Amongst
the participants of the press conference were Mr. Alex H.C. Chen (秀全副),
Deputy Director-General of the Department of Investment Services - Ministry of
Economic Affairs as well as Dr. Thomas Prinz, Director General, German
Institute Taipei. To provide a deeper insight into the current business
situation of German companies, two distinguished representatives attended as
well, i.e. Mr. Erdal Elver, President & CEO of Siemens Limited Taiwan and Ms.
Shu-Juei Chen, Services Director of TRUMPF Taiwan
Industries Co., Ltd.
Chief
Representative and Executive Director of the German Trade Office Taipei, Mr.
Axel Limberg, presented the results of the survey in detail, showing that even
though Taiwan’s outlook is still positive, a few challenges remain. He stated: “Confirming
last year’s results, the vast majority of German companies would start their
business in Taiwan again, indicating that Taiwan is still perceived as an
attractive business location. However, even though business climate is still regarded
as positive, we also observe that there is a slightly less optimistic outlook
in terms of economic expectations.”
Survey Results:
According
to the results of the Business Confidence Survey 2018, the majority of German
companies expect the Taiwanese economy to remain unchanged, while 30.1% believe
it will be improving in 2019. The number was even slightly more positive regarding
their own industry with 33.8% expecting their industry to improve. However,
around one fourth of the companies are concerned that both the Taiwanese
economy as well as their own industry will worsen.
Profile of Responding Companies
Taiwan
as a business place proves to be a long-term commitment, with 57.8% of the
companies have been operating in Taiwan for more than 15 years. However, as in
previous years, we also see lots of new companies starting their business in
Taiwan.
Most
companies are typical German small and medium sized enterprises with less than
50 employees at their local site in Taiwan (73.6%), while large size
enterprises employing more than 500 people accounted for 4.2%. Most of the
participating companies are active in the field of machinery/industrial
equipment (30.6%), followed by the logistics (13.9%) and the sales/marketing (12.5%)
sectors.
Business Satisfaction
Around
49% of the companies were able to achieve or even exceeded their business
targets in 2018, while 44.3% predict that all their targets will be achieved or
even be exceeded in 2019. Both numbers serve as a wake-up call for the economic
development, as they are slightly lower compared to 2017.
The overall view of German businesses towards
Taiwan remains stable, turnover (50.7%) and profits (40.8%) are both expected to increase
or even increase significantly. However,
57,8% predict their investments to remain similar or unchanged, while 62.0% do
not expect big changes in employment.
Investment Climate
German
companies remain committed to their investments in Taiwan. 39.4% of the
survey’s participants are currently planning investments within the next two
years. The major motivations for new investments are following key customers
(49.1%), finding better qualified staff (40.0%) and cost reduction (21.8%).
Like last year, sales and marketing (36.2%) are still considered to be the most
important investment sectors, followed by investments in services (25.9%).
Business Challenges
About
46% of the German companies identify the cross-strait relations as well as the
political stability in general as major business challenges for German business
activities in Taiwan. Additionally,
the reliability of governmental framework (40%), bureaucracy and administrative
hurdles (38%), participation in public tenders (36%) as well as the absence of
FTA and investment protection agreements (33%) are also regarded as challenges.
Recommendations to Overcome Major Challenges
The
results indicate that three major issues should be addressed by the Taiwanese
government. Political stability should be improved in order to keep the
existing high level of trust in Taiwan as a location for business and
investments. This means that long-term commitments for projects should be
uphold and agreed time schedules should be adhered to.
The
further pursuit of the “Five plus two” innovative industries plan is recommended,
and the political plan should be transferred into business opportunities, as
this is realized with the topic of energy transition from fossil fuels to
renewable energies. These agendas shall be kept stable and similar frameworks
would also support the other segments such as biomedicine.
The
survey results also indicated that recruitment still poses an urgent business
challenge. It is therefore recommended to implement a system of dual vocational
education in order to increase the level of qualification to allow the
companies to recruit more qualified staff.
For further information, please go to our website to download the full report "Business
Confidence Survey 2018 Report"