Chaiwan: Realities and Illusions

Chaiwan: Realities and Illusions
China Times News editorial (Taipei, Taiwan, ROC)
A Translation
June 16, 2009

Cross-Strait tensions have eased. Wave upon wave of mainland Chinese purchasing groups have surged onto Taiwan, shopping until they drop. A new term has even appeared: Chaiwan. Simply put it refers to cooperation between [Mainland] China and Taiwan in production, research and development, and combined market share. As long as cross-Strait relations remain unchanged, Chaiwan's efficiency will increase. Will Taiwan and the Mainland share the benefits Chaiwan has to offer? Or will Taiwan eventually be replaced and sink beneath the waves?

Two years ago, the South Korean media reported on the impact of cooperation between Mainland China and Taiwan. At the time cross-Strait tensions had yet to ease. The time was not ripe. But last year cross-Strait tensions eased. Cross-Strait trade relations warmed. Cross-Strait industrial relations warmed. Following the global financial tsunami, the Mainland wanted to boost its economy. It increased domestic demand. It also promoted improved cross-Strait relations. Wave upon wave of Mainland Chinese purchasing groups arrived on Taiwan in recent months. They boosted cross-Strait trade cooperation to new heights. They allowed Chaiwan to affect the future, and again attracted widespread attention.

South Korea considers this of great importance. It is highly sensitive about Chaiwan. The reason of course is that South Korea and Taiwan have long been major competitors. As much as 80% of their industrial product is the same. In the past, Taiwan businessmen, by pursuing "investment-led exports," managed to maintain long term double-digit growth in exports to the Mainland. At one time they constituted 20% of all products shipped to the Mainland. But later South Korea gained the upper hand. It gradually increase its investments. Together with its brand advantages, the market share of Korean products on the mainland grew to 9.9% by the end of last year. Taiwan products shrank to 9.12%, behind South Korea.

But once Mainland Chinese purchasing groups began arriving on Taiwan, the sale of Taiwan products gradually increased. Flat panels are among the most fiercely contested products manufactured by Taiwan and South Korea. This year flat panels from Taiwan took a 60% share of the Mainland Chinese market. Flat panels from Korea, which took almost 50% of the Mainland Chinese market last year, were squeezed down to under 30%. Other product categories include telecommunications, information, household appliances, LED lighting, and automotive parts. Once large-scale Mainland purchasing groups began arriving on Taiwan and putting in their orders the market share of Taiwan products rose and began squeezing out those of other countries, including South Korea.

The Chaiwan wave has taken effect. The relaxation in cross-Strait tensions has brought powerful Mainland Chinese purchasing groups to Taiwan. But this is not a case of Mainland charity toward Taiwan. The economic impact is a mutually beneficial win/win process. Mainland China's household appliance industry was losing money. Once it received full support from Taiwan's industry, it enjoyed a profitable first quarter. Once high-profile, high-priced Korean products have been forced to lower their prices. Mainland entrepreneurs have openly stated that Mainland businesses intend to continue making procurements from Taiwan. They also look forward to increased cross-Strait business and industry cooperation. They intend to strengthen Mainland Chinese industries by taking advantage of Taiwan's strengths in marketing, creativity, and production management.

This wave of procurements has yet to give Taiwan's local enterprises a full injection of capital. Let's not forget the lesson of "Wintel" over the past twenty years. Over the past twenty years, it was the world's fastest-growing IT industry. This empire was the joint creation of three companies. Intel's microprocessors, Microsoft's operating system (Windows software), and Taiwan enterprises large and small, including countless upstream and downstream hardware makers in the supply chain.

Over the past twenty years, Taiwan has built a strong and comprehensive hardware supply chain. Technology industries have become Taiwan's proudest and most important industries. But because their development is subject to foreign specifications, they could only fulfill the role of "faithful followers." They were unable to master key technology or establish their own brands. While the other two companies continued to enjoy 40 to 50% margins, many of Taiwan's superficially booming technology industries were stuck making only 4% or even 3% profit margins.

Therefore, riding the Chaiwan wave is both good news and bad news. The good news is that the Chaiwan wave has allowed Taiwan enterprises to receive a short term injection of capital. This is not in doubt. One need only look at these enterprises' capacity utilization trends. This wave of procurement may have helped these enterprises increase the volume of their business in the medium and long term. Will they always be the bridesmaid, and never the bride? Will these enterprises wind up earning only the lowest of profit margins? This remains a matter of concern.

Will Chaiwan be a source of real profits, or merely a hollow dream? In order to turn the Chaiwan niche into a long term niche for Taiwan's economy, enterprises on Taiwan must not just sell products. They must seize the opportunity to form strategic alliances, to engage in joint marketing, and even make joint investments. They must find a way to profit from production, marketing, brand building, and the establishment of industry specifications. They must avoid a repeat of the embarrassing Information Industry fiasco, in which they wound up in low margin industries.

The government may be incapable of playing a constructive role. But at least it must not become a hindrance. It must not adopt a smugly conservative posture. It must not impose all sorts of restrictions on business investments. From a longer and more forward looking industry perspective, it must help Chaiwan seek out a long term market niche.

中時電子報 新聞
中國時報 　2009.06.16
社論－Chaiwan─真實與虛幻之間
本報訊

當兩岸關係融化、一波波大陸採購團湧向台灣之後，一個新的名詞─Chaiwan出現：簡單講就是中國與台灣合作，在生產、研發、市場共享上的爆發力。未來只要兩岸關係不變，Chaiwan效益將逐漸加溫。但，台灣最後是與大陸共享 Chaiwan之利，還是終被取代而沉淪，仍有待觀察。

兩年前，韓國媒體就曾以Chaiwan報導中台合作的影響，但當時限於兩岸關係仍凍結，未成大氣候。到去年之後，先是乘著兩岸關係解凍、經貿加溫之風，兩岸經貿與產業互動加溫。到全球金融海嘯之後，大陸一方面為提振本身經濟，推出大規模的擴大內需，另一方面也為拉進兩岸關係，近月一波波的大陸採購團，將兩岸經貿合作推上一個高峰，也讓Chaiwan之影響與未來，再度引起各方矚目。

韓國所以會如此重視、對Chaiwan如此敏感，主因當然是台、韓彼此一直是主要競爭對手，兩國產品的相似度高達八成。過去，台商在「以投資帶動出口」的牽引下，對大陸出口長期維持兩位數成長，在大陸進口產品中，一度高佔兩成之高。但韓國卻後來居上，挾著逐漸增加的投資，及自擁品牌的優勢，到去年底，韓國產品在大陸市占率達九．九％，台灣產品跌到九．一二％，反而落後韓國。

不過，在大陸採購團啟動之後，台灣產品又逐漸上揚。以台、韓正面交鋒最厲害的面板而言，今年台灣面板在中國市場拿下近六成市占率，去年在大陸市占率近五成的韓國面板，被擠壓到三成以下。其它產品類，從通訊、資訊、家電、到ＬＥＤ照明、汽車等各項產品，在大陸採購團大舉來台採購後，台灣產品市占率的回升，進而擠壓到包括韓國在內的其它國家產品，也必然會逐步發酵。

而在Chaiwan效益逐步發酵時，我們也可發現：因為和緩的兩岸關係帶來的強大的大陸採購團，絕對不是大陸官方對台灣的「施捨」，經濟上絕對是「合則兩利」的雙贏。在得到台灣產業的全力支持後，大陸原本虧損的家電業者，第一季紛紛轉虧為盈，原本姿態高、價格硬的韓國產品，價格紛紛出現鬆動。大陸業者更明白表示，著眼未來，大陸企業不僅要採購，更期望能深化兩岸企業與產業的合作，藉著台灣強項的行銷、創意、及生產管理，更強化大陸本土企業。

不過，台灣與國內企業，都不應以這波的採購、挹注營收為滿足點。不要忘了廿年來「WINTEL」的教訓。近廿多年，全球成長最快的資訊產業，被認為是由三家「公司」合作創立，打下的江山─INTEL英特爾的處理器、微軟的作業系統（WINDOW視窗軟體）、及「台灣公司」─包含大大小小、數不盡的上下游供應鏈構成所支援的硬體。

廿多年下來，台灣固然建構堅強且完整的硬體供應鏈，科技產業成為台灣最傲人、最重要的產業。但，卻因規格制定受限於國外、只能當「忠實的跟隨者」，未能掌握關鍵技術又缺乏本身的品牌等因素，當其它兩家企業仍享有四、五成以上的高額毛利時，台灣許多形似壯大的科技業者，卻紛紛陷入「保四」、「保三」─即獲利僅止四％、三％或甚至更低的窘境。

因此，對乘著這波Chaiwan風而起的大利基，是讓人既喜又憂。喜者是Chaiwan風對台灣企業、產業短期的挹注與效益，可謂無庸置疑，看企業的產能利用率紛呈倍數增加即可知。但，中長期而言，這波採購風固然為企業衝出量，不過，未來是否又要回到「為他人作嫁衣裳」的打工模式，只分配到末端最低的獲利，卻不得不讓人憂心。

到最後，Chaiwan到底是真實的利益回饋，還是虛幻的一場夢呢？要讓Chaiwan的利基成為台灣經濟與企業可長可久的利基，國內企業不應僅滿足於「賣東西」，更應藉此機會，透過策略聯盟、聯合行銷、甚至彼此入股，從生產、行銷、到品牌創立、規格制定等，都能「卡」到一個利基，以免重演資訊產業發展最後落入低利、難以為繼的窘境。

而政府方面，即使無能扮演正面角色，至少也不該扮演「阻礙」的力量；不要再以保守與自以為是的姿態，對企業的投資做行政指導與限制，而能從更長期與前瞻的產業觀點著眼，為Chaiwan追尋長期的利基與效益。