Taiwan's AI Expectations

2020/5/5 下午1:15 ISSUE SPONSOR May 2020 | Vol. 50 | Issue 5 | Issue 50 Vol. | 2020 May 台灣的AI期望 Published by the by Published Commerce Commerce In Taipei American Chamber Of NT$150NT$150 NT$150 Taiwan’s AI Expectations Taiwan’s INDUSTRY FOCUS INDUSTRY FINANCIAL SERVICES BUSINESS TAIWAN COPING WITH COVID-19 COPING WITH COVID-19 Read TOPICS Online at topics.amcham.com.tw topics.amcham.com.tw Online Online at at TOPICS TOPICS ReadRead 號執照登記為雜誌交寄 THE AMERICAN CHAMBER OF COMMERCE IN TAIPEI TAIWAN BUSINESS TOPICS May 2020 | Vol. 50 | Issue 5 中華郵政北台字第 5000 5_2020_Cover2.indd 1

壽險業唯一度獲得壽險8

成就 • 信賴的典範保德信人壽第 8 度通過金管會評鑑審核為「模範壽險公司」，是業唯一感謝客戶和我們一同成就這項殊榮；最大的持續動力除了成為模範，更來自於客戶對我們的信任與支持，支持著我們堅持帶給無數家庭信賴的那份初心。而在評鑑的 6 項評量指標中，〝〞更能反映壽險顧問持續以卓越表現彰顯我們是客戶的絕佳選擇，持續服務、堅守承諾，專注保險的核心價值不變。

為提倡健全的國內保險市場，金管會於「保險商品銷售前程保障規劃及服務品質高於法規要求財務穩健推動良善社會工作卓著序作業準則」第 2 1 條規定中，符合保戶需求設立了 6 項指標，通過該評鑑審核即成為「模範壽險公司」。專業服務獲客戶肯定專業把關品質有保證嚴謹遵循法規模範

保德信國際人壽保險股份有限公司台北市松山區 10570南京東路 5段161號10樓 www.prulife.com.tw 客戶服務專線：0800-015-000 CONTENTS NEWS AND VIEWS 6 President’s View Amid Taiwan’s success in fighting COVID-19, a tinge of bitterness MAY 2020 VOLUME 20, NUMBER 5 By William Foreman 一○九年五月號 7 Editorial Reform, Don’t Undermine, the Publisher WHO William Foreman WHO需要改革，不應被削弱 Editor-in-Chief Don Shapiro 10 Taiwan Briefs Deputy Editor Jeremy Olivier By Jane Rickards Art Director/ / Production Coordinator 14 Issues Katia Chen An Eye on the USTR Agenda; Manager, Publications Sales & Marketing Caroline Lee Budget Coverage for New Drugs; Translation Dealing with Osteoporosis Kevin Chen, Yichun Chen, Charlize Hung, 留意美國貿易代表署關注的議題；健 Andrew Wang 保新藥預算；關於骨質疏鬆症 By Don Shapiro

American Chamber of Commerce in Taipei 129 MinSheng East Road, Section 3, 7F, Suite 706, Taipei 10596, Taiwan COVER SECTION P.O. Box 17-277, Taipei, 10419 Taiwan Tel: 2718-8226 Fax: 2718-8182 By Jeremy Olivier 撰文／歐嘉仁 e-mail: [email protected] website: http://www.amcham.com.tw 18 Taiwan Tests the Limits 050 with Artificial Intelligence 2718-8226 2718-8182 台灣測試人工智慧極限 Taiwan Business Topics is a publication of the American Chamber of Commerce in Taipei, ROC. Contents are Industry, government, and independent of and do not necessarily reflect the views of the Officers, Board of Governors, Supervisors or members. academia are all working © Copyright 2020 by the American Chamber of Commerce in Taipei, ROC. All rights reserved. Permission to reprint together to create a vibrant original material must be requested in writing from AmCham. Production done in-house, Printing by Farn Mei AI ecosystem in Taiwan, while Printing Co., Ltd.

recognizing that some major challenges remain. 10866 5000 24 Where Taiwan Can Make ISSN 1818-1961 the Most of AI Much of Taiwan’s industry Chair: C.W. Chin Vice Chairs: Fupei Wang, Timothy Shields is being transformed by Secretary: Seraphim Ma Treasurer: Al Chang the introduction of AI 26 The COVID-19 2019-2020 Governors: technologies, particularly in Al Chang, Albert Chang, Seraphim Ma, Jan-Hendrik Pandemic and Taiwan’s AI Meidinger, Paulus Mok. the areas of manufacturing and health care. Development 2018-2019 Governors: C.W. Chin, Brian Sung, Timothy Shields, Fupei Wang, Roger Yee, Angela Yu.

2020 Supervisors: Mark Horng, Stephen Tan, Terry Tsao.

COMMITTEES: Agro-Chemical/ Melody Wang; Asset Management/ Eric Lin, Angela Yang, Derek Yung; Banking/ Paulus Mok; Capital Markets/ Mandy Huang, Eric Jai, C.P. Liu; Chemical Manufacturers/ Charles Liang, Michael Wong; Cosmetics/ Abigail Lin; Defense/ Manohar Thyagaraj, Roger Yee; Digital Economy/ Max Chen, Renee Chou, Tai Chi Chuan; Energy/ Richard Freer, Randy Tsai; Human Resources/ Christine Chen, Carmen Law, David Tsai; Infrastructure/ Wayne Chin, Paul Lee; Insurance/ KT Lim, Mandy Shih, Linda Tsou; Intellectual Property & Licensing/ Jason Chen, Peter Dernbach, Vincent Shih; Marketing & Distribution/ (tba); Medical Devices/ Louis Ko, Jeffrey Wang; Pharmaceutical/ Justin Chin, Rie Nakajima, TAIWAN BUSINESS Shuhei Sekiguchi; Private Equity/ echo Yeh; Public Health/ Joyce Lee, Pongo Peng, Tim Shields; Retail/ 30 Checking Temperatures: How Businesses in Taiwan are Ceasar Chen, Mark Chen, Peggy Liao; Sustainable Development Goals/ Kenny Jeng, Lume Liao, Coping with COVID-19 Cosmas Lu, Fupei Wang; Tax/ Heidi Liu, Cheli Liaw; Technology/ Cynthia Chyn, Stella Lai, Angela Yu; Companies are trying to figure out how best to respond to new and Telecommunications & Media/ Thomas Ee, David Shin, Joanne Tsai; Transportation & Logistics/ (tba); unique challenges, while staying vigilant about the unexpected. Travel & Tourism/ Gina Tsai, Jason Yeh, Fiona Yuan. By Jeremy Olivier

4 TAIWAN BUSINESS TOPICS • MAY 2020

5 contents.indd 4 2020/5/5 下午1:16 MAY • VOLUMEVOLUME 5050 NUMBER NUMBER 5 5 COVER SPONSOR

LAW 33 Taiwan’s Personal Data Protection Rules A review of the essential regulations, plus some caution on dangers for the unwary. By John Eastwood, Wendy Chu, and Nathan Snyder

INDUSTRY Fubon Financial Holdings Overview F CUS A Report on the Financial Committed to becoming one of Asia’s first-class financial Services Sector institutions, Fubon Financial Holdings has built a strong lineup 38 Japan’s LINE banks on of financial service companies. Its major subsidiaries include Fintech in Taiwan Fubon Life, Taipei Fubon Bank, Fubon Bank (Hong Kong), Success as a virtual bank in Fubon Bank (China), Fubon Insurance, Fubon Securities, and Taiwan would bring the Japanese Fubon Asset Management. As of the end of 2019, Fubon messaging app closer to super app status. Financial Holdings had total assets of US$283.9 billion, rank- By Matthew Fulco ing second among Taiwan’s financial holding companies, and it 41 Enhanced Anti-money has been the most profitable company in the industry in terms Laundering Controls Pay Off of earnings per share (EPS) for eleven consecutive years. The for Taiwan company was named to the Fortune Global 500 for the second Taiwan’s ranking by a money-laun- consecutive year in 2019. dering watchdog has risen over the past year, but future efforts Fubon Financial Holdings’ subsidiaries rank among the top will need to address challenges emerging from digitization of the performers in their respective sectors. Fubon Insurance has financial sector. consistently led all P&C insurers with an over 23% market share. By Matthew Fulco Taipei Fubon Bank is one of Taiwan’s biggest privately owned 43 The Life Insurer Exodus banks; Fubon Securities ranks among Taiwan’s top three securi- Companies have needed to be ties houses; and Fubon Life ranks second in total premium. in the right niche to survive in the Taiwan market. Fubon Financial Holdings is now the only Taiwanese financial By Don Shapiro institution with banking subsidiaries in China, Taiwan and Hong Kong, and the company continues to expand its Asian network EXECUTIVE SUITE and deepen its presence in Greater China. 46 Meet Veronica Acurio of 3M By Jeremy Olivier Looking ahead, Fubon Financial Holdings will continue to strengthen our presence in Taiwan and pursue stable growth. At SPONSORED CONTENT the same time, Fubon Financial Holdings will continue to search 8 Pfizer Outlines Five-Point for suitable M&A opportunities in order to develop a foothold in Plan to Battle COVID-19 the regional market and move closer to the goal of becoming a 48 Seeing Taiwan first-class business group in Asia. Go East for a Wonderful Taiwan Adventure

TAIWAN BUSINESS TOPICS • MAY 2019 5

5 contents.indd 5 2020/5/5 下午1:16 PRESIDENT'S VIEW

Amid Taiwan’s success in fighting COVID-19, a tinge of bitterness

recently posted a photo on Insta- extremely sensitive and politically When he returned to Taiwan, he dis- gram of my family celebrating my charged. covered two things: 1) His employees Iyoungest daughter’s birthday at one One AmCham member con- already had enough masks, and they of her favorite restaurants, Saffron 46, tacted me to express frustration with thought the P95s were too heavy-duty to enjoying crispy samosas and scallops in not being allowed to send face masks wear all day. And 2) Taiwan was success- curry while the Taipei 101 skyscraper to his brother in the U.S. Only Tai- fully containing COVID-19 and ramping was twinkling in the background. wanese could send a limited number up the production of masks, so protec- A friend in New York commented: of masks overseas, and then only to tive gear was becoming less of an issue. “Wow, you get to go out to eat in their Taiwanese relatives. So not even So the boxes of masks sat in his Taiwan? Or is this a memory? Sitting in this AmCham member’s Taiwanese office, and he didn’t think much of a restaurant seems like such an exotic wife could send masks to her American them until COVID-19 began blowing activity right now.” brother-in-law in the Midwest. up in the U.S. In horror, he watched Once again, I felt a deep privi- “It appears the Taiwan government TV scenes from his hometown of New lege for being able to live and work in doesn't consider foreign marriages and York, where doctors and nurses were Taiwan. I seized the opportunity to pro- family to be as real as those between caring for patients without the neces- mote Taiwan, explaining how it has Taiwan nationals,” the member told sary protective gear. done better than any other country me. “My brother is my wife’s brother- His new mission became finding a fighting the virus. Now, the Taiwanese in-law. Her family, too, is my family, way to send the masks he brought to are helping the world by donating mil- and if they needed masks while I was Taiwan back to his family and friends lions of masks to the U.S., Europe, and in the U.S., I would have no problem working in the medical sector in New its diplomatic allies. I only wish the U.S. sending them some. However, right now York. But his efforts were quickly could come close to doing so well. that is not the case for Taiwan, despite thwarted, despite numerous meetings It’s a story I’ve been telling all my all the positive press the Taiwan govern- with officials. Taiwan wasn’t allowing friends and family overseas. Expats ment is seeking.” foreigners to export masks – even the like me are often Taiwan’s best brand The government’s COVID-19 pol- ones that he bought in the U.S. ambassadors as we share our passion icies have also affected my family. My “We feel let down a bit because we for this island with a global network of oldest daughter, who graduates from have adopted Taiwan as a home and key influencers. If we could calculate college this month in the U.S., planned built our lives and careers here,” he the ad value, it would be in the billions. to do what many of her Taiwanese said. “We expect our home to treat us Few other countries need such advo- peers will do: Temporarily move back as family, yet that didn’t happen in our cates more than this nation, due to its home with her parents as she searches case. We weren’t treated as they treat diplomatic isolation. for a job. But Taiwan’s new visa rules themselves and that kind of hurt.” However, it pains me to say that the won’t let her return “home.” So, as a I fully understand that we’re in a COVID-19 crisis is leaving a bitter taste recent grad with no income, she’ll have time of crisis. Extreme measures are in the mouths of some of Taiwan’s most to find a place to stay in the U.S. until necessary. The government is facing a supportive expats. These are people the pandemic is over – or when Taiwan massive challenge. Getting everything who have lived here for years. They’ve eases its visa restrictions. right is impossible, though Taiwan has started businesses, created jobs, and Few things are worse than worrying come extremely close. One improve- paid taxes. They’ve married Taiwanese about loved ones and feeling helpless. ment would be adopting a more and have been warmly welcomed into Another AmCham member and long- nuanced view of “foreigners.” More families here. They’re staunch sup- time resident of Taiwan shared a more flexibility should be granted to long- porters of Taiwan and advocate for this remarkable story. He was visiting the term residents who have proven their special place whenever and wherever U.S. in January when it looked like deep commitment to this country. they can. COVID-19 might hit Taiwan hard. Con- But at times during this crisis, the cerned about protecting his Taiwanese government’s actions have reminded employees at his company, he started them of their second-tier status here. stocking up on face masks to take back William Foreman This is especially the case with face to Taiwan to give to his staff. He bought President, masks – an issue that has become the best ones he could ﬁnd – P95s. American Chamber of Commerce in Taipei

6 TAIWAN BUSINESS TOPICS • MAY 2020

5 presidents view.indd 6 2020/5/5 下午1:16 E D I T O R I A L Reform, Don’t Undermine, the WHO

hile the COVID-19 menace continues to present tise and resources to respond to the pandemic swiftly and a threat to global health on a scale not seen competently, many countries in the world are not so fortu- W in generations, President Donald Trump has nate. Depriving them of potential assistance during this suspended U.S. funding for the World Health Organization critical period is not only callous, it is short-sighted. and even mused about establishing a rival body. The same argument applies both to maintaining WHO’s The U.S. is the largest contributor to the WHO, funding and to finding a way to overcome the communi- normally providing nearly half a billion dollars per year cation gap between the WHO and Taiwan. Contagious or about 20% of the total budget. Trump said that before disease does not respect national borders. Leaving any part deciding whether to resume allocations, the U.S. govern- of the world unprepared to respond to potential epidemics ment would conduct a review of what he called WHO’s constitutes a direct threat to the rest of the globe. “role in severely mismanaging and covering up the spread At the same time as the WHO has come in for wide- of coronavirus” in the early stages of the pandemic. spread criticism (not only from President Trump) for its AmCham Taipei has been critical of WHO in the past, slowness and lack of transparency in responding to early particularly its hands-off approach to Taiwan. WHO is a warnings of a severe epidemic in Wuhan, Taiwan has specialized agency under the United Nations, and Taiwan received well-deserved praise in the international community lost its seat in the UN when China was admitted in 1971. for its success in curbing domestic spread of the contagion. Full-fledged membership for Taiwan in the WHO may It has also won considerable good will by donating large therefore be too much to expect. But the only reason for quantities of protective equipment to other countries. the WHO to exclude Taiwan from even observer status What’s more, with its excellent national healthcare and critical access to information channels on public health system, talented medical researchers, and fast-developing issues is political expediency in deferring to pressure from biomedical industries, Taiwan is in a strong position to China. contribute to international efforts to enhance global public Despite AmCham’s dissatisfaction with the WHO’s health. policy toward Taiwan, however, we question the Trump We encourage the U.S. to continue its call for the WHO administration’s rash decision to cut off funding for the to provide Taiwan with some form of meaningful partic- organization in the middle of a global crisis. Deficiencies in ipation, and we hope that in the wake of the coronavirus the WHO should be spotlighted and corrected, including its challenge more countries will support that effort. As the treatment of Taiwan, but this is not the time to undermine World Health Organization, WHO’s responsibility should its ability to operate. be to cover the healthcare interests of every part of the Although Taiwan possessed the professional exper- globe.

WHO需要改革，不應被削弱

OVID-19持續對全球醫療衛生構成好幾個世代以來給台灣的待遇，但此時不宜減損它運作的能力。最嚴重的威脅，就在此刻，美國總統川普決定暫停台灣具有快速有效因應全球大流行的專業技能與資源， C 提供經費給世界衛生組織（WHO），甚至思考另世上有許多國家卻沒那麼幸運。在這個危機時刻讓它們無外成立全球公衛組織。法取得可能的援助，不僅是狠心的作為，更是缺乏遠見。美國是WHO經費最大來源，平常每年提供將近5億美維持WHO的經費與設法克服WHO與台灣之間的聯繫落差元，占WHO總預算大約20%。川普說，在決定是否恢復提是同樣的道理，傳染病不管國界，世上任何地方若無法因供經費之前，美國政府將檢討WHO在COVID-19疫情初期應可能發生的疫情，都會對其他地方構成直接的威脅。「對病毒擴散的因應嚴重失當及掩蓋實情一事所扮演的角武漢傳出嚴重疫情的早期警告傳出之後，WHO反應遲緩色」。且欠缺透明度，因此遭到許多批評（不只是來自川普），台北市美國商會過去曾批評WHO，特別是它對台灣不台灣則因成功遏止國內疫情，在國際間廣受好評，而且名理不睬的態度。WHO是聯合國之下的專門機構，而中國於副其實。台灣也因捐贈大量防護裝備給其他國家，換得許 1971年進入聯合國之後，台灣便失去它的席次，因此台灣多的善意。要在WHO享有完全席次可能期待過高，但WHO連觀察員的此外，台灣有極佳的全民健保體系，優秀的醫學研究地位也不給台灣，而且不讓台灣透過重要資訊管道取得有人才，還有發展快速的生物醫學產業，因此處在很好的地關公共衛生議題的訊息，唯一的原因是在中國的政治壓力位，可以對各國提升全球公共衛生的努力做出貢獻。我們下便宜行事。鼓勵美國持續要求WHO對台灣提供某種有意義參與的方但儘管本商會不滿意WHO對台灣的政策，我們對於川普式。在疫情的挑戰結束之後，我們希望有更多國家支持這政府在全球危機時刻匆促決定暫停提供經費給WHO一事提項努力。做為全世界的衛生組織，WHO的責任應該是要照出質疑。對於WHO的不足應該加以注意並且改正，包括它顧到全球每個地方的衛生與保健。

TAIWAN BUSINESS TOPICS • MAY 2020 7

5 Editorial.indd 7 2020/5/5 下午1:17 ADVERTORIAL Pfizer Outlines Five-Point Plan to Battle COVID-19

Pfizer has called on the biopharmaceutical industry to join the company in committing to unprecedented collaboration to combat COVID-19.

In this troubling time, Pfizer is committed to doing all The companies estimate that there is potential to supply mil- we can to respond to the COVID-19 pandemic,” Dr. lions of vaccine doses by the end of 2020, subject to technical “ Albert Bourla, the company’s Chairman and CEO, success of the development program and approval from the said in a statement. “Many companies, including Pfizer, regulatory authorities. Capacity would then be scaled up to are working to develop antiviral therapies to help infected produce hundreds of millions of doses in 2021. patients fight this emerging virus as well as new vaccines to In addition, Pfizer is cooperating with the Liverpool prevent infection and halt the further spread of this disease. School of Tropical Medicine’s Respiratory Infection Clinical Pfizer is working to advance our own potential antiviral ther- Research Group on studies of whether existing Pfizer medi- apies and is engaged with BioNTech on a potential mRNA cines may be useful in treating COVID-19 patients. coronavirus vaccine. We are committed to work as one team As a matter of principle, Pfizer has committed itself to five across the industry to harness our scientific expertise, tech- measures to help scientists rapidly develop therapies and vac- nical skills and manufacturing capabilities to combat this cines to provide protection from the escalating pandemic and evolving crisis.” prepare industry to better respond to future global health The collaboration with BioNTech involves the joint con- crises: ducting of clinical trials for COVID-19 vaccine candidates, 1. Sharing tools and insights. Since so little is known about initially across multiple research sites in the U.S. and Europe. this virus, many are working to develop cell-based assays, viral screening, serological assays, and translational models to test potential therapies and vaccines. Pfizer will make the vital tools we develop available on an open source platform to the broader scientific community and to share the data and learnings gained with other companies in real time to rapidly advance therapies and vaccines to patients. 2. Marshalling our people. Human capital is our most valuable resource. Pfizer has created a SWAT team of our leading virologists, biologists, chemists, clinicians, epidemi- ologists, vaccine experts, pharmaceutical scientists, and other key experts to focus solely on addressing this pandemic. This team is applying their passion, commitment, and expertise to accelerating the discovery and development process that will deliver therapies and vaccines to patients as soon as possible. 3. Applying our drug development expertise. Many smaller biotech companies are screening compounds or existing therapies for activity against the virus causing COVID-19, but some lack the experience in late-stage development and navi- gating the complex regulatory systems. Pfizer is committed to sharing our clinical development and regulatory expertise to support the most promising candidates these companies bring forward. 4. Offering our manufacturing capabilities. Once a therapy or vaccine is approved, it will need to be rapidly scaled and deployed around the world to put an end to this pandemic. As one of the largest manufacturers of vaccines and therapeu- tics, Pfizer is committed to using any excess manufacturing capacity and to potentially shifting production to support others in rapidly getting these life-saving breakthroughs into

8 TAIWAN BUSINESS TOPICS • MAY 2020

Pfizer adv.indd 8 2020/5/5 下午1:17 ADVERTORIAL

the hands of patients as quickly as possible. 5. Improving future rapid response. To address future global health threats, Pfizer is reaching out to U.S. federal agencies including NIH, NIAID, and CDC to build a cross- industry rapid response team of scientists, clinicians, and technicians able to move into action immediately when future epidemics surface. “In recent years, the biopharmaceutical industry has brought forward some of the most impactful medical breakthroughs known to society, from therapies for HIV and cancer that have extended millions of lives to novel gene therapies that are seeing cure-like outcomes for some the most devas- tating rare diseases,” said Albert Bourla. “Pfizer calls on all members of the innovation ecosystem – from large pharmaceutical companies to the smallest of biotech companies, from government agencies to academic institutions – to commit to work together in addressing this dire crisis. With our combined efforts we know that there is no health challenge that we cannot overcome.”

對抗新冠肺炎輝瑞提五大要點計畫

事行於各界對此一發明出病毒所甚，許多業正在研發以公「對此一時刻，為的法病毒檢力因應疫情。包括法及，可能的物與疫在內的許多公正在研發病毒。透過源平台學界提物，助染對病毒，同時研供自發的重要具，並與其他公發疫，預防染，止疫情。時享資訊及學心得，加速為病正研發可能的病毒物，也研發物與疫。公一發具力的人才資源極其業儘快提供病人足以的病毒疫。我們力於。成立公內病毒學物。業界合作，運學專業家生物學家學家醫流應為因應後全技與能力，對持續的行病學家疫專家學家重球衛生威脅，正與美國國家衛生研危機。」要專家組成的 W ，專注因應究國家過與傳染病研究病與的合作內，包括這疫情。他們要為此入情管聯機關接，成立學對疫進行，與專業，加速研發流，儘快為病家醫與技人員組成的產業初期在美國多處研究設。提供物疫。快速因應，在來流行病出時能預期，若成研發技，藥為對病立行。得法管機關可，2020年將毒，許多生技公正在病說「近年生物有能力供應疫。接疫產毒合物有物，而公在界出世人所最具力的量可望在2021年提高到億。後期研發因應法度方經物，包括助人的人此外，也與國物醫學有。享研發法疫不全病毒（HIV）與物，染研究組合作，研究公關專業，支援這公當中最具以及可能治最嚴重見病的有能否在治療病人時發力的方。因療法。無是大公生作。療法疫得政最的生技公政府機關學機對此次疫情，作出項助府許可後，速量產，世界各構，生態系的所有成員學家加速研發物疫的，期地，以疫情。為全球最合作，一同對這個重大危機。我們助大受疫情，讓業界更有能大疫物之一，運只要大家同心力，沒有無法克服力因應來全球公衛危機。產能，甚至生產業，助其他的挑戰。」

TAIWAN BUSINESS TOPICS • MAY 2020 9

Pfizer adv.indd 9 2020/5/5 下午1:17 T A I W A N B R I E F S

— BY JANE RICKARDS —

MACROECONOMICS ECONOMIC INDICATORS

IS THE IMF BEING US$ billion Year earlier TOO NEGATIVE? Current Account Balance (Q4 2019) 17.02 18.65 In the International Monetary Fund’s Foreign Trade Balance (Mar.) 9.5 9.04 World Economic Outlook for April, New Export Orders (Mar.) 40.26 38.6 Taiwan’s GDP forecast for 2020 was Foreign Exchange Reserves (end Mar.) 480.4 464.1 set at a horrendous -4%, a figure that government officials are doing their best Unemployment (Mar.) 3.72% 3.68% to refute. The National Development Discount Rate (Apr.) 1.125% 1.375% Council is arguing that the IMF did not Economic Growth Rate 2019p 2.37% 2.71% have full knowledge of Taiwan’s econ- Annual Change in Industrial Output (Mar.)p 10.40% -9.50% omy and neglected to account for how Annual Change in Industrial Output (Jan.-Mar.)p 8.85% well Taiwan has controlled the COVID- Annual Change in Consumer Price Index (Mar.) -0.01% 0.00% 19 outbreak, for example allowing Annual Change in Consumer Price Index (Jan.-Mar.) 0.55%

factory operations to continue. P=PRELIMINARY SOURCES: MOEA, DGBAS, CBC, BOFT In other responses to the pandemic, the private Taiwan Institute of Economic Research downgraded its forecast for ing and Statistics reported. However, But all other export categories showed Taiwan’s economic growth this year officials said external demand remained declines. Reflecting the severity of the from 2.67% to 1.58%, citing the unexpectedly strong, with the COVID- COVID-19 crisis in the U.S. and Europe, economic impact of the COVID-19 19 epidemic mainly crimping domestic exports to those markets declined pandemic, and the semi-official Chung- consumption, including the impact of a 3.1% and 8.1% year-on-year respec- hua Institution for Economic Research more than 50% drop in foreign tourists tively, while exports to Japan fell 2.1%. downgraded an earlier forecast of 2.44% in the quarter. However, exports to China (includ- to 1.03%. Fitch Ratings also lowered its At the same time, sectors such as ing Hong Kong) grew by 3.4% and to GDP growth forecast to a mere 0.3%, semiconductors and telecommunica- ASEAN by 5.6%. down from a previous estimate of 2.3%. tions have received a significant boost The unemployment rate rose in In the first three months of 2020, in demand as consumers working from March by just 0.002 percentage points Taiwan’s economy showed its slowest home purchase new equipment. March to come to 3.72%, showing that so quarterly growth in four years, expand- export orders, a leading indicator, unex- far the economic slowdown has not ing 1.54% from a year earlier, the pectedly grew at the fastest pace in had a huge impact on employment. Directorate General of Budget, Account- 17 months, rising 4.3% year-on-year Still, Taiwan faces the risk of reces- to reach US$40.3 billion. Electronics sion because of the toll the pandemic is TAIWAN STOCK EXCHANGE orders, in particular, rose 23.8% from a taking on the global economy. The value PERFORMANCE year earlier. The Ministry of Economic of Taiwan’s exports is normally equiva- THE LINE SHOWS CHANGES IN TRADE VALUE AND THE SHADED AREA CHANGES IN THE TAIEX INDEX. Affairs said the good performance was lent to more than 60% of GDP.

POINTS NT$ BILLION partially due to “delayed” demand since 13000 315 many factories in China had been closed INTERNATIONAL 12000 280 under the COVID-19 lockdown. 11000 245 March exports, however, contracted PRESIDENT TSAI’S 10000 210 by 0.6% year-on-year to US$28.27 PANDEMIC DIPLOMACY 9000 175 billion. Total imports rose by 0.5% In early April, President Tsai Ing-wen 8000 140 from a year earlier to US$25.48 billion, announced a new diplomatic initiative 7000 105 leaving a favorable trade balance of in an attempt to turn Taiwan’s success 6000 70 US$2.78 billion. Exports of electronic in battling the coronavirus into a geopo- 5000 35 4000 0 components grew 18.1% year-on-year litical win, despite China’s efforts to M and information, communication, and isolate Taiwan politically. Noting that

DATA SOURCE: TWSE audio-video products edged up by 0.2%. Taiwan had transformed from being an

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importer of facemasks to the world’s darity,” while the U.S. National Security mismanaging and covering up the spread second largest producer, she said: “We Council also expressed its gratitude. of COVID-19 after it emerged in China cannot stop the spread of COVID-19 In rival diplomacy, Beijing is also – and Taiwan has received support from simply by preventing an outbreak within delivering masks, ventilators, and Japanese Prime Minister Shinzo Abe, Taiwan. All members of the international other aid to countries hit hard by the Canadian Prime Minister Justin Trudeau, community must pool their capabili- pandemic, but its cause was not helped U.S. Secretary of State Mike Pompeo, ties and work together to overcome this by donating face masks to the Nether- and others – analysts say a breakthrough challenge.” lands that were found to be faulty and to enable Taiwan’s participation in the Tsai then pledged to donate 7 million test kits to Spain that were rejected as world health body is unlikely. masks to the EU, UK, and Switzer- substandard. Further complicating matters was land, which have been hard-hit by the a row that erupted in early April when pandemic, with a further one million CONTINUED W.H.O. WHO chief Tedros Adhanom Ghebreye- to go to Taiwan’s diplomatic allies and CONTROVERSIES sus, a native of Ethiopia, complained that two million to the U.S., all under the The international good will Taiwan he had been subjected to racist comments slogan “Taiwan can help.” Plans also has accumulated through its perfor- originating in Taiwan and that Taiwanese call for shipping an additional 100,000 mance during the COVID-19 pandemic officials did nothing to suppress them. masks per week to the U.S. under a sepa- is raising questions as to whether Taiwan Responding that Taiwan opposed all rate bilateral cooperation agreement. will be able to participate this year in forms of discrimination, President Tsai Two million masks were sent to Japan in the World Health Assembly, the govern- invited Tedros to visit the island. “For late April, and the foreign ministry said ing body of the UN-affiliated World years we have been excluded from inter- Taiwan is seeking to strengthen coopera- Health Organization. In recent years, national organizations and we know tion with Japan on vaccine research and pressure from China has kept Taiwan better than anyone else what it feels like the exchange of medical experts. from being invited to the gathering. to be discriminated against and isolated,” Taiwan also inked an agreement with Although Beijing acquiesced to Taiwan’s Tsai said in a statement. In Beijing, China the Czech Republic for cooperation on attendance as observers during the Ma accused Taiwan of “venomously” attack- fighting COVID-19 and it has donated Ying-jeou administration, it reverted ing the WHO and backed up Tedros’s thermal cameras to four diplomatic allies to opposing that connection once the allegations. in the South Pacific. European Commis- Democratic Progressive Party returned to In late April, Taiwan’s health minis- sion President Ursula von der Leyen power in Taipei in 2016. ter Chen Shih-chung and U.S. Secretary tweeted her thanks for the masks, saying Although U.S. President Donald of Health and Human Services Alex “We really appreciate the gesture of soli- Trump has accused the WHO of Azar held a conversation by teleconfer- ence. Chen thanked Azar for “the strong support extended by the United States for Taiwan’s participation in the WHO.” In turn, Azar thanked Taiwan for sharing its best medical practices. Reportedly, other cabinet-level Taiwan-U.S. contacts have taken place in the past, but they have been rare. The Chen-Azar dialogue was interpreted as a strong showing of Ameri- can support for the democratic island.

DOMESTIC

FORMER PREMIER HAU PEI-TSUN DIES Former Premier Hau Pei-tsun passed away at the age of 100 at the end of March. As a young military officer, Hau had fought in the Chinese Civil War, Former Premier Hau Pei-tsun, who passed away in March, is remembered for his and as an army commander stationed extensive military service and government experience. PHOTO: MARTTI CHEN

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on Kinmen had been in charge of its defenses during a landmark 44-day bombardment of the outlying archipel- ago by Chinese Communist forces in 1958. He was chief of the general staff for Taiwan’s armed forces from 1981 to 1989, the longest-serving person ever to hold that position. He then served as defense minister in 1989-1990 and premier from 1990 to 1993. His son, Hau Lung-pin, is a ranking Chinese Nationalist Party (KMT) official and a former mayor of Taipei.

COVID-19 OUTBREAK ON NAVAL FLEET In mid-April, an outbreak of COVID-19 was discovered among mili- Taiwan's baseball league was the first in the world to start the 2020 season, although with no spectators in the stands. tary personnel aboard a naval combat PHOTO: MARTTI CHEN support ship, one of three Taiwan- ese warships that had visited Palau, not known how the crew contracted the the field against the Uni-President Lions the Pacific island nation that is one of illness, the first COVID-19 cases to be at the Taichung Intercontinental Base- Taiwan’s 15 remaining diplomatic allies, reported in Taiwan’s military. No cases of ball Stadium on April 12, Taiwan on a goodwill mission. As of press time, COVID-19 have been reported in Palau. became the first place in the world for 31 people who were aboard the ship had As of the end of April, a total of over the 2020 baseball season to open despite been diagnosed with the illness. 430 people had contracted COVID-19 the COVID-19 pandemic. But at least On the ship’s return to Taiwan, more in Taiwan since the pandemic began, an for the beginning of the season, the than 700 sailors had been allowed to excellent showing compared with other games will be played to empty stadiums, disembark before the outbreak’s discov- countries. The majority of cases were attended only by the players, coaches, ery. They were then recalled and placed classed as imported rather than local umpires, and cheerleaders, in adherence in quarantine while the authorities sent transmissions. to social distancing rules. text messages to more than 200,000 Taiwan’s five-team Chinese Profes- people who might have been in contact TAIWAN 1ST TO OPEN sional Baseball League was originally with them, asking them to perform self- BASEBALL SEASON scheduled to start play several weeks health management for 14 days. It is still When the Chinatrust Brothers took earlier. The 2020 regular season will run until mid-October with a total of 240 games scheduled. Eleven Sports network is streaming home games for one team, the Rakuten Monkeys, live on Twit- ter with English commentary. Other teams were also looking to offer English- language play-by-play for the benefit of baseball-deprived sports fans in other countries.

DEADLY FIRE AT KARAOKE CLUB As of press time, six people had died from injuries in a fire that broke out in Sailors aboard the returned naval combat support ship Panshih were discovered a karaoke club in Taipei. The fire broke to be infected with COVID-19 after they were allowed to disembark in mid-April. out at the Linsen North Road branch PHOTO: MARTTI CHEN

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of Cashbox Partyworld KTV, one of the TAIWAN'S JAN. - MAR. 2020 TRADE FIGURES island’s largest karaoke-parlor chains. (YEAR-ON-YEAR COMPARISON) At the time of the incident, all five major safety features – an indoor fire hydrant, /China apan ASEA TOTA automatic sprinkler system, automatic fire 31 alarm, emergency broadcasting system, 29.1 13.6 13.2 13.4 12.5 8 11.2 10.6 8.9 78.7 5.7 5.9 and smoke extraction equipment – had 75.9 69.2 66.8 been turned off, investigators said. The 2020 2019 2020 2019 2020 2019 cause of the fire, which left more than 50 .S.A Europe people hospitalized, has not been officially 11 8.3 8.9 10.6 8.2 8.3 7.1

determined. The KTV chain halted oper- 10.6 ations at its 17 karaoke parlors across 2020 2019 2020 2019 2020 2019 the island and paid families of the victims T: S Billion NT$1 million each in compensation. Exports mports SO RCE: BOFT/MOEA

CROSS-STRAIT

HK BOOKSELLER ing down Taiwan’s east coast. The flotilla communication. In many government OPENS TAIPEI SHOP then entered the South China Sea through agencies, officials are increasingly work- A Hong Kong bookseller, Lam Wing- the Bashi channel that separates Taiwan ing from home owing to the COVID- kee, who fled the Chinese territory last and the Philippines. The ministry said it 19 pandemic, but they will no longer be year amid fears of Chinese persecu- monitored the carrier group’s progress allowed to use the Zoom video confer- tion, re-opened his shop, Causeway Bay throughout. encing app. In a statement, the Executive Books, in Taipei’s Zhongshan District 20 Perhaps in response to China’s recent Yuan said the decision was due to security months after its closure in Hong Kong. provocations, an American warship sailed reasons, without specifying the precise The opening was attended by a number of through the Taiwan Strait on two sepa- nature of the concerns. dignitaries, including legislative speaker rate recent occasions. A U.S. Seventh Fleet According to media reports, however, Yu Shyi-kun, who said it was a moment spokesman said the ship was the guided a recent analysis by researchers at the of pride for Taiwan’s democracy. missile destroyer, USS Barry, which both University of Toronto found that the keys Lam sought refuge in Taiwan after he times sailed in a north to south direction. used to encrypt and decrypt Zoom meet- was detained by Chinese agents for eight On the day of the first passage in early ings may be sent to servers in China. The months in 2015 for selling books, popular April, Chinese fighter jets were conduct- researchers also noted that Zoom employs with visiting mainland Chinese tourists, ing a drill close to Taiwan’s air space. The about 700 software developers in China, that were critical of the Chinese leader- second time, in late April, coincided with which “may make Zoom responsive to ship. A few days before the new store’s the Liaoning’s operations in waters south pressure from Chinese authorities.” opening, he made front-page headlines of Taiwan. The Ministry of Education also said it after a man threw red paint at him. The The spokesman said the USS Barry had was banning the use of Zoom in schools. suspect and two alleged accomplices in conducted a “routine Taiwan Strait tran- the attack were arrested but later released sit” in accordance with international law. HON HAI, MEDTRONIC on bail. “The ship’s transit through the Taiwan IN VENTILATOR DEAL Strait demonstrates the U.S. commitment U.S. medical device manufac- PRC CARRIER SAILS to a free and open Indo-Pacific,” he said. turer Medtronic and Taiwan’s Hon Hai BY EAST COAST Precision Industry, better known inter- A Chinese naval fleet led by the PRC’s BUSINESS nationally as Foxconn, have entered into first domestically built aircraft carrier, an agreement to make ventilators to help the Liaoning, passed relatively close to BAN ON OFFICIAL patients afflicted by the COVID-19 virus. Taiwan during military exercises, the USE OF ZOOM Personnel from the two firms have begun Ministry of National Defense said in mid- The Executive Yuan in April made work on the design stage, and Medtronic April. Accompanied by five warships, the Taiwan one of the first countries to CEO Omar Ishrak told CNBC that Liaoning first passed through the Miyako prohibit use of popular videoconferencing Foxconn’s new Wisconsin plant would be Strait northwest of Taiwan, before sail- software Zoom for official government used to make the ventilators.

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An Eye on the USTR Agenda

An annual report lists Taiwan-related trade issues being followed in Washington.

arly each year, the Office of the U.S. Trade Representative (USTR) releases a country-by-country Report on Foreign Trade E Barriers. The nine-page Taiwan section for 2020 provides a concise statement of the main areas of U.S.-government concern regarding elements of the bilateral trade relationship. Taiwan’s restrictions on the import of certain U.S. beef and pork products, particularly those containing the leanness-enhancing feed additive ractopamine, continued to be among the main outstanding trade issues. On numerous other issues, USTR’s comments frequently reflected input from relevant AmCham Taipei committees. These included: Medical devices. USTR cited the persistence of “longstanding concerns…over Taiwan’s systems for medical device product license 00 approvals and pricing review mechanisms.” A primary example was “documentary requirements that effectively limit the number of products eligible” for a simplified application process of regulatory review of medical devices. Other examples dealt with limitation to self-pay and balance billing (partial self-pay) mechanisms to provide access to high-end devices or new technologies not fully covered by National Health Insurance reimbursement to hospitals. Pharmaceuticals. “U.S. industry stakeholders continue to under- score the need for greater transparency and predictability in Taiwan’s pricing and reimbursement policies for pharmaceuticals, including innovative pharmaceuticals,” said USTR. It referred to U.S. industry suggestions for reform of the Drug Expenditure Target (DET) system to address such matters as the “inconsistent treatment of different forms of patented pharmaceutical products in price adjustments” and the mode of calculation of annual drug expenditure targets. Agrochemicals. “The Taiwan authorities’ slow process for establishing MRLs (maximum residue levels) for pesticides, low number of approved MRLs, and zero tolerance policy for pesticides without established MRLs have resulted in U.S. shipments being stopped at ports of entry and has dissuaded some trade due to the high risk of rejection,” the report noted. It said the U.S. would encourage Taiwan to “continue to improve the speed, efficiency, and transparency of its MRL regulatory system to facilitate trade.” Intellectual Property Protection. While crediting Taiwan with positive developments regarding pharmaceutical patent linkage, strengthening of the Copyright Act, and amendments to the Trade Secrets Act, USTR pointed to remaining challenges, “particularly with respect to online piracy.” Transparency. Calling it a positive step toward improving regulatory transparency, the Report mentioned Taiwan’s 2016 extension of the mandatory notice-and-comment period from 14 days to 60 days for proposed laws and regulations originating in executive agencies 0 and related to trade, investment, or intellectual property rights – an

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initiative that AmCham Taipei had strongly supported. USTR noted, 0 however, that implementation of the 60-day rule has been inconsistent. The above are some of the issues likely to be covered as part of 0 the Trade and Investment Framework Agreement (TIFA) process between Taiwan and the U.S. The high-level TIFA Council talks – negotiations between delegations led by the Deputy U.S. Trade Representative and Taiwan’s Vice Minister for Economic Affairs – have not been held since 2016. Even before the disruption of 0 the coronavirus pandemic, no schedule had been announced for resuming the talks. Nevertheless, it should be possible for working-level discussions between the two sides to continue, most likely by video conference.

— By Don Shapiro

Budget Coverage for New Drugs

AmCham’s Pharmaceutical Committee has suggestions.

ear after year, a key concern of the major pharmaceutical companies operating in Taiwan is the ease with which new Y drugs and new indications (meaning new applications for existing treatments) can enter the market. Given Taiwan’s single-payer universal healthcare system, much depends on whether the National Health Insurance Administra- tion (NHIA) under the Ministry of Health and Welfare has sufficient budget to accommodate the additional expense of new medications in its reimbursement to hospitals and clinics. Recognizing the importance of accepting new drugs to provide Taiwanese patients with the most up-to-date and effective treatments, NHIA maintains a separate budget for new drugs/new indications. But invariably questions arise as to whether the budget, which currently amounts to more than NT$2 billion, is enough to cover all the worthwhile drugs that are ready for launch. When representatives of AmCham Taipei’s Pharmaceutical Committee met in mid-April with officials from the National Devel- opment Council and MOHW, the means of determining the new drug/new indications budget was the main item on the agenda. Giving the officials a preview of the pharmaceutical section of AmCham Taipei’s 2020 Taiwan White Paper due for release on June 00 10, the Committee members suggested adoption of the technique of “horizon scanning” in the budgeting process. In the past, the budget was set chiefly by looking back at the previous several years’ expenditure and rate of growth. The Committee is urging NHIA to also look ahead, taking into account a five-year financial forecast to be provided by the pharmaceutical companies and verified by the Center for Drug Evaluation.

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More broadly, the Committee is urging the government to shift from a mindset mainly of cost control to one of value creation, adopting global standards of care and assuring that unmet clinical needs are fulfilled. — By Don Shapiro

Dealing with Osteoporosis

As Taiwan society ages, this challenging condition is becoming more prevalent.

ith the rapid rise in the proportion of elderly people in the Taiwan population, one of the medical conditions W that will require increased attention is osteoporosis. A progressive skeletal disease characterized by decreased bone density and weakened bone tissue, osteoporosis frequently leads ， to falls and fractures among senior citizens, especially women. The result can be severe pain, disability, and even death due to infection. AmCham’s Public Health Committee has been seeking to raise public awareness of the seriousness of the problem. It notes that osteoporosis is often called the “silent killer of the elderly.” Without leaving any obvious signs, the disease gradually hollows out the bones so that a mild bump or fall can result in a fracture. Domestic studies have shown that one in three women, and one in five men, over the age of 50 suffer from osteoporosis. Hip fractures are the most serious consequence, leaving patients heavily reliant on the care of others and causing a heavy burden for the public healthcare system, the Committee notes. It cites National Health Insurance Administration statistics showing that Taiwan has the highest incidence of hip fractures in Asia, with 50 nearly 20,000 people diagnosed with the injury every year. Up to 80% of patients with hip fractures become disabled, and 20% of them die within a year. In the absence of a fracture, osteoporosis often goes undi- agnosed as there are no evident symptoms. The Committee is therefore urging increased efforts at early detection of osteoporosis 0 and fracture prevention through screening programs and health 0 intervention. Besides expanded screening for those over 65 years of age, it is urging the Ministry of Health and Welfare to engage in more public education to raise awareness regarding bone health. In addition, the Committee is recommending expanded 5 coverage of osteoporosis treatment under the National Health Insurance system. Currently NHI provides reimbursement only for patients who have already experienced a fracture. But preventing a first fracture should be just as important, since elderly people who have already had one fall are far more vulnerable to repeated, potentially even more serious fractures. — By Don Shapiro

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Taiwan’s AI Expectations 台灣的AI期望

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TAIWAN TESTS THE LIMITS WITH ARTIFICIAL INTELLIGENCE

Industry, government, and academia are all working together to create a vibrant AI ecosystem in Taiwan, while recognizing that some major challenges remain.

BY JEREMY OLIVIER

sk anyone in Taiwan’s business and IC design. a new technology as AI. or technological circles these In addition, Taiwan’s open-source In the past, Taiwan’s dominant tech A days what they think will be the data policies offer a treasure trove of hardware sector tended to pull most fresh next big thing for Taiwan industry, and useful data for AI algorithms to learn young talent into that sphere. Positions the answer is almost certain to be “artifi- from. Furthermore, Taiwan’s government in long-established local companies like cial intelligence.” and industries are beginning to explore Taiwan Semiconductor Manufacturing There is good reason to believe that how its traditional focus on tech hard- (TSMC) and Mediatek were traditionally Taiwan can make the most of this new ware and manufacturing can be leveraged more lucrative than those in the software and dynamic technology, which inter- to take full advantage of what AI applica- engineering field. national consulting firm McKinsey esti- tions have to offer. Ethan Tu, founder of Taiwan AI Labs, mates will add US$13 trillion in global But some thorny challenges to a privately funded research organization economic output by 2030. Most impor- Taiwan’s aims of becoming an AI inno- based in Taipei, says that he encountered tantly, the country possesses a large pool vation hub still remain. For one, while a lot of negativity when he first relocated of highly capable but relatively inexpen- Taiwan’s high-quality workforce is to Taiwan from the U.S. in 2017. sive engineering talent. It is also home to praised by local and international busi- “People said ‘oh, a software company probably the strongest and most compre- nesses alike, the supply of domestic talent will never survive because Taiwan’s hensive ICT ecosystem in the world, espe- is insufficient to meet the rising demand, market is too small’ and ‘Taiwan doesn’t cially for semiconductor manufacturing especially for those with expertise in such have enough AI talent,’” says Tu, who

00 I台灣的的

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is also the founder of the popular Taiwan- ese bulletin board system PTT. “At the beginning, only [Minister without Portfo- lio] Audrey Tang and [Minister of Science and Technology] Chen Liang-gee supported me,” he recalls. However, Tu and others observe that the mindset has gradually begun changing as more and more companies look to AI as the future of tech on the island. For culti- vating the talent pool, the main issue now is the pattern of brain drain that Taiwan is stuck in. Engineers continue to leave the country in search of better-paid options – mostly in China. The issue of talent insufficiency is not lost on Taiwan’s leadership. Last May, Premier Su Tseng-chang announced plans to train 10,000 new AI specialists each year. Education about the technology will begin as early as elementary school, the premier said. There are also ethical questions surrounding the adoption of AI. Some of these are universal, such as how to avoid bias in AI models or deal with job loss and inequality associated with AI-driven automation. Others are particular to Taiwan. How, for example, can the National Health Insurance Administration’s cache of healthcare data be properly utilized for AI research or commercial purposes while still preserving privacy and adhering to Taiwan’s data protection regulations? Challenges aside, the enthusiasm for realizing Taiwan’s potential in AI is palpa- ble. Enormous resources have been poured

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ARTIFICIAL INTELLIGENCE

into the development of AI and related AI-focused products and solutions. an academic at one of Taiwan’s universi- technologies since 2016 as part of the Other projects under the MOST aegis ties or research institutions, it is not eligi- Tsai administration’s push to reform have included a NT$4 billion (US$133 ble to receive MOST funding. Taiwan’s economy for the digital age. million) initiative to help Taiwan’s “In Taiwan, funding for scien- Multiple government ministries have robust semiconductor industry acceler- tific research is for academic institu- introduced sweeping, multi-million- ate its development of AI edge technol- tions only,” says Yeh. “That is a different dollar AI-focused schemes, which involve ogy, as well as four AI research innova- model from the U.S., and I think that for the participation of industry, academia, tion centers spread among various univer- AI it’s a big misstep. A lot of companies and both publicly and privately funded sities around the island. These facilities, have the required technologies to push research institutions. which focus respectively on AI core tech- forward AI research, but we have no way The largest investment by far has nologies, AI for medical applications, AI of getting funding from MOST.” come from the Ministry of Science and for manufacturing, and AI services, are For his part, Deputy Minister Hsu Technology (MOST), who saw the grow- intended for both research and develop- sees the AI Taiwan@MOST program ing global trend in AI. Its five-year AI ment purposes, as well as talent cultiva- as a good first step, one that has been Taiwan@MOST program, launched in tion. The centers have so far produced followed by additional funding from a 2017, has put up around NT$16 billion hundreds of academic papers and success- few other ministries. (US$500 million) and encompasses five fully completed 58 cases of technology Those subsequent efforts were carried different national projects. transfer. out under the Executive Yuan’s “Taiwan MOST’s projects are mainly centered According to MOST Deputy Minis- AI Action Plan” introduced in January around supporting academic research ter Hsu Yu-chin, funding for academic 2018. The Plan, which is set to last until of AI technologies, as well as encourag- research is essential to creating the tech 2021, contains a broader set of objectives ing academia-industry collaboration on landscape needed for the intelligence era. than AI Taiwan@MOST. a range of areas deemed important to After all, he says, all new technologies One of the main goals of the Plan is to Taiwan’s AI development. begin with the initial scientific research, enlarge Taiwan’s existing pool of AI engi- One such project is a shared-use AI later moving on to industrial production. neering talent. In addition, it also sets and Big Data cloud-computing plat- Yet some in Taiwan’s nascent startup out to expand and capitalize on Taiwan’s form, powered by the Taiwania 2 super- scene have pointed to a lack of flexibil- world-leading position in the semicon- computer at the National Center for ity in funding under the program. Joe ductor industry, remold Taiwan into an High-Performance Computing (NCHC). Yeh, founder and CEO of the medical AI industrial hub, liberalize regulations to Launched in May 2019 and expanded for startup aetherAI, says that his company enable the development of innovative commercial use a few months later, the has published three peer-reviewed journal technologies, and use AI to transform platform – called the Taiwan Comput- articles – something companies are not industry in Taiwan. ing Cloud (TWCC) – has been accessed normally obligated to do. Nevertheless, The Executive Yuan has also called on by several startups to develop their because aetherAI was not established by industry – particularly large multinational

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tech firms – to help lead the charge. Giants such as Microsoft, Amazon, and Google have set up large R&D centers on the island over the past few years. These facilities work closely with government and local universities to train and employ Taiwan’s top-tier engineering talent. In 2018, Microsoft established its AI R&D Center in Taipei. The NT$1 billion (US$33 million) project was launched in partnership with the Ministry of Economic Affairs under its Global R&D Innovation Partner Program. The Center employs a team of 100 local engineers, who are assigned to work on a combination of six independent projects covering the subfields of computer vision, user intention, and vertical industries. Michael Chang, the Center’s direc- IMAGE COURTESY OF MOST tor, says the decision to locate the facil- ity in Taipei was easy to make. Taiwan [on production] is so short,” he says. ing innovative vertical applications in a boasts some of the highest-ranked science “This is important from an innovation range of different areas. This growing and technology universities in the world, perspective.” community is complemented by a system producing some 10,000 computer science of supporting institutions from both the graduates and 25,000 electrical engineers Startup island public and private sectors. every year. In fact, 30% of the Center’s The best-funded of Taiwan’s AI start- employees were recruited directly from With the help of generous govern- ups is Appier, which has raised over Taiwan’s universities. ment support and some newly intro- US$160 million since its founding in The island’s compact size, population duced regulatory frameworks, a flour- 2012. The company uses artificial intelli- density, and excellent ICT infrastruc- ishing startup space centered around AI gence to assist its clients with their digital ture were also major factors for Micro- products and solutions has begun form- marketing strategies. Appier’s success in soft. “Taiwan has a really unique posi- ing in Taiwan in recent years. Several cornering this market in the Asia-Pacific tion,” says Chang. “The supply chain of the startups that have emerged from has earned it a place among Forbes’ top is so complete and the turnaround time this scene have found success develop- 50 AI companies worldwide.

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Before joining the company in 2018, deep-learning techniques. around seven other startups in Taiwan Min Sun, Appier’s U.S.-educated Chief Since coming on board, he and the are now competing in this area. AI Scientist, spent most of his career on rest of his technology team have led One of these startups is iKala, origi- the academic side of AI development, the company’s efforts in pushing for nally an online karaoke and live broad- focusing his research on natural language AI-driven business transformation for its casting platform that years ago decided to processing and computer vision. more than 1,000 clients. The team uses first switch to cloud streaming for enter- Sun says that Appier founder Yu Chih- supervised machine learning models, prises. Sega Cheng, iKala’s founder and han’s goals of building one of the best which allows it to account for consump- CEO, says that after the company made AI-based R&D teams in Taiwan, serv- tion and engagement habits across differ- this pivot, “that’s when we started doing ing customers with innovative AI solu- ent countries and cultures. serious business.” tions, and seizing business opportunities Considering that digital marketing is Cheng, who was trained in AI in the Asia-Pacific aligned with his own experiencing one of the most rapid digi- programming at Stanford University, objectives at that time. Joining Appier tal transformations of any field, it seems says that later applying the technology also allowed Sun to take advantage of his a likely choice for an AI-related startup to to the company’s digital marketing solu- background in multimedia analysis using lock in on. Indeed, in addition to Appier, tions made sense. The decision was a

Microsoft launched its AI R&D Center in Taipei in 2018 to help train and cultivate high-quality local AI talent. PHOTO: MICROSOFT

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wise one. iKala now partners with some learn from. recognize and reject copyrighted images. of the world’s biggest tech companies, WritePath’s algorithms are designed “That’s the kind of responsible AI we including Facebook and Google. It has to work in collaboration with human want to be working on,” says Cheng. raised around US$13 million so far and is translators to create the final prod- “Putting humans in the equation – not just preparing for Series B funding in the fall. uct for its clients. These algorithms are stealing and not just replacing people.” Other startups are looking elsewhere fed all the data from previous cases the for developing AI applications, such as company has completed, as well as data- Getting businesses on board creating solutions for use in the health bases and public information that Chin and medical, security and surveillance, and his team gleaned from around the One of the biggest challenges to incor- retail, and finance sectors. world. The AI performs the first transla- porating AI and other software-oriented Niche opportunities exist as well. tion, targeting repeated words, glossary solutions further into Taiwan’s industries Charles Chin, CEO of WritePath, an terms, and previously used phrases, and is the slow pace of digital transformation AI-enabled translation service for the the human translator polishes it. on the island. Cheng of iKala notes that financial industry, says that he and his Appier, Writepath, and iKala all companies need to have a strong digital co-founders initially sought to partner emphasize that their AI solutions are foundation before they can begin adopt- with academia to develop the text-based “human-centered.” Asked what this ing AI technologies. AI solution. “However, when we brought means, Cheng of iKala stresses the But many companies in Taiwan the idea to them, they told us ‘you guys involvement of people in AI development currently lack the necessary comprehen- are very brave,’” Chin says. “It’s a part of and applications, as well as the creation sive understanding of how, step by step, AI technology, yes, but it is not the major of ethical, humane AI. to digitally transform a business. These focus.” He cites the example of one of iKala’s companies, Cheng says, need a clear But Chin had observed the growing products, an innovative picture-as-a- “digital roadmap” that would put all demand among Taiwanese companies service (PicaaS) technology, which he stakeholders on the same page. to translate financial statements from calls a “deepfake for good.” The soft- Cheng and his team at iKala have Chinese to English in order to attract ware automatically edits product pictures seized on the current gap in digital liter- foreign investment. Besides, the compa- – removing background, promotional acy to come up with a framework to help ny’s client list was expanding and the text, and unnecessary overlays – allow- businesses successfully navigate a digi- particular market they found themselves ing companies to widely circulate clean tal overhaul. Entitled the DAA (Digitali- leaning toward seemed to lend itself well photos of their products. zation, Analytics, Application) flywheel, to incorporating AI. However, Cheng says that after this framework is not only useful for Translating financial documents, says initially launching the platform, the guiding clients through the process, but Chin, requires a deep knowledge of the company received some complaints that also helps iKala determine whether AI is special terminology used in those docu- it could potentially be used to infringe even necessary for an individual compa- ments in two different languages. In on image owners’ intellectual prop- ny’s digital transformation. addition, financial documents contain erty rights. Cheng and his team then “Instead of just boasting about or repeated terms and phrases for AI to went back and re-trained the software to selling you AI services or solutions, tell-

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ing you how magical it is, what we do Michael Chang of Microsoft agrees tive to make such a big investment in the is to first help you define clear business that digital transformation is important company’s future. goals,” says Cheng. “In our past expe- and notes that company culture is the “I hope to see that change, so that rience, there were some circumstances leading factor preventing businesses from governments and businesses can soon where we held a workshop or looked at taking the leap. He says that the culture start to see the value of software,” says a business owner’s goals and concluded at Taiwanese companies has historically Chang. “Software, including AI, is the that they didn’t need AI at all,” he says. been a bit more cautious and conserva- key to their success.”

WHERE TAIWAN CAN MAKE THE MOST OF AI

Much of Taiwan’s industry is being transformed by the introduction of AI technologies, particularly in the areas of manufacturing and healthcare.

BY JEREMY OLIVIER

ndustry the world over is experienc- have seized this opportunity to promote startups to test their solutions. ing some radical changes, propelled the development of AI-enabled manufac- According to MOST Deputy Minis- I by the continued development and turing capabilities in Taiwan. ter Hsu Yu-Chin, the central and south- application of AI technology across a The Ministry of Science and Tech- ern robotics hubs had hosted 71 startups wide variety of different fields. While in nology (MOST) in 2018 launched the as of the end of last year – 43 of them most countries everything from finance NT$2 billion (US$66.59 million) Robot local or international AI-related startups and banking to transportation and logis- Makerspace initiative, which established from the ministry’s Taiwan Tech Arena tics is being revolutionized by AI, certain smart robotics hubs in Taichung and program. Startups at the two hubs have areas in Taiwan are undergoing more Tainan within the Central and Southern been responsible for more than 99 new drastic transformations than others due Taiwan Science Parks. These centers offer products or technologies, and in 2019 to the country’s natural advantages in co-working spaces and accelerators for generated over US$400 million in over- those sectors. These fields include robotics for industrial automation, semiconductor and hardware manufacturing, as well as for healthcare. In these areas, as well as many others, Taiwan stands to reap the most benefits by integrating innovative software capabilities into its existing hardware infrastructure. Taiwan’s economic miracle began with its shift to export-oriented manufacturing in the 1970s, and manufacturing is still a core driver of Taiwan’s economy today. Furthermore, an increasing number of Taiwanese manufacturers have begun leaning toward industrial automation, boosting demand for smart machinery – Originally specializing in power generation and electrical components, Taiwanese including intelligent robots – in produc- tech company Solomon has in recent years begun developing computer vision and tion lines. Both government and industry AI systems for industrial automation. PHOTO: SOLOMON

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seas venture capital and international business collaboration opportunities. Other industrial automation projects are being carried out by the government- backed Industrial Technology Research Institute (ITRI), including a self-taught robot technology that utilizes deep-rein- forcement learning algorithms. Vincent Feng, general director of the Computa- tional Intelligence Technology Center at ITRI, notes that the robotics currently used in manufacturing are semi-automatic and do not have AI capabilities. However, since production in Indus- try 4.0 can vary from time to time, Feng says, robots should be able to learn to recognize the shape of different objects and materials. AI is not solely the province of startups and large tech multinationals. A ITRI’s smart funduscope uses AI to help ophthalmologists determine if a patient has growing number of Taiwan’s more estab- diabetic retinopathy. PHOTO: ITRI lished technology companies are beginning to explore AI-enabled robotics solutions for their client base as well. goods, and e-commerce companies. Solo- One inspection-equipment vendor Founded in 1973, Solomon Tech- mon’s 3D vision design has received inter- for which ITRI developed an algorithm nology Corp. has expanded its scope national recognition as well, winning the was able to raise the price of its product of business over the years, going from prestigious Vision System Design Innova- tenfold and has provided the AI-enabled the initial distribution of power gener- tors Award in Chicago last year. equipment to major PCB manufacturers, ators and electrical components to the Taiwan’s push to introduce AI into Feng says. addition of LCDs, semiconductors, and manufacturing processes is not restricted Although the benefits of AI to manu- batteries in the 1980s and 1990s. In 2009 to robotics. Among other ways in which facturing are clear, there is still some hesi- the company became the sole Taiwan high-tech operations can benefit from tancy among Taiwan’s manufacturers distributor for Rockwell Automation, the integration of hardware and soft- about adopting the technology whole- the world’s largest industrial automation ware capabilities is predictive mainte- heartedly in their operations. company. It was at that time, says Solo- nance. ITRI’s Feng says that knowing Richard DeVries, managing direc- mon Chairman Johnny Chen, that the when factory equipment is likely to break tor of Geber Brand Consulting, says that company began to get interested in what down or needs to be replaced is espe- “Taiwan is well-positioned to take advan- it could do with robots. cially important in the semiconductor tage of AI,” but in his experience working “I was going to a lot of trade shows, and petrochemical industries, where an with local B2B manufacturers, companies and all of the robots I saw were just unplanned equipment failure can stall the are not always ready to embrace it. He doing repetitive tasks,” says Chen. “We pipeline and cause heavy losses. says that this reluctance is generally due started looking into vision systems and Another function that is benefit- to silo issues within an organization, lead- figured that this would be key to solving ing from AI integration is defect inspec- ing to a lack of communication between a lot of the more complex problems you tion and classification, ensuring the qual- departments and a persisting top-down find in production lines.” ity of production. This technology can hierarchy that’s common in Taiwan- The company began building up be applied in the production of semicon- ese companies. There may be impetus to an R&D team to develop its own 3D ductors, printed circuit boards (PCBs), incorporate AI from lower-level employ- computer vision system – a robot’s D-RAM, and panels, says Feng. ees, but the top executives – the decision- “eyes,” as Chen puts it. The machine “For example, in the PCB industry, we makers – might be unaware of how it vision is combined with AI deep-learning collected millions of images, then trained could benefit the company. technology to give the robots the added the AI model to distinguish between “We get around this by starting off benefit of a “brain” – the ability to recog- actual defects and false alarms,” Feng with a general introduction of how AI nize complex objects and patterns. explains. These false alarms are common in all its forms can apply to B2B manu- According to Chen, Solomon’s deci- with the current system of automatic facturers,” DeVries wrote in an emailed sion to delve into AI and machine vision optical inspection and require human response to Taiwan Business TOPICS. has really begun to pay off. Its systems inspection for verification. ITRI’s AI “You need to show them via statistics, are now being applied by some of the inspection model, on the other hand, is trends, and case studies that this is a world’s leading automobile, consumer much more accurate. huge and growing trend. Using fear of

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being left out, along with the opportuni- tion are diabetic. However, most ophthal- who also heads the Office of AI Applica- ties AI can bring, often gets buy-in from mologists are based in Taiwan’s big cities. tion Strategy under ISTI. the top level.” Patients in more remote locations that Still, given the competition Taiwan have eye conditions like retinopathy are faces from China and other regional play- Making healthcare smarter thus often referred to bigger hospitals in ers in the AI realm, the situation now is the city, a real inconvenience to diabetics. “like running a race that’s started before AI for the medical field currently The AI-enabled funduscope thus allows the gun even sounded,” Su says. “We revolves mainly around disease diag- doctors to better serve rural patients. need to have technology and controls in nosis and drug screening. It relies on The Healthcare Lab at privately place so that data can be used in a more vast amounts of data to learn from and funded research organization Taiwan transparent way and that its value can be improve its accuracy, something which AI Labs is also using the NHI’s medical maximized as well.” Taiwan is well-suited for. Since the mid- image data for its Malaria Diagnostics Joe Yeh, founder of the medical 1990s, the health data of almost every Project, which uses deep learning to more image AI startup aetherAI, says that his Taiwanese citizen has been collected under quickly diagnose the disease by locat- company has had to work around the the National Health Insurance program ing the parasite that causes it in images of data use restrictions by obtaining insti- from around 30,000 hospitals and clinics blood samples. The data is also used for tutional review board (IRB) approval to and stored in the NHI central database. the Lab’s brain cancer detection software collect data directly from local hospitals. Having access to such a massive Deepmets, which it launched in partner- This method is legal but time-consuming, amount of data is a real boon to devel- ship with Taipei Veterans General Hospi- he says oping AI and smart health systems. Of tal in 2018. Yeh and the aetherAI team now use most immediate relevance to AI research- That same year, AI Labs teamed up the data they collect from individual ers is the cache of medical image data with Microsoft to launch a precision hospitals in Taiwan to develop AI for contained within the NHI’s database. medicine platform called TaiGenomics. digital pathology. While this field has This data can be used to train algorithms The platform’s algorithm processes and been around for nearly a decade, having to detect certain conditions in patients, analyzes medical and genetic data which the AI diagnostic systems in place to which doctors and technicians then is stored in Microsoft’s Azure cloud manage the image data and help create confirm, increasing the efficiency and reli- computing platform to help doctors make reliable prognoses takes a lot of the ability of diagnoses. better diagnoses more efficiently. burden off of pathologists. Taiwan’s medical image data is An ongoing issue with the NHI data is “AI can be very sensitive, it doesn’t get currently being used by ITRI to assist that while it is available for academic and tired, and it trains on a vast amount of Taiwan’s ophthalmologists in determin- research purposes, it cannot be accessed data,” Yeh says. He notes that “in pathol- ing whether patients are suffering from by private industry because of Taiwan’s ogy, you can now have double readings, diabetic retinopathy, a condition that stringent data protection laws. where AI screens once and the patholo- can cause blindness if left untreated. The The restrictions on data use indicate gist screens a second time.” algorithm ITRI devised was fed around the government’s desire to align with data There are indications that Taiwan’s 10,000 images of retinopathic patients’ protection standards from places like data regime may become more flexible in eyes and then installed in a smart fundu- Europe and the U.S. and to be a “good the future. According to a March article in scope – a medical device used to examine global citizen,” says Stephen Su, vice local publication Digitimes, NHI Admin- the interior structure of the eye. president and general director of ITRI’s istration Director-General Lee Po-chang ITRI’s Feng emphasizes the importance Industry, Science and Technology Inter- has said that the administration is begin- of this technology, given the high preva- national Strategy Center (ISTI). But the ning to discuss with life insurance compa- lence of diabetes among Taiwanese – 2.45 government has recognized the need to nies the possibility of using NHI data to million people or 10.83% of the popula- make the data more accessible, says Su, better tailor plans for their clients.

THE COVID-19 PANDEMIC AND TAIWAN’S AI DEVELOPMENT

he COVID-19 pandemic is to research the disease’s origins, treat people under enforced quarantine and taking an unprecedented toll on it, and manage its spread. Nowhere has trace the movements and contacts of T the global economy and human this been seen done more effectively than infected individuals. lives. Yet it is also inspiring the inno- in Taiwan, where the government has Research institutions, academia, and vative application of new technologies used AI and Big Data analytics to track industry in Taiwan are also getting on

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Taiwan AI Labs has developed an AI tool that screens chest X-rays and determines if a patient has pneumonia or is infected with SARS-Cov-2. PHOTO: TAIWAN AI LABS

board, developing AI algorithms to target in a patient’s chest X-rays. The algorithm ary 4. Included among the drugs tested specific issues that have arisen as a result has been fed over 40,000 chest radio- was the antiviral Remdesivir, which the of the pandemic. The products and solu- graphy images, including around 5,000 model found would be useful in treating tions that have resulted from these efforts images of patients infected with SARS- COVID-19. have the potential to benefit countries the CoV-2. Among the AI-related COVID-19 world over. Tu says that AI Labs is now work- research projects the semi-governmen- Taiwan AI Labs, a private research ing with the National Health Insurance tal Industrial Technology Research Insti- organization that works closely with Administration to implement the plat- tute (ITRI) is working on is a predic- academia, government, and industry, is form in Taiwan. They have installed the tion model to test different approaches currently working on a range of AI-based algorithm in the NHI’s central database to “flattening the curve” – reducing the solutions to combat COVID-19. All of to automatically screen all chest X-ray amount of infections in a population. these solutions are open source and avail- data uploaded from hospitals. The soft- The model, which ITRI is developing in able for public use at the web address ware alerts doctors if the X-ray is found collaboration with the National Applied covirus.cc. They include a platform that to present pneumonia or SARS-CoV-2. Research Laboratories, will analyze meth- uses genetic sequencing data from the Having this system in place, says Tu, will ods such as mask-wearing, social distanc- German GISAID database to map all of eventually help shorten the waiting time ing, quarantining, and others to deter- the different SARS-CoV-2 strains with for getting a diagnostic result from one mine which is most effective in curbing phylogenic trees. The resulting visual aid week to a matter of minutes. the virus’ spread. shows the full evolution of the virus and Another project AI Labs has launched Vincent Feng, general director of can help doctors and researchers trace a on covirus.cc is a drug screening model ITRI’s Computational Intelligence Tech- patient’s viral strand to its origin. that tests the efficacy of possible COVID- nology Center, says that ITRI is work- “Using this tool allows us to under- 19 treatments, including the anti-malarial ing closely with the government, using its stand the relationship between virus drug hydroxychloroquine touted by U.S. technological expertise to fight the virus strains,” says AI Labs founder Ethan Tu. President Donald Trump. The accuracy of and staunch its spread. Its newly unveiled “And we can analyze in detail how this the technology allows biomedical labs to smart home-care technology can signif- virus has mutated. This helps us detect determine the priority of drugs to bring icantly reduce the burden on epidemic the source of the virus in each patient – to clinical trials. prevention personnel. whether it is from the U.S., Europe, or Tu says the model, which only tests Also, he notes, ITRI will continue to elsewhere.” drugs already approved by the Food and employ its strengths in cross-disciplin- The covirus.cc website also hosts a Drug Administrations in Taiwan and ary research to confront the far-reaching medical image screening platform that the U.S., produced screening results on implications of COVID-19. uses deep learning to detect coronavirus a range of treatments as early as Febru- On the commercial side, one solution

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soon to go to market is the LivMote, a concept in February to getting test units out to company Solomon Technology Corp., touchless temperature-screening device pilot locations in June, and we are moving on to known for its AI-powered industrial auto- developed by Taipei-based hardware-as- mass production in August or September.” mation products, has released two kinds a-service startup Soda Labs. The wall Temperature-screening technology is a of autonomous guided vehicle (AGV) mounted device combines infrared ther- common thread among companies work- robots. One is equipped with a UVC light mography with a few other ambient ing on AI solutions to combat COVID- and the other with a disinfectant atomizer. sensors and engages machine learning to 19. This trend is not surprising since The products were developed with the improve the accuracy of its temperature almost 88% of confirmed cases of the help of Solomon’s Denmark-based part- reads over time. virus have fevers, according to a Febru- ner, Mobile Industrial Robots. Organizations that install the LivMote ary 2020 report from the World Health According to Solomon Chairman can choose what data it collects, whether Organization. Johnny Chen, the sterilizing AGVs can it is stored in the device or in the cloud, Cardinal Tien Hospital in New Taipei be deployed in settings such as hospitals, and how long it is stored for. The security City’s Yonghe District has collaborated schools, and office buildings, helping ease system, developed with Microsoft’s Azure with Microsoft Taiwan to install a device the anxiety of people entering those build- IoT infrastructure, is built directly into that screens the temperature of individu- ings and reducing the burden on commer- the product. als entering the hospital and determines cial cleaning services. Chen says that Soda Labs CEO Andrew Jiang says whether they are wearing the required so far Solomon is focusing only on the that the LivMote is intended for use in face mask. Microsoft’s solution was devel- Taiwan market for sales of the new AGVs. senior living and long-term-care facili- oped on its Azure cloud-computing plat- ties, places that host particularly vulner- form. The product, which was launched Seizing opportunities able populations. (At the end of April, within two weeks, combines infrared the Wall Street Journal reported that the sensors for temperature screening and AI COVID-19, while terrible, also pres- death toll from COVID-19 in Ameri- to detect face-mask-wearing on an intel- ents tremendous opportunities for AI can nursing homes had topped 10,000). ligent-edge device placed at the hospital’s development and other innovative tech- For Jiang and his team, the goal in creat- entrance. nologies worldwide. Taiwan is well posi- ing the product with long-term partner It employs the Azure Bot service to tioned to take advantage of those oppor- Foxconn was to devise something that alert hospital authorities to any abnor- tunities, says Soda Lab’s Jiang. helps safeguard the health of vulnerable malities in body temperature or visitors “Taiwan has both the tech hardware segments of the populations, while also not wearing masks. In a Microsoft press manufacturing knowledge and the trust addressing privacy concerns in countries release, Liao Mao-hung, Cardinal Tien of the Western world,” Jiang says. It where facial recognition technology is Hospital’s Administration Vice Superin- therefore has an opening now to lend its seen as too invasive. tendent, noted that use of the device can expertise and to build and improve prod- The LivMote was rolled out in just a matter reduce the workload of front-line medical ucts that will be used around the world. of months. “We got to put to the test our abil- personnel, saving on human resources. “I don’t think Taiwan necessarily has to ity to launch hardware/software products very Solutions are not limited to temper- push the boundaries of innovation in AI quickly,” says Jiang. “We went from R&D ature screening. Veteran Taiwanese tech but can adopt international best practices and fit that together with hardware,” Jiang says. Min Sun, Chief AI Scientist at digital marketing startup Appier, agrees, though he cautions that Taiwan and other countries need to continue to walk the line between developing AI solutions for good purposes like fighting COVID-19, while still protecting the personal data of their citizens. “I can see COVID-19 as a true growing force, not only in Taiwan, but also in countries where the situation is more severe. They need this more-efficient, data-driven, decision-making solution,” says Sun. “But we do need to be care- ful about the data privacy issue – to think carefully about how to achieve this state- of-the-art technology while also building systems that preserve privacy.” The LivMote, produced by Taipei-based startup Soda Labs, screens the temperatures of individuals at care facilities without the use of facial recognition technology. PHOTO: SODA LABS — By Jeremy Olivier

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CHECKING TEMPERATURES: HOW BUSINESSES IN TAIWAN ARE COPING WITH COVID-19

Companies are trying to figure out how best to respond to new and unique challenges, while staying vigilant about the unexpected.

BY JEREMY OLIVIER

s the COVID-19 pan- recently returned navy vessel Panshih restaurants and bar, even with social demic continues to spread, after a five-day quarantine later tested distancing measures in place. This A wreaking havoc on econo- positive for the coronavirus. The inci- includes a modest increase in demand mies throughout the world, companies dent reinforced a sense of apprehension for private dining rooms. The Sherwood are struggling to come up with ways to and vigilance in Taiwan’s business com- is even offering a premium NT$350 keep business operational, as well as munity. Taiwanese-style lunchbox option for employees and clientele safe. Meanwhile, some enterprises in the takeout, which von Hake says has sold Taiwan, for its part, has managed to hard-hit travel and tourism industry are very well lately. keep the virus well contained, thanks using the downtime caused by the drop In addition to the continued to early and effective government in business to take care of tasks that employee training, the Sherwood is also intervention. Besides taking useful pre- may have otherwise been scheduled for undergoing renovations that were orig- cautionary measures such as mandatory later in the year (or which they may not inally scheduled for the late summer mask wearing and temperature taking, have had time to do at all). months when business travel is usually very few companies have had to resort For hotels, right now is an excellent at a low ebb. Von Hake stresses that to anything more drastic. time to take advantage of staff training because the renovations are being stag- In a flash survey conducted by courses offered by Taiwan’s Tourism gered, there will be very little disruption AmCham Taipei in April regarding the Bureau, says Achim von Hake, gen- to hotel operations. The Sherwood, effects of the pandemic on member eral manager of The Sherwood Taipei. he says, will remain open for business companies, more than 62% of respon- His hotel’s room occupancy rate has throughout. dents said that they have no plans plummeted to around 5% on weekdays In the retail sector, companies are or intentions to lay off or furlough because of strict immigration controls coming up with new ways of keeping workers. Furthermore, Taiwan’s unem- the government put in place in March, crowds minimal while still maintaining ployment numbers have experienced a barring any foreigner without residency steady sales volumes. The pressure to much smaller increase than in countries from entering the country. Business encourage social distancing in brick- like the U.S. In March, the jobless rate picks up a little over the weekends and-mortar stores where space is increased only slightly to 3.71%. when more domestic travel occurs. sometimes limited can present some Still, business leaders are feeling Von Hake says he agrees with the tough challenges to businesses. more cautious lately. Most understand restrictions, which he notes have kept Visitors to Costco locations in that the situation could change very the number of confirmed COVID-19 Taiwan nowadays may notice some new quickly and that preparation for the cases much lower than in neigh- arrangements meant to cut down on the worst-case scenario is essential. boring countries. In any case, the hotel number of people in the store at one In mid-April, dozens of sailors who has been able to maintain a consis- time and increase the physical distance were allowed to disembark from the tent flow of patrons to its high-quality between shoppers. In Costco’s pop-

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ular indoor food court areas, all seating assigned Infectious Disease Coordi- ny’s 1,400 employees at 17 offices has been removed, drastically reducing nators who “help collect information throughout Taiwan are working from trafﬁc there. from employees and speed up commu- home, this setup has not negatively Also, whereas previously four people nication with the staff.” impacted operations. It does give rise were allowed to enter the store using Teams can also be formed across to some interesting challenges, though, one membership card, this number has companies within an industry. Cigna as some functions involving the per- now been reduced to two at a time. Taiwan CEO says that he and other sonal data of clients and policy holders Costco’s Senior Vice President for Asia insurance providers have formed a cannot be performed outside of the Richard Chang says that this change chat group with the head of Taiwan’s office because of Taiwan’s data protec- hasn’t really affected business or the Insurance Bureau on popular mes- tion laws. flow of members through the stores saging app LINE. Group members “So, one of the things we’re working because “people are going to buy send daily updates regarding any pos- on with the regulator is a feasible busi- what they need to buy, but instead of sible outbreaks in their organization ness continuity plan, since we didn’t bringing the whole family, just two of and coordinate on how to handle events originally have a virus shutdown them are doing the shopping for now.” like the Panshih incident. “It’s a good policy,” says Shields. “The one we had Chang also highlighted the com- way of tracking, measuring, and con- in place was more for one to three-day pany’s efforts to increase cleaning trolling” the virus’ spread within their disruptions caused by earthquakes or and sanitation of its 14 Taiwan loca- industry, says Shields. typhoons.” tions. Such efforts include wiping Of course, maintaining dis- But if an insurance company has to down frequently touched surfaces such tance between staff members is also shut down its offices for two weeks or as shopping cart handles and display a consideration for many companies. more, can insurance – paying claims – tables once every hour, if not more fre- Arrangements such as requiring that be classed as an essential service and quently. Chang noted that even the all employees in a department work thus be performed by employees at solution used in the floor-scrubbing from home – or dividing them into dif- home? Shields says that this is the case machines used during off-hours has had ferent teams that come into the office in other countries around the world sanitizer added to it. on a rotating basis – have helped com- where Cigna operates, and he hopes “Back in 2003 during the SARS panies begin easing into what could that Taiwan’s Insurance Bureau will crisis, we also had to implement sim- become a necessary transformation of come to the same conclusion. ilar protocols,” says Chang, adding that the way they operate. AmCham Tai- The growing push to have office many of the elements in these proto- pei’s COVID-19 Flash Survey found employees work from home illustrates cols continued to be applied even after that almost 84% of responding member the need for companies that have not SARS was contained. “Our members companies have instituted some form yet fully undergone a digital transfor- really appreciate the SSOPs [sanitation of remote working plan, although mation of their business to do so at a standard operating procedures] we have 24% said that these arrangements were much quicker pace. One of AmCham’s had in place ever since.” hurting productivity. member companies, which declined Cigna’s Shields, however, says that to be named in this report, said that Keeping things going while more than half of the compa- while it was one of the earlier adopters

For companies with significant in- house teams, decisions must be made on how to effectively keep staff safe and healthy while still maintaining business continuity. For some, that means forming a task force and coming up with contingency plans for unexpected events. According to Citibank Taiwan Chairman Paulus Mok, the company acted early, forming a Crisis Man- agement Team in January. The team, consisting of senior company executives, is tasked with “reacting quickly to an evolving situation and providing updates to the staff regularly,” Mok wrote in an emailed statement to Taiwan Business TOPICS. In addition, Mok says, each depart- The Sherwood Taipei is undergoing staff training and staggered renovations during the downtime caused by the COVID-19 pandemic. ment within the organization has been PHOTO: THE SHERWOOD TAIPEI

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of a digital strategy in its field, the last of sought-after goods – it was not capital and liquidity perspective,” he COVID-19 crisis has caused it to accel- totally immune to similar impulses. In says. “Despite the difficult situation, erate the changes it is making to bring March, government leaders and busi- Citi Taiwan delivered great results in its business into the digital era. ness owners came out to reassure the Q1, 2020. Both our institutional and Whether the effect is short-term or public that production of toilet paper consumer banking businesses reported turns out to be long-lasting, businesses and instant noodles would be increased solid growth.” in Taiwan are hurting. The AmCham after supermarkets and stores around Taipei COVID-19 Flash Survey found the island temporarily sold out of those Bright spot that for 77% of the companies who items. Premier Su Tseng-chang went so responded, the pandemic has had a mod- far as to encourage people to buy as Taiwan has earned well-deserved erate to severe negative impact on their much as possible in a post on Facebook. international acclaim throughout business in Taiwan. Of those companies, Chang of Costco says that panic the COVID-19 crisis for its effective 66% said the biggest impact was on buying was an issue at their stores in approach to combating the disease. demand for their products or services. late February, but only for a very brief Businesses in Taiwan agree: a staggering Cigna’s Shields says that even for period. The situation calmed down sub- 95% of respondents to the AmCham the health insurance industry, business sequently, though demand at Costco for COVID-19 Flash Survey said they were has slowed quite a bit. “People are con- certain items has stayed high. satisfied with the government’s efforts cerned,” he says. “Their portfolios have Chang says that the company’s to control the virus. taken a hit and they’re tightening their house-brand, three-ply interfold toilet Countries around the world are belts. They’re therefore going to be more paper is the biggest selling item among taking notice of the way Taiwan has cautious for the medium to long-term.” its Taiwanese members. He notes that ramped up its production of personal On the other hand, certain busi- Costco has benefited greatly over the protective equipment (PPE), notably of nesses are having trouble keeping years it has operated in Taiwan from medical masks. Production capacity in up with a rapid increase in demand, building strong relationships with local Taiwan went from around 1.8 million especially in the areas of retail and con- vendors. Almost all of the Kirkland face masks per day in January to 17 sumer goods. Around the time that Signature products sold in its Taiwan million now. That number is expected the virus began spreading much more locations are sourced in-country, he to rise to 19 million by mid-May. A sur- quickly to other parts of the world says, meaning that even if a partic- plus of PPE has led Taiwan’s Ministry beyond China, many retail outlets ular item sells out, the stores can easily of Foreign Affairs to begin donating experienced a rash of panic buying, par- restock by the next day. items like face masks and thermometers ticularly on items like toilet paper. The banking sector also appears to other countries where such supplies And while Taiwan has been rel- to be faring relatively well. Citibank are lacking, including the U.S. atively sheltered from the kind of Taiwan has not experienced a drop Private industry in Taiwan has also scenes witnessed in Hong Kong, Sin- in business since the start of the offered to pitch in, according to an gapore, and the U.S. – completely COVID-19 outbreak in January, says emailed statement from the American barren supermarket shelves and exas- Mok. “During these uncertain times, Institute in Taiwan. Numerous compa- perated consumers fighting over the Citi remains well-positioned from a nies have approached AIT offering to donate PPE and medical equipment des- perately needed back in the in U.S. “After vetting, qualifying donations and proposals from qualifying pharmaceutical and medical device companies have been sent to the U.S. Federal Emergency Management Agency for consideration and distribution to where they will do the most good,” the statement reads. Working with Taiwan to secure medical supplies helps the U.S. build more diversified supply chains, reducing its reliance on China for such items. It could also shine a bigger spotlight on Taiwan’s efforts to fight the virus both within and outside its borders. “Taiwan has an opportunity to further bolster its reputation as a reliable Costco has removed all seating from the food courts at its 14 Taiwan locations to reduce the supplier of quality medical supplies,” number of people congregating in one area. PHOTO: COSTCO the statement from AIT concludes.

32 TAIWAN BUSINESS TOPICS • MAY 2020

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TAIWAN’S PERSONAL DATA PROTECTION RULES

A review of the essential regulations, plus some caution on dangers for the unwary.

BY JOHN EASTWOOD, WENDY CHU, AND NATHAN SNYDER

s your business handling personal can be severe, including heavy fines as amount of overlap between intellec- data? Of course, it is. You don’t well as prison sentences of up to five tual property law and data protection, I have to be an e-commerce giant, years. So getting this right is absolutely especially since IP lawyers spend a lot financial institution, or medical clinic important for any business. of time helping clients implement effec- to fall under Taiwan’s laws regarding Mainstreaming of data protection: tive trade-secrets protection programs. the protection of personal information. The European Union’s implementation Anyone who has spent time drafting a Just the act of having employees means of the General Data Protection Reg- non-disclosure agreement between two you’re already holding a lot of personal ulation (GDPR) in 2018 resulted in a parties has a pretty good sense of what’s information. seismic shift globally as companies and involved in assuring the protection of The Taiwan Personal Data Pro- organizations rushed to comply with somebody else’s info. tection Act (PDPA) defines “personal its strict rules. It has become one of the Examples of data protection gone information” broadly to include “the hottest topics in business, with com- wrong: name, date of birth, ID card number, panies scrambling to ensure that their • In a case a couple of years back, passport number, characteristics, finger- privacy policies match up with it on the a multinational’s exit procedures prints, marital status, family, education, assumption that compliance with the for one of its Taiwan managers occupation, medical records, medical GDPR is a “gold standard.” It’s impor- required him to turn over to cor- treatment, genetic information, sexual tant to note, however, that individual porate security in the U.S. his life, health examinations, criminal countries, including Taiwan, some- home personal computer and records, contact information, financial times have their own distinct standards drives – devices that contained his condition, social activities and other that may be even stricter, and warrant a tax filings, financial data, medical information which may be used to iden- closer look. records, family photos, and many tify a natural person, both directly and Some parallels: Because data pro- other highly personal materials. indirectly.” tection touches upon so many other The multinational held onto the Even at the job-applicant phase, areas of law, in recent years many law- employee’s computer and drives prospective employees have already yers across different practice areas have for months of review, finally turned over their names and educa- had to learn the issues. Our firm’s regu- organizing a meeting at the offices tional, work experience, and contact latory and employment specialists work of its local counsel in Taipei to information. After they start work, on them on a daily basis, and these return them. you’ll definitely also have their date of days our corporate due-diligence teams At the meeting, they asked birth and ID card number, and in order also run into these issues all the time, the former employee to sign an to pay them you will know their bank both in terms of evaluating the risks of acknowledgement that he retro- and account number. a target company and in reviewing the actively approved the fact that Punishments for violating the PDPA data involved in the case. There’s a huge the company had made a com-

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plete copy of his drives and been transferred without his per- complaint in court against the would be keeping the data indef- mission. A few years ago, a case supplier. The supplier was found initely. The letter requesting the involving this kind of situation guilty of violating the PDPA acknowledgement was issued on led to an immediate complaint. because the reason for disclosing Taiwan company letterhead and Clearly the kind of personality the retailer’s data was due to a under the name of the multina- that sets up special accounts for business dispute, not to protect a tional’s Taiwan country manager, each subscription is also the kind person from any harm. Further, who apparently didn’t realize who is aware of his/her rights and this disclosure of the shipping that copying the former employ- will report any mistakes to the order was outside the normal ee’s personal information without authorities. purpose of a shipping order. permission could be a criminal • In a published High Court case The failure to correct the disclo- offense. in Taiwan, a product supplier sure demonstrated an intent to Once we pointed out the was found guilty of violating the damage the retailer, and in fact obvious breach, the multination- PDPA. This supplier had estab- damage to the retailer’s business al’s counsel frantically demanded lished a group on the messaging occurred. that we return the letter because app LINE to conduct product Consent is key: The PDPA takes into it was their client’s “property.” sales. Among the 70-80 mem- account the idea that the collection or We noted that it was a letter bers of that group was a retailer processing of personal data generally delivered successfully to its recip- with whom the supplier was presents no problem when a contractual ient. Within days of pointing out upset because the retailer had or quasi-contractual relationship exists the potential PDPA prison terms previously failed to pay for an between the company and the indi- for the multinational’s country order. Without the consent of vidual – for example between buyer and manager, the other side came the retailer, the supplier then seller or employee and employer. How- back to settle. unlawfully used the retailer’s per- ever, a company typically may need to • Some adept consumers set up sonal data by posting a picture share data with business partners, mar- dedicated email accounts so that of a shipping order containing keting consultants, accountants, and they can trace where their data the retailer's name, address, other related entities. goes. For example, someone and phone number on the LINE There’s a lot you can do with per- named John B. Doe might sign up group for all the members to see. sonal data as long as you get advance for a newsletter for ABC Corp. This unlawful use of personal consent from the other party, and it is by submitting the newly-created data violated the retailer’s right always best to do this at the start of email address “ABCnewletter@ to privacy. The retailer, who the relationship rather than trying to johnbdoe.com.” If anybody else had been removed from the chase them down later to get approval. uses the address to contact him, Line group and was notified of For example, many companies provide Doe knows that his data has the situation by a friend, filed a a data-protection policy online with

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the opportunity for customers to click “OK” prior to ordering products or a subscription online. In cases where personal data was There’s a lot you can do with personal data as long collected under an older, outdated data- protection policy, companies often need as you get advance consent from the other party. to go back and seek consent. If consent to the new rules is not given, then companies need to accept that restriction on the use of the personal data. Individual rights: Although compa- Taiwan’s PDPA is no different. Its notice specify the means by which the notifi- nies can do a lot as long as they have requirement lists a few points that must cation has to be made, but it must be the individual’s consent, there are some be disclosed to individuals about the done promptly. Article 22 of the PDPA’s rights that cannot be waived. Individ- collection of their personal information: enforcement rules states that the notice uals can always request: 1. Name of the collector or user of the has to include the “facts pertaining to • a review of their personal infor- information; the data breach and the response mea- mation 2. Purpose(s) of collection; sures already adopted” to address it. • a copy of their information 3. Types of personal information col- Article 18 of Taiwan’s Cyber Secu- • the opportunity to supplement or lected or used; rity Management Act (CSMA) also correct their personal information 4. Time period, area, target, and way of requires that cybersecurity incidents • cessation of the collection, pro- using the personal information; be reported to the central authority in cessing, or use of their personal 5. The rights of the subject of the data charge of the relevant industry, followed information; and and how to exercise them as pre- by proper handling and improvement of • deletion of their personal infor- scribed in Article 3; cyber security. Article 8 of the CSMA’s mation. 6. The impact on the subject’s rights enforcement rules requires the report to Companies are often unaware of and interests if he/she chooses not to include: these responsibilities, but the provide the personal information. 1. Times of the occurrences of – or Taiwan PDPA requires that action The following situations may be the awareness of occurrences of – be taken on such requests within exempted from the notification require- the incidents, and the completion 15 or 30 days, depending on the ment prescribed in the preceding of damage control or recovery type of request. paragraph: operations. Enhanced rights: Taiwan’s PDPA 1. When in accordance with the law; 2. The scope of the incidents and the provides additional protections for par- 2. When the collection of personal damage assessment. ticularly sensitive information, stating information is necessary for a 3. The damage control and recovery that data concerning personal health, government agency to perform operations. medical treatment, genetic background, its official duties or a non-gov- 4. Incident investigations and han- sexual life, and criminal offenses should ernment agency to fulfill legal dling operations. not be collected, processed, or used, obligations; 5. Analysis of the cause of the inci- except within fairly tight restrictions. 3. When the notice will impair a dent. Exceptions include situations in which government agency in performing 6. Measures regarding manage- the individual has made the information its official duties; ment, technology, manpower, or public on his/her own given consent in 4. When the notice will impair the resources taken to prevent reoc- writing, or the information has already public interest; currences of such incidents. been published legally. Even if the sub- 5. When the subject should have 7. Estimated completion schedule ject of the individual data consents, already known the content of the and follow-up mechanism of the there needs to be a valid specific pur- notification; measures mentioned in the pre- pose for collection of the data. 6. When the collection of personal ceding clause. Notices: Data-protection fundamen- information is for non-profit pur- Article 3 of the Regulations on the tals do not vary much from jurisdiction poses and clearly does not cause Notifications and Response of Cyber to jurisdiction. The basic principle is any detriment to the subject. Security Incidents sets out requirements to keep individuals informed about the Breaches: When the personal infor- for the content of the report. These collection and use of their information, mation is stolen, disclosed, altered, or include: and ensure they know about and can infringed in other ways due to the vio- 1. The agency where the incident easily enforce their rights. Laws about lation of this law, a breached company occurred. personal information are typically needs to notify the affected persons 2. The time of occurrence or aware- written with some notification require- after an investigation to ascertain ness. ment to accomplish these basic goals. the relevant facts. The law does not 3. A description of the situation.

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4. Assessment of the severity of the data to be able to understand the nature important to have local counsel review breach. of the consent they’re giving. Generally, those policies and procedures to make 5. Coping measures in response to if your site is already translated into sure that response times, notices, con- the incident. local languages to better reach people, sent procedures, and other issues are in 6. Assessment of the need for that’s an indication that your data-pro- line with local requirements. If unifor- external support. tection policy should also be translated. mity is desired for efficiency purposes, 7. Other relevant items. For employees, it depends on your then complying with the strictest juris- Article 11 of the above regulations workforce and the usual languages dictions (after confirming their identity provides that non-government agen- used for communicating their rights with local counsel) is advisable. Many cies shall make the notification of the and obligations. Many companies will of our clients make sure that their over- cyber security incident within one hour include personal-data provisions in their view of these issues is matched with in the manner designated by the com- employment contract or offer documen- analysis of the local specific require- petent authority for their relevant tation to make the company’s policies ments. industry. Article 13 sets out timelines clear to employees. for damage control and recovery operations, depending on the level of the Summary cyber security incident. — John Eastwood is the managing Languages: Many companies want Taiwan’s PDPA and related laws partner of Eiger and regularly works to know whether they must translate have serious implications for compa- with SMEs through to multinationals their English-language data protection nies doing business here. Multinationals on data-protection compliance policy into local languages. The answer naturally want to ensure that their matters. Wendy Chu is a senior depends on the industry sector and data-protection policies and breach associate and Nate Snyder is an whose information is being collected. procedures are as uniform as possible associate with Eiger, both working You want individuals submitting their across jurisdictions, but it can be quite regularly on these issues.

Congratulations, TOPICS

It is not easy for anything to continue for 50 years, especially a magazine. TOPICS is valuable not only “ to AmCham members, but to outside readers as well,

because it provides a very special angle to look into

the Taiwan economy. The views of TOPICS are neither American nor Taiwanese, but they are always objective and insightful as they are deeply rooted in “ 0YEARS good knowledge of the local economy. Many of these views have been constructive to the policy debate 5 and formation in Taiwan.

— Chen Tain-jy, Professor Emeritus of Economics at National Taiwan University and former Minister of the National Development Council. 36 TAIWAN BUSINESS TOPICS • MAY 2020

5 law.indd 36 2020/5/5 下午1:21 INDUSTRY F CUS

A Report on the Financial Services Sector

More Banks, Fewer Insurers

TAIWAN BUSINESS TOPICS • MAY 2020 37

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JAPAN’S LINE BANKS ON FINTECH IN TAIWAN

Success as a virtual bank in Taiwan would bring the Japanese messaging app closer to super app status.

BY MATTHEW FULCO

n Taiwan, Japanese messaging three digital-banking licenses from IN THIS REPORT app LINE is best known for its the Financial Supervisory Commis- I cartoonish stickers of furry crea- sion (FSC) last year, LINE is planning tures. LINE’s emojis telegraph the to launch LINE Bank in the second kawaii (literally “cute” in Japanese) quarter, with its fintech arm, LINE culture of Japan many Taiwanese Financial, holding a 49.9% stake. adore. Once hooked on the free LINE Bank will compete against stickers, users start paying to build Chunghwa Telecom-backed Next a bigger collection. They might also Bank and Rakuten Bank, backed by use the LINE app to shop or watch the Japanese e-commerce giant. television. If LINE Bank is successful, it will • Japan’s LINE banks on Fintech in Taiwan LINE is not stopping there, be a watershed moment for Taiwan’s p38 though. It wants to bring digital financial sector. The industry has banking to its 187 million users, been online for decades, and almost 21 million of whom are in Taiwan. all retail banks offer mobile apps to “Fintech is among the best means of their customers. Yet no technology • Enhanced Anti-money Laundering Controls monetization for platform compa- company has gained a substantial Pay Off for Taiwan p41 nies,” says Zennon Kapron, director footprint in the Taiwanese financial of Singapore-based Kapronasia, a sector. research firm. “Going beyond pay- There is a catch: the FSC requires ments into wider retail banking virtual banks to work with existing would allow LINE to generate much financial services providers. “It’s a • The Life Insurer Exodus p43 more value from its user base.” joint-venture model,” says Ryan Ter- Taiwan is integral to LINE’s fin- ribilini, founder of Taipei-based tech aspirations. The island country Formosa Financial, a digital asset is wealthy, has high internet connec- management company. “The reg- tivity and smartphone penetration, ulators want to give incumbents a and its consumers are eager to try chance to experiment with a more more LINE services. About 91% of innovative banking model.” the population uses LINE, and its The FSC’s approach to virtual digital wallet LINE Pay is the market banking is “somewhat open-minded” leader in mobile payments with a in that the structure of the three vir- 27.3% market share, according to tual banks’ shareholding is “pretty the semi-governmental Market Intel- diverse,” says Jessica Liu, a partner ligence & Consulting Institute (MIC). at Taipei-based AppWorks, one of Having been approved for one of Asia’s largest accelerators.

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LINE Bank’s main partners include four financial institutions and two telecoms. Taipei Fubon Bank holds a 25.1% stake, while CTBC Bank, Union Bank of Taiwan, Standard Chartered Bank, Taiwan Mobile, and Far EasTone each have 5%. “Leveraging services provided by these six partners, LINE Bank aims to develop a common portal while the company can leverage its partners’ expertise in risk control, financial product designs, legal compliance, and money-laundering control,” says Alex Chu, an MIC industry analyst. LINE Bank will start from a strong position thanks to the prevalence of LINE Pay with its 6 million users and 120,000 merchant partners, including leading Taiwanese e-commerce platforms like PChome, Shopee, and Yahoo. LINE Pay has been successful with Taiwanese consumers in large part because of its credit cards, co-branded with local banks, that LINE, a Japanese messaging app that is popular in Taiwan, is now looking to introduce

offer generous cash-back incentives. digital banking and financial services to its Taiwanese users. Credit cards are by far the most popular cashless payment option in Taiwan. game but picked up the pace in the past banking industry needs to boost competi- LINE will target Taiwan’s retail few years on the back of growing con- tiveness. banking market. The idea is to provide sumer acceptance of mobile payments, At the same time, the FSC is wary consumers in the LINE ecosystem with a plus government efforts to encourage about disrupting the banking sector with wide array of conventional financial ser- reduced reliance on cash. Mobile-pay- digital upstarts. They will be permitted vices such as deposits, loans, payments, ment penetration reached 62.2% in in Taiwan, but with some caveats. For and insurance, as well as some innova- 2019, up more than 10% year-on-year, one thing, neobanks are forbidden from tive services such as bill-splitting and according to government data. acquiring a traditional bank, which will tourism advice. frustrate efforts to fast-track growth. Nor This strategy mirrors that of the Chi- Standing out in the crowd are they permitted to open retail outlets. nese super app WeChat (owned by At first blush, that seems reasonable for Shenzhen-based Tencent Holdings), Despite its strong positioning, LINE a business that is “digital” or “virtual.” but without lending services for small- Bank may find Taiwan a challenging The problem is that some customers may and-medium-sized enterprises. WeChat market to break into. Put simply, Taiwan want the option of opening an account or launched its fintech business in 2013 with is overbanked. Its retail banking market speaking to a customer service represen- a basic digital wallet before rolling out a is among the most saturated in the world. tative in person. much larger suite of services. Roughly US$1.6 trillion in assets – about If virtual banks want to eventu- WeChat’s digital bank, WeBank, the same as what Citigroup alone holds – ally compete in wealth management founded in late 2014, offers wealth man- is spread out among 37 different banks. services, which often involve large trans- agement and financing services through The banks all have their niches, but the actions, being branchless could be a big different digital platforms. It currently market is not large enough for them to disadvantage. “There’s a fairly restric- has a valuation of US$21 billion, making grow meaningfully. tive environment for banking in Taiwan it one of the world’s most valuable fin- The FSC urges consolidation but does which limits how far it is possible to go tech unicorns. not go further than that. Twelve mergers with innovative banking services,” says Once WeChat became a digital bank, or acquisitions have occurred since 2004, Formosa Financial’s Terribilini. its users had much more reason to spend but most have been too small to make a LINE Bank is betting on technology time in the app. The timing was right, big impact on the industry landscape. The to give it an edge over the competition, too. As WeChat became the dominant M&A cases have brought Taiwan from particularly in consumer lending. With messaging app in China, building a user 49 banks to 37 – still far too many for its large user base, LINE Bank will have base of more than a billion, China moved its market size. Market insiders say that troves of user data at its disposal – data swiftly to embrace cashless payments. labor-union resistance has prevented the that can be analyzed by artificial intel- Taiwan has been late to the cashless large-scale consolidation that Taiwan’s ligence applications to make product

TAIWAN BUSINESS TOPICS • MAY 2020 39

5 IF.indd 39 2020/5/5 下午4:42 INDUSTRY F CUS recommendations to customers, observes LINE Bank must contend with the two only four years ago and is under pres- Jon Jones, co-founder of Taipei-based other recipients of virtual bank licenses. sure to show investors it has a sustainable blockchain firm Unitychain. Next Bank can tap principal shareholder business model. In the fourth quarter of More data should allow the AI Chunghwa Telecom’s 10 million sub- 2019, LINE posted an operating loss of tools to better target users’ preferences, scribers, and its consortium also includes 11.5 billion yen even as revenue increased resulting in their spending more time in three financial institutions and the gro- 8.6% year-on-year to 60.8 billion yen. the LINE app. In that way, “the platform cery retailer PX Mart, which has 9 Without establishing a bigger fin- will become much stickier,” Jones says. million members. tech business, LINE’s growth prospects Recognizing that young Taiwanese – Then there is Rakuten Bank, which is are limited. Stickers, advertising, and who have not had time to build credit – Japanese like LINE but targets a different media only go so far, especially when struggle to get conventional bank loans, demographic. With its 21 million users user growth is stagnant. LINE’s quirky LINE Bank is also developing its own in Taiwan, LINE is casting a wide net. messaging app has a loyal following model for assessing borrowers’ credit. Rakuten, in contrast, is targeting existing in Japan, Taiwan, Thailand, and Indo- “It is a sore point for young con- users of its e-commerce platform in nesia – but that’s it. China has WeChat, sumers, so we will take the initiative by Taiwan, many of whom are working pro- South Korea has Kakao, and the rest of inviting them to use our model,” Morris fessionals aged 25 to 50 who spend a lot the world uses WhatsApp and Facebook Huang, chief executive of LINE Bank’s of time on their smartphones and have an Messenger. preparation office in Taiwan, said at a affinity for Japanese products, says MIC’s Taiwan is the only one of LINE’s press conference last year. Chu. markets where it has secured a digital LINE Bank’s model will not be used Rakuten is the only one of the three banking license. If the company could by any other institutions and is not virtual banks with significant financial become a preferred bank for a signifi- intended to replace Taiwan’s standard industry experience. It set up in Rakuten cant portion of its Taiwan user base – means of credit scoring used by the Joint Bank in Japan in January 2000 and has people who already use the app to chat Credit Information Center, the com- about 7.2 million users. with friends, conduct business, shop, and pany says. The JCIC model provides card Compared to Next Bank and Rakuten watch television – it would have a shot at issuers with detailed information on an Bank, the stakes for LINE are higher. The becoming Taiwan’s first super app. That applicant’s credit history and ability to non-banks holding majority shares in would be an impressive feat, and just repay loans. Next and Rakuten are established prof- might help Taiwan mint its first billion- Besides Taiwan’s traditional banks, itable companies. But LINE went public dollar startup.

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ENHANCED ANTI-MONEY LAUNDERING CONTROLS PAY OFF FOR TAIWAN

Taiwan’s ranking by a money-laundering watchdog has risen over the past year, but future efforts will need to address challenges emerging from digitization of the financial sector.

BY MATTHEW FULCO

aiwan has significantly strength- cial regulator, suspicious transactions became a crime. ened its anti-money laundering occurred between Mega’s New York City The Mega incident “was a cata- T regime in recent years, which has branch and two branches in Panama, a lyst that triggered a transition from been reflected in its improved ranking by high-risk destination for money laun- compliance in form to compliance in sub- a key regional watchdog. In late 2019, dering. The Taiwanese bank failed to stance,” says Thomas McGowan, an the Australia-based Asia Pacific Group adequately manage risks associated with expert in financial-services law and a on Money Laundering (APG) agreed to the transactions, the NYDFS said. Fur- foreign legal consultant in the law firm place Taiwan (referred to as “Chinese ther, Mossack Fonseca, the Panama law Russin & Vecchi Taipei. “The risks posed Taipei”) in the “regular follow-up” cat- firm at the center of the Panama Papers by regulatory shortcomings to both the egory, alongside Hong Kong, Macau, scandal, was said to have likely been banking system and Taiwan’s global rep- Indonesia, and the Cook Islands. involved in the formation of “a sub- utation resulted in substantive upgrading Taiwan had previously been in the stantial number of customer entities” at of money-laundering controls.” “enhanced follow-up” category, which several Mega branches. APG lauded Taiwan’s compliance requires more frequent reporting to the Taiwan moved swiftly after the fining reforms in an October 2019 report. “Chi- APG. The island nation has never been of Mega Holdings to implement more nese Taipei has pursued wide ranging a haven for financial crime but was robust AML/CFT controls, passing new reforms since early 2017, with very sig- slow to adopt fast-evolving global anti- legislation in June 2017. The legislation nificant progress achieved in a short money laundering (AML) and countering brought Taiwan’s money-laundering con- period of time,” APG said, adding that financing of terrorism (CFT) standards. trols in line with global standards by the progress “reflects strong political The languid pace of compliance strengthening and expanding the require- commitment” to AML and CFT reform. reforms eventually caught up with ments that financial institutions perform “Taiwan finally improved its index Taiwan. Citing lax controls at the New customer (including beneficial owner) status” with more robust laws and reg- York City branch of Mega International due diligence, keep records, and report ulations, better staff training at financial Bank Co., Taiwan’s third largest lender suspicious transactions. Customs decla- institutions and in the private sector by assets, New York’s Department of rations for cash and gold over a certain broadly, as well as public education Financial Services (NYDFS) fined the value were made mandatory. Using the efforts, says Ross Darrell Feingold, a bank US$180 million in October 2016. name of a person other than the owner in Taipei-based lawyer and political risk According to the New York finan- property or shell-company transactions analyst. “As these efforts more than sat-

TAIWAN BUSINESS TOPICS • MAY 2020 41

5 IF.indd 41 2020/5/5 下午1:14 INDUSTRY F CUS isfied APG’s assessment requirements, the Although a stricter compliance regime financial institutions did not have “an upgrade to Taiwan’s index status was jus- may increase the complexity of banking actual understanding of the background tified.” here for foreigners, it boosts Taiwan’s of customers and the reasonableness of If anything, Taiwan’s money-laun- global reputation, showing that it com- establishing customer relationships,” had dering controls may have become almost plies with developed country standards, failed to obtain the requisite documenta- too strict in some cases. For instance, McGowan says. tion for identifying beneficial owners, and opening a retail bank account as a for- had not retained records or data related eigner in Taiwan has become a complex Staying ahead of the curve to rejected customers. process. Additionally, the FSC told financial One of the reasons for this enhanced Now that Taiwan has revamped its institutions to enhance their moni- oversight is that Taiwan since January AML and CFT regime, the challenge will toring of accounts, transactions and 2019 has participated in the OECD be to stay ahead of potential financial name checking. Name checking should common reporting standard (CRS), crime – adopting a proactive approach be faster and more thorough, including which requires banks and other finan- to maintain the momentum from recent for relevant beneficial owners and senior cial institutions to provide tax authorities successes. management, the regulator said. with information about their customers. At least on the regulatory side, there Foreign legal consultant McGowan The information is then shared with other are signs that Taiwan has adopted such a says that the compliance deficiencies participating countries in which the cus- proactive approach to controlling finan- mentioned in the FSC’s March letter to tomer holds citizenship or residence. cial crime. In late March, the Financial financial institutions fall within the realm CRS is intended to foster tax compliance Supervisory Commission (FSC) sent a of process and procedural shortcom- but also effectively enhances the overall letter to local financial institutions that ings that could lead to future failures of know-your-customer (KYC) process. highlighted a number of areas in which the system to identify and prevent AML/ While the U.S., China, Hong Kong, AML and CFT compliance should be CFT, as opposed to major money laun- and Macau are not currently within enhanced. dering incidents. While Taiwan's AML CRS’s scope in Taiwan, “this does not The FSC found deficiencies in risk and CFT regime has improved con- mean that individual or entity account assessment, transaction monitoring, and siderably in the past few years, “some holders or controlling persons of passive name checking – an anti-fraud service aspects of the internal control and AML/ non-financial entities that are tax resident that verifies names when people make CFT implementation systems at finan- in these jurisdictions or other non-report- payments – as well as with customer due cial institutions are not quite there yet,” able jurisdictions will not have their diligence and the customer risk-rating McGowan observes. accounts examined by Taiwan financial system. The latter two areas appear to One area where McGowan sees room institutions,” according to an October have the most room for improvement. for improvement is making more trans- 2018 Deloitte Taiwan report. The FSC said it found that Taiwanese parent the process by which money launderers are identified, caught, and punished. At present, that process is largely confidential and not readily visible to the public. Looking ahead, Taiwan’s virtual banks – which are expected to launch in the second half of the year – will need to be vigilant about ensuring AML/CFT compliance. Three digital banks are being licensed: LINE Bank, Next Bank, and Rakuten Bank. While the three consortia all include financial services incumbents, their majority shareholders are non-financial firms: the fintech arm of Japanese messaging app LINE, telecoms giant Chunghwa Telecom, and Japanese e-commerce platform Rakuten, respectively. The lack of legacy IT systems is an advantage for digital banks when it comes to fulfilling compliance requirements as they don’t have to retrofit clunky infrastructure designed for in- branch transactions. Premier Su Tseng-chang speaks at an event on Taiwan's progress in implementing anti- money laundering standards after the island's APG status was raised to the highest “Virtual banks have the benefit of category. PHOTO: CNA building their systems from the very

42 TAIWAN BUSINESS TOPICS • MAY 2020

5 IF.indd 42 2020/5/5 下午4:48 A Report on the Financial Services Sector

beginning to cross-reference structured tion was constantly monitored for linkage nasia. “Virtual banks tend to try to data in an ecosystem that connects the to sanctioned issues rather than just at the build scale rapidly, with aggressive cus- financial supply chain with the compli- initiation, providing an additional layer of tomer acquisition strategies. The key is ance value chain,” says Carl Wegner, the verification in real time,” Wegner says. achieving a balance between ambitious Singapore-based CEO of trade-finance Yet virtual banks must also be prudent growth targets and time-consuming regu- platform Contour. as they work to develop their deposit latory requirements.” Virtual banks could potentially bases and loan books, says Zennon “If all the emphasis is on growth,” he develop more robust AML processes than Kapron, a fintech expert and director of adds, “AML and CFT controls may be traditional banks. “Imagine if a transac- the Singapore-based consultancy Kapro- overlooked.”

THE LIFE INSURER EXODUS

Companies with appropriate business models have continued to be viable.

BY DON SHAPIRO

ost of the leading interna- iary in what it referred to at the time as standard. tional companies that were a “demonstration of its commitment to For life insurers in Taiwan, IFRS 17 M once active in Taiwan’s life the Taiwan market.” Over the years, the seems bound to entail substantially larger insurance industry have long since exited company has been repeatedly recognized capital commitments than are currently the market. The list includes Aegon, for the quality of its service and its dedi- required. “The key issue will be equity Aetna, ING, Manulife, MetLife, New cation to promoting protection products. cost,” explains Jennifer L. Wang, a pro- York Life, and Winterthur. It is the only insurance company to have fessor of risk management and insurance Now it appears likely that one of the been named a “Model Company” by the at National Chengchi University and a few remaining major foreign players, Pru- Financial Supervisory Commission (FSC) former FSC chairperson during the Ma dential Financial of the U.S., will follow seven times, and the only privately owned Ying-jeou administration. suit. Following media reports that Pru- life insurer in Taiwan to hold a twAAA “Because of changes in the RBC [risk- dential was considering pulling out of rating from Taiwan Ratings. based capital] ratio, companies will need both Taiwan and Korea, the compa- According to the Prudential website, to inject more equity,” she says. “Every ny’s head office issued a two-sentence the Taiwan subsidiary maintains capi- company will need to run a stress test to statement earlier this year: “Prudential talization of nearly NT$5 billion (about see how they will have to prepare.” At Financial, Inc. confirms it is exploring US$167 million) and had asset value in the same time, financial-service providers strategic options for its Taiwan life insur- 2018 of NT$165.5 billion (about US$5.5 are facing considerable pressure to invest ance business, which may include a sale. billion). in new financial technologies (fintech) to As a company policy, we do not comment Informed observers see Prudential’s stay competitive. on the details of potential business trans- probable departure as a reflection of On the other hand, notes Wang, the actions.” expected challenges in the Taiwan market development of fintech may eventually The departure from Korea, however, in the coming several years as the insur- open opportunities for foreign insur- is already confirmed. After negotiations ance industry prepares to adapt to a new ance companies to serve markets such as with several potential buyers, Prudential set of accounting standards known as Taiwan’s without having to maintain a last month announced an agreement to IFRS 17. The new International Financial domestic subsidiary or branch. sell its Korean life insurance operations Reporting Standard was adopted by the Even without the additional pressures to the KB Financial Group Inc., a leading financial industry’s independent, inter- posed by the pending upgrading to IFRS Korean financial services provider, for national standard-setting body in 2017, 17, foreign insurers in Taiwan histori- US$1.9 billion. and after several delays is now sched- cally have faced difficult challenges due Prudential first entered the Taiwan uled to take effect on January 1, 2022. In to the stricter standards imposed on them market in 1990 as a branch, and in 2000 Taiwan, the FSC is expected to wait until by regulators in their home countries. transformed the operation to a subsid- 2026 before adopting IFRS 17 as the new Several of the companies that exited the

TAIWAN BUSINESS TOPICS • MAY 2020 43

5 IF.indd 43 2020/5/5 下午1:14 INDUSTRY F CUS A CHRONOLOGY Taiwan market in the past did so explic- In particular, Seewald credits Koo with itly to reap a consequent huge windfall. calling attention to the over-emphasis With the closure of the Taiwan operation, in the Taiwan life insurance market on 2007 the foreign company could gain access to investment-linked products – and seeking Taiwan’s China Life Insur- a vast amount of cash that no longer had to correct that tendency by encouraging ance, part of the Koo’s Group, to be held as a reserve to meet the over- the promotion of policies offering real bought Winterthur Life Taiwan seas requirements. protection. for US$12.2 million from the Further, having to tie up more capital Besides Prudential Financial, two French-based Axa Group. in reserves would add to a multinational other foreign companies operate in insurance company’s costs, tending to Taiwan as subsidiaries: Cigna and PCA 2008 make its products less competitive against (known in some markets as Prudential of The Netherlands’ ING Group, those of local insurers. the UK, but no relation to the U.S. Pru- which in 2001 had acquired In the low-interest rate environ- dential). Aetna’s international opera- ment that has lasted for many years, the As primarily a health-insurance pro- tions including its Taiwan problem was exacerbated by the “nega- vider, Cigna has not faced the challenge branch, announced the sale tive spread” – the gap between the cost of long-term liabilities that Seewald of its Taiwan life insurance of funding a company’s obligations to its referred to. In fact, Cigna notes that business to Fubon Financial policyholders and the yield it can obtain Taiwan has developed into its third Holding for the equivalent of from its investments. “This is a problem largest market worldwide. Although US$600 million, plus a 5% particularly if you’re writing the tradi- Taiwan has universal healthcare coverage stake in Fubon. An ING state- tional types of insurance with long-tail under its National Health Insurance pro- ment at the time said “the liabilities,” says Leo Seewald, a 10-year gram, many consumers prefer to maintain divestment is in line with veteran of the financial services sector supplemental health insurance to expand ING’s strategy to actively in Taiwan and former executive with their benefits. The aging of the Taiwan manage its portfolio of busi- BlackRock and Manulife. “For foreign population has further increased the nesses, allocating capital to companies that are under international demand for insurance to cover retirement those businesses that gener- accounting treatment, those liabilities can needs and health contingencies. ate the highest return.” become very volatile because they need to PCA explains its continued “deep be marked to market. The local compa- commitment” to the Taiwan market by nies aren’t in that situation because their noting its more than 20 years of opera- 2009 reserve ratios are much less.” tion in Taiwan – and its nearly 100 years Aegon, headquartered in the If Taiwan adopts IFRS 17, however, of involvement in Asia. In fact, PCA Netherlands, sold its Taiwan “then local companies will be required to refers to Taiwan as a “champion” in that operations for US$100 mil- mark to market and they’ll have massive it has the highest sales volume for the lion to a local consortium in volatility swings.” company among the insurance growth order to achieve a “positive For the foreign life insurers in Taiwan, markets in the Asian region. impact on cash flow and another issue has been the inability to Responding by email to questions future earnings.” maintain a proper match between assets from Taiwan Business TOPICS, PCA and liabilities. The foreign companies also stressed that its business strategy has 2011 tend to specialize in policies denominated coincided with that of the Taiwan gov- The Chinatrust group (now in foreign currencies, and so would like ernment in recent years – “responding CTBC) acquired the Taiwan to match those obligations with invest- to the trend of an aging population and operations of MetLife of the ments in those currencies to lessen foreign declining birthrates by actively pro- U.S., for a reported US$180 exchange risks. Although the restric- moting” protection-oriented policies and million, renaming it CTBC Life. tions have been loosened in recent years, digital development. In Taiwan and other Taiwan regulations have limited the pro- Asian markets, PCA has been empha- 2014 portion of investments that can be made sizing “participating (dividend-paying) overseas. policies,” which provide fundamental • CTBC Life expanded by “The Taiwan regulators – espe- security coverage while also serving as a acquiring the Taiwan opera- cially FSC Chairman Wellington Koo – form of investment. tions of Canada’s Manulife deserve a lot of credit for trying to tackle To enhance its competitiveness, PCA for US$24 million. some of these difficult issues,” says See- has adopted a number of innovations, • Yuanta Financial Holding wald. “There’s been significant if gradual including such digital platforms as the entered the life insurance progress. Perhaps the progress could be industry’s first e-commerce “Insurance business by acquiring the quicker, but I fully understand why it’s Shopping Cart” for health and protec- Taiwan subsidiary of New being done slowly – there’s a lot of money tion policies. It has also introduced user- York Life Insurance for at stake and you don’t want to shock the friendly customer services on a variety of US$3.3 million. market.” platforms, including LINE.

44 TAIWAN BUSINESS TOPICS • MAY 2020

5 IF.indd 44 2020/5/5 下午1:14 Are You Reading a Borrowed Copy?

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Fullpage_Subscription_19.indd 45 2020/5/5 下午1:24 EXECUTIVE SUITE

MEET VERONICA ACURIO OF 3M

Veronica Acurio, Area Vice President of 3M’s Greater China Health Care Business, has spent three decades climbing the ranks in the multinational conglomerate. Her journey has brought her from Peru to the U.S. and now Taiwan, a place she has developed a deep admiration for.

In this month’s Executive Suite interview, Acurio speaks with Taiwan Business TOPICS Deputy Editor Jeremy Olivier about her inspiration for going into business, her strengths as a leader, and why she’s stayed with 3M for so many years.

What got you interested in a career tional side of business? tioned me to a new role as Healthcare in business? At what point in your life Honestly, not initially. But I was Country Business Leader for Peru. did you make that decision? given the opportunity very early on in I wasn't sure that I would like this I think it partly came from my my career to take on roles that were not change at first, but it opened so many upbringing. From an early age, my normally ﬁlled by someone as young as new doors to me. father inculcated me and my siblings I was. By my early 30s, I was already There are generally a few reasons with a strong sense of creativity. He in the highest role possible for a local why people change employers. One would sit down with us on Sundays and employee at 3M Peru. So, when I was is that your boss’ management style would invent stories and have us help offered the chance to go work in the doesn’t work for you. Another is an him come up with the ending. From U.S., I had to really consider if it was unhealthy or uncomfortable work envi- then on, I have always had a passion the right move. In the end, I accepted ronment. Sometimes, the role you’re in for building things, but I knew I didn’t the offer, and from there my career at is just not right for you; it doesn’t allow want to be an architect. I wanted to 3M blossomed. you to be who you are. create businesses. I started to see that it doesn’t matter That’s why I’ve stayed with 3M for My decision to go into business actu- where you come from, you could create this long. I have been offered new and ally happened very early on, back when value anywhere. Transition to global exciting opportunities so consistently I was just 14 years old. By age 16, I roles was a special experience for me. since I started. I have seen the great was already studying at a very unique I’m now the type of person that likes to leadership and values of those within university in Peru. In order to grad- learn and get a sense of the best prac- the company. Also, I am allowed to be uate from that school, I had to build tices from other places. I come with a myself – to be authentic – in every role a business from scratch with a couple very open mind and try to find what I’ve had at 3M. of partners – my two best friends. We makes each market special. established a company that produced 3M has been active in producing clothes for career women. This was You’ve been with 3M’s health care much-needed PPE to confront the back in the 1990s when women were division for 30 years now. What drew global COVID-19 crisis. What role has just starting to break the glass ceiling you to the company? What has kept the company’s Greater China Health and get put in leadership roles. you there for most of your career? Care Business had in this effort? If you look at the span of my career, As you can imagine, there is a Your career has brought you to I have worn many hats. When I started growing need for personal protective three different continents. Have you at 3M, I was working in ﬁnance. A year equipment now for people across the always had an interest in the interna- and a half later, the company transi- world. In our case, we need to prioritize

46 TAIWAN BUSINESS TOPICS • MAY 2020

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healthcare workers in our supply of this artificial intelligence. Of course, laws weaknesses. I think that my sensibilities essential PPE. And in both Taiwan and will need to be liberalized to make the have sometimes led me to take positions China, we have worked closely with most of the data. on certain issues too quickly. So, I think the governments to make sure that the I could probably work on not over-uti- products that we are shipping them are Would you say you have a partic- lizing my strengths. going first to hospitals and healthcare ular style as a manager? What do see as facilities. We are also coordinating with your main strengths? Is there any area What are the major pluses and our vendors to make sure that we can where you’d like to improve? minuses of leading an expat life? Are locate products to be distributed to this I think about this question a lot, and any of these particular to Taiwan? priority segment. I would say that first and foremost I am Being an expat has given me the not a manager that believes leadership opportunity to explore new things that What are the main characteristics of is about a job title or my position in the have made me stronger – and not just the healthcare market in Taiwan? How company’s hierarchy. Rather, I believe me, but my family, too. It’s opened does it differ from that of other loca- in building relationships based on trust my children’s eyes to new possibilities, tions where you’ve worked? with subordinates and colleagues to allowed them to meet people that can I’ve worked hard since coming to achieve outcomes. I think this is the be important for them and their future. Taiwan to learn about the local envi- way that you drive change within an It also offers an opportunity to come ronment by visiting customers and organization. to a new place and start from scratch. making observations. I’m impressed That desire to challenge the status Although this kind of change is not easy, about many things in Taiwan, but the quo, I think, is one of my strengths as there are many benefits to doing it, like healthcare system is probably at the a manager as well. I have always car- making great new friends and learning top of my list. The level of quality and ried with me that sense of creativity my to adapt to a whole new environment. value I have witnessed in Taiwan paired father helped to cultivate. I find inspira- Over the past two years I’ve been with the low cost of care is something tion from seeing what other companies in Taiwan, I have come to admire so I don’t think you could find in many and industries are doing and love get- many things about this place. I look other countries in the world. ting new ideas from my team. out my window at the number of busi- What I’ve found from the decades I believe my other strength is a nesses I see in the streets. There is this working in the healthcare side of 3M combination of authenticity and trans- great entrepreneurial spirit here. I am is that the way that health insurance parency. I like to be genuine because I so impressed with all of the Taiwanese systems are set up drives clinician and think that it provides the foundation business leaders that I’ve met that have patient behaviors. And I believe that for trust. been so successful, yet manage to stay Taiwan is in a unique position in that Lastly, I have the courage to make very humble. It has made me realize it is sitting on this gold mine of data important decisions and take risks that Taiwan is a very unique place. collected through the NHI. When you when needed. Having courage also think about the future of healthcare, means speaking up, saying the things If you had one piece of advice for it will be more and more tied to data, that need to be said to create positive young professionals in your industry, which will drive better value-based change in an organization. what would it be? care. It will also be more and more Of course, they say your biggest You have to love what you do. Make driven by innovative technologies like strengths can also become your greatest sure that whatever career you decide on connects well with what is in your heart. If you’re authentic and have a passion for the things you love doing, success will come naturally.

What is your favorite way to unwind after a long week at work? Lately, because of the COVID-19 situation, a long week of work might be seven totally full days, so unwinding has deﬁnitely become important for me. For me, spending time with my family, talking with them – even if it’s just for an hour a day – is really important. I also brought a little dog over from the U.S. I like to go walking with him and taking in the city life as we stroll. That is how I disconnect for a Veronica Acurio has spent the last two years of her 30-year career at 3M in Taiwan, which she praises for its great entrepreneurial spirit. little bit.

TAIWAN BUSINESS TOPICS • MAY 2020 47

Veronica.indd 47 2020/5/5 下午1:21 SEEING TAIWAN

read about it is true. It is 150 kilometers in length, yet no more than 4 kilometers wide. While it contains no major cities, a railway line with frequent express service runs through it. The valley is one of the best places in Taiwan to grow rice and sugar, and travelers can visit a shuttered sugar refinery in Guangfu Township. To get a better understanding of what makes East Taiwan such a unique destination, visitors should spend some time at the nearby Matai’an Wetland Ecological Park. More than 100 aquatic plant species thrive in the wetland, and there are demonstrations of traditional labor- saving fishing methods. Restaurants in the area serve dishes associated with Taiwan’s Austronesian indigenous ethnic minority, such as pieces of Go East for a Wonderful fish cooked by first heating stones in a fire, then placing the stones and the fish, along with some greens, in a water- Taiwan Adventure filled segment of bamboo. The place name Matai’an derives from the word for pigeon pea in the or many Taiwanese, as well as Mountain Range is a formidable barrier language of the Amis indigenous for thousands of international for those wishing to travel between the people, the largest of Taiwan’s 16 F visitors and foreign residents, East Rift Valley and the Pacific Coast. Austronesian tribes. Pigeon peas used to the east coast is their favorite region of Yet its peaks are pygmies compared to grow in abundance here, and were once Taiwan. those of the Central Mountain Range, a local staple. On the western half of the island, the the spectacular massif further inland. Several of the Amis villages in bustle is nonstop. The east, by contrast, The East Rift Valley is misnamed, in Hualien and Taitung have their own is the very definition of bucolic. that it has been shaped by converging symbol. For the village of Dabalong – With 652 people per square kilome- rather than diverging tectonic plates, long ago, Matai’an’s traditional enemy ter, Taiwan is one of the world’s most but everything else you are likely to – it is a white crab. In recent decades, crowded countries. In the eastern coun- ties of Hualien and Taitung, however, the population density is less than a tenth that of the western lowlands. It is a realm where Mother Nature does as she pleases – as shown by the bridge that carries Highway 30 over the Xiuguluan River in the East Rift Valley. The river’s rock-strewn bed conceals the boundary between the Eurasian Plate, to the west, and the Philippine Sea Plate, to the east. Millimeter by millimeter, tectonic forces are driving the former under the latter. At intervals of three to five years, the bridge must be realigned as the Coastal Mountain Range grows ever higher. Reaching heights of up to 1,680 meters above sea level, the Coastal

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Dabalong’s inhabitants have earned a ity, but in recent years this little town years, the authorities have arranged reputation as exceptional woodcarvers. has evolved into a very different kind shuttle buses to the mountain from the In July and August, Amis commu- of place. It attracts artists from all over, railway station at Taimali, which is a nities celebrate the taking in of the backpackers who stay for weeks on good option for travelers depending on harvest with singing, dancing, and end, and couples who decide to swap public transportation. feasting. As with harvest festivals their big-city lives for a more laid-back Heading south, the next station is worldwide, these events are both cele- existence. Jinlun, a little town where Han people brations of abundance and expressions The former sugar factory in Dulan live side by side with Amis and Paiwan of gratitude for the blessings received now houses galleries and shops, and aborigines. Since World War II, Chris- from gods and ancestors. is a venue for live music. Visitors with tianity has become a key facet of access to a motorcycle (or willing to pay indigenous identity – Taiwan’s Han for a taxi) can head into the hills behind majority are mainly Buddhist and the town, and hike 3.8 kilometers to Taoist – and a church within walk- the top of Dulan Mountain (elevation ing distance of Jinlun railway station 1,190 meters). The views are spectacu- contains a fascinating blend of Austro- lar, and the trail is well maintained. nesian and Roman Catholic motifs. Among Hualien County’s most strik- Inside Kiokai Ni Santo Josef, images of ing sights are the daylily plantations the Crucifixion feature people wearing on Sixty Stone Mountain and Chike traditional Paiwan clothes, while snake Mountain. These protein-rich orange emblems (the tribe’s animal totem) flowers are cultivated as a kind of vege- appear throughout the interior. table and often added to pork-rib soup Those planning a trip to Taiwan or fried-noodle dishes. For a few weeks will find an abundance of information in late summer, tourists flock to these online in a variety of languages. Useful uplands to appreciate both daylily local-government websites include the cuisine and beautiful landscapes. ones maintained by the Hualien County During daylily season, both moun- Government (http://tour-hualien.hl.gov. tains are closed to private vehicles. To tw) and Taitung County Government get comprehensive information about (https://tour.taitung.gov.tw). To read parking arrangements and shuttle buses, up on Taiwan’s Austronesian cultures, contact the East Rift Valley National visit the Digital Museum of Taiwan The precise date of the Ilisin Harvest Scenic Area Administration, or drop Indigenous People (www.dmtip.gov. Festival varies from village to village, as by the Luoshan Visitors Center just off tw). For all kinds of travel information does the pattern of rituals and taboos. Highway 9. about the country, visit the Tourism Travelers interested in attending one of Daylily-dominated vistas can also Bureau’s website (www.taiwan.net.tw), these events can obtain details from the be enjoyed at Kinchen Mountain (also or call the 24-hour tourist information East Rift Valley National Scenic Area often spelled Jinzhen Mountain), two hotline 0800-011-765 (toll free within Administration (www.erv-nsa.gov.tw). hours’ drive to the south. In previous Taiwan). Unlike most of Taiwan’s Austro- nesian tribes, the Amis society is matrilineal. Another important facet of their culture is an age-set system through which males of a similar age maintain close ties and a common identity throughout their lives. Once its members have completed their rites of passage, each cohort receives a name, a little like the Western world’s Genera- tion X, Generation Y, and so on. Several Amis clans live on the Pacific Coast, in places such as Feng- bin, Jingpu, and Dulan. Jingpu is where the Xiuguluan River emerges from the Coastal Mountain Range and flows into the Pacific. The sugar industry brought Dulan in Taitung County its initial prosper- FORMER SUGAR FACTORY IN DULAN

TAIWAN BUSINESS TOPICS • MAY 2020 49

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