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Taiwan firms in China express mixed outlooks

SHANGHAI--Some Taiwanese businesses in China said Friday in Shanghai that they see vast business potential in China's continued urbanization, while others said they have hit hurdles amid the global economic slowdown.

At a summit in Shanghai on cross-Taiwan Strait chain businesses, Scott Chiu, chairman of Hocheng Corp. (HCG), a Taiwanese manufacturer of bathroom fixtures, said the markets in first-tier and second-tier Chinese cities have been saturated and that the markets with the most potential in the urbanization plan should be in third-tier and fourth-tier cities.

He said he was most impressed with the development in Henan, which not only benefited the real-estate market and the basic infrastructure industry, but also created business for the retail sector after the population in the province grew.

Cheng Wu-shui, an executive of Nova Vision, which owns Taiwan's Formosa Optical, however, said his company will slow down its expansion in China this year because the global economic turmoil has affected China's foreign trade and also hurt Chinese people's purchasing power.

The retail sector in China, including clothes and shoes, has taken a huge blow since last year, he said.

Meanwhile, Wu Guohua, deputy director of China's Department of Circulation Industry Development under the Ministry of Commerce, said at the summit that his country's urbanization drive can benefit the development of Taiwanese chains in China.

Wu said the Chinese government will support the development and expansion of Taiwanese brands in China and will also reinforce logistics infrastructure and improve the legal system.

The summit was held just a few days after Li Keqiang took over as China's premier.

Li has repeatedly pushed for continued urbanization. But he has also vowed to streamline government efficiency, reduce the budget for official spending, and ban the use of state funds to build upscale government buildings.

While the improved government efficiency resulting from Li's campaign is expected to benefit many businesses in China, some Taiwanese businessmen said in the summit that the cut in budget and spending may also bring challenges to Taiwanese companies in different industries.

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