mm •Taiwan in focus WHAT'S NewS Nummer 4 August 1995 banker on the spot 3 There was a time when a 'Made in Taiwan' sticker guaranteed a cheap, mass-produced product. But times have changed and the Taiwanese are moving with them. High-tech is the keyword today, but the island economy still continues to grow at around 6.5 percent per year. We ask Paul Cheng how he plans to position the bank in this challenging market. You have been working the Taiwanese market from Hong Kong for some years now. Why choose this moment to open an office? The timing is no more than common sense. I've heen com- muting back and forth for a long time, building up a num- ber of contacts, primarily food wid agri-companies, and put ting together an extensive prospect list. At some point, a decision has to be made on where you should be located. Is F&A a large sector in Taiwan? It has been. Growing is dimin- ishing rapidly so they are obliged to source raw materials elsewhere. The Taiwanese have established a very strong domestic food processing sec tor and they rely on imports to feed it. On the other hand, it is not easy for foreign companies to get a foothold here. I think until this country enters GATT and the WTO, it will remain a ^ery protected market. Who are the major partners? Traditionally the US, but in- creasingly Australia. This is re- latively new. For many decades, Taiwan was fairly isolated. For all kinds of political reasons I won't go into here. But histori- cally, the US was the most dominant trading partner. That is changing rapidly and the market is opening up. Just to give you one example. Until not too long ago, US insurers were the only foreigners allow- ed to operate here - no one else. Recently, the first UK company has moved in. That is really a breakthrough. What about other sectors? The Taiwanese are definitely on a high-tech track. They are looking to become a technol- ogical centre of excellence in the region and for clean indus tries. This economy has been booming for so long, that this is a fairly logical development. A lot of traditional manufacture, including high-tech, has already been relocated to Taiwanese- financed facilities in neighbour- ing low-wage countries. And there is a lot of trade and cap- ital flowing in and out of here. And you'd like to finance the trade? Of course, but to do that we'd need to be a branch because these are essentially domestic transactions. The licence we have means that if we do deals with domestic companies, we'd be liable for a 20-percent with- holding tax. So we'11 be depending heavily on working with the network here in the region, but also in the US, to provide creative products. Will positioning the bank be uphill work? No, not really. The great ad- vantage is that the Taiwanese know the Dutch well. The Dutch government's attitude to Taiwan has been friendly all along. You may not know this, but until very recently the only direct flights between Taipei and Europe went to Amster dam. That means anyone travelling to Europe would also land at Schiphol airport. So people here tend to have a very positive perception of the Dutch. That helps. And you're even more welcome when you happen to be a Dutch bank HB STANDPLAATS TAIPEI De Taiwanese economie kent een gezonde groei. Bij de ex port is het accent de laatste jaren verschoven van landbouwproduk- ten en industriële massaproduktie naar meer geavanceerde techno logie. Er is sprake van flinke con currentie tussen een groot aantal banken. In dit klimaat van dynami sche groei en intensivering van de handel in consumptieprodukten opende in juli een nieuwe vesti ging haar deuren. Manager Paul Chen licht het pionierswerk van RabobankTaipei toe. FACT FILE - TAIWAN Population 21 min Land surface 36,000 km2 Labourforce 9.2 min Unemployment 1.7% GDP (per capita) 13,055 Real growth GDP 6.8% Inflation 4.2% Exports 106,350 Imports -91,200 Source: Economist Intelligence Unit,figures in US$ and percen tages are estimates for 1995. armed with a huge capital base and Triple-A rating. Have you seen signs of this 'special relationship'? Well, I think the fact that the governor of the Taiwanese Central Bank (photo) was here to open the office is fairly sig nificant. This is a very over- banked market and he definit ely doesn't go to all openings. We're actually being launched with quite a splash. How overbanked? There's a lot of coming and going here. In that sense, it is very different from Hong Kong where you rarely see banks leaving, they may skip town, but they don't close up shop. In Taiwan, Canadian banks are moving in at the moment and the Japanese, of course. A lot of newcomers are opting to huy out an existing bank - ABN Amro bought Continen tal Bank, ING acquired Lloyds. It's a definite trend and, clearly, not having to start from scratch, but having an existing portfolio that gen- erates turnover from day one is an attractive proposition. The question is always whether you can hang on to a portfolio - that's a very different issue. Your issues are very different? Yes. In the past our approach to this market was rather op- portunistic. If we saw a deal, f we went for it. But that's not really our style. It may take a 1 while for us to go into a mar- ket, but once we're in, we're |Éfl£ i there to stay.

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