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.