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Most US companies in Taiwan upbeat on 2014
Publication Date : 10-01-2014
Around two-thirds of American businesses in Taiwan were profitable in 2013, and around the same proportion of businesses expect an increase in profit in 2014, according to the 2014 Business Climate Survey released by the American Chamber of Commerce (AmCham) in Taipei yesterday.
Eleven per cent of respondents said they were “very profitable,” while 54 per cent said they were “relatively profitable” in 2013. The rest broke even or were close to it. However, business conditions remained inferior to 2010 and 2011, when respectively 74 per cent and 72 per cent of respondents said they were very or relatively profitable, the survey said.
A total of 64 per cent of respondents are expecting an increase in the level of both revenue and profit in the coming year - a slight drop from 66 per cent last year and 68 per cent in the 2012 survey, but far less than the 82 per cent recorded in 2011.
In general, respondents consider Taiwan to be a good place to do business, with an industrious and well-educated workforce. In general, Taiwan's workforce is viewed very favorably. The major shortcomings are the degree of creativity, initiative and international-mindedness.
This year, according to the survey results, 41 per cent of companies plan to hire more people. It is the larger companies that expressed an intention to recruit more personnel. Companies in the legal services, management consulting, health care and human-resource consulting sectors are the most likely to hire more staff, AmCham said.
Governmental bureaucracy is No. 1 obstacle
Respondents also indicated heightened dissatisfaction with bureaucratic obstacles to business operations, more specifically the need for greater coherence in regulatory interpretations, adherence to the rule of law and transparency in the regulatory process. In addition, respondents raised concerns about the effect of political unrest on the economic climate.
“Governmental bureaucracy” was cited as the number-one factor impacting business operations, along with related factors such as “inconsistent regulatory interpretations” and “inconsistent application of the rule of law.”
With regard to the major risks their operations face in the months and years ahead, most respondents cited the threat of economic slowdowns, whether in Taiwan (61 per cent of those surveyed), globally (58 per cent) or in major overseas markets such as mainland China (37 per cent), the US (34 per cent) and Europe (25 per cent).
Encouragement for regional integration
AmCham business leaders also expressed satisfaction with the Economic Cooperation Framework Agreement (ECFA) that Taiwan has entered into with Beijing, and touted the cross-strait service trade agreement currently being deliberated in the Legislative Yuan as a positive development. They urged governments in Taiwan and the US to conclude a Bilateral Investment Agreement, as it will bring clear advantages to their businesses.
AmCham business leaders consider it important for Taiwan to join the Trans-Pacific Partnership (TPP). with 65 per cent of those surveyed saying Taiwan is capable of meeting the high standards required for membership in the TPP, and 80 per cent saying Taiwan should pursue membership.
AmCham was heartened by President Ma Ying-jeou's 2014 New Year's Day address, which was devoted entirely to plans for revitalising the economy, including the promotion of Free Economic Pilot Zones and steps to assure Taiwan's integration in the regional and world economies.
The survey was conducted in November and December of 2013. Of the 423 voting representatives from AmCham member companies, 220 did so for a 52-per cent response rate. The sample covered a wide spectrum of companies by size of employment - from the very small to the very large.