BOFT Head Details Official Plans to Sail Taiwan Through Global Storm-Some 70 trade promotion delegat
2009/02/16 | By Judy LiThe current global economic crisis has battered exports out of Taiwan. Charged with its official duty to help local exporters weather the downturn, the Bureau of Foreign Trade (BOFT), under the Ministry of Economic Affairs (MOEA), has set in motion the four-year "Global Market Expansion Plan" or "New Zheng-Hoeh Plan" with a budget of about NT$8.53 billion (US$266.56 million at US$1 = NT$32), with the program scheduled from September 2008 to December 2012.
The ongoing export promotion program aims to tap especially emerging markets as China, India, Russia, Central & South Americas and the Middle East, which is savvy since demand from North America and Europe have waned due to the global downturn.
Perfect Timing
Also the current trade-stimulus effort is perfectly timed considering the sobering figures: Taiwan's exports have been declining monthly since the third quarter of 2008, posting negative growths of 1.6%, 8.3%, 23.3% and an amazing 41.97% for September, October, November and December, respectively.
"Taiwan's economic life thrives on foreign trade," C.P. Huang, director general of BOFT, indicates. "The global financial crisis has not spared Taiwan exports. And the outlook on the world economy is predicted to remain dim with the forecast for the global GDP growth to be a lackluster 0.2%, and likely negative for the developed countries. So it's swim or sink for Taiwan exporters and traders amid this economic maelstrom."
Multi-pronged Effort
The BOFT works on several fronts to help liven Taiwan's export strength, including offering financial support, skill training, and marketing and industrial promotions. "Inadequate finances raise risk in trading. So, the government will support exporters with export insurance, loans, and transfer loans-loans to foreign buyers through mediation with banks in their home countries," Huang explains. "Besides, subsidies are available to suppliers planning to exhibit in international trade shows in emerging markets as China, South America, the Middle East, Eastern Europe, South Asia and the ASEAN (Association of Southeast Asian Nations) countries."
"To enhance trading skills, the BOFT helps train export professionals to enable domestic suppliers to put their best foot forward in global markets," Huang adds. "Moreover, the BOFT helps manufacturers streamline operations and management, as well as consult on private-label promotions and branding plans."
"Seeing sizable numbers of Taiwan industries floundering amid the global economic recession, the BOFT is ready to do whatever it takes to help them survive the tough times," Huang affirms. "The BOFT plans to organize more than 70 trade promotion delegations this year targeting industries as food, information technology (IT) & telecommunications, opto-electricity, machinery, auto parts, solar energy, hardware & building materials, pharmaceutical & healthcare, medical equipment, and construction. We believe such promotions will help suppliers to attract needed attention globally."
Tapping Improved Taiwan-China Relations
The BOFT is also ready to tap the opportunities generated by the pro-China stance taken by the Kuomintang administration headed by president Ma Ying-jeou, who took office on May 20, 2008, which is especially relevant given that China, among other emerging Asian nations, is one of few predicted to enjoy positive economic growths in 2009. Besides other encouraging signs, China looks to be one of the biggest consumers of cars, luxury goods, housing, ITC products etc. in the future.
"Since taking over office, the new administration has been relaxing restrictions on cross-straits economic and trade policies, such as raising the ceiling on China-bound investments and simplifying procedural reviews of the same," Huang points out. "Moreover, Taiwan now allows the legal exchange between renminbi (RBM) and New Taiwan dollar on the island, as well as more incoming tourists from China."
Riding this wave of liberalized trade and economic ties between Taiwan and China, the BOFT is not overlooking any potential opportunities to further tap that enormous market. One more reason for the BOFT to prioritize China as a key target market, says Huang, is that China is mapping out a program to stimulate domestic demand, worth approximately four trillion RMB or about US$625 billion, which could rise to 10 trillion RMB or about US$1.56 trillion.
Subsidizing Exhibitors
To further entice domestic suppliers to explore the China market, the BOFT is offering higher subsidies to industrial associations to organize exhibition groups to attend trade shows in China, as well as helping Taiwanese manufacturers in both Taiwan and China to expand sales networks not only in urban centers in China but also smaller communities.
The trade-promotion arm under the BOFT, the Taiwan External Trade Development Council (TAITRA) operates five trade representative offices in China, including in Beijing, Shanghai, Qingdao in Shangdong Province, Chengdu in Sichuan Province, and Xiamen in Fujian Province, with more to be set up to meet growing demand, including in Dalian of Liaoning Province, Guangzhou in Guangdong Province, Wuhan of Hubei Province, and Nanjing of Jiangsu Province.
Branding Assistance
Knowing that Taiwan-made products are widely popular in China, the BOFT is also helping Taiwan suppliers tap the branded-product market in China. "Taiwan makers stand excellent opportunities to build private brands in China, where the consumer market there is big enough to support Taiwan's branded products," Huang says. "For instance, Taiwan-based food suppliers have a window of opportunity in the wake of the tainted milk powder scandal in China in the second half of last year; while export-reliant Taiwan enterprises in China can, with waning demand from N. America and Europe, think about targeting the domestic market instead."
Seeing the enhanced added-value and market competitiveness of branded products, the BOFT will continue implementing the "Branding Taiwan Plan" by establishing a branding venture capital fund and a brand-assessment system, which subsidize suppliers aiming to develop branded products and offer quality control assistance.
MICE Promotion
The BOFT will also continue the "Taiwan MICE Industry Advancement Project," because meetings, incentive-driven functions, conventions and exhibitions definitely are catalysts of foreign trade and can fuel tourism, F&B and hospitality sectors, helping to earn foreign exchange for Taiwan at once.
"I envision the health of Taiwan's foreign trade lies in exercising the nation's economic and trade strengths. Making the most of improving relationships with China, where Taiwan stands to succeed to build bigger market shares, as well as promoting trade in other emerging markets, I believe Taiwan not only can survive this severe global downturn, but also prove my vision is correct," Huang states firmly.