Less US businesses optimistic of long-term Taiwan prospects

AmCham in Taipei yesterday released its third annual Business Climate Survey, featuring responses from 269 U.S. business leaders in Taiwan.

The majority of respondents — 69 percent — said they expect an increase in profits and revenue in 2013. The figure is a marginal uptick from the 68 percent of 2012, but is much less than the 82 percent of 2011.

AmCham also asked respondents to supply a longer-term outlook for their business in Taiwan. Looking ahead to the next five years, just 56 percent of respondents said they are “optimistic” or “slightly optimistic,” as opposed to the 71 percent of 2012 and the 81 percent of 2011.

Meanwhile, 19 percent of respondents were “pessimistic” or “slightly pessimistic” about the next five years, compared with the 8 percent of 2012 and 13 percent of 2011.

Sectors that reported the brightest five-year outlook were management consulting, legal services and tourism and leisure, according to survey coordinator Gordon Stewart. Sectors least optimistic over the long term include retail and consumer packaged goods.

Keeping Up with the Kims

Taiwan has correctly identified strategies that can improve its foreign investment climate, but the nation must move faster to keep pace with its neighbors, such as archrival South Korea, said AmCham.

Survey respondents were asked to name government measures that would improve their business outlook in Taiwan. Top replies were “simplify government bureaucracy (47 percent of respondents), “increase direct foreign investment incentives” (29 percent) and “reduce personal taxation” (24 percent). Other priority measures include signing bilateral trade deals with “non-U.S.A. countries,” speeding up Economic Cooperation Framework Agreement (ECFA) negotiations and restarting talks under the Trade and Investment Framework Agreement (TIFA).

President Ma Ying-jeou has correctly identified these as areas to work on and is actively developing solutions, stressed AmCham Chairman Alan Eusden at a press event on Thursday.

“But our membership believes that Taiwan really needs to move faster if it wants to fulfill its potential and be able to secure long-term prosperity,” he said.

“What's happening is that many of the competitive countries — countries where our members go to next — have been getting stronger (as investment prospects),” he continued.

Taiwan's neighbors have been rapidly upgrading their investment infrastructure by inking free trade agreements, dismantling bureaucratic obstacles and ensuring basic infrastructure such as energy and water supply, according to Eusden.

South Korea in particular has proven a strong draw for U.S. business interests in Taiwan, he added.

Not Creative

AmCham's survey pointed out that U.S. employers still see the lack of human resources as a major worry.

For 35 percent of respondents, deficiencies in the quantity and quality of available human resources are a major worry confronting their business. “Lack of human resources” was also a significant worry in the 2012 and 2011 surveys, named by 35 and 36 percent of respondents, respectively.

In the 2013 edition, respondents rated local talent low on four traits: “shows a good deal of creativity,” “of world-class standard,” “easy to recruit” and “shows a great deal of initiative.”

Respondents also perceived Taiwan human capital as “hard-working,” “very trustworthy,” “extremely well-educated,” “very loyal” and “highly productive.”

The 2013 Business Climate Survey, conducted from Nov. 20 to Dec. 12, 2012, was based on responses of 269 AmCham voting members.

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