues cloud US-China relations. I have high hopes that James Morriarty will
make significant contribution due to his vast experience in Washington, Beijing and Taiwan.”
Direct quotations regarding the AIT
“Frequent change in personnel with inadequate handover requires ongoing education by industry with
regard to advocacy needs.”
Direct quotations regarding the AIT
Trans Pacific Partnership (TPP)
The TPP is a free-trade agreement recently negotiated by 12 nations (USA, Australia, New Zealand, Japan, Singapore, Malaysia, Brunei, Vietnam, Chile, Canada, Mexico and Peru). The aims of TPP are to eliminate, or at least substantially reduce, barriers to trade and investment and to create 'gold standards' to deal with economic issues such as intellectual property.
Trans Pacific Partnership (TPP)
Trans Pacific Partnership (TPP)
Our survey covered the period October through to December, i.e., prior to and after the U.S. elections. The TPP was still a possibility when some of our respondents completed the survey. It became progressively less likely after early November 2016 and the USA formally withdrew in January 2017. The drop in “Should pursue” scores this year probably reflects the likelihood of a U.S. withdrawal/demise of the whole agreement.
Trans Pacific Partnership (TPP)
Don’t know, 15% Don’t know, 14%Don’t know, 11%
Don’t know, 23%No, 2%
No, 3% No, 2%
No, 9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015 2016 2017
Should Taiwan pursue membership of the TPP?
TPP: Additional comments
“Stop being cowed by the pork industry. Taiwan's superb pork quality can easily compete with US duty
free imports.”
“TPP is a nice to have - it will not drive Taiwan’s growth by itself.”
TPP: Additional comments
“Taiwan has already lost most of its competitive advantage; it cannot afford to have its products made more expensive compared to competitors by failing to
accede to TPP.”
“Potentially provides a counter-balance to China's influence, will have a positive impact on trade.”
TPP: Additional comments
“Pointless, now.”
“It won't happen. TPP is dead.”
“However, I doubt TPP will happen even for phase 1 countries.”
Yes72%
No5%
Don't know/Can't say
23%
Should the USA government support Taiwan’s accession into the TPP?
“Taiwan is an important trading partner and military ally, and it is important that Taiwan not be left out of TPP, which provides a framework that gives countries in Asia an alternative to economic dependency upon
China.”
“USA should support Taiwan more on everything.”
Additional Comments on U.S. Support for Taiwan’s accession into the TPP
“Not until Taiwan makes substantial legal/regulatory changes.”
“But now too late.”
Additional Comments on U.S. Support for Taiwan’s accession into the TPP
“Short-term, would prefer if Taiwan got into RCEP as don't believe TPP will happen.”
“Under the one-China policy, USA should defer to Beijing.”
Additional Comments on U.S. Support for Taiwan’s accession into the TPP
China-Taiwan Cross-Strait Services Trade Agreement (CSSTA)
In June 2013 China and Taiwan signed a services trade agreement (although, this has still to be ratified into law), with the intent to open areas such as financial services, retail and travel, to greater levels of cross-strait investment. We asked our business leaders if they felt that the Taiwanese legislature should ratify this agreement. Most thought that it should.
Yes54%
No8%
Don't know38%
Should the Taiwan Legislature ratify the CSSTA?
“The anti-CSSTA [movement] tells other potential investors that Taiwanese people fear doing business
with China/foreigners.”
“This is probably more important for Taiwan in the short-term than the TPP”
Unprompted comments on the question: Should the Legislature ratify the CSSTA?
“Business exchange between PRC and ROC is already reality, so removing hurdles would open up
opportunities on both sides.”
“Taiwanese businesses need it.”
Unprompted comments on the question: Should the Legislature ratify the CSSTA?
“This is not in Taiwan's best interest.”
“The Taiwanese people don't want it, it is flawed and gives too much over to China.”
Unprompted comments on the question: Should the Legislature ratify the CSSTA?
“CSSTA would be economically beneficial to Taiwan, but national security should trump economics. While I personally believe integration with China would be a
net positive for the Taiwanese people, it would be foolish and irresponsible for the government to make such blatant moves in this direction unless the people
support the ultimate outcome.”
Unprompted comments on the question: Should the Legislature ratify the CSSTA?
The resumption of Trade and Investment Framework Agreement (TIFA) talks in 2013, after a more than five-year break, was a welcome relief. Better still they have been maintained since that time.
We asked what impact these high-level annual talks had on their business and on Taiwan. They are perceived to positively impact the country, more so than their businesses.
TIFA: Business leaders glad to see talks
0%
5%
10%
15%
20%
25%
30%
35%
40%
Don't know/Can't say No Impact Some Impact Significant Impact Extreme Impact
What is the impact of the TIFA process on your business, and on Taiwan?
Effect on my business Effect on Taiwan
The lack of a Bilateral Investment Agreement (BIA) with the USA…
A BIA which would be designed to protect private investment and develop market-oriented policies between the USA and Taiwan. The impact of not having one on their business and on Taiwan was the question we sought to answer this year.
21%
38%
30%
7%
4%
28%
9%
27% 27%
9%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Don't know/Can't say No Impact Some Impact Significant Impact Extreme Impact
What impact does the lack of a Bilateral Investment Agreement (BIA) have?
Effect on my Business Effect on Taiwan
*Whilst we use the term “Taiwan” it should be remembered that most of our leaders live in the Taipei area and many of their comments will reflect “living in Taipei”.
And finally…”The Living is Nice, Easy, & Safe”
When asked about the quality of life in Taiwan*, corporate leaders strongly agree that Taiwan is a place where: “Taiwanese people are extremely nice”; “My family feels safe”; and Understandably, there was no significant change in the rankings in this year’s survey.
The Top Benefits of Living in Taiwan (Ranked)
Benefits 2017 2016 2015 2014 2013 2012 2011
My family feels safe in Taiwan 1 3 2 2 2 2 1
Taiwan is an easy country to live in 2 1 3 3 3 4 3
Taiwanese people are extremely nice 3 2 1 1 1 1 2
Taiwan provides quality Health/Medical/Dental services 4 4 4 4 4 3 4
Taiwan provides adequate shopping opportunities 5 7 7 6 6 7 7
Mobile telephone coverage is excellent 6 6 8 8 9 9 8
Alternative transportation options are usable and provide options to driving my car (i.e., buses, bike lanes, taxis, trains,
sidewalks).7 5 5 5 7 6 5
The Top Benefits of Living in Taiwan (Ranked)
Benefits 2017 2016 2015 2014 2013 2012 2011
Internet connectivity is excellent 8 10 11 17 14 8 9
Taiwan delivers reliable electricity 9 8 6 7 5 5 6
Recycling and trash services meet needs 10
Not in top benefits last year
Taiwan's neighborhoods, parks and thoroughfares are clean 11
Taiwan provides quality parks and trails 12 9 12 10 12 12 11
The Postal service is excellent 13 11 9 9 8 10 10
Living in Taiwan…The not so great things.
We asked if people agreed or disagreed with the statement ”Where there is no traffic lights, pedestrian (Zebra) crossings are a safe place to cross the road.”There was the most strongly negative response we have seen in seven years.This public safety issue is something that local governments/policing should address as a priority.
Living in Taiwan…The not so great things.
We asked (for the first time) if Taiwan’s air quality was good. Unfortunately, there was a negative response to this question as well, ranking it the third least desirable aspect of living in Taiwan.
As we have seen over past years:
– Taiwan is not such an English-friendly environment
– Banking and other financial services are seen as far from excellent.
The Least Appreciated Aspects of Living in Taiwan (Ranked worst first)
Concerns 2017 2016 2015 2014 2013 2012 2011
Where there are no traffic lights, pedestrian (Zebra) crossings are a safe place to cross the road
1 New in 2017 – Most negative response in 7 years.
Taiwan provides an 'English-friendly' environment for me and my family
2 1 2 1 1 1New in 2012
Taiwan's air quality is good 3 New in 2017
Banking and other financial services are excellent 4 2 3 3 4 6 4
Taiwan provides quality drinking water. 5 5 4 2 3 3 3
Water runoff from storms is controlled and minimizes flooding 6 4 7 5 2 2 1
The standard of schooling is excellent 7 7 6 8 9 10 8
The Least Appreciated Aspects of Living in Taiwan (Ranked worst first)
Concerns 2017 2016 2015 2014 2013 2012 2011
Taiwan government is approving development that enhances the quality of life in our community
8 8 13 11 10 12 17
Taiwan provides quality youth activities 9 9 8 6 6 4 2
The library services provided to our community are current and meet our needs
10 6 5 4 7 5 4
Taiwan provides safe food 11 3 1 New in 2015
Taiwan provides quality Police services 12 12 9 13 8 9 6
There are plentiful opportunities to enjoy the arts 13 10 11 12 14 12 15
Street surfaces are drivable and safe 14
The sewer system in Taiwan works reliably 15 11 10 7 5 8 7
141
Section 3:About the sample
Who, When, and How.
The survey was addressed, via email, to the 412 voting representatives – usually the CEO – among AmChamTaipei’s Corporate Sustaining and Company membership. The survey invitation was sent out on October 11, 2016, and the last response was accepted on December 21, 2016.The 40-question survey was conducted online with each respondent receiving a unique link. Certain question choices were randomized - to avoid bias.The survey received a total of 173 responses, representing a 42% response rate.
Industry Classifications
Our respondents identified their industry classification based upon the one which best described their principal business in Taiwan.
We have reclassified our sample according to the STANDARD INDUSTRIAL CLASSIFICATION SYSTEM OF THE REPUBLIC OF CHINA (Rev.10, 2016) and used the STATISTICAL YEARBOOK OF THE REPUBLIC OF CHINA 2015, Issued in October 2016, for the number of businesses.
Our sample draws from all of the major industrial classifications in Taiwan but is skewed towards the “Goods-producing” industries.
Sector Total Taiwan Our Sample
Agriculture, forestry, fishing & animal husbandry 0.9% 0.6%
Goods-producing industries 19.5% 35.3%
Services-providing industries 79.6% 64.2%
“Goods-producing” industries include: Mining & quarrying, Manufacturing, Electricity & gas supply, Water supply & remediation activities, and Construction.
Services-providing industries include: Wholesale & retail trade, Accommodation & food service activities, Transportation & storage, Information & communication, Financial & insurance activities, Real estate activities, Professional, scientific & technical activities, Support service activities, Public administration & defence; compulsory social security, Education, Human health & social work activities, Arts, entertainment & recreation, and ‘Others’.
Industry Classifications (Cont’d.)
Industry Classifications (Cont’d.)
Our sample is also more skewed towards ‘Manufacturing’, ‘Professional Scientific/Technical services’, and the ‘Finance and Insurances’, industries.
It is under-weighted in the ‘Wholesale and Retail Trade’ industry. The Wholesale and Retail trade account for some 650,000 of all the businesses registered in Taiwan; representing over 49% of all business numbers and many employ few people and have little turnover.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
2017 Sample vs. Total Taiwan
Sample Taiwan
Breakdown of Industry Classifications
Our sample is more heavily skewed towards the Medical Devices, Management Consulting, Chemical and Pharmaceutical industries.
NGO
Securities, Mutual Funds, Asset Management
Semiconductor and Other Electronic Component Manufacturing
Arts, Entertainment, and Recreation
Automotive
Education and Training
Risk Management
Accounting Services
Foods and/or Non-Alcoholic Beverages
Media
Retail Trade
Sourcing and Procurement
Health Care Services
Consumer Packaged Goods
Engineering and Technical Services
Insurance
Travel and Leisure
Banking Services
Finance
Human Resource Consulting
Legal Services
Chemicals
Pharmaceuticals
Management Consulting Services
Medical Devices
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0%
Industries in our 2017 Sample
Accommodation and Food Services
Agriculture, Forestry and Fishing
Alcoholic Beverages
Communications Equipment Manufacturing
Component Manufacturing - General
Construction
Information Technology
Lobbying Services
Management of Companies and Enterprises
Navigational, Measuring, Electro-medical, and Control instruments…
Real Estate and Rental and Leasing
Telecommunication Services
Testing, Inspection, Certification Services
Transportation and Warehousing
Waste Management and Remediation Services
Wholesale Trade
Aerospace
Computer Software Programming Services
Conglomerate
Defense
Energy
Logistics and Distribution
Manufacturing - General
Market Research Services
NGO
0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4%
Industries in our 2017 Sample (continued)
Type of legal entity
Three out of four (74.5%) of businesses in this sample are either a Branch office, a Subsidiary, or a Taiwan-incorporated company.
1.2%
1.2%
1.7%
2.3%
5.2%
5.2%
8.7%
21.4%
21.4%
31.8%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%
NGO
Not for Profit
Representative Office
Other
Partnership
Joint Venture
Independent agent
Taiwan incorporated company
Subsidiary
Branch office
2017 Sample Profile by Legal Entity
Time in Taiwan
In terms of the time that there has been a physical presence in Taiwan, our sample is split roughly into four ‘ages’:
– 28% are relatively new to Taiwan with less than 15 years here
– 24% have been established between 16-25 years
– 21% have been established for 26-35 years
– And those who are well-established (more than 35 years) at 27%.
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
Length of Physical Business Presence in Taiwan
Number of Full Time Equivalent Employees (FTEE)
Our 2017 sample covers a wide spectrum of employers - from the very small to the very large. However, our sample generally represents larger employers than found in the Taiwan business population. For example:
– 10% of our sample employ 5 or less FTEE. This compares to 79% of all Taiwanese business entities who are micro employers.
– more than 97% of Taiwanese employees are employed by SME’s versus our sample of only 55%.
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Number of FTEE
Statistical Testing for Significance
When comparing the results against previous years surveys we performed a Chi-square test for the comparison of two proportions (from the two independent samples), expressed as a percentage. Note that for this Chi-square test, Yates' correction for continuity is applied and that P-values are two-sided (or two-tailed). When the calculated P value is less than 0.05, the conclusion is that the two proportions are significantly different. Throughout the results, we have highlighted the difference between the two proportions (at the 95% confidence level) via our commentary when we have detected a significant change.
For more details, please contact…
Gordon Stewart, Managing Director,
Independent Marketing & Research Limited via: [email protected]