Help SMEs Develop Within the Mainland Domestic Market

Help SMEs Develop Within the Mainland Domestic Market
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
October 22, 2010

The Fifth Plenary Session of the 17th Party Congress has passed a "ten two five plan." The plan will attempt to rapidly change the direction of the Mainland Chinese economy over the next five years. It will increase domestic demand and improve people's lives, and enable the domestic consumer market to become the strategic focus of economic development. Private consumption is expected to reach 36% of total GDP, a significant increase from its current low level. For thousands of SMEs on Taiwan, this Mainland market is an earnest invitation to a golden opportunity that must not be passed up.

The signing of the cross-Strait economic cooperation agreement (ECFA) was the opening shot. The Mainland has over 200 products ready to enter the Taiwan market, tariff free. Taiwan meanwhile, has over 500 products that will enjoy zero tariff or low tariff treatment, beginning next year. These can make a major push into a vast market of 1.3 billion consumers. Most of these products are manufactured by SMEs. How will small and medium enterprises from Taiwan fare amidst the influx of goods from the Mainland? This question has many people worried. Conversely, many more daring and promising Taiwan enterprises, face an inconceivably vast Mainland market. How can they achieve a stable footing, make the most of their competitive advantages, and expand their businesses? This is a rare opportunity one could never have hoped for.

A shining opportunity has suddenly appeared. Taiwan has over a million SMEs. But how many are ready to take advantage of this generous invitation? Regrettably, very few. For small and medium enterprises, the risks have always been high. Over the past several decades, regardless of whether those in power were Blue or Green, large enterprises and high-tech industries have always received preferential treatment. Traditional and small and medium enterprises have received only neglect. They were forced to sink or swim. For small and medium enterprises, life is short. They rarely last more than ten years. Those that master their market niches, that are able to survive, stick largely to their niche markets, maintaining the status quo. Apart from OEM enterprises and suppliers of essential raw materials, they rarely have the courage to overstep their bounds. As a result, they allow others to seize the value-added market, while they maintain their closed and conservative business model. Even professionals in the information, design, and marketing industries, seldom have the courage to make any further moves.

These small and medium enterprises have enormous potential. Their untapped value is amazing. Once the doors to the Mainland are thrown open, they will be looking at a vast market. Even if tempted, they will be afraid to act rashly. Conquering new territories and achieving bold victories is not their forte. Even if they had the courage to take bold steps, the odds would still be stacked against them. But once the Mainland market has been thrown open, wealthy and powerful Mainland tycoons will sift through these SMEs. They will pick out the uncut diamonds. They will separate the wheat from the chaff. These SMEs will become part of a highly profitable Mainland market. Taiwan will be left with the dregs. These SMEs will be like brides who have been married off, totally unable to resist.

Yesterday President Ma attended the "Global Chinese Business Summit." He spoke enthusiastically of the post-ECFA era. He said companies on Taiwan should seize this low-tariff, no-tariff opportunity to enter the Mainland market, They should take advantage of domestic demand to build their own brands. They should break free of the the low margin OEM business model. This is fully consistent with our own reasoning. President Ma however, is urging them to jump directly from their OEM business model to building their own brands. Apparently he is unaware of the dangers, difficulties, and frustrations that confront conservative Taiwan enterprises, which consequently may miss this golden opportunity.

The Mainland market has magnanimously rolled out the red carpet for Taiwan products of superior quality. Taiwan's design skill and marketing talent have already reached maturity. But if no one has the determination to cut and polish the many hundreds of thousands of diamonds in the rough, bridging the Taiwan Strait will be difficult, and all their efforts will be in vain.

Twenty-five years ago, export industries began relocating. Taiwan's industrial chain was severed. Businesses with competitive advantages, such as upstream and midstream raw materials exporters, relocated. Downstream branded products suitable for an international market were missing. This was our fatal mistake going up against South Korea. We failed to fill in this gap as soon as possible. Just how many brands on Taiwan can be developed? Two remedies are available. One is to offer guidance to upstream and midstream industries, fully integrating their existing design and marketing talent, energetically developing high-quality downstream industries. The second is to take advantage of rising labor costs on the Mainland, and the relocation of large numbers of downstream industries. Provide an environment, carefully select industries with the most potential, invite them to Taiwan to merge with upstream and midstream industries, thereby creating an unbroken industrial chain.

President Ma sees the opportunity for SMEs. The Ma administration should swiftly make the necessary preparations, and implement its plans as soon as possible.

協助中小企業開發大陸內需市場

【聯合報╱社論】 2010.10.22 0



中共十七屆五中全會通過的「十二五」計畫的建議，確立中國大陸未來五年將致力加快轉變經濟發展方向，堅持擴大內需、改善人民生活，這將使內需消費市場成為經濟發展的戰略重點；民間消費可望自目前佔GDP 36％的偏低水準大幅上升，這對於萬千面對大陸市場躍躍欲試的台灣中小企業而言，如同鄭重發出的邀請，不能錯過此一大好機會。

兩岸經濟合作協議（ECFA）的簽署，開了第一槍。對岸將有二百多項產品排闥直入，免稅攻掠台灣市場；相對地，台灣更有五百多項產品從明年開始享受減免關稅的待遇，可以大舉進軍十三億人構成的廣闊天地。這些相對開放的產品大多出自中小企業。我們的中小企業要如何在大陸貨品入侵的開放市場中掙扎求存，這是許多人憂心忡忡的挑戰；反過來說，更多身手矯健、潛力雄厚的台灣企業，面對大得難以想像的大陸市場，又如何站穩腳步、發揮優勢，大事擴展，眼下更是可遇不可求的難得契機。

然而，當如此耀眼的機會忽然臨頭，在台灣一百餘萬中小企業裡，有多少已經準備好迎接慷慨的邀請？我們不能不憾然指出，恐怕微乎其微。中小企業的經營，原本就艱險重重；而數十年來，主政者不論藍綠，概皆偏好大企業與高科技產業，而忽視傳統型的中小企業，任令其自生自滅。因而中小企業壽命甚短，能持續十餘年即屬難能可貴；而幸得掌握市場利基、屹立不搖者，多半堅守其利基市場，以不變應萬變，除了為人代工、供應基本原材料之外，不敢輕易越雷池一步；因而附加價值多為他人奪佔，經營模式封閉而保守，甚至已發展成熟的資訊、設計、行銷等專業，也不敢嘗試再作進取。

這類的中小企業，潛力十足，未開發的價值驚人，然一旦大陸市場大開，他們遙望廣闊的對岸市場，即使心動，也不敢輕舉妄動；且因如何攻城掠地，取勝致果，亦全非其所長，即使大膽邁出一步，恐怕也是凶多吉少。但在市場大開之後，這一大群中小企業，在對岸財大氣粗的金主眼中，有如未琢璞玉，必將挑精揀肥，挾往彼岸大發利市，使台灣只能抱殘守缺，為人作嫁，完全喪失抗衡力量。

馬總統日前出席「全球華人企業高峰論壇」時，意氣風發地倡言，後ECFA時代，台灣企業應把握低關稅或免關稅進入大陸市場的良機，藉廣大內需開創自有品牌，突破賺取代工微利的窘境。我們深然是言，這與以上的推理完全吻合；只是馬總統跳躍性地自代工微利直取自創品牌，卻似不識其中的艱難險阻以及台灣企業困頓與保守的實情，因而可能坐失這個天賜良機。

的確，大陸市場為台灣的優質產品鋪出坦蕩的道路；台灣的設計功力與行銷人才，已臻成熟圓融的境地；但若無人用心將數以十萬計的眾多璞玉砥礪雕琢，台灣海峽的鴻溝難以跨越，這一切仍屬枉然。

再者，自從二十五年前出現加工出口業外移潮，台灣的產業鍊即橫遭斬斷，徒有優異的中、上游原材料大量出口為人作嫁，卻欠缺可供發展品牌的下游產品揚名國際市場；這是我們與南韓對壘時最大的致命要害。不儘速彌補此一缺口，究竟台灣有多少品牌可以發展？彌補之道有二，其一是全力輔導中上游產業整合既有設計、行銷人才，努力開發優質下游產業；其二是乘對岸工資高漲，大批下游業者蜂擁外移之際，提供適當環境，精選可造之材，迎來台灣與中上游結合，打造完整的產業鍊。

馬總統看到了中小企業的機會，馬政府要趕緊完成相關的工作，早日促其實現。