 ThinkTecAway, civil engagement lives here. Welcome to the Asian Review. I'm your host, Bill Sharp. My guest today is Mr. Liu Shujong. Mr. Liu is the vice chairman of TITRA. What does TITRA stand for? TITRA stands for the Taiwan External Trade Development Council. It's really great to have him with us. And hello there, Mr. Liu. How are you doing today? Very good, Bill. It's my honor to be on your show. That's great. It's really great to have you with us. You have such an impressive resume. I think TITRA is very glad, should be very happy to have you as its vice chairman. Well, I kind of think this as a one thing in the lifetime opportunity for me, too. So I cherish the opportunity of working here. That's great. That's great. Well, let's get right into it. Now, a lot of our viewers might not know all that much about TITRA. So could you please very basically tell us something about the history and the mission of the organization? Yes. I think ever since Taiwan withdrew from the United Nations in early 1970s, I think the island country has been facing a very difficult challenge when it comes to its international space and international participation. So TITRA was established nearly 48 years ago as a semi-government organization doing mostly trade promotion for Taiwan. Because I think most people know that Taiwan is a big power in economy. Geographically speaking, Taiwan is small. But economically speaking, Taiwan is the number 20 country, a big power, big economic power in the world. So TITRA, throughout nearly five decades, has been doing a lot of trade promotions, organizing exhibitions for Taiwan, and also traveling hard to match Taiwanese businessmen with their international counterparts. Interesting. Is TITRA modeled after Japan's highly successful JETRO, the Japan External Trade Organization? Yes. In fact, JETRO from Japan is Taiwan TITRA's kind of counterparts. And also in Korea, they also have this kind of a similar organization called CULTRA. Exactly my next question. So thank you. You saved me the effort of going there. So in fact, there has been a lot of very, very frequent cooperation between these through Asian trade promotion organizations. And both JETRO and CULTRA, they all have office in Taipei, Taiwan has office in Tokyo and so too. Now where else does TITRA have offices? In Tokyo? Oh, where else? Oh, wow. In the world. TITRA, TITRA's office is in the world, including the most recent open one in New Daily India. Interesting. Now the staff of TITRA is, do they come from different ministries of Taiwan's government or they're all sort of, their first loyalty is to TITRA? Well, structurally speaking, TITRA is under the government umbrella of ministry of economics. But TITRA also has quite independent ways of doing business. We have more than 60 office in the world. We're kind of like a mini ministry of foreign affairs, except we're doing mostly trade and investment issues. I see. That's interesting. That's really interesting. So now, how does TITRA develop external markets? Well, as I say, TITRA has a history of almost 50 years. We are about to celebrate our half century anniversary. So throughout this long period of time, we have cultivated very comprehensive networks with Taiwan business community, especially the small and medium-sized business. So we help them to explore business and investment opportunity, for example, in mainland China. And now, of course, the area of what we call new southbound policy countries are also our top priorities. So within those 61 overseas office that TITRA has, we have 10 office in mainland China, and 13 office in those areas of what we call new southbound policy countries. Wow. That's a lot. Is one of TITRA's mission, especially during the time of the Tsai Ing-wen government, to help to limit Taiwan's dependence on China as an export market? That's not how we characterize this new trade initiative. What the Tsai Ing-wen administration has advocated is more of a concept of diversification. Because of course, even up to today, over 40% of Taiwan's exports all goes to China, including Hong Kong. And it's still going on. But in most recent years, we have seen more difficulties for Taiwanese companies to do business in mainland China for several reasons. For example, the increasing wages and also stricter rules. So even without the government initiative to diversify Taiwan's overseas markets for most Taiwanese companies who have been doing business in mainland China, they have already come up with some new strategic thinking of diversifying their office or factory to ASEAN countries or India. But right now, I think the timing for the Tsai Ing-wen administration to introduce this new concept of new Southbound policy was kind of a reflection of most Taiwanese business thinking, especially after they have invested in the Chinese market for more than 20 years. Right. Well, that's really interesting. Now, some of the problems that you mentioned that Taiwan companies encounter in doing business on the mainland, increasing cost of business, increasing cost of labor, increasing regulation by the Chinese government, these are problems that all external investors encounter, it seems. Yeah. And also, that Taiwan is not the only country that has been doing this kind of diversification. I mean, the Koreans are doing this. The Japanese are doing this. The Korean president, Moon Jae-in, when he visited Indonesia last year, he also introduced this Korean version of moving South. So I think most Asian countries, on the one hand, they want to continue to do business with the Chinese, including Taiwan. But on the other hand, they all know there has been growing risk and challenges when doing business with the Chinese. So the better strategy for them is to not put all acts in one basket and to try to come up with some ways of diversifying their international outreach. Interesting. Yeah. That's really interesting. I think it's probably fair to say that Taiwan companies probably encounter more difficulties in doing business in China, since the Chinese government often looks at the Taiwan businessmen as a kind of a lever for getting the government of Taiwan to unify with China. Yeah. Of course, there's always this so-called divided and counter-kind of strategy behind Chinese policy toward Taiwan. But the irony is, even looking at the numbers, I'm talking about Taiwan's overall export to the Chinese market throughout the year of 2017. Even after the Taiwan administration was in power for almost one year, you know, throughout the year of 2017, Taiwan's export to China has grown at average 12 percent. Even during the Sino-Indian period. Yes. Yes. That's interesting. So yeah, it seems to me that there is a tendency of sort of a separate economics from politics. You know, you know, ever since President Tsai Ing-wen took office, the Chinese side has suspended official contacts. But when it comes to people-to-people engagement and also trade and investment, I think it's still going on. You know, and then we have seen very, very impressive numbers of growing. Even when it comes to the first quarter of 2018, we see these numbers continue to grow for an average double digit. That's very interesting. Let's use the expression or indicate there's a separation between politics and economics. It sounds very much like the relationship between Japan and China. The politics are not very good, but the economic exchange is very good. Yeah, but you know, CrossFit, the nuance of political-of CrossFit relation is that the Chinese has been very, very unfriendly to Taiwan in the political areas. They continue to harass Taiwan militarily and isolate Taiwan internationally. Right. They didn't respond to President Tsai's Goodwill and Olive approach, so which is quite regrettable. Right. All right. Right. That's true. And especially in the last few months, it's been so much a military, a mainland military intimidation of Taiwan that's been going on. Yeah. Yeah. Let me add to your earlier question. It's not the Taiwan government's policy to limit or restrict Taiwanese investment in trade with the Chinese. We want it to do business with the Chinese. And the Thai trust office, 10 office in mainland China continue to forge new opportunities of investment for Taiwanese businessmen, too. But while doing that, we'll also try to explore other global markets for the Taiwanese businessmen. So, OK, you said there are 10 Thai trust offices in mainland China. Mm-hmm. OK. How many personnel are there? How many Thai trust personnel are there? Well, speaking, Thai trust has nearly 1,300 staff, including local employers. Oh. But in Thailand, in mainland China, I think we have among those 10 office, I think we have explorer at least 50 to 60 staff there. Altogether. Yeah. Altogether. Yeah. And I can imagine your offices are in Beijing, Shanghai, Guangzhou, Chongqing, all major cities. Yeah. Yeah. Xi'an. Yeah. Almost all major cities. Yeah. OK. All major cities. But it's interesting that with the new office setting up in New Delhi, India, right now, Taiwan has four office in India. I read that on your website. Yes. New Delhi, Kolkata, Mumbai, and Chennai, right? Yes. Yes. That's quite interesting, because I remember it was just a few years ago, the Indian government was very hesitant about having any more tech row offices in India. And now they're allowing more tight row offices. I mean, I think that says something. Yeah. But I think the Indian government's foreign policy and trade policy has transformed a lot in the past few years. They have replaced the old version of looking east with this new initiative of acting east. So especially under the premiership of Modi, I think the Modi government has been pushing forward aggressively eastward. So I think the Indian government wanted to business with not only Taiwan, but also other parts of Asia. Recently, through Thai trust efforts, for example, there are two major initiatives that has been progressing. One is that Thai one side and India side have jointly agreed to develop an electric vehicle because India, they wanted to transform their traffic and pollution. So they want to have more electric vehicle and electric motorcycle. So Thai trust has been bringing a lot of Taiwanese electric motorcycle and vehicle companies to India to explore more markets. Another project that has been going on is a new initiative to open up a petrol chemical company. Wow. That is really interesting. I think this is a good place to take a break. You're watching Asia in Review. I'm your host, Bill Sharp. I'm talking to Mr. Liu Shuzong. He is the vice chairman of TITRA, the Taiwan External Trade Development Corporation, Council, rather. And we're having a really interesting talk about how TITRA seeks to increase Taiwan's exports. We'll be right back. Don't go away. Aloha. I'm Kili Akina, and I'm here every other week on Mondays at 2 o'clock PM on Think Tech Hawaii's Hawaii Together. In Hawaii Together, we talk with some of the most fascinating people in the islands about working together, working together for a better economy, government and society. So I invite you into our conversation every other Monday at 2 PM on Think Tech Hawaii Broadcast Network. Join us for Hawaii Together. I'm Kili Akina. Aloha. Hi. I'm Pete McGinnis-Mark, and every Monday at 1 o'clock, I'm the host of Think Tech Hawaii's Research in Munna. And at that program, we bring to you a whole range of new scientific results from the university, ranging from everything from exploring the solar system to looking at the Earth from space, going underwater, talking about earthquakes and volcanoes, and other things which have a direct relevance not only to Hawaii, but also to our economy. So please try and join me 1 o'clock on a Monday afternoon for Think Tech Hawaii's Research in Munna. And see you then. Welcome back to Asian Review. I'm your host, Bill Sharp. Today I'm talking to the vice chairman of TITRA, the Taiwan External Trade Development Council. And we're having a really great conversation here. Just before the break, we were talking about, well, we're talking about a lot of things. So we're talking about the number of offices that TITRA has in China and other places around the world. Tell me something. Does TITRA promote investment in Taiwan at all? Part of TITRA's effort is to, through our international connection, hopefully we will help the international investors, joint ventures, to get to know more about Taiwan's investment environment because the current government of Taiwan has been doing a lot of efforts trying to make a better environment for foreign investment, especially in the area of green energy startups and also some of the financial sectors. So we will come, the foreign investor, to explore opportunities for investment in Taiwan. In other words, TITRA helps not only foreign investors to invest in those areas which you just mentioned. And I know that all of those are very prominent in Tsai Ing-Wen's economic thinking, but it of course also helps Taiwan companies. Yeah, Taiwan is doing a two-way, two-way function. It's performing two-way functions. We want to bring Taiwan to the world, and also we want to bring the world to Taiwan too. That's a really great way to put it. That's a really great way to put it. Well, okay, while we talked about the New South policy, I think we pretty well covered that. Now, TITRA also puts together delegations to visit the United States to purchase all kinds of American products, especially agricultural products in hopes of keeping down the trade imbalance. Is that correct? Taiwan has been doing this for years in terms of agricultural purchase. And I think what happens recently is of course this trade fiction between the US and China. And Taiwan has been watching very carefully in this potential trade war between Washington and Beijing. Why? Because of Taiwan's huge investment in mainland China, Taiwan company provides a lot of what we call the intermediate devices like smartphones and tablets. They are components and parts to the Chinese market. And in China, they reproduce it and then export to the American market. And now, Trump has introduced a series of increase of trade, a tariff on the Chinese products. So indirectly, we'll have some impact on Taiwan companies. But we are doing a lot of survey and research at this moment to try to find out what kind of impact or the extent to which those kind of impact might have for the tariff list introduced and announced by the Trump administration. For some of the industry like, for example, electronic communication devices and smartphone parts, they were not included in the tariff list so far. But of course, Trump has said that he has instructed USTR to do more research on the possible increase of tariffs on the Chinese market, on Chinese products. So we are still doing a lot of research. And so far, the feedback that we received from Taiwan's company in China showed that the impact was not that serious so far, so far. But still, we've been watching it very cautiously. That's good. But to give back to my original question, every once in a while there's this huge Taiwan trade delegations that come to the US with the idea of buying a lot of agricultural products and other American products so as to keep the balance fairly, the trade balance fairly even between Taiwan and the US. Does TITRA organize those kinds of delegations? It's more of a joint arrangement between Ministry of Economics and TITRA. So last year, there was this delegation called SelectUSA, so we organized a lot of big companies from Taiwan, so small SMEs from Taiwan to Washington, DC, and met with the official from the US government. But this year, I think next month, TITRA and also with the Ministry of Economics, we're going to organize another group of SelectUSA to Washington, DC. This time, my understanding is that we're going to also spend some time in some individual states to hopefully to reach deeply to some of the US market in the individual states. Interesting. Well, you have to come to Hawaii. Yeah, that could be one of the options, yes. I'm not sure, realistically speaking, I'm not sure that Hawaii offers a very big market, but it's always a nice idea. I remember one of those delegations, a very recent one, Guotai Ming, the chairman of Foxconn was a member, and he announced a big investment in Wisconsin. In Wisconsin, yes. But of course, there was more of the Foxconn's, their own decision to investment in Wisconsin. I think TITRA's job in most cases is to help the SMEs or individual Taiwanese companies to think about investment in the US market. This is a very interesting TITRA's emphasis on SMEs. Did this start with the Tsai Ing-wen administration, or has this always been the case? I think it's always been the case, because SMEs are the backbone of Taiwan's economies. And of course, I think when different parties are in power, of course they have these kind of priorities. Like for example, for the KMT, I think China, they put more emphasis on Chinese market. But I think the world is changing, China's economic power kind of makes a message to the global markets. So I think now DPP is in power. So I think what Tsai Ing-wen has adopted is more of a balanced approach. That is to say, well, we still wanted to do business in the Chinese market, but we want to diversify our foreign trade and investment outreach. So new southbound policies include 18 countries. 10 ASEAN countries, plus six countries from South Asia, and then Australia and New Zealand. Right. Right. But that's why doing business with the world, not just new southbound policies. Right. Right. Right. Getting back to the SMEs, it always seemed that when the Guomindang, the national spot of the KMT was in power, it really kind of favored big companies. It didn't pay that much attention to SMEs. SMEs, sometimes when they find the potential market, they just go for it, even without the government regulation or government assistance. But if they are having trouble doing business in certain countries, in most cases they will come back to Taiwan and seek help from the Taiwanese government. So it's a government, Taiwanese government's responsibility to make sure that if they want to move their factory and company back to Taiwan, of course, we will come back. So we will make sure that Taiwan's domestic investment environment is also very good for them. If they wanted to switch their companies and factories to, for example, Vietnam, Indonesia, or even Cambodia, I think Taiwan is always in those countries too. So we will be happy to help them to set up their new business in those Asian countries too. Does Taitra have any policy or goal to encourage countries, companies that have invested outside of Taiwan to move back to Taiwan? Is that any kind of active effort of Taitra? In that regard, I think there are other government agencies doing those kind of things. Oh, which one? I think the Ministry of Economics and also the Council for National Development, they are doing all those kind of things. For Taitra's main business, like I said earlier, we wanted to bring as many Taiwanese companies to the world and to explore trade opportunity, investment opportunity. At the end of the day, we want to bring international investors and join venture to Taiwan. Interesting. That's interesting. You, Taitra organizes a lot of large-scale trade shows, doesn't it, both in Taiwan and abroad? Yes. Taitra has been doing this kind of expose for many, many years, but starting in last year because New Southbound Policy is one of the Chinese government's policy initiative. So since last year, Taitra put additional efforts to organize four exports in the New Southbound Policy countries, including Indonesia, Vietnam, Philippine, Malaysia. And this year, Taitra is also going to organize five additional what we call Taiwan exports, Taiwan exports in countries like Indonesia, India for the first time, and then Vietnam and Malaysia and Thailand, too. So the idea is to organize a bigger event, bigger show events, expo events, and we will bring local government from Taiwan, different agencies from Taiwan to present their best quality of products, and also in a way to rebrand Taiwan. The ultimate goal is to rebrand Taiwan through those kind of Taiwan exports, especially what we call New Southbound Policy countries. Wow, that's really interesting. We're down to, like, our last 45 seconds. So let me just squeeze in one kind of small question, and I'll ask you to give a pretty short answer to this. Okay, for these SMEs that might not be so knowledgeable about doing business abroad, does Taitra organize training classes of how to approach external markets, what you need to do if you want to succeed in external markets, that kind of thing? Yes, Taitra has research center and training center, too. We've been cooperating a business talented for years, and for those students who graduate from Taitra's training center, the number is over 5,000, and they are everywhere in the major business and companies in Taiwan. So they are very appreciative of Taitra's efforts to train them and provide them a lot of perspective. Wow, that's interesting, very interesting. So yeah, Taitra promotes investment of Taiwan companies all around the world, and it seeks to bring foreign investment to Taiwan, and it's very sensitive to the needs of small and medium-sized enterprises and offers training classes, so those small and medium-sized enterprises that might want to get into the global market. That's really quite a mission. Well, it looks like we're out of time again. Like I always say, time just goes too fast. I want to thank you so much for joining us and for your insight and your very clear answers on how Taitra has developed, what its mission is, how it goes about accomplishing its mission. It's really great to see you again, and we'll see you soon.