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Bulletin — 5 March 2012

Chairman’s Message

Dear members and friends,

Taiwan after the presidential elections: Good business prospects and the ATBC’s reputation at a new high

Last month I visited Taiwan and met a number of business and government leaders. For the information of members and friends, a copy of a short report on my visit is included in this Bulletin. I urge members to read it. The main point is that in Taiwan the ATBC has never been held in higher regard, guaranteeing us unparalleled access and influence.

Ashurst Business Luncheon 3 February

Ashurst (formerly Blake Dawson) hosted a highly successful business luncheon on 3 February at their Sydney premises. Guest of Honour was Taiwan’s new Representative at Canberra, Ambassador Katharine Chang. Mr Rowan Callick, Asia Pacific Editor, the Australian, also spoke at the luncheon.

Many thanks to Ashurst for generous hospitality and a valuable and thoroughly enjoyable opportunity to exchange ideas about business prospects in Taiwan during President Ma’s second term.

Submission to the Ken Henry White Paper on Australia in the Asian Century

The secretariat for the White Paper sought ATBC views and I was interviewed in late February. Many thanks to those members who contributed ideas and suggestions for my presentation. I was careful to explain to the interviewer that we were not given enough time formally to consult all ATBC members, so responsibility for the views expressed rests solely with me. I am happy to share them with interested members. Call or email me.

ATBC-Ai Group Relations

Last week I visited Mr Innes Willox, the CEO-designate of the Ai Group. Innes was previously Director, International and Government Relations and in that capacity was supportive of ATBC programs, particularly Angus Robinson’s work in developing a strategic framework agreement linking Australian and Taiwan ICT companies. Innes and I agreed to strengthen cooperation and he accepted an invitation to take part in one of our business luncheons. I also saw Bill Petreski, a former Executive Director of the ATBC who is now Principal Advisor, ICT and Electronics at Ai Group.

Ross Maddock


06 March 2012

Post election atmospherics — muted optimism

There was general relief that the elections are out of the way. An air of muted optimism prevails. Most people I met think the economic outlook is reasonable and that later in the year further improvement is possible.

I was surprised at the number of people who said that the KMT had the DPP and the Chinese Communist Party (CPP) to thank for the re-election of President Ma Ying- Jeou, reflecting a widely held view that during his first term Ma had not performed strongly and had not campaigned well. But the DPP’s campaign was even less impressive. And China, during the previous three elections having learned not to try to bully the Taiwan electorate, this time had helped the KMT a great deal, mainly by keeping quiet about Taiwan matters. There was also a view that the US government had not been as even-handed as it professed; its apparent preference for the KMT had hurt the DPP.

KMT supporters are of course happy with the return of President Ma. Business leaders I met think Ma will manage well, though not spectacularly. Ma does seem to have learned lessons from the tight campaign; already he is seen to be putting more effort into communicating his vision and policies to the electorate, with most of the emphasis on economic transformation and improving incomes for the lower paid.

DPP supporters have mostly accepted defeat with grace and realize the party needs to re-invent itself and devise better China policies if the DPP is to win the presidency in 2016.

There was unanimity that the elections marked a further step in the consolidation of Taiwanese democracy. The KMT’s loss of a large number of seats in the legislature, to the DPP and two other parties, was seen as a good thing: a more numerous ‘loyal opposition’ would do a better job of keeping the ruling party honest.

Few people seemed to be concerned that the CCP would soon push the KMT to start formal negotiations on political issues. The majority believes the CPP has learned its best approach is to hasten slowly.

There was some disquiet on the part of more circumspect people, many of whom are concerned that China now has great influence over much of Taiwan’s print media and has captured many of the wealthiest Taiwanese, several of whom have said publicly that the sooner China takes over Taiwan the better. China seems to be tightening the cordon around Taiwan. As I have written elsewhere, while Taiwan will for many years remain a great place for Australia to do business, the distinctive characteristics which many of us respected and admired so much seem likely gradually to disappear, swept away by mainland law-of-the-jungle culture and authoritarian politics.

ATBC highly regarded

I am delighted to report that, at the most senior levels in Taiwan, the ATBC has never been held in higher regard.

Vice President Vincent Siew, Timothy Yang, Minister for Foreign Affairs and senior officials in the National Security Council, Ministry of Foreign Affairs (MoFA) and Economic Affairs (MoEA), as well as the chairmen of state-owned enterprises, all received me with great warmth and enthusiasm.

For ATBC members, what this means is that we have the access and the influence to get things done for them. It also means we have excellent insights on economic, business and policy developments.

For more than a quarter of a century the ATBC has been working quietly and effectively to promote the interests of its members and to advance broader Australian interests in Taiwan and China. Though we have always made clear we work solely for Australia and for Australian companies, much of what we have achieved has also served Taiwan’s interests.

Many of the officials who, during the early years of this council, took an interest in Australia and the ATBC have now reached the highest levels of the Taiwan government: Vice President Siew, Timothy Yang at MoFA, Yiin Chii Ming, Chairman of the Council for Economic Planning and Development (CEPD), Dr Gary Lin, now Secretary General at MoFA and IM Tong, now Director General of the InternationalDepartment of the MoEA, to name but a few. So we have a large number of ‘friends at court’.

We also have a great friend and advocate in Mr Edward Chen, the Chairman of Taiwan Power and our counterpart council, the ROCABC.

The outstanding success of last August’s 25th Joint Conference continues to work in our favour. The ATBC’s energy and resourcefulness at that conference impressed Taiwan officials and business leaders, the more so because of the contrast between our vitality and the parlous state of some other foreign business councils with which Taiwan’s business leaders, politicians and officials have relations.

The ROCABC is determined to host a 26th Joint Conference in September or October this year, at Kaohsiung, which is at least as successful and productive as the 25th.

Mr Kevin Magee, Australia’s Representative at the Australian Office, Taipei, offered his support for the ATBC’s delegation at the 26th Joint Conference. He also gave me a useful briefing on recent developments in Taiwan and in Australia-Taiwan relations.

Australia-Taiwan business opportunities and outlook

At my meetings with business leaders, bankers, ministers and officials, I concentrated on three areas of opportunity:

1. Finance sector links

2. Taiwan investment in Australian resources and infrastructure

3. Agribusiness and food security

Finance sector links

Five Taiwan banks are already established in Australia: Mega, Taiwan Business Bank, Taiwan Cooperative Bank, First Bank and Hua Nan Bank. At least one other has approval to begin operations. If they are all to succeed, they cannot concentrate just on servicing the small Taiwan community in Australia. They need better knowledge of Australia and the Australian finance sector and to be better connected to mainstream business. They should be members of the ATBC and we are encouraging them to join.

The Australian and Taiwan finance sectors still do not know each other well. During my recent visit I argued, as we have for two decades, that this market failure represents opportunity. Taiwan has a large pool of savings and too few domestic investment opportunities. Australia is a large economy — twice as big as Taiwan’s — with a strong currency; it’s a capital importer with relatively high interest rates and numerous strongly performing companies in the resource and finance sectors.

Taiwan investment in Australian resources and infrastructure

Ever since the establishment of the ATBC in the early 1980s, its leaders have been urging ‘Taiwan inc’ to invest in Australian resources and infrastructure. Very little investment has eventuated. Two years ago, we prepared the most comprehensive case ever including, as well as economic and commercial imperatives, international political, strategic and security considerations. We presented this case at the level of the Vice President. During my recent visit, I made the same comprehensive case to Mr Timothy Yang, Minister for Foreign Affairs, who immediately arranged for me to brief Dr Chien Chung, a senior advisor at the National Security Council. Dr Chung, an expert in energy security issues, seemed to find my presentation compelling and has undertaken to brief President Ma1.

Agribusiness and food security

I found there is a renewed interest in Australian agribusiness on the part of the Taiwan government and business community.

We are trying to identify a suitable person from Taiwan’s food and agribusiness sector to visit Australia later this year under the ATBC’s Senior VIP Business Visitor program. One possibility is the CEO of the UniPresident Group. In 1992, Mr Kao Chin-yuan then and now the Chairman of UniPresident, visited Australian as a guest of the ATBC.

Australia-Taiwan relations: beyond purely business

In general, Taiwan ministers and officials seemed satisfied with the state of Australia- Taiwan relations. The recent business visit by an Australian cabinet minister is viewed as a sign willingness on Canberra’s part to restore exchanges to the level of ten years ago. I urged the Taiwan government to send an appropriate minister to attend the 26th Joint Conference, to be held in September or October this year, at Kaohsiung.

The two governments’ annual bilateral economic consultations are likely to be held in April in Canberra, coinciding with the 18th World Taiwanese Chamber of Commerce Congress, to be held in Sydney on 15 April. ATBC has been working to attract federal and state government support for the Congress, expected to attract up to 800 Taiwan entrepreneurs from Australia and abroad.

Taiwan ministers and officials

Vice President Vincent Siew, at the Presidential Palace

• Congratulated him on his role in the re-election of President Ma and on the completion of his long period of service to the people of Taiwan

• Expressed an interest in attending the inauguration in May of President Ma and Vice President elect Wu

• Briefed him on the outlook for the Australian economy and the political situation.

• Invited him and his wife to visit Australia

• Possible visit to Australia of the Minister for Economic Affairs and of the

Australian Minister for Trade to Taiwan

Mr Timothy Yang, Minister for Foreign Affairs

• Briefed him on the ATBC’s programs and activities for 2012 and asked for his support

• Briefed him on the outlook for the Australian economy and the political situation

• Expressed an interest in attending the inauguration in May of President Ma and Vice President elect Wu

• Rehearsed the international political, strategic and security arguments in favour of Taiwan investment in Australian resources

• Possible visit to Australia of the Minister for Economic Affairs and of the Australian Minister for Trade to Taiwan

Mr Steve Chen, former Minister for Economic Affairs and Chairman of the Sinocon Foundation

• Taiwan and China’s efforts to establish independent, shared standards in the ICT sector

• Taiwan’s new cabinet and Australia-Taiwan political, economic and business relations

• ATBC activities in 2012, including the 26th Joint Conference, September- October, Kaohsiung

• Practical steps that might be taken to encourage Australian business to work with Taiwan business in China

Dr Gary Lin, Secretary General, Ministry of Foreign Affairs (MoFA)

Mr James Tien, Director General, Asia Pacific Division, MoFA

• Australia-Taiwan relations, including ministerial visits

• Taiwan’s new Representative at Canberra and her office’s support for ACT

programs and activities

• ATBC support for the 18th Taiwanese Chamber of Commerce Congress, 15 April

2012, Sydney

• Name change of the Australian Commerce and Industry Office (ACIO), Taipei

• Ways to promote the exchange of ministerial and other senior visits

Mr IM Tong, Director General, Department of International Cooperation, Ministry of Economic Affairs (MoEA)

• Issues for the 2012 Australia-Taiwan officials ‘bilateral economic consultations’ (BEC)

• MoEA support for the 26th Joint Conference of ATBC and ROCABC

• Possible visit to Australia of the Minister for Economic Affairs

• ATBC access to MoEA officials

• Issues relating to the taxation of Australian enterprises in Taiwan

• Taiwan investment in Australian resources, infrastructure and agribusiness

Dr Chien Chung, Senior Advisor, National Security Council

• Australian coal, gas and uranium and Taiwan’s energy security

• International political, strategic and security arguments in favour of Taiwan

investment in Australian resources

• Possible business between Australia and Taiwan in defence-related industries

• Australia-Taiwan informal dialogue on strategic issues

Taiwan state-owned enterprises

Mr Edward Chen, Chairman, Taiwan Power and Chairman, ROCABC

• ATBC activities and programs

• 26th Joint Conference

• Taipower’s performance and the market for Australian coal, ATBC coal

company members and their interests

• LNG issues, ATBC LNG company issues

• Nuclear power issues

Dr Tsou Jo-Chi, Chairman, China Steel Corporation (CSC)

Mr Sung Jyh-Yuh, President, China Steel Corporation (CSC) And other senior managers, at Kaohsiung

• Briefed Chairman Tsou on ATBC history, relations with CSC, programs and activities

• Chairman Tsou briefed on CSC’s performance in 2011 and strategy and outlook for 2012 and beyond

• Rationale for Taiwan investment in Australian resources, iron ore, coal

• Specific investment opportunities for CSC

• Chairman Tsou briefed on CSC’s establishment of a division to manage overseas


• CSC investment in CSC Sonoma Pty Ltd, Queensland

• 26th Joint Conference, September-October 2012, CSC participation and support

Mr Chen Jie-yuan, CEO, Natural Gas Division, Chinese Petroleum Corporation (CPC)

Mr Robert Chen, General Manager, LNG Purchase Division, CPC

• CPC results for 2011 and outlook for 2012

• The CPC INPEX -Total LNG contract

• Recent Australian press speculation about CPC and a possible investment in

Woodside’s Browse.

• Other investment opportunities in Australia

• CPC’s joint venturing with China entities for exploration and development of

energy resources in third countries

Other Taiwan businesses

Mr Chung Ching-tsung, Senior Vice President, UniPresident Group

• ATBC- UniPresident relations — Chairman’s visit to Australia in 1992

• Food security issues and opportunities for investment in Australian agribusiness

• Possible invitation to the President of UniPresident to take part in the ATBC’s

VIP Visitor Program later in 2012

Mr Webster Kiang, Executive Vice President, Chinatrust Commercial Bank

• ATBC programs and activities for 2012, 26th Joint Conference

• Taiwan banks in Australia — the case for Chinatrust to be there

• Opportunities in debt and equity markets in Australia

• Health of Chairman Dr Jeffrey Koo

• Taiwan’s business outlook

• Taiwan-China finance sector relations

Australian officials and business people in Taiwan

Mr Kevin Magee, Representative, Australian Commerce and Industry Office (ACIO)

• Taiwan’s presidential and legislative council elections: implications for Australian business

• Australia-Taiwan relations, including business visits by senior ministers, 2012 BEC, 18th World Taiwanese Chamber of Commerce Congress, investment issues

• ATBC programs and activities for 2012, including the 26th Joint Conference

Mr Terry King, Country Executive Taiwan, ANZ Banking Group

Mr Peter Chan, Executive Director, ANZ Taiwan

• ANZ Group membership and support for the ATBC, including the 26th Joint Conference

• ANZ Taiwan’s performance and prospects

• Taiwan’s economic and business outlook

• Taiwan-China finance sector relations

• Marshalling Taiwan savings for Australian capital markets