Looking South Episode #37 – Ties with Vietnam

In this week’s episode of Looking South, Eric Gau speaks with Harrison Liu, chairman of Vietnam Manufacturing and Export Processing Limited, to talk about economic ties between Taiwan and Vietnam under the New Southbound Policy.

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Transcript:

Eric Gau: Good morning everyone, and welcome to this latest installment of Looking South, exclusively on ICRT. I’m Eric Gau, and joining me on the air today is Vietnam Manufacturing and Export Processing Limited Chairman, Harrison Liu, to talk about economic ties between Taiwan and Vietnam under the Tsai administration’s New Southbound Policy. Chairman Liu, welcome to the show.

Harrison Liu: Hi Eric, good morning to everyone.

Eric: Mr. Liu, to start us off, what is the importance of Vietnam as a foreign market for Taiwan?

Harrison: I think the first point is that Vietnam is a very ideal investment destination. Labor costs and land costs are comparatively cheap. And they have pretty complete infrastructure and stable political and social systems and quite complete supply chain clusters. Vietnam has already become the biggest investment destination of Taiwanese in ASEAN countries. Second, Vietnam is a good gateway for Taiwanese investors to enter ASEAN countries and markets, and to expand their business. ASEAN has more than 625 million people with 2.6 trillion GDP. And the third one is, Vietnam is a market with great potential. They have nearly 100 million population with a fast-growing economy and sizable middle-class population, strong position power with increasing income. The fourth one is a close relationship in every respect with Taiwan, like culture, labor supply, trade, marriage, students, and geographic distance. The last one is that Vietnam is well-connected to international society and major economies in the world. Vietnam is a member of ASEAN and APEC, and is tied up more than 25 countries with FTAs.

Eric: Can you tell our listeners what the state of Taiwanese business and investment in Vietnam was like before the implementation of the New Southbound Policy?

Harrison: According to the official statistics, there are more than 6,000 Taiwanese companies and more than 2,500 projects invested in Vietnam. Total investment reached around 31 billion US dollars. Taiwan is the #4 biggest foreign investor in Vietnam. More than 50 thousand Taiwanese work and visit there. Taiwan investment is mostly concentrated in the manufacturing sector. Actually, there are four important industrial clusters that come from Taiwan: shoes, textiles, motorcycles, and bicycles.

Eric: And what has changed for Taiwanese firms doing business since the Policy, or is that already the result of growth over two years?

Harrison: I think there has been quite a big change. I want to divide this into four aspects. The first one is from the information side. After the New Southbound Policy, more information regarding Vietnam was available to Taiwanese investors. And the information is systematically delivered via media, seminars, investment forums, or people interactions. Second, is that investments are more diversified. Before, many investments from Taiwan in Vietnam were in the manufacturing sector. But now, more investment comes from manufacturing to real estate, service, e-commerce, and the beverage and food industry, for example pearl milk tea or mooncakes. The other way is from downstream assembly for third industries to upstream parts and materials, like Formosa Steel, like New Far Eastern Textiles. The third one is mutual business interaction between the two countries has become more active. Many Taiwanese Expos and Fairs were held in Taiwan this year, and Vietnamese companies come to Taiwan to establish their liaison office. And also some Vietnamese companies come to Taiwan looking for business opportunities. The last one is that tourist visits increased dramatically from both sides. In the year 2017, they have 610 thousand Taiwanese visiting Vietnam; on the other hand, they had 380 thousand Vietnamese visited Taiwan. Especially from the Vietnam side, the tourists visiting Taiwan increased a lot. And also, the Taiwan government gave them some preferential treatment, like you can apply for the electronic visa online. And the last one is that Vietnamese in Taiwan have become more active in business and social activities. Vietnamese has become one of the most popular languages to learn in Taiwan.

Eric: Aside from business and investment, you kind of touched on this already with the tourism, but how has the Policy affected Vietnamese people’s perceptions of Taiwan?

Harrison: Taiwan is more impressive to Vietnamese. The image of Taiwan to Vietnamese is a clean and friendly country with good food, high-tech, and a beautiful place. As I mentioned, many tourists visit Taiwan. They visit for tours, they visit for their relatives, and they visit their friends. There are more than 7,500 students studying in Taiwan. There are more than 220 (thousand) Vietnamese laborers working in Taiwan. And more than 120 thousand Vietnamese ladies married Taiwanese. And the Vietnamese community is involved in Taiwan, involved in social issues.

Eric: Going forward, what would you like to see the government do to further stimulate bilateral business exchanges with Vietnam?

Harrison: I think the government has done a lot, especially from the New Southbound Policy. But I think there are still many more things that can be done, to make it better. The first one I want to mention is to systematically promote Taiwan’s image in Vietnam, and via various kinds of activities, like expos, culture, sports, charities, and so on. Second, we have some organizations from Taiwan in Vietnam, some economic organizations or business organizations. I think some kind of integration for all these organizations to bring them together, to deeply and comprehensively survey, study, and research Vietnam, and regularly issue or share information to Taiwanese investors or policymakers. That would be a very important thing. The third one is to study, and use like SWOT to find out the best benefits or strategies of Taiwanese industries and investment and to help and guide them to smartly invest into Vietnam and form a strong cluster. Many Taiwanese investors in Taiwan go in alone, and they are small and medium companies. But their power is limited. If the Taiwanese government can help them to become a cluster and from the upstream to the downstream, then Taiwanese business and investment will be stronger and more influential in Vietnam. The fourth one is to strengthen the function and capabilities of Taiwanese businesses, chambers or associations in Vietnam, and to increase our influence and power to the Vietnam government and society. Actually, from last year, the Taiwan business chamber has become active in Vietnam. They helped to organize the Taiwan Expo, just held at the end of this July. All this kind of activity is very helpful and can increase the awareness and perception of Vietnamese to Taiwan. The last one is to give more scholarships or sponsorships to young and potential Vietnamese students, or even some Vietnamese officials, to learn and study in Taiwan. And do the same to the Taiwan, I mean encourage Taiwan’s young students and officials to study in Vietnam, to increase mutual understanding and the mutual relationship.

Eric: We’ve been talking with VMEP Company Chairman, Mr. Harrison Liu. Chairman Liu, thank you again for joining us on the program today.

Harrison: Thank you ICRT, and thank you ICRT’s listeners.

Eric: That’s it for today’s episode of Looking South. I’m Eric Gau, and thank you all for tuning in today.

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