Digitalisation Taiwan: Trapped between low cost and high tech

Author / Editor: Frank Jablonski / Frank Jablonski

In economically tough times of pricing pressure and competition, companies and associations in Taiwan are responding with investment in quality and digitalisation. In this phase, the voters are putting a spanner into the works with a political change of course.

Machine builders from Taiwan are networked via their association Tami and the foreign trade organisation Taitra and present at trade fairs.
Machine builders from Taiwan are networked via their association Tami and the foreign trade organisation Taitra and present at trade fairs.
(Photo: Jablonski)

Taiwan is becoming feminine. And according to the barometer of public opinion, as expressed by a taxi driver during the journey from airport to the inner city of Taipei, that is good too: “A woman as president? It’s good, it’s good!”, sounded enthusiastic from the driver’s seat. Taiwan had voted the previous day and elevated Tsai Ing-Wen of the large opposition party to the presidential chair with more than 58 % of votes – which shall be occupied by a woman for the first time in history.

The historic election took place at the time of economic stagnation and increasing frustration during many elections over the overdue economic success. The formerly ruling Kuomintang had viewed its economic (and also political) salvation in a growing number of trade agreements with Mainland China.

But, the promises do not seem to be fulfilled to any extent, neither in case of the growth rates nor simple voting populace. Many citizens furthermore perceived the simultaneous approach of conservative previous government to China as too close. Yet others see the latest election result anxiously and fear an increase in tensions.

Anxiety in Taiwan due to tensions with People's Republic of China

A brief view in the history shall help in understanding these anxieties better: Taiwan considers PR China as a rebellious province, whereas Republic of China views the Island of Taiwan, which is its official name, as a sovereign state. The Island of Taiwan, which was a Japanese colony for a long time, did not belong to the territory of Republic of China till 1945 and served as a retreat area for the authorities of Republic of China at the times of famous leader Chiang Kai-shek. While Taiwan is under its own rule until now, Beijing is striving for an association.

In the days after election, a lot has been speculated about the future interaction of both in Taiwanese Media. However, there are indications that the political status quo shall be maintained even under the new government. The economic relationships and advantages of team work on both sides are too close.

Estimates assume the investment sums of Taiwanese companies in China to be way over 100 billion dollars and conversely the mainland Chinese shall buy billions of computers, electronics, bicycles and machines. With China, the Taiwanese machine builders have their most important market directly at their doorstep.

Despite the absence of possible tensions with China, the economy on the small island is currently not doing well. As C. C. Wang, President of Taiwan Association of Machinery Industry (Tami), explains, on one hand it depends on the changing market requirements and on the other on the external conditions such as the unfavourable rate of exchange to Yen for Taiwan.