March 2021 | Vol

2021/3/3 5:56 PM Issue Sponsor Issue 3 | Issue 51 | Vol. 2021 March 號執照登記為雜誌交寄 THE AMERICAN CHAMBER OF COMMERCE IN TAIPEI TAIWAN BUSINESS TOPICS March 2021 | Vol. 51 | Issue 3 中華郵政北台字第 5000 3_2020_Cover.indd 1

CONTENTS

NEWS AND VIEWS 7 Editorial

MARCH 2021 VOLUME 51, NUMBER 3 Chips and COVID Burnish Taiwan’s 一一○年三月號 Reputation 晶片與防疫擦亮台灣招牌

Publisher 發行人 8 Taiwan Briefs Leo Seewald 李豪 Senior Advisor 資深顧問 By Austin Babb and Jason Wu Don Shapiro 沙蕩 Senior Editor 資深編輯 6 President’s View 11 Issues Jeremy Olivier 歐嘉仁 Art Director/ 美術主任/ Improving English Proficiency A New Numbering System for ARCs Production Coordinator 後製統籌新式外來人口統一證號 Katia Chen 陳國梅 Requires Comprehensive Change Cover Designer 封面設計 By Leo Seewald By Matthew Fulco Grace Yang 楊慈安 Manager, Publications Sales & Marketing 廣告行銷經理 Caroline Lee 李佳紋 COVER SECTION Translation 翻譯 Kevin Chen, Yichun Chen, Andrew Wang 推動台灣雙語化陳又銘, 陳宜君, 王先棠 Making Taiwan Bilingual

By Louise Watt American Chamber of Commerce in Taiwan 129 MinSheng East Road, Section 3, 7F, Suite 706, Taipei 10596, Taiwan P.O. Box 17-277, Taipei, 10419 Taiwan Tel: 2718-8226 Fax: 2718-8182 e-mail: [email protected] website: http://www.amcham.com.tw 名稱：台灣美國商會工商雜誌發行所：台灣美國商會臺北市10596民生東路三段129號七樓706室電話：2718-8226 傳真：2718-8182

Taiwan Business Topics is a publication of the American Chamber of Commerce in Taiwan. Contents are independent of and do not necessarily reflect the views of the Officers, Board of Governors, Supervisors or members. © Copyright 2021 by the American Chamber of Commerce 15 Aiming to Create a 22 New Approaches to English in Taiwan. All rights reserved. Permission to reprint original material must be requested in writing from AmCham. “Bilingual Nation” Learning Production done in-house, Printing by Farn Mei Printing Co., Ltd. The government is seeking 23 The Impact of Culture 登記字號：台誌第一零九六九號印刷所：帆美印刷股份有限公司 to greatly increase the level 經銷商：台灣英文雜誌社台北市108台北市萬華區長沙街二段66號 of English fluency in the 發行日期：中華民國一一○年三月中華郵政北台字第5000號執照登記為雜誌交寄 Taiwan population by 2030 ISSN 1818-1961 through a variety of programs,

Chairperson: CW Chin mainly focusing on improving Vice Chairpersons: Fupei Wang, Timothy Shields the effectiveness of English Secretary: Daniel Tseng Treasurer: Angela Yu teaching in the schools.

2020-2021 Governors: C.W. Chin, Brian Sung, Timothy Shields, Fupei Wang, Roger Yee, Angela Yu.

2021-2022 Governors: TAIWAN BUSINESS SPECIAL REPORT Justin Chin, Cynthia Chyn, Paulus Mok, Terry Tsao, Daniel Tseng. 37 Demand Surges for 2021 Supervisors: Max Chen, Shelley Chia, Seraphim Ma International Education in

COMMITTEES: Taiwan Agro-Chemical/ Melody Wang; Asset Management/ Eric Lin, Angela Yang, Derek Yung; Banking/ Paulus An influx of families fleeing the Mok; Capital Markets/ Mandy Huang, Eric Jai, C.P. pandemic has created a supply Liu; Chemical Manufacturers/ Charles Liang, Michael Wong; Cosmetics/ Abigail Lin; Defense/ Manohar crunch at international schools. Thyagaraj, Roger Yee; Digital Economy/ Max Chen, 25 Is Taiwan Ready for the Renee Chou, Tai Chi Chuan; Energy/ Richard Freer, By Matthew Fulco Randy Tsai; Human Resources/ Christine Chen, Hydrogen Economy? Carmen Law, David Tsai; Infrastructure/ Wayne Chin, Paul Lee; Insurance/ KT Lim, Mandy Shih, The government has yet to Linda Tsou; Intellectual Property & Licensing/ Jason Chen, Peter Dernbach, Vincent Shih; Marketing & include hydrogen in its renewable Distribution/ (tba); Medical Devices/ Louis Ko, Jeffrey energy policies, but the private Wang; Pharmaceutical/ Justin Chin, Cellina Yeh, Shuhei Sekiguchi; Private Equity/ Echo Yeh; Public sector is already investing in this Health/ Joyce Lee, Pongo Peng, Tim Shields; Retail/ Ceasar Chen, Mark Chen, Peggy Liao; Sustainable fast-growing area. Development Goals/ Kenny Jeng, Lume Liao, By Timothy Ferry Cosmas Lu, Fupei Wang; Tax/ Heidi Liu, Cheli Liaw; Technology/ Cynthia Chyn, Stella Lai, Angela Yu; Telecommunications & Media/ Thomas Ee, David 27 The Promise of Green Shin, Joanne Tsai; Transportation & Logistics/ (tba); Travel & Tourism/ Gina Tsai, Jason Yeh, Fiona Yuan. Hydrogen By Timothy Ferry

4 TAIWAN BUSINESS TOPICS • MARCH 2021

3 contents.indd 4 2021/3/3 5:56 PM MARCH • VOLUME 51 NUMBER 3 COVER SPONSOR INDUSTRY F CUS Updating the Financial Services Industry

Fubon Financial Holdings Overview

30 Breaking the Deadlock on Financial Consolidation in Taiwan A proposed acquisition could be a Committed to becoming one of Asia’s first-class financial institu- turning point for Taiwan’s overbanked tions, Fubon Financial Holdings has built a strong lineup of financial financial services industry. service companies. Its major subsidiaries include Fubon Life, Taipei By Jeremy Olivier Fubon Bank, Fubon Bank (Hong Kong), Fubon Bank (China), 33 Updating Taiwan’s Banking Fubon Insurance, Fubon Securities, and Fubon Asset Manage- System with Fintech ment. Fubon Financial Holdings had total assets of US$307.5 The Financial Supervisory Commis- billion as of the end of September 2020, ranking second among sion’s new action plan includes goals related to data liberalization, encour- Taiwan’s financial holding companies, and it has been the most aging disruption and innovation, and profitable company in the industry in terms of earnings per share talent development. (EPS) for twelve consecutive years. The company was also named By Angelica Oung to the Fortune Global 500 for the third consecutive year in 2020. 35 Taiwan Seeks More Foreign Finance Talent Fubon Financial Holdings’ subsidiaries rank among the top per- By Hilton Yip formers in their respective sectors. Fubon Insurance has consis- EXECUTIVE SUITE tently led all P&C insurers with an over 24% market share. Taipei 42 Meet Mike Wong of Kraton Fubon Bank is one of Taiwan’s biggest privately owned banks; By Jeremy Olivier Fubon Securities ranks among Taiwan’s top three securities houses; and Fubon Life ranks second in total premium. COMPANY ADVOCACY 12 Through Innovation, Collaboration, and Culture, Fubon Financial Holdings is now the only Taiwanese financial Novartis Aims to Reimagine institution with banking subsidiaries in China, Taiwan and Hong Medicine Kong, and the company continues to expand its Asian network and 44 Do Gig Workers Want to be deepen its presence in Greater China. Employees? New Survey Results May Surprise You Looking ahead, Fubon Financial Holdings will continue to SPONSORED CONTENT strengthen our presence in Taiwan and pursue stable growth. At 40 MSD’s Vision of Putting People the same time, Fubon Financial Holdings will continue to search First for suitable M&A opportunities in order to develop a foothold in the 47 Pfizer and Taiwan’s National regional market and move closer to the goal of becoming a first- Health Research Institutes Sign class business group in Asia. Precision Medicine Agreement

TAIWAN BUSINESS TOPICS • MARCH 2021 5

3 contents.indd 5 2021/3/4 12:19 PM PRESIDENT'S VIEW

Improving English Proficiency Requires Comprehensive Change

Dear Members and Friends, Due to the rapid advancement of artificial intel- ligence, there are already apps that correct your This issue of TOPICS focuses on the Taiwan spelling and syntax the minute you start typing a Government’s drive to make the island bilin- sentence. This type of technology will likely extend gual. This is one of the few initiatives that has to all written media in the future. We must there- bipartisan support, and while it has taken flight fore prioritize speaking and listening when we rather gradually, it seems that it will only grow teach English. Understanding and being under- in momentum. At its heart is a recognition that stood is far more important that having perfect Taiwan will benefit economically and socially from grammar. a population that is fully competent in both Chi- We also need to consider how to use tech- nese and English. nology to teach English to the next generation. Some have suggested that “bilingual” might Taiwan does not have enough qualified teachers be too strong a nomenclature. At least at this and young people already use technology on a point, it seems we are moving more toward Eng- daily basis. How do we increase the use of Eng- lish proficiency than true bilingualism. In any lish for what they already do online? How do we case, whether improving English competency is get them interested in using the language? There just a first step or where we end up, this is the is an abundance of rich, enjoyable English content right direction for Taiwan. It is the best way to out there, but we need to help children seek it out. build global connectivity and boost Taiwan’s com- The Taiwan government should expend at least petitiveness. AmCham Taiwan’s annual Business some resources looking at these questions. It is not Climate Survey always highlights the importance about how we use English now; it is about how of improving Taiwan’s English capability and the we will use it in the next 10-20 years that matters. international mindedness of its workforce. Finally, I would like to add my thoughts on The goal of bilingualism is ambitious to say the opportunity this drive to achieve bilingualism the least. It requires a whole population, young provides for Taiwan’s foreign business commu- and old, to learn English or at least improve nity to help out. No one is better positioned to their current level over the next decade. The lead by example than we are. The scope of what Taiwan government, with the National Develop- we can do is vast, but it can start with making ment Council taking the lead, has begun putting sure our local corporate websites are fully bilin- together a plan to accomplish this goal, and gual, providing English training to our staff, and AmCham and other international chambers are offering bilingual services to our local customers. providing input. I encourage our members to take a look at your I believe the focus must be on children’s educa- organizations to see what you might be able to do tion – particularly at the elementary school level. to support bilingualism in Taiwan. As the parent of three children presently in the local Taiwanese school system, I know that the current exam-based approach to English education – stressing grammar points over spoken fluency – will not work. This approach is outdated in any case and if we look forward 10 years, speaking Leo Seewald and verbal comprehension skills will become more President, useful than writing skills. American Chamber of Commerce in Taiwan

6 TAIWAN BUSINESS TOPICS • MARCH 2021

3 presidents view.indd 6 2021/3/3 5:57 PM E D I T O R I A L Chips and COVID Burnish Taiwan’s Reputation

aiwan has often found itself underestimated or overlooked basically misunderstood the nature of the current shortage. Rather by the rest of the world – sometimes mistaken for Thai- than being caused by any chipmaker’s decision on supply alloca- T land or considered largely through the prism of China’s tions, the problem was mainly due to the auto companies’ own view of the island. failed forecasts. At the onset of the pandemic, they began cutting Lately, however, Taiwan has been coming in for unaccustomed chip orders based on their pessimistic outlook for the car market. international attention. Over the past 14 months, its government’s The sudden upsurge in global car sales late last year – at the same early action and skillful handling of the COVID-19 pandemic has time as lockdown policies increased demand for chips for devices gained Taiwan global recognition. When commentators in the for work or entertainment at home – brought component short- West cite an example of a country that has met the challenge well, falls that overwhelmed automobile assembly lines. they invariably note Taiwan’s remarkable performance in holding From a broader perspective, Taiwan over the years has proven the spread of the coronavirus to under a thousand cases, with only itself to be a reliable and responsible trading partner. The U.S. nine deaths. government – under President Trump and now with the Biden Even more recently, Taiwan’s proficiency as a high-tech administration – has recognized that fact by including Taiwan in supply center, especially for semiconductor production, has ongoing discussions on how to ensure stronger and more secure been receiving worldwide notice. The reason for the new aware- global supply chains for strategically sensitive products. TSMC’s ness was an abrupt shortage of chips for use in the automotive commitment to build a huge US$12 billion wafer fab in Arizona, industry, causing assembly lines in the U.S., Germany, and Japan where it will be joined by various Taiwanese suppliers to form to temporarily shut down or reduce output. Unfortunately, news a production cluster, is further evidence of Taiwan’s intention to reports such as Bloomberg’s “The World is Dangerously Depen- forge even stronger business ties with the U.S. dent on Taiwan for Semiconductors” conveyed the notion that The world’s reliance on Taiwan for semiconductors should be the crux of the problem was the dominant position in the industry viewed not as a vulnerability but as an opportunity to maintain held by Taiwanese companies, notably Taiwan Semiconductor a robust relationship with a trusted trade partner. While Taiwan Manufacturing Co. (TSMC), the world’s largest chip foundry. remains under existential pressure from China, the island is taking The Bloomberg article cautioned that given China’s continuing steps to enhance its cybersecurity to counter the risks. And with threats toward Taiwan, the island’s chipmakers’ prowess repre- continued U.S. military support through defense equipment and sents a potential “choke point in the global supply chain” for training assistance, Taiwan should have the ability to deter serious semiconductors. Adding fuel to the argument, U.S. Senator Debbie provocation from Beijing. Stabenow from the car-producing state of Michigan appeared to Under those conditions, AmCham Taiwan sees no reason why blame the situation on a “decision” by TSMC to “reduce its ship- the world should not continue to benefit from the innovative ments” to American manufacturers. semiconductor design and production that Taiwan has become As various industry observers hastened to point out, the critics known for.

晶片與防疫擦亮台灣招牌

灣常發現自己被世界其他地區低估或忽略――有時被短缺問題的本質。這並非任何晶片製造商的供應分配決策所造誤認為泰國，或是外界大多透過中國對台看法的稜鏡成，而是主要因為汽車業者自己做出糟糕預測所致。當大流行開台來衡量台灣。始爆發時，車廠對車市展望悲觀，因而開始削減晶片訂單。全球不過近來台灣一直受到不尋常的國際關注。過去14個月來，汽車銷售在去年年末突然激增（與此同時，防疫封鎖政策推升在政府對2019年冠狀病毒疾病(COVID-19)大流行的及早行動和熟家工作或娛樂所需裝置對晶片的需求），導致零組件出現缺口，練處置，讓台灣贏得全球讚賞。當西方評論家列舉應對疫情挑戰癱瘓汽車組裝線。有成國家的例子時，總是會注意到台灣將冠狀病毒傳布控制在從更廣泛的角度來看，台灣多年來已證明自己是可靠且負責 1,000起病例以下、其中僅9例死亡的傑出表現。的貿易夥伴。不論是川普總統主政或現任拜登團隊，美國政府都甚至最近台灣身為高科技供應中心（特別是半導體生產）的認識到此一事實，讓台灣加入仍在進行中的討論，商討如何確保實力也受到全球注意。台灣獲得新知名度的原因是車用晶片突然具戰略敏感性產品的全球供應鏈更加強大且安全。台積電承諾在短缺，造成美國、德國和日本的組裝線暫時關閉或減產。不幸的亞利桑納州興建造價120億美元的龐大晶圓廠，並和多家台灣供是，諸如彭博社《全球倚賴台灣生產半導體並不安全》之類新聞應商共組生產聚落，這進一步證明台灣打算和美國建立更鞏固的報導所傳達的觀點，將問題癥結歸因於台灣企業（尤其是全球最商業關係。大晶圓代工廠台積電）在該產業擁有優勢地位。全世界倚賴台灣生產半導體，不該被視為是弱點，而是和值彭博社這篇報導警告說，鑒於中國持續威脅台灣，後者的晶得信賴的貿易夥伴維持強勁關係的機會。台灣儘管仍承受來自中片製造商在產業具有優勢地位，意味這是半導體的潛在「全球供國的生存壓力，卻正採取措施強化網路安全，以對抗前述風險。應鏈隘口」。讓此派看法更加甚囂塵上的是，來自美國汽車生產而且在美國持續透過國防設備和訓練協助提供軍事奧援的情況重鎮密西根州的聯邦參議員斯塔貝諾似乎將晶片短缺情況歸咎於下，台灣應有能力嚇阻北京的嚴重挑釁。台積電「決定」對美國製造商「減少出貨」。在前述狀況下，台灣美國商會看不出有任何理由不應讓全世多位產業觀察家隨即指出，這些批評者基本上誤解當前晶片界繼續得益於台灣名聞遐邇的創新半導體設計和生產。

TAIWAN BUSINESS TOPICS • MARCH 2021 7

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— BY AUSTIN BABB AND JASON WU —

MACROECONOMICS ECONOMIC INDICATORS

FORECASTS RISE, US$ billion Year earlier AS DO EXPORTS Current Account Balance (Q4 2020) 27.3 17 Prospects continue to look posi- Foreign Trade Balance (Jan.) 1.8 1 tive for Taiwan’s economy in 2021. The New Export Orders (Jan.) 52.7 35.3 National Development Council (NDC) Foreign Exchange Reserves (end Jan.) 541.5 479.1 forecast in mid-February that Taiwan’s GDP could expand by more than 4% Unemployment (Dec.) 3.68% 3.67% this year. A few days later, the Direc- Discount Rate (Dec.) 1.125% 1.375% torate-General of Budget, Accounting Economic Growth Rate Q3 2020p 3.92% 3.33% and Statistics (DGBAS) upgraded its Annual Change in Industrial Output (Dec.)p 9.90% 6.29% own GDP growth forecast from 3.83% Annual Change in Industrial Output (Jan.-Dec.)p 6.81% to a much higher 4.64%. As factors in Annual Change in Consumer Price Index (Dec.) 0.06% 1.14% their revised forecasts, the two organiza- Annual Change in Consumer Price Index (Jan.-Dec.) -0.23%

tions cited Taiwan’s successful pandemic P=PRELIMINARY SOURCES: MOEA, DGBAS, CBC, BOFT management, as well as strength- ened exports, private investment, and January last year, while this year’s break how to balance the influence of major consumer spending in 2021. took place in February. economies. In these talks, Okonjo-Iweala Ministry of Finance statistics show The TAIEX (Taiwan Capitalization said she intends to work on improving a 36.8% spike in exports in January Weighted Stock Market) advanced 560 participation for Taiwan and other WTO 2021 compared to the same month last points after the Lunar New Year break. members. year. The MOF states that the substan- Dealers note that the market is playing The talks and Okonjo-Iweala’s tial increase can be linked to the recent catch-up with robust gains in the U.S. comments mark progress for Taiwan in surge in demand for smartphones, stock market, undergirded by the strong the WTO despite a less than auspicious laptops, TVs, and other technology performance of Taiwan Semiconductor start in the organization. Taiwan was products. Export orders in January rose Manufacturing Co. (TSMC) during the originally excluded from the body but 49.3% year-on-year to US$52.72 billion, weeklong holiday. was able to join in 2002 under the name according to the Ministry of Economic "Separate Customs Territory of Taiwan, Affairs (MOEA). The ministry said that INTERNATIONAL Penghu, Kinmen, and Matsu." the large differential was due in part to the Lunar New Year holiday falling in NEW WTO HEAD TAIWAN SECURES PLEDGES SUPPORT COVID VACCINES TAIWAN STOCK EXCHANGE Taiwanese authorities congratulated As of February 21, Taiwan has PERFORMANCE Ngozi Okonjo-Iweala last month on her secured around 20 million doses of election as Director-General of the World COVID-19 vaccines from three different THE LINE SHOWS CHANGES IN TRADE VALUE AND THE SHADED AREA CHANGES IN THE TAIEX INDEX. Trade Organization (WTO). Ministry of sources. It is expected to begin a rollout POINTS NT$ BILLION Foreign Affairs spokesperson Joanne Ou of the vaccine by early March, accord- 17000 450,000 highlighted Okonjo-Iweala’s vast experi- ing to Health and Welfare Minister Chen 16000 400,000 ence in global trade and economics. Ou Shih-chung. 15000 350,000 stressed Taiwan’s support of free trade 14000 300,000 and a rules-based system, as well as its 13000 250,000 12000 200,000 commitment to work with the WTO to 11000 150,000 strengthen multilateral trade. The new 10000 100,000 Director-General took office on March 1. 9000 50,000 During her election campaign, 8000 0 Okonjo-Iweala twice met virtually with Taiwan representatives to discuss WTO DATA SOURCE: TWSE members’ rights and welfare, as well as PHOTO: STOCK IMAGE

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3 Briefs.indd 8 2021/3/4 11:59 AM T A I W A N B R I E F S

Taiwan will obtain 10 million doses Jaw will encourage unity among pan- lative Yuan during the current legislative of AstraZeneca vaccines, five million blue forces. session, according to a Cabinet official. Moderna vaccines, and 4.76 million Immediately upon his return, Jaw Under the proposal, the new minis- vaccines through the World Health positioned himself as a contestant in try will supervise Taiwan’s ICT industry, Organization-led COVAX program. In the upcoming election for KMT chair, oversee network infrastructure construc- addition, German vaccine maker BioN- despite questions about his eligibil- tion, and manage information and Tech has said that another five million ity. KMT election rules provide that to communication security. In addition, doses of its vaccine will be supplied run, candidates must have been a party many government agencies such as the to Taiwan, despite concerns of alleged member for at least one year and be NCC, the Department of Posts and Tele- Chinese political interference. former members of the Central Stand- communications currently under the Two other vaccines developed by ing Committee (CSC) or the Central Ministry of Transportation and Commu- domestic manufacturers Medigen Advisory Committee (CAC). Chiang nications, and the Cabinet’s Department Vaccine Biologics and United BioPharma announced plans to appoint Jaw to of Information Management will be are currently undergoing phase II clinical the CAC but was swiftly met with a incorporated into the new ministry. trials. Chen said the two local manu- National Communications Commis- The proposal is part of the govern- facturers can provide five to 10 million sion (NCC) investigation into whether ment’s broader organizational reform vaccines each, potentially reaching the such an appointment would violate laws efforts to restructure the Cabinet, reduc- government’s goal of 45 million total protecting media independence. ing the current 37 agencies to 29. Plans doses. Domestic vaccines will be ready While his qualifications to run for for five yet-to-be-reformed agencies are for rollout by July, according to Chen. KMT chairman remain uncertain, Jaw scheduled to be submitted during the On February 26, Premier Su Tseng- indicated an interest in seeking the autumn legislative session. chang announced that all 4.76 million party’s endorsement for the 2024 presi- doses of the COVAX vaccines are dential election. CROSS-STRAIT expected to arrive in April. Vaccine Jaw has been a vocal critic of the administration could begin as soon as current Democratic Progressive Party-led TAIWAN MENTIONED seven days after its arrival, with medi- government’s China policies. He accused IN BIDEN-XI CALL cal workers first in line for inoculation, President Tsai of destabilizing cross- U.S. President Joe Biden held his followed by police, social welfare work- Strait relations and lacking sincerity in first phone call with Chinese leader Xi ers, and the military. calls for dialogue with Beijing. Jinping ahead of the Lunar New Year, during which Biden expressed the U.S.’ DOMESTIC DIGITAL MINISTRY objections to mounting Chinese military PLAN TO GO TO LY pressure against Taiwan. JAW RETURNS TO An Executive Yuan proposal to estab- In a statement following the call, the KMT AND POLITICS lish a Ministry of Digital Development White House said Biden “underscored Media personality and Broadcast- is expected to be submitted to the Legis- his fundamental concerns about Beijing’s ing Corp. of China Chairman Jaw Shaw- kong has reentered Taiwanese politics TAIWAN'S JANUARY 2021 TRADE FIGURES after his membership in the Chinese (YEAR-ON-YEAR COMPARISON) Nationalist Party (KMT) was restored in early February. A former Environmental China/ apan ASEA TOTA Protection Administrator and legislator, Jaw left the KMT in 1993 to co-found 14.9 9.5 7.0

the New Party and ran unsuccessfully for 5.5 4.7 4.1 3.9 3.5 3.0 2.8 2.3 1.9 Taipei mayor in 1994. 2021 2020 2021 2020 2021 2020 The KMT leadership views Jaw’s 34.3

return as beneficial to the party. In .S.A Europe 28.1 25.9 21.6 a statement, party chairman Johnny 4.7

3.8 3.1 2.7 3.1 2.5 2.4 Chiang said, “Mr. Jaw’s return to the 2.8 2021 2020 KMT at this time will certainly help 2021 2020 2021 2020 to strengthen the KMT’s power, social T: S Billion Exports mports SO RCE: BOFT/MOEA support, and influence.” He added that

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coercive and unfair economic practices, the crackdown in Hong Kong, human rights abuses in Xinjiang, and increasingly assertive actions in the region, including toward Taiwan.” Biden’s call echoes the State Depart- ment’s statement of support for Taiwan earlier this year against the backdrop of increased incursions by China’s military into Taiwan’s air defense identification zone (ADIZ). The department affirmed its “rock-solid” commitment to Taiwan’s security, prosperity, and democracy.

NEW CHIEF NAMED FOR MAINLAND AFFAIRS Chiu Tai-san, the former Minister of Justice, was sworn in as the new head of the Mainland Affairs Council on February 23. PHOTO: MARTTI CHEN Former Minister of Justice Chiu Tai- san was sworn in on February 23 as the new Mainland Affairs Council (MAC) lawmaker and served as justice minister to discuss the possibility of expanding minister. He replaces Chen Ming-tong, from 2016 to 2018. Chiu also worked at semiconductor production. Such talks who has been appointed to head the the MAC from 2004 to 2005 during the could prove crucial in assisting numer- National Security Bureau (NSB). Chen Shui-bian presidency. ous American auto industry workers, During the swearing-in ceremony, who are facing reduced hours and wages Chiu pledged to resume cross-Strait BUSINESS due to plant shutdowns amid the chip exchanges without compromising shortage. Taiwan’s national sovereignty and CARMAKERS SEEK democracy once the global COVID-19 TAIWAN CHIPS COVID SUCCESS pandemic has been contained. He noted Financial information provider LURES FOREIGNERS that although such an undertaking will IHS Markit estimates that nearly one Amid the ongoing COVID-19 be challenging given current geopolit- million fewer light motor vehicles will be pandemic, Taiwan continues to be an ical tensions, rebuilding cross-Strait produced in the U.S. in the first quarter attractive location for foreign talent. relations will be necessary in the post- of 2021 due to semiconductor shortages. Ministry of Labor statistics show an pandemic world. The combined effects of COVID-19, 18% increase in foreign white-collar Chiu is expected to take a more dependence on foreign manufactur- workers in Taiwan since last year. In pragmatic approach to the “1992 ers, and the impact of severe weather addition, there was an astounding 300% Consensus” – a vague formulation under on semiconductor plants in Texas have rise in 2020 in the number of holders of which both sides agree that there is one strained supply lines for the American the Employment Gold Card, a special China – and breaking the current cross- automobile industry. visa for high-level and senior talent Strait impasse. He asserted that the Last month, U.S. President Joe introduced by the NDC in 2018 to help Chinese interpretation on the “1992 Biden’s top economic advisor, National combat Taiwan’s brain drain. Consensus,” which regards Taiwan as a Economic Council Director Brian Deese, Foreigners who have recently come part of the People’s Republic of China, is wrote to Taiwan’s Minister of Economic to Taiwan cite its “normality” and safety unacceptable to the Taiwanese people. Affairs Wang Mei-hua asking for help as two major factors contributing to Some have characterized Chiu’s in easing the shortfall in chips for U.S. its attractiveness during the pandemic. appointment as a friendly gesture to automobiles. The Biden administra- While many countries have enforced Beijing. Chiu emphasized that he holds tion has identified the semiconductor strict pandemic prevention policies, daily no hostility toward China and suggested industry as a priority area in its goal of life in Taiwan has for the most part been that both sides can begin to restore the reducing the U.S.’ reliance on China. unaffected. People can gather in crowds, relationship by building mutual trust in Officials in the U.S. State and dine at restaurants, and enjoy other non-political spheres. Commerce Departments have previously benefits that are not present in other The new minister is a former approached the Taiwanese government countries due to COVID-19.

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3 Briefs.indd 10 2021/3/3 5:58 PM ISSUES

A New Numbering System for ARCs

he numbering system used on foreign nationals’ alien resident certificates (ARCs) changed in January to T match that of Taiwanese citizens’ IDs, removing a longstanding hindrance to carrying out everyday activities

such as online banking, ticket booking, and registration for PHOTO: WIKIPEDIA medical appointments. Before the change was made, whether an ARC number could be entered successfully online depended on the particular organization’s IT system. That piecemeal approach meant that a foreign national in Taiwan might be able to sign up for online banking at certain banks but not others, or to register 新式外來人口 online for appointments only at certain hospitals. The National Immigration Agency (NIA) changed the 統一證號 numbering format for foreign nationals from a code of two 人統一號 English letters followed by eight digits to a new code of one 稱統號一月為照國民 English letter followed by nine digits, which is identical to the 字號國人長行 structure used for citizens’ ID card numbers. 行號日 The NIA explains that under the new system, the English 路 letter is the area code, indicating the place of application and 統號資統 corresponding to the area code in citizens’ ID card numbers. 為政台國人登行 The first digit indicates gender – 8 for male and 9 for female. 路行行 The last digit is the checksum, used to verify data integrity. 行號 While the NIA began issuing ARCs with the new 民人統號2英文字 numbering system on January 2, there will be a 10-year grace 字編為1英文字9字 period during which ARCs with the previous system remain 國民字號 valid. 民統號中英文字 “A simultaneous replacement mechanism” will undergird 區照國民字號區 the transition from the old to new numbering system, the NIA 第一字9為 said in a statement. When a foreign national applies for exten- 字資 sion, reissuance, or replacement of his/her resident certificate, 民一月二日發有統號 the NIA will issue a new number to the applicant. The foreign 有年期統號 national will pay the standard application fee, with no addi- 期有 tional charge for the change. 民中統號 Permanent ARC holders should simply apply with the NIA 期行發人 to change their number before the grace period expires on 期發民發統 January 1, 2031. 號人照行 The new numbering system does not require foreign 發統號 nationals to make changes to other forms of identification, 有201年1月1日 such as NHI cards, driver licenses, or bank accounts. 期民發統號 “If the government is trying to promote Taiwan [as being 人照行號 hospitable to foreign residents], it needs to resolve these 份統號 little issues that make life more difficult for foreigners living 長統號台北國社 here,” says Timothy Berge, general manager of Interna- 區廣電台經理歐台商會生 tional Community Radio Taipei (ICRT) and co-chair of the 會主文：政 European Chamber of Commerce in Taiwan’s Better Living 廣台灣 Committee, which had long advocated the change. 台國人生問

— By Matthew Fulco 文長

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3 issues.indd 11 2021/3/3 5:58 PM A MESSAGE FROM NOVARTIS

Through Innovation, Collaboration, and Culture, Novartis Aims to Reimagine Medicine

he healthcare industry is in December 2020. where people can be fully empowered currently undergoing a radical In addition to its ever-expanding at work, value diverse perspectives, and T transformation. Patients portfolio, Novartis continuously seeks to ultimately to bring their best self to work increasingly have access to better, more forge strong and long-lasting partnerships every day,” Wagner says. He explains that personalized treatment options targeting with government, industry, and academia in order to drive innovation, performance, previously intractable illnesses, allowing in order to create groundbreaking and reputation, as well as enhance them to live longer, more fulfilling lives. healthcare solutions. In Taiwan, the the overall work experience, Novartis Yet for Novartis, this hard work is company has been exploring collaborative has transformed its culture to be more just the beginning of the long journey. opportunities with technology companies “Inspired, Curious, and Unbossed.” While the global healthcare ecosystem and strengthening partnerships with Wagner says that having “unbossed” continues to flourish, reaching ever more healthcare providers. employees is critical to Novartis’ success patients and providers, the multinational In one of Novartis’ most recent as a major pharmaceutical enterprise. pharmaceutical firm maintains its purpose collaborative efforts, it teamed up last He emphasizes that leadership is able to of reimagining medicine in all the markets year with the Europe-Taiwan Biotech achieve the company’s objectives through where it operates. Association (ETBA), a non-profit teamwork. “The team members have the When asked what is meant by organization established in Zurich best knowledge to know what needs to “reimagining medicine,” Novartis Taiwan Switzerland. With the network of ETBA be done to achieve those objectives and President Jorge Wagner responds that spanning across biotech, medtech, and therefore they don’t need a boss as much essentially it is “to improve and extend digital health industries in Europe and as an enabler; someone to help them reach people's lives.” To accomplish this goal, Taiwan, the collaboration accelerates the their full potential,” he says. To help its he says, the company commits itself to development of novel digital biomarker employees becoming more “unbossed,” maintaining a robust portfolio bolstered solutions that can be adopted in early- Novartis Taiwan’s office is designed with by a comprehensive drug pipeline. stage clinical studies. Novartis has also Activity-Based Workstation; none of Globally, Novartis expects to submit over become strategic partners with Acer, the seats is assigned and all employees 50 new drug applications between now one of the world’s top ICT companies, can choose the seats to suit their best and 2024 and is currently conducting and supported Acer Healthcare on the interest of the day. This is the concept of more than 300 clinical trials. license approval and implementation of Choice with Responsibility, a principle to Wagner adds that reimagining medicine the first locally developed and TFDA also involves making impressive gains approved ophthalmologic AI solution. in the development of personalized The AI-assisted diagnostic tool for and precision treatments. Chief among diabetic retinopathy utilizes deep learning these is gene therapy, which Novartis techniques to provide diagnostic results Taiwan Chief Scientific Officer David Lee similar to what a patient would receive describes as “treating the condition at its from a professional physician. source.” Compared to most traditional None of this innovation and forward treatment options for severe illnesses, movement would be possible without a which generally target symptoms, Lee company culture that actively sustains it. says that gene therapy addresses the While Novartis continues to work toward fundamental cause of a disease, with the its overarching goal of “reimagining potential of one-time treatment to cure medicine,” leaders in the company like certain conditions. The first license of gene Wagner understand that a concurrent therapy in Taiwan has just been issued by culture transformation is critically Taiwan FDA for treating Spinal muscular importance to achieving that objective. atrophy, a genetic neuromuscular disease “We aim to foster an environment

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Novartis advertorial.indd 12 2021/3/4 1:57 PM A MESSAGE FROM NOVARTIS

reinforce unbossed culture. continued to deliver value to healthcare And while Novartis remains dedicated Due to COVID-19 pandemic, systems and to society. For example, the to helping people everywhere weather the many companies rethink their work company has become involved in assisting current pandemic, one of the company’s arrangements, Novartis Taiwan has with the production of COVID-19 priorities is protecting the health and already taken an advance step to let vaccines. As part of its strong commitment safety of its employees. Pharmaceutical employees to make decisions of where and to help resolve the global health crisis, and healthcare professionals are one of the when to work to be a new norm, beyond Novartis signed an agreement in late most at-risk segments of the population, the pandemic period. January to leverage its manufacturing Wagner notes, and ensuring that they As the pandemic has impacted people capacity in Switzerland to boost the remain healthy is crucial to carrying out and industries globally, Novartis has supply of vaccines worldwide. Novartis’ goal of reimagining medicine.

諾華用創新、合作與文化，重新創想醫藥未來

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3 CoverStory.indd 14 2021/3/3 6:00 PM BILINGUAL POLICY

AIMING TO CREATE A “BILINGUAL NATION”

The government is seeking to greatly increase the level of English fluency in the Taiwan population by 2030 through a variety of programs, mainly focusing on improving the effectiveness of English teaching in the schools. The goal is to raise Taiwan’s international competitiveness. But classroom learning will need to be supplemented through the creation of more “bilingual environments” throughout the society.

BY LOUISE WATT

t’s an ambitious goal: turn Taiwan The government has specified that the flagship bilingual academies, and encour- into an English-Mandarin “bilingual term does not necessarily mean designa- aging more schools to incorporate the nation” by 2030. With broader abil- tion of English as an official language. use of English in teaching other subjects, ityI to communicate in English, Taiwan Published in 2018, the Execu- such as athletics and social studies. should be able to strengthen its busi- tive Yuan’s “Blueprint for Developing Besides the changes in the educational ness dealings with the rest of the world, Taiwan into a Bilingual Nation by 2030” system, observers say that if the bilingual improving the investment climate and aims to raise the level of English profi- policy is to have any chance of working, creating more job opportunities. ciency among the general public so as Taiwan will need to create more English- Although the potential benefits are to enhance Taiwan’s overall national speaking environments, making the clear, more than two years after the competitiveness. language an integral part of its business initial plan was published, it is still uncer- Much of the emphasis in the Blueprint and cultural fabric. tain which areas of public life and busi- is on education, including recruiting and The wide-ranging plan calls for ness will be most affected – or even how training more English teachers, trans- improving the English comprehen- “Bilingual Nation” should be defined. forming certain schools and colleges into sion and speaking skills of primary and

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secondary students, and even offering The new policy direction has received The goals for the plan are more English classes for taxi drivers. It also some initial pushback from commenta- modest than the phrase “Bilingual envisions fostering a bilingual environ- tors within Taiwan. One criticism is that Nation” might connote. The aim is not ment in the country’s science and indus- the plan appears more about convenience for all citizens to speak English by 2030, trial parks – for example, by encouraging for foreigners than upgrading the island’s or even to install English as a second offi- the hiring of people with better English international competitiveness. Another cial language after Mandarin – an idea – as well as the production and broad- is that the emphasis on English could that the Blueprint says should be studied cast of English-language TV and radio undermine the government’s efforts to after 2030. programs. promote students’ learning of Taiwanese, What the term appears to mean so far The authorities note that most Hakka, and Indigenous languages. is to significantly broaden the proportion government documents and legislation Anticipating those objections, the of the population – especially among the relevant to foreigners are already avail- Blueprint takes pains to stress the broad younger generations – who are comfortable in translation; where such materials national goals that the plan is address- able conversing in English, which in turn are still lacking, English versions will be ing. “Promoting bilingualism will enable should enable them to develop more of prepared. the nation to look forward,” the docu- an international mindset. Besides increas- Another key focus is on making life ment reads. It “will enable Taiwan’s ing the amount of English taught in the easier for non-Chinese-speaking tour- next generation to enter the future with schools and providing more opportunities ists and expats. That means ensuring that greater competitive advantage.” As for for standardized testing of English abil- English is spoken by personnel at muse- the impact on fostering other languages, ity, the program would also seek to raise ums and other tourism locations, banks, the Blueprint provides assurance that the the level of English competence in govern- on the 110 and 119 emergency numbers promotion of native-language culture will ment offices by increasing the English and government switchboards. be given “equal importance.” component in civil service exams.

Expats and Taiwanese volunteer their time to offer suggestions on how to implement the 2030 Bilingual Nation plan, at a meeting of the Alliance for a Globally-Oriented Taiwan in 2019. PHOTO: CROSSROADS

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Attempting to increase the nation’s collective English skills and provide more bilingual information will be an ambitious undertaking. Corporate and government websites often use poor English, many tourist sites lack information in English or provide only partial translations, and Taiwan’s schools have long been churning out students who are unable to use English in what the Minis- try of Education calls a “practical and meaningful way.”

No ready model

There is no roadmap for how to make a country “bilingual.” Taiwan can’t necessarily look to places like Hong convenient testing options for people. budget for the first two years of the Kong and Singapore for lessons on how To improve workers’ English skills project will come to NT$4.1 billion to incorporate a very different language and make Taiwan more internationally (US$146.4 million), but did not provide into its business and public life, as the competitive, the Council says the govern- a breakdown of how the funds would ubiquitous use of English in those loca- ment will create “benchmark schools” be allocated. The money comes from the tions is tied to their colonial history. and “professional bilingual bench- government’s Forward-looking Infra- Also, based on the experience of other mark colleges,” promote English courses structure Development Program, whose countries that undertook similar initia- and relevant extracurricular studies at mission is to build infrastructure to tives, the 2030 target may turn out to be schools, increase the numbers of English promote development over the next three unrealistic. Reaching the goal of bilin- teachers and boost their English-teach- decades, including “human resources gualism could take much longer. ing abilities, promote English study for infrastructure to nurture talent and boost In response to a question from “all ages,” “create English-use environ- employment.” Taiwan Business TOPICS about its strat- ments,” and work with the public and Questions remain over how the bilin- egy, the National Development Coun- private sectors to create new professional gual policy will be implemented, which cil (NDC), the bilingual policy’s coor- English-proficiency certifications. areas of public and business life it will dinating agency, said it will “cultivate Civil servants will undergo inten- affect the most, and how the government bilingual talents in various professional sive English communication training will encourage the private sector to get fields,” improve the English abilities of in Taiwan and attend short-term inten- on board. civil servants who deal with international sive English programs abroad to improve “From what I’ve observed, there’s organizations and English-speaking coun- their English communication and writing still the traditional mindset – let’s try to tries, and expand Taiwan’s English-test- skills. find ways of hiring more English teaching capabilities to provide affordable and The NDC has disclosed that the ers in Taiwan,” says David Chang, who

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President Tsai Ing-wen and Vice President William Lai attend the first 2030 Bilingual Nation policy consultation meeting at the NDC. PHOTO: OFFICE OF THE PRESIDENT

initiated the now-disbanded Alliance for Bilingual Nation by 2030” in December ization of the physical environment of a Globally-Oriented Taiwan, a group 2018 after it had been drawn up by the government units, public signage, and of expats and Taiwanese who drew up NDC, the Yuan’s policy-planning body, tourism, etc.” – but unable to enlist suggestions in 2019 for how the govern- with input from the various ministries. public participation and support. ment could implement the 2030 plan. The major policy objective was to This time around, the policy will “It’s not just about getting more cultivate people’s English proficiency focus on “demand-driven supply,” equip- educational resources, it’s about Taiwan’s by optimizing English-learning plat- ping workers and professionals with greater internationalization,” Chang forms and media resources to strengthen better English skills, and using digi- says. “How do we make a greater people’s English listening, speaking, read- tal technology to reduce the urban-rural connection to the rest of the world so ing, and writing skills. A secondary divide, whereby students in relatively that English becomes more relevant in objective was to elevate national compet- remote areas may have suffered from people’s professional and social lives? If itiveness – bolstering Taiwan’s industrial insufficient funding for English teachers you don’t have that demand, and you’re competitiveness, giving people quality job and learning resources. just going to be learning English for the opportunities, and elevating the island’s The Blueprint notes that a coun- sake of getting good grades, then I don’t economic development. try with a high standard of English has see it really much going anywhere.” It is not the first attempt by the a better chance of luring investment Taiwan authorities to raise the public’s from multinational corporations, creat- The background level of English. According to the Blue- ing well-paying employment opportu- print, the past attempts failed because nities. Taiwan must become a bilingual The Executive Yuan approved the they were “mostly devised by supply- nation to “enable our young generation “Blueprint for Developing Taiwan into a side thinking, emphasizing the bilingual- to have better development opportunities

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in their homeland, lifting wage levels as a To measure the degree of success of of government websites and laws into whole and spurring the prosperity of our implementation, the Council has set up English, and that spending money national economy,” the document says. a number of key performance indica- on translation for the convenience of In the run-up to the January 2020 tors (KPIs), including “the full bilingual- foreigners might spark objections from presidential and legislative elections, the ization of official websites of each minis- the public. bilingual initiative appeared to recede try and department; the bilingualiza- As a long-term solution, David Chang to the political backburner, but it has tion of documents, certificates, legisla- suggests setting up English depart- returned to a more prominent place on tion, and press releases that are relevant ments, staffed with native English speak- the public agenda in recent months. to foreigners; and the provision of bilin- ers, within government agencies to culti- The first 2030 Bilingual Nation policy gual services at government public service vate an inhouse international presence, consultation meeting was held in Novem- areas’ front desks.” rather than simply sending material to a ber with participants that included Pres- “Already 95% of the documents, translation agency. Chang serves as secre- ident Tsai Ing-wen, Vice President Lai certificates, etc. that are relevant to tary-general of Crossroads, a non-profit Ching-te, Minister of Education Pan foreigners are now in dual language, focused on increasing exchanges between Wen-chung, NDC Minister Kung Ming- which is a good implementation result,” the Taiwanese and international commu- hsin, and leading figures from the the NDC said in a written answer to nities. It has also lobbied the NDC in academic and business sectors. TOPICS. relation to the 2030 plan. President Tsai told the meeting that When the plan was first announced, Obstacles to Chang’s proposal include the government was “sparing no effort” there was concern that it would be too labor and national security issues – the in transforming Taiwan into a bilingual costly to translate the large number idea that foreigners are taking jobs away country by 2030. She said a high standard of English proficiency would mean younger generations could better connect with the world and Taiwan could better share its coronavirus-combating success.

Initial progress

The NDC cites a series of areas in which “preliminary progress” has been achieved on the bilingual policy “with the concerted efforts of various government departments.” They include “improving the English level of relevant public and private services, encouraging banks to set up bilingual model branches, and local government household registration offices setting up English counters or A YouBike “Sweet Notice” politely gives riders safety and other tips. providing English services.” PHOTO: LOUISE WATT

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from locals and may even be spies – and sector to play in promoting bilingualism, either through one-on-one classes or a civil service law that makes it difficult AmCham Taiwan President Leo Seewald in groups of four. It also distributes all for government agencies to hire foreign- sees a particularly meaningful role for internal communications, such as emails ers, he says. multinational companies in Taiwan. and videos, in a bilingual format to The NDC has been supporting “Given their international connections help equip personnel with the ability to amendments to the Act for the Recruit- and perspective, they are especially well- communicate fluently in English. ment and Employment of Foreign Profes- positioned to provide support to this For its part, PwC Taiwan offers sionals that would relax restrictions on important government initiative,” he group classes and workshops to help employing foreign teachers in public says. “Their operations should be models staff members practice their English. schools and ease work and residence for how to train employees and provide a Workshop topics may include discus- requirements for foreign professionals. high standard of bilingual service to the sions about world news or the playing The revisions would also extend more public.” of board games, while group classes are social security and tax benefits for the Some companies have long taken more business-driven. foreign professionals. steps in that direction. For example, Such efforts are not limited to foreign Although the government hasn’t speci- Citibank Taiwan provides extensive companies. Taiwan Semiconductor fied the part that it would like the private English-language training for its staff, Manufacturing Co. (TSMC), the world’s largest contract chipmaker, announced in July last year that it had launched an “English learning zone” for its employees, with online English webinars, one- on-one consultations, and business English workshops. By August, more than 3,000 people had taken part in the webinars, the company said. More needs to be done, however, when it comes to maintaining a bilingual online presence. An informal check just of AmCham member companies, who might be expected to lead the way in bilingual communication, found that only around 28% had fully functioning English websites, while 26% had Taiwan websites only in Chinese. Among the companies offering the most complete English-language services are hotels, travel agencies, and airlines. Even for those that do maintain More and more banks in Taiwan are offering information and services in English. English versions of their websites, much PHOTO: LOUISE WATT less information is available there than

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on their Chinese-language websites. These companies are generally cater- ing to the local market, and Taiwan’s push to attract more foreign talent hasn’t yet created an impetus for them to offer more English services online. In the area of financial services, a number of local banks are working on developing bilingual branches. In Decem- ber, the Financial Supervisory Commis- sion said that 15 banks had opened a total of 69 bilingual branches since 2019, when it began promoting the concept and encouraging banks to help staff improve their English. E. Sun and Hwa Nan Banks have declared that all their branches will be fully bilingual by 2026, and First Commercial is set to follow in 2028. But it is not yet clear how meaningful this initiative will turn out to be. Cross- try of Education in 2019 started work- ments for English-speaking culture,” roads’ Chang remains skeptical. “They ing with International Community Radio he says, in contrast to cities like Shang- might actually have a bilingual person Taipei (ICRT) to produce “News Lunch- hai and Singapore where “they are using who’s willing to speak to you, but regard- Box.” These English-learning programs English very naturally” at conferences. ing banking services,” it may still be for elementary and middle school “We translate, but that’s not enough” difficult for a foreigner to open a bank students are broadcast at lunchtimes and to have creative brainstorming, effective account, he says. are available for download. networking, and the sharing of ideas, Su To some observers of the government’s Another prong of the 2030 plan is to says. “If you don’t know English, you’re bilingual effort, the biggest challenge will create an English-language video stream- getting nothing.” be finding ways to make English part of ing platform. The primary purpose is to ZAShare already runs an annual daily life. Before its disbanding, the Alli- raise Taiwan’s profile abroad, attracting event that is billed as Asia’s biggest expo ance for a Globally-Oriented Taiwan more foreigners to the island for work or on innovation in education. This year, came up with several suggestions, includ- travel and thus contributing to building Su intends to expand it into an interna- ing the designation of a National English a more conducive environment for bilin- tional creative content conference and Language Week once or twice a year and gualism. festival in the mold of the Austin, Texas- a requirement that all English-language “In Taiwan we always stay in our based South by Southwest (SXSW) movies shown in theaters display both comfort zone,” says Ozzie Su, CEO of conference, which isn’t limited to just English and Chinese subtitles. ZAShare, a social enterprise that orga- one industry. His hope is that by 2023, In an attempt to boost contact with nizes large-scale conferences on inno- he can put on an English-only event, English outside the classroom, the Minis- vative education. “We have no environ- with no translation.

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NEW APPROACHES TO ENGLISH LEARNING

his school year, students in 85 ture, technology, and public health. stress on written tests of grammatical selected Taiwanese elementary and The ministry told TOPICS that by rules. “The actual usage of the language, junior high schools – an increase next year it hopes to have a list of poten- like talking and interaction, isn’t really fromT 65 last year – are gaining expo- tial schools for inclusion in the project, applied to the teaching methodology.” sure to English in courses aside from the with at least one school where 30% or The Education Ministry says it usual language classes. In those schools, more of the departments are completely expects to recruit 300 more foreign English is being used as a language of bilingual. The goal is for four fully trans- teachers this year. instruction in courses such as the arts, formed benchmark schools to be opera- Even before the Bilingual Nation humanities, health, and physical educational by 2030. plan was published, some local govern- tion. The scope of the program is to be Taiwan’s education system has long ments had already started their own gradually expanded in future years. faced criticism for its heavy focus on experiments in bilingual teaching. In The trial project – part of the 2030 preparing students to pass tests at the some cases, they have been aided by a Bilingual Nation plan – is based on the expense of nurturing creativity. It has Fulbright Foundation program that has idea that languages can be more easily also been turning out students who are been bringing recent U.S. college gradu- learned if they are treated as a natu- largely unprepared to use English to ates to Taiwan as English Teaching Assis- ral part of life rather than merely as an converse with foreigners or in a work tants. academic discipline focusing mainly on environment. One foreign teacher at a junior high grammar and syntax. Along the same The situation is part of the reason school sounded a note of caution about lines, English classes in the future will for the explosion in the number of cram teaching other subjects in English, noting place more emphasis on speaking the schools, as some parents and companies that the content of the course must be language, instead of concentrating on look for opportunities to give students carefully tailored to match the English reading comprehension. a more real-life English-speaking expe- level of the students. He says that in his Another innovation under the 2030 rience. home economics classes, he is expected to Bilingual Nation plan will be the trans- Paul Huang, who operates Paul’s discuss types of fabric such as cotton and formation of certain senior high schools, Quality Academy cram schools in Taipei polyester even though “the kids barely colleges, and universities into what are and Taoyuan, says it should be feasible speak English.” being called “flagship” or “benchmark” for Taiwan to become basically bilingual To achieve its targets under the Bilin- bilingual institutions. The Ministry of by 2030 provided the education author- gual Nation program, the Education Education, which envisions the establish- ities make two changes in the system. Ministry says that it will be pushing local ment of these specialized bilingual acad- The first is to group students in classes governments to develop English educa- emies in fields such as finance and tech- according to their English ability – not tion by 2030, offering subsidies for bilin- nology, has earmarked NT$979 million simply their age or year in school. “That gual education at 7,450 schools, “profes- (about US$34 million) to fund the plan- way teachers can better cater to their sional workplace experience activities” at ning stage. needs,” he says. 1,000 schools, and “professional work- According to a December announce- Secondly, he regards it as vital – as place courses” at 100 schools. ment, the ministry will prioritize institu- the government appears to recognize – to The authorities also plan to work tions offering courses in such subjects as gear instruction toward enabling students with the American and British govern- trade negotiation, intellectual property, to engage in actual conversation. Huang ments on English-language education. In semiconductors, finance, law, architec- says current practice puts too much December, the U.S. and Taiwan signed

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a memorandum of understanding to increase educational exchange, mostly by expanding existing Fulbright and Department of State education programs. In addition, the American Institute in Taiwan has announced that it will work with the Taipei, Changhua, and other local governments to support bilingual education by organizing professional development workshops for teachers. The Education Ministry has also begun the training of bilingual teachers. In 2019, it subsidized eight teacher- training colleges to set up bilingual teaching research centers and develop teaching methods and materials. During the 2019- 2020 academic year, nine teacher training colleges launched bilingual teacher training courses, with a total of 322 students The Ministry has also received assistance Cram schools that hire native enrolled. In 2020, 150 teachers took part from the British Council in assessing the English speakers as teachers in bilingual teaching classes. English skills of Taiwanese students. The have become popular as a way of giving students more real-life For the future, the Ministry plans to results might be used as reference when English-speaking experience. increase the budget for teacher training. setting KPIs to measure the long-term PHOTO: PAUL'S QUALITY ACADEMY It aims to send 3,845 teachers abroad for success of the bilingual policy. short-term training and give advanced training to 5,700 teachers within Taiwan. — By Louise Watt

THE IMPACT OF CULTURE

hough sweeping in its ambition, ourselves, how we communicate with the Bilingual Nation plan seems to each other.” have largely overlooked one key Whiteley, who was one of the first to area:T culture. gain an Employment Gold Card based on The Blueprint refers to “promoting expertise in the arts and culture, says that bilingual services at cultural and educa- he was concerned by the absence of the tional venues,” but neglects the need to word “culture” from the 2030 Blueprint. address cultural influences in a larger “They are missing out on a huge part of sense – factors that need to be taken into what bilingual means, which is factor- account in any attempt to increase bilin- ing in the cultures of other countries and gualism, according to Taiwanese and how that is going to have an impact on foreigners working in the cultural field. foreigners wanting to come here and “We always talk about culture in create a life in this country.” relation to the arts, but it’s much more Instead, the Ministry of Culture than that,” says Paul Whiteley, who is focused on “retaining traditional has performed in international musi- Taiwanese culture and indigenous arts,” cals including The Phantom of the he says. Opera and Billy Elliot and is now work- To cater to the bilingual community, Paul Whiteley, who has performed in ing as a performer, producer, and direc- in January Whiteley presented Bright international musicals including The tor in Taiwan. “Culture is the representa- Lights for Dark Nights, a collection of Phantom of the Opera and Billy Elliot, now works in the cultural field in Taiwan. tion of the history and development and Broadway and West End classics sung by PHOTO: LOUISE WATT the voice of a society – how we express himself and four other performers (one

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BILINGUAL POLICY

American and three Taiwanese), accom- says. “To have the ability to create using tapped after the Ministry’s initial choice, panied by Taiwanese musicians. Chinese a different language takes more than just the Public Television Service (PTS), translations of the lyrics were projected understanding that language. You have to expressed concerns that the project onto the stage. understand the culture.” would undermine its independence. Also crossing the cultural divide is The previous production of Zeelandia Asked about the role of culture in Derek Lin, a Taiwanese producer, writer, projected Chinese subtitles onto the the 2030 plan, the Ministry referred to and composer. He wants to present bottom of the stage, much like a movie. the video-streaming project. It said the Taiwan’s culture to the world, but in a But with advances in technology, it may platform would “convey our culture format that the world can understand: an be possible to view subtitles through and values to the world, while shap- English-language, Broadway-style musi- augmented reality (AR) glasses, Lin says. ing Taiwan’s brand identity, construct- cal. In 2014, his musical Zeelandia – set “We’re betting that just as people enjoy ing our country’s international discourse in the period of the Dutch colonization Hollywood movies and read the subtitles, power, and enhancing international of Taiwan – became the first full-length they can also enjoy a theater piece and people’s knowledge and understanding English original musical created and read from the subtitles.” of Taiwan.” It expressed hope that the produced by a Taiwanese team. Now he So far, the Ministry of Culture’s platform will become “the most interna- is rewriting the musical and planning for involvement in the Bilingual Nation tionally trusted Asian emerging media another stage production in August. plan appears to be limited to setting up brand.” Lin says that while government offi- an international video-streaming plat- “In this way,” the Ministry said, “it cials seem serious about wanting to form that is slated to produce programs will also promote and spur the develop- promote a bilingual environment, “I think about Taiwan in English – with subtitles ment of domestic related industries, and it needs more time for them to understand in Chinese and English – to promote the cultivate international communication that ‘bilingual’ should be more than just island to the world. and technical talents.” translating websites into English.” The Ministry of Culture has commis- “If the population is going to be bilin- sioned the official Central News Agency — By Louise Watt gual naturally, they have to be able to (CNA) to operate a pilot project that is think in both Mandarin and English,” he being launched this month. CNA was

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3 CoverStory.indd 24 2021/3/4 12:07 PM TAIWAN BUSINESS

Is Taiwan Ready for the Hydrogen Economy?

The government has yet to include hydrogen in its renewable energy policies, but the private sector is already investing in this fast-growing area.

BY TIMOTHY FERRY

he Star of Hope ferry carries up founded in 2001. Its dozens of mem- hydrogen in its latest Five-Year Plan. to 90 passengers several times bers include the Industrial Technology China has already put around 10,000 a day across Sun Moon Lake, a Research Institute (ITRI) and the Insti- hydrogen-powered trucks on the road. routineT journey made exceptional by tute of Nuclear Research (INER). Taiwan’s government, by contrast, the boat’s drive system: electric motors Taiwanese companies are sup- offers little support for the hydrogen powered by clean, emissions-free pliers of key components to U.S.- fuel cell industry, and does not include hydrogen fuel cells. Built by New Taipei based Bloom Energy, one of the hydrogen fuel cells in its Renewable City-based YC Synergies Ltd. and com- world’s largest manufacturers of solid Energy Development Act or other leg- missioned in 2015, the Star of Hope is oxide fuel cells (SOFC). The compa- islation aimed at fostering renewable the largest hydrogen fuel cell-powered ny’s systems use natural gas instead of energies. ferry in Asia. hydrogen but still produce 60% fewer “Energy policy is the most important YC Synergies is just one of dozens of pollutants than typical fossil fuel gen- thing for all renewable energies,” notes companies manufacturing key compo- erators. Taiwan also has several fuel Meg Lin, an associate research fellow in nents, specialized materials, and entire cell systems integrators, some of which the Green Energy and Innovation Tech- hydrogen fuel cell power systems for focus on hydrogen. Others, such as the nology division of the Taiwan Institute the burgeoning global fuel cell sector. hiPower Green Technology Co. and of Economic Research. Currently, “the Fuel cells use the chemical energy of Green Hydrotec Inc., use methanol as Taiwan government only focuses on hydrogen (or other fuels, including fuel. Although these are mostly small solar and wind power,” she says. methane and methanol) to cleanly and firms that sell only a few units annu- Lin, who also serves as TFCP’s CEO, efﬁciently produce electricity. ally, their systems are exported around says that the government does offer lim- Fuel cells also operate at 60% effi- the world. ited support for fuel cell development, ciency, compared to around 25% for Despite this global footprint, how- given the large number of companies in internal combustion engines. The elec- ever, Taiwan has almost no domestic Taiwan that have long been involved in tricity generated by fuel cells can be fed market for hydrogen fuel cells – or any that sector. Yet the prevailing attitude is into the grid or used to power electric fuel cells for that matter. Despite the that hydrogen fuel cells are too expen- vehicles or machinery. high-profile success of its marine ves- sive, she says. Global interest in hydrogen fuel sels, YC Synergies now focuses on Leading economies, by contrast, cells has exploded in recent years, China, where it produces hydrogen are making a concerted push for the but Taiwan has been involved in the fuel cell systems for the booming heavy expansion of hydrogen energy in their industry for decades. The Taiwan Fuel transportation market. The Chinese jurisdictions. The EU, as part of its Cell Partnership (TFCP), a consortium government provides huge incentives for €750 billion Green New Deal relief of companies and research centers, was hydrogen fuel cells and even includes effort and net-zero emissions goals,

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aims to produce up to ten million reforming, is highly polluting and the feasible. tons of “green hydrogen” – hydrogen end product is called “grey hydrogen.” A number of solutions are being produced from water via renewable In order to reduce the carbon footprint tested and deployed to overcome these energy-powered electrolysis technolo- of producing hydrogen and make it a challenges. Japan, the leading proponent gies – by 2030, with total investments more viable green energy option for of hydrogen power, imports a petro- potentially reaching €470 billion consumers, companies both in Taiwan chemical called toluene from Brunei, (NT$15.8 trillion) by 2050. and globally have been working on which it adds to its hydrogen supply. Newly inaugurated U.S. President more environmentally friendly solu- This mixture forms methylcyclohexane

Joe Biden has likewise prioritized green tions, such as electrolysis – generating (C7H14), a toxic and flammable chem- hydrogen as part of his administra- hydrogen through water using equip- ical that is nevertheless liquid at room tion’s push to combat climate change, ment called electrolyzers – to produce temperature, removing the need for although he has yet to lay down spe- “green hydrogen.” Such a process, compression or liquefaction. The tol- cifics on how to promote it as an while preferable, can be prohibitively uene is extracted and returned to Brunei energy source. expensive. Given this, the vast majority for the next shipment. Japan has long been a leader in of hydrogen produced in Taiwan and Japan imports its hydrogen, as the hydrogen-powered transportation – the elsewhere is grey. (For more on grey local supply is insufficient to feed its Toyota Mirai is the world’s only mass- and green hydrogen, see the accompa- hydrogen fuel cells. Taiwan, by con- produced hydrogen fuel cell vehicle nying article in this section). trast, uses hydrogen only for industrial (FCV) – and Japan expects to have Besides its high costs, green processes, and as its current demand for 200,000 such vehicles on the road by hydrogen production continues to hydrogen is met by locally based sup- 2025. South Korea, meanwhile, aims present other, technical challenges. pliers, it has no need for imports. to introduce 6.2 million FCVs by 2040, Hydrogen is highly reactive and so can Veera Rajagopal, a graduate stu- along with 15 gigawatts of fuel cell degrade metal pipelines and storage dent at National Taiwan University of power generation. tanks. It is also the lightest element and Science and Technology, leads a team Law firm Frost and Sullivan has for transport must either be compressed that is using nanotechnology to store forecast that global hydrogen produc- or chilled to extreme temperatures to hydrogen in a solid state as a powder. tion will rise from 71 million tons in become liquified – processes that are The nanoparticles absorb the hydrogen, 2020 to 168 million tons by 2030, with energy-intensive. rendering it inert. When exposed to revenues surging from US$177.3 billion Hydrogen is also highly combus- heat, the hydrogen is then released from to US$420 billion. tible, and compression runs the risk the nanomaterials to become available Taiwan’s suppliers of hydrogen fuel of explosions. Liquefaction is a safer as a gaseous fuel for a fuel cell. Raja- cell components in theory should be process, but it also requires huge invest- gopal says the research is progressing well-positioned to take advantage of ments in infrastructure and equipment but still doesn’t meet the standards for this fast-growing market. As the global and consumes lots of energy. The costs commercialization. market expands and intensifies, how- associated with both compression and Meg Lin of TFCP says that transpor- ever, the lack of a domestic base may liquefaction, combined with the high tation and storage costs and risks have put Taiwanese manufacturers at a dis- power demands of electrolysis, have impelled the local fuel cell industry to advantage. made green hydrogen production less explore other fuels besides hydrogen. “Taiwan is too small to be the main focus for the industry, but we need to incubate the industry here, where the manufacturers can sharpen their skills. Then, when they reach out to the global market, they will be more competitive,” says Mark Huang, CEO of YC Synergies. As the market surges, attracting more and more participants, competition will only get fiercer, says Huang. “The next three years will be critical for the local hydrogen fuel cell industry.”

Making Hydrogen “Green”

While hydrogen also shows promise as a low carbon energy source, the The Toyota Mirai, which is being sold in Japan, North America, and Europe, is currently usual means of production, a cost-effi- the only mass-produced hydrogen fuel cell-powered vehicle on the market.

cient process known as steam-methane PHOTO: WIKIPEDIA

26 TAIWAN BUSINESS TOPICS • MARCH 2021

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market transition phase. A National Cheng Kung University research paper reports on the successful use of a photochemical process to produce hydrogen from organic sources. Industry insiders also note that both ITRI and the state-owned Taiwan Power Co. (Taipower) are developing green hydrogen projects using renewable energy and electrolysis. While these projects offer exciting possibilities, Mark Huang of YC Syner- gies says that Taiwan spends too much on basic research that is years away from commercialization at the expense “Local people were afraid of large, “So far, green hydrogen is still of establishing demonstration projects compressed hydrogen storage facil- largely a dream,” he says. His company and market subsidies for the industry ities,” she explains. Instead, many sells his methanol-hydrogen power gen- that already exists. manufacturers turned to methanol, a eration systems throughout Southeast “The government doesn’t need to simple alcohol that can be produced Asia and is looking to South Africa as a be specific; the industry is very flex- from a variety of sources, as a fuel. potential future market. ible,” he says, referring to the array Obtaining hydrogen from meth- Taiwan supports numerous research of technological options and applica-

anol releases CO2, but much less than efforts on hydrogen production. A tions available in the hydrogen fuel cell in methane steam reforming, and research team at the Green Energy space. “If the government can help the requires less energy than electrolysis. Development Center at Feng Chia Uni- local players mitigate the risks, they M.H. Rei, founder of Green Hydrotec, versity published a report in 2017 on will have an advantage in the global says that the overall carbon footprint the fermentation of hydrogen produc- economy.” of methanol-derived hydrogen can be tion from biomass. The report provides But with China, the U.S., and even lower than electrolysis-generated a roadmap to industrialization of this Europe all entering the fray, “we must hydrogen. process, which it stated is nearing the move fast,” he says.

The Promise of Green Hydrogen

lthough hydrogen gas emits only water, it does not naturally exist in its pure form and must be generated from another hydrogen-carrying source – usually

Amethane (CH4) – through a process called steam-methane reforming. Cheap and well-established, this process is also highly polluting, generating 10 tons of greenhouse gases for every ton of hydrogen. Hydrogen formed from steam methane-reforming is dubbed “grey hydrogen.” Electrolyzers can generate hydrogen from water by split- ting it into oxygen and hydrogen, but high energy demands make this process costly. According to the International Energy Agency (IEA), electrolysis currently accounts for less than 5% of global hydrogen production. The International Renewable Energy Agency (IRENA) says that at US$650 per1000/kW, investment costs are still too high for mass installation. “Electrolyzer technology from a reliability perspective is a Electrolysis, an environmentally friendly hydrogen production pro- mature technology, but not from a cost competitiveness per- cess, accounts for less than 5% of hydrogen generated globally spective,” notes Olivier Blanchard, General Manager of Air due to its high costs

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Liquide Far Eastern Ltd., a joint venture between Paris-based teries, which are becoming more economical but for which Air Liquide and Taiwan’s Far Eastern Group. supply is still limited. Instead, this excess power can be Air Liquide is a supplier of industrial gases to Taiwan’s directed toward electrolyzers that generate hydrogen, to then semiconductor and electronics manufacturers, oil refineries, be used in fuel cells to generate electricity again. and other industries. Such firms as Air Liquide, Germany’s Taiwan does not have an abundance of green energy – at BASF, and U.S.-Taiwan joint venture Air Products San Fu least, not yet. So far, Taiwan’s 5,867MW of installed solar supplied 458.5 million cubic meters of hydrogen to Taiwan capacity, 128MW of offshore wind, and 725MW of onshore between November 2019 and November 2020, according to wind have yet to generate surplus power. In 2020, renewables, the Ministry of Economic Affairs. All of this was high-emis- including hydroelectric dams, generated no more than 6% of sions grey hydrogen. Taiwan’s total demand, and even on the sunniest days solar Air Liquide is also a global champion for hydrogen generates only about 10% of the total, according to Taipower. energy as a key means to decarbonize the economy. It was But renewable energy’s share of power supply and gen- one of the 13 founding members of the Hydrogen Council, eration is mounting steadily. Solar power installations made a global association of executives in energy, transportation, record gains in 2020, though it has another 14GW to go to and industry formed in 2017 to promote industry aware- meet the government’s goal of 20GW by 2025. And although ness and investment. This past April, Air Liquide Far Eastern Taiwan’s offshore wind sector hit some speedbumps in 2020, announced that it was investing nearly US$242 million interest remains high. Developers have crowded into the (NT$6.75 billion) to deploy electrolyzers in its new hydrogen market, proposing up to 20GW in projects in bids for the production facilities in the Hsinchu Science Park. The com- 5GW of capacity at stake in the upcoming third round of

pany says the use of electrolysis technology will reduce CO2 project allocation. Taiwan aims to add 5.7GW by 2025 and a emissions by an estimated 20,000 tons per year. further 10GW by 2035. While Air Liquide’s electrolyzers will avoid direct green- Regardless of how realistic these goals are, Taiwan will house gas emission caused by methane steam reformation, certainly see a large influx of renewable energy over the they would still cause high emissions through power con- coming years, potentially destabilizing the grid. Solar power sumption. These electrolyzers would rely on grid power, 80% capacity of 20GW would generate up to 1,000MWh or more of which is still generated through fossil fuels, according to of electricity, meeting 30% of Taiwan’s peak demand. the state-owned Taiwan Power Co. (Taipower). With solar and offshore wind power combined with Tai- The wide deployment of emissions-free, fuel-free renew- wan’s inflexible nuclear, coal, and natural-gas baseload able power can overcome the high energy demands associated capacity, which constantly generates over 2,000MWh, Taip- with electrolysis. In many nations, particularly in northern ower would be hard-pressed to manage the total. As an Europe, renewable energy is widely abundant, making “green island, Taiwan cannot transmit excess power to other grids hydrogen” both emissions free and financially feasible. or draw power from neighbors if there is a lack of wind or Hydrogen likewise solves the issue of renewable energy sunlight. Redirecting excess solar and wind power to electrol- intermittency – fluctuations in energy production caused by ysis plants that could in turn feed fuel cell power generation environmental conditions, which can cause either unpre- would solve the intermittency issue. dictable lulls in power or an excess during peak times. “Although Taiwan does not currently have an excess of Germany, for example, often generates more renewable renewable energy, it will in the next three to five years and we energy than it can use, and must offload it onto the Polish or need to start preparing for this now,” says TFCP’s Meg Lin. Czech grids at a price. This excess power can be stored in megawatt-scale bat- — By Timothy Ferry

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Hydrogen.indd 28 2021/3/3 6:13 PM INDUSTRY FINANCE F CUS Updating the Financial Services Industry

TAIWAN BUSINESS TOPICS • MARCH 2021 29

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BREAKING THE DEADLOCK ON FINANCIAL CONSOLIDATION IN TAIWAN

A proposed acquisition could be a turning point for Taiwan’s overbanked financial services industry.

BY JEREMY OLIVIER

IN THIS REPORT ast December, Fubon Financial Taiwan is host to nearly 40 domestic Holdings, the second-largest and foreign commercial banks, over financial services organization 100 securities companies, dozens inL Taiwan, announced that it was of asset management firms, and 15 pursuing a hostile takeover of Jih Sun FHCs – all competing in a market of Financial Holdings through a public only 23 million people. tender offer for at least 50% of the Such an overcrowded environ- company’s shares. The offer is valued ment creates a very high level of at NT$24.53 billion (US$880 mil- competition and weakens banks, as lion), or NT$13 per share. those operating in the market are • Breaking the Deadlock on Financial The acquisition could be signifi- constantly locked in a race to the Consolidation in Taiwan p30 cant for Taiwan’s financial services bottom. industry. If successful, it would be Conversely, consolidation helps the first non-friendly acquisition in reduce the competitive pressures. Taiwan of one financial holding com- According to a report from multi- • Updating Taiwan’s Banking System with pany (FHC) by another. It would national accounting firm KPMG, Fintech p33 also make Fubon the largest FHC mergers and acquisitions in the in Taiwan in terms of market share, banking sector serve Taiwan’s long- passing the current titleholder, term financial interests. The report Cathay Financial Holdings. states that such activity increases • Taiwan Seeks More Foreign Finance Talent Importantly, the deal could set a stability by ensuring that Taiwan’s p35 precedent for further consolidation of financial institutions have suffi- an industry that has historically seen cient capital to weather financial a very low level of M&A activity. difficulties, and that consolidated Taiwan, as most observers can attest, banks are better able to integrate is plagued by too many banks and resources, which can improve their other financial institutions. performance. Also, the larger scope “The market in Taiwan is too of business that restructured finan- fragmented; there are too many cial institutions are capable of allows players” says CY Huang, president of them to provide better, more varied FCC Partners, a boutique investment services to consumers. bank based in Taipei. Huang, who The government has tried is also the founding chairman of the throughout the years to encourage Taiwan Mergers & Acquisitions and consolidation in the financial services Private Equity Council, notes that sector, usually to little avail. The

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most fruitful effort was what is called the tile mergers and acquisitions of financial remaining banks and financial institu- first financial reform, which included the holding companies,” says Buxton. “This tions are state-owned or invested. In introduction of the Financial Institutions increased clarity was likely a factor in addition, the Legislative Yuan has been Mergers Act in 2000 and the Financial Fubon’s decision to acquire Jih Sun and reluctant to permit privatization of these Holding Company Act a year later. These may pave the way for subsequent similar institutions, further discouraging their two laws allowed for commercial and transactions.” consolidation. investment banking activities to be con- The industry professional who spoke Other experts, such as Jerry Lin, ducted within the same institution, and to Taiwan Business TOPICS says one of director of the Taiwan Association of promoted the establishment of FHCs, the biggest difficulties faced in further Banking and Finance’s (TABF) Finan- large conglomerates that can incorporate consolidating Taiwan’s financial sector cial Research Institute, and his colleague, commercial banks, insurance companies, after the first reform was the incestuous assistant researcher William Lai, say that securities firms, and other subsidiaries. nature of relations between the owner- synergy between organizations is a big According to an industry profes- ship of Taiwan’s financial institutions. factor in whether they are a good fit for sional who agreed to speak on condition “These rich guys all know each other,” a merger. Another is price. In a public of anonymity, the first financial reform he says. “Also, these organizations are tender, the acquiring company offers to resulted in some positive changes to the family-owned, so the big shareholders purchase the target companies shares at industry, including a significantly lower will defend their stake very strongly.” a premium over the market share price. non-performing loan (NPL) ratio at He says that things also get compli- The shareholders of the company being many commercial banks and the govern- cated when the target of an acquisition acquired usually try to negotiate the ment’s forced sale of problematic banks is a state-owned institution, pointing to price per share in order to maximize their to better, stronger ones. the case of Taishin Holding Company’s gains from the sale. The relative success of the first finan- attempts to purchase a majority stake The third challenge, according to cial reform motivated the then Chen in Chang Hwa Bank, 20% of which Lai, has to do with the employees of Shui-bian administration to push for fur- is owned by the Ministry of Finance. the acquired entity. “During an acquisi- ther consolidation by encouraging the Taishin was invited as a strategic investor tion, oftentimes these employees form a “good” banks that survived the first to purchase 22.5% of shares in the trou- union and begin issuing demands to the round to merge with one another. This bled commercial lender in 2005, during surviving entity, such as guaranteeing second reform was plagued by scandals the Chen Shui-bian presidency. employment of the union members for and is generally considered a failure. However, things changed when at least two years or providing a prefer- Since that time, there have been very Ma Ying-jeou of the Chinese Nation- ential calculation method for retirement few M&A transactions, particularly alist Party (KMT) was elected president funds,” he says. among larger organizations. According in 2008. Taishin has been locked in a to data from the Financial Supervisory struggle with the government for majority Getting the deal through Commission (FSC), a mere 57 deals were control of Chang Hwa ever since. concluded between September 2004 and The Taishin case is instructive for In the case of Fubon’s bid to acquire a the latest one in January 2018. Most other organizations looking to con- majority stake in Jih Sun, many of these of these entailed a large FHC acquiring solidate, given that many of Taiwan’s complicating factors are coming into a smaller bank, insurance firm, or bills finance company. None of them were hostile takeovers. Greg Buxton, a partner at the Taipei- based law firm Winkler Partners, says that strict regulations present impediments to M&A transactions in Taiwan’s financial services industry. “There is a certain baseline level of regulatory challenges faced in getting these deals done,” says Buxton. “Add to that the need for merger control approval and these transactions become that much more difficult.” In 2018, the FSC once again began encouraging the consolidation of FHCs by amending the Regulations Governing the Investing Activities of a Financial Holding Company. The FSC’s amendments “clarified the procedures and Fubon's public tender offer to acquire Jih Sun, if ultimately successful, would be the first M&A transaction between two financial holding companies in Taiwan. conditions related to conducting hos- PHOTO: COMMONWEALTH

TAIWAN BUSINESS TOPICS • MARCH 2021 31

3 IF.indd 31 2021/3/4 12:09 PM INDUSTRY F CUS play, along with others. While the FSC stake in the company, which Lai notes services industry.” gave Fubon its go-ahead to initiate the was also around NT$13 per share. These One other issue that has surfaced tender offer in January, the Fair Trade two shareholders have thus requested during the public tender process is Commission (FTC) approval process between NT$14 and NT$16 per share. related to one of Jih Sun’s main share- forced the company to extend the public However, Lai notes that Fubon’s orig- holders, Capital Target Ltd., which is tender period. inal offer was based on Jih Sun’s price- reportedly owned by Chinese billion- On February 25, however, the FTC to-book ratio – its stock price per share aire Xiao Jianhua. Suspicions arose in announced that it had completed its compared to its book value per share – late December that the acquisition is evaluation, finding that the Jih Sun which was quite low at the time. This intended to help Xiao dispose of his acquisition would not lead to a major could mean the company was either assets for cash. increase in Fubon’s market share. Since undervalued or underperforming. He Xiao was abducted by alleged Chi- the impact on market competition would says that this factor could give rise to nese security officers from his hotel room be negligible, the FTC said it would some serious issues for future share- in Hong Kong in 2017, purportedly for approve the application for public tender. holders of the surviving entity. Fubon financial crimes, and has not made a With most regulatory hurdles has argued that its bid price consti- public appearance since, although his cleared, a major issue now appears to tuted a premium of 24.8% over Jih Sun’s main company, Tomorrow Holding, con- be related to Fubon’s bid price, which average closing price per share over the firmed in July 2020 that he is in China. Jih Sun has said it considers to be too previous 20 trading days before the offer Politicians from Taiwan’s Democratic low. Last December Jih Sun hired two was made. Progressive Party have requested that the accounting firms to calculate the com- Lin says that Jih Sun’s shareholders FSC investigate whether Capital Target is pany’s fair value. One concluded that a will need to consider that premium if they linked to Chinese capital. reasonable price range for purchasing ultimately reject this offer, since there is The FSC responded by releasing a a majority stake in the company would no guarantee that a better one will come statement on December 24, noting that be NT$9.63-16.93 per share, while the along. On the other hand, he says, Fubon whether Chinese entities maintain an other put the range at NT$13.89-15.71. must offer some vision of how the merged ownership stake in Capital Target is a At NT$13 per share, Fubon’s offer entity will be run in the future. separate matter not directly related to falls below the low end of the second “If you look at past M&A activity in the public tender, for which the Commis- appraisal. Jih Sun then made a regulatory Taiwan, issues related to the employees sion determined the conditions had been filing in early January stating that Fubon and company culture of the merging fulfilled. underestimated the company’s value. organizations have resulted in difficulty “Regardless of whether the tender Lin and Lai of the TABF say that the for the surviving entity,” he says. “Fubon offer succeeds, the FSC will fulfill its duty two largest shareholders in Jih Sun – Jap- should provide an explanation or plan and determine whether mainland Chi- anese Shinsei Bank and Capital Target for how it will address these issues if the nese entities have an ownership interest Ltd. from Hong Kong – are considering acquisition is successful, and how it can in CTL [Capital Target Ltd.],” reads the in their negotiations with Fubon the help the government in this area to pro- FSC’s statement. “If the FSC discovers price they paid in purchasing their initial mote future consolidation of the financial that CTL gets involved in any specific

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legal violations, the FSC will take further the same family,” Lin says. “I see a tremendous need for consoli- actions in accordance with the law.” Huang of FCC partners says that dation and M&A,” says Huang. But, he TABF’s Lin says that based on some domestic consolidation is gradually says, “I think domestic M&A is mean- of the abovementioned factors, particu- becoming less of a priority for very large ingless because most companies here are larly Fubon and Jih Sun’s battle over the financial companies like Fubon, which similar in skills and size.” tender offer price, this particular deal have begun looking to expand their over- Given what he’s seen recently, not just may not succeed after all. He and col- seas presence through international in Taiwan’s financial sector but in other league Lai posit that a merger of Taishin M&A transactions. He points to Fubon’s major industries, Huang says that consol- Financial Holdings and Shin Kong Finan- recent move to increase its stake in South idating overseas is the best path forward. cial Holdings would make more sense Korea’s Hyundai Life Insurance (renamed “Taiwanese companies will become an given their smaller size and the synergy of Fubon Hyundai Life Insurance Co.) to emerging force in international M&A. their operations. “In addition, these two 62% and take management control of I do expect to see more of that in the companies are owned by brothers from the company. future.”

UPDATING TAIWAN’S BANKING SYSTEM WITH FINTECH

The Financial Supervisory Commission’s new action plan includes goals related to data liberalization, encouraging disruption and innovation, and talent development.

BY ANGELICA OUNG

peaking at the Taiwan Capital year before I could have online banking cial services in Taiwan “more convenient, Market Forum last August, Presi- services for my company, whereas an cost-saving, accessible and high-quality.” dent Tsai Ing-wen disclosed some 18-year-old Taiwanese would have gotten Yet the roadmap, with its four objec- startlinglyS ambitious plans to transform it the same day.” tives, three principles, and “sixty items Taiwan into an Asian financial hub. Alex Liu, CEO of cryptocurrency in eight implementation dimensions” can “We are going to make Taiwan the trading platform MaiCoin, on the other appear a daunting document. number one center in Asia for capital hand, is optimistic about Taiwan’s fin- In an interview with Taiwan Business movement and establish ourselves as a tech potential in comparison with TOPICS, Brenda Hu, deputy executive wealth management center,” said Tsai. regional rivals. secretary of the FSC’s Fintech Center, “This means loosening rules and pro- “Taiwan has technological strength discussed what the roadmap boils down viding more diversified financial products that Singapore or Hong Kong does to for existing financial institutions, fin- and services.” not have,” says Liu. “We have a real tech startups, and the average Taiwanese Tsai’s rousing words seem to be economy that is three to four times consumer. at odds with Taiwan’s currently over- larger. We can ground fintech across sev- At the heart of the roadmap are pro- crowded and old-fashioned banking eral technologies in a way Hong Kong visions for data sharing. Without open environment. Bank passbooks updated and Singapore cannot.” To foster more data, the most exciting fintech innova- by dot-matrix printers are still the norm, innovation and liberalization, Liu has tions such as open banking and third- and foreigners often complain of having called on the government to step up the party service providers (TSPs) would to jump through arcane hoops just to get pace of fintech development. not be possible. The roadmap will liber- fairly standard service. Shortly after Tsai’s speech, the Finan- alize data sharing, but with a “tiered and “I’ve had an account at Mega Bank cial Supervisory Commission (FSC) rolled gradual approach,” says Hu. since 1996,” says Anthony van Dyck, a out its three-year Fintech Development Right now, a holding company with Canadian entrepreneur and resident of roadmap, which seeks to elevate Taiwan’s a bank, a securities subsidiary, and an Taiwan since 1989. “I had to wait half a fintech environment by making finan- insurance arm cannot share data on the

TAIWAN BUSINESS TOPICS • MARCH 2021 33

3 IF.indd 33 2021/3/3 6:14 PM INDUSTRY F CUS same customer from one unit to another. “Startups do tend to have a ‘move fast “Through the process of getting to This creates “silos of information” that and break things’ attitude, but what we know companies wanting to enter the Hu says will be broken down under the want to see when it comes to any kind of sandbox, we’ve frequently been able to roadmap. fintech startup is a ‘responsibilities first’ take care of the regulatory hurdles that “In the future, with the consent of attitude,” Hu says. stood in the way,” she says, pointing to the consumers, data can be almost freely To foster fintech startups while the case of a company seeking to make shared,” Hu says. “This way, security keeping them within the confines of the fixed-term, fixed amount purchases of measures such as KYC (Know Your Cus- law, the roadmap called for the creation foreign mutual funds. “They don’t need tomer) will only need to be done once.” in Taipei of what is being called FinTech- to enter the sandbox because we are While data liberalization is key to Space. Hu describes it as “an incubator, ready to amend related regulations to successfully transforming Taiwan’s an accelerator, and more.” She mentions help them start their operations.” financial industry for the digital age, that 55 FinTech partners are operating There are other reasons, beyond tight Thomas McGowan, a foreign legal con- out of the space, which also provides regulations, why the Taiwanese fin- sultant with four decades of experience one-on-one regulatory clinics, assists tech startup scene can appear relatively in Taiwan, says the kind of shift that is in fundraising and matchmaking, and stunted, with more companies working necessary to truly unleash the potential houses the Digital Sandbox. on incremental rather than radical solu- of fintech is also ultimately its biggest The sandbox, which was launched in tions, says Hu. potential downfall. 2018, offers a platform through which “The Taiwanese scene doesn’t have “If you want to see fintech fail, have fintech startups can experiment freely much in the way of angel investors a massive data breach that can’t be without threatening the wider financial interested purely in making great ideas fixed,” says McGowan. “All the folks system. The sandbox allows startups to happen,” she says. “Instead, most of the that touch the data have an obligation to operate without the usual licenses nec- money going to fintech startups is from protect the data.” essary to work within the realms of existing financial institutions.” Acknowl- To maximize both convenience banking, securities, or insurance. edging the difficulty of getting funded, and security, the roadmap calls for a “They can hold up to NT$200 million she says there may be room in the future standardized biometric verification mech- if they convince us it’s legitimately neces- for the creation of a fintech fund. anism called F-FIDO, which Hu says sary,” said Hu. Hu adds that startups concerned would solve the problem of repetitive While the number of fintech startups about whether their product meets the data entry by financial consumers. that have taken advantage of the criteria outlined in the roadmap should “We will use biometric technology sandbox remains low, with only 15 appli- reach out to the FSC. “Laws and regula- such as facial recognition,” Hu notes. cations as of the end of 2020, Hu says tions can always be adjusted as long as “Once the consumer enters the system, the success of the program doesn’t rest you convince us you’ve got adequate pro- they will not be hassled again just purely on how many companies enter the visions to meet our principles of security because they are working with another sandbox. and stability,” she says. institution.” Although the roadmap is gradual, Hu The road ahead admits that the end-point is ambitious. “After allowing sharing between subsid- Attorney McGowan says some parts iaries within the same holding company, of the roadmap are more likely to come we will implement sharing between dif- to fruition than others. ferent financial institutions, and finally “The good thing is that the drafters cross-market sharing,” she says. “For of the roadmap were very cognizant of instance, an insurance company might the problems that are out there,” says want to share data with a medical com- McGowan, “Taiwan won’t meet all the pany.” challenges, but the glass is half or maybe In addition to the liberalization of even three-quarters full.” data, there are many provisions in the He is particularly upbeat about the roadmap to encourage innovation in the sections that address fintech talent and fintech space for Taiwanese startups. Taiwanese startups, calling the efforts “We are pro-innovation – in fact, we “achievable.” One of these sections calls are pro-disruption,” Hu says. “It would for a new fintech certificate in order to be really fantastic to see a Taiwanese fin- “cultivate professionals” with the skills tech startup do something truly eye- to navigate the technical and security catching.” However, she notes that there challenges of working in fintech. are two prerequisites: The rights of the Brenda Hu says that the FSC's fintech “You’re taking engineers and teaching consumers must be protected, and the roadmap will target data and innovation them how banking works,” he says. in the fintech space. start-ups must not introduce systemic The regulatory adjustment necessary PHOTO: ANGELICA OUNG risk to the economy. to go from laws written for brick-and-

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mortar banks to a fintech world where “everything is done on an app” will be more of a challenge. “All the rules were written for a brick-and-mortar world,” says McGowan. “The roadmap recognizes that it might be easier to build a new house than to fix the old one. But it will take time.” He says that top-down pressure helps, and that President Tsai’s emphasis on strengthening Taiwan’s financial services industry is a good sign. As for Tsai’s ambitions of making Taiwan an alternative to Hong Kong as a regional financial hub? McGowan said it’s a goal that might become less relevant as fintech gains prominence. “Fintech is by its very nature decen- tralized,” he says. “I could be in The FinTechSpace was created by the FSC to incubate and provide guidance to Afghanistan doing business with South Taiwan's fintech startups. It also houses the Digital Sandbox for innovative fintech solutions. Africa through Taiwan.” PHOTO: FINTECHSPACE

TAIWAN SEEKS MORE FOREIGN FINANCE TALENT

ast December, Taiwan’s Finan- attract foreign professionals through the a Malaysian, and someone from Hong cial Supervisory Commission (FSC) launch of programs and incubators. Kong.” announced the easing of require- Yet in traditional sectors such as For those interested in setting up busi- mentsL for foreign finance professionals, banking and insurance, hiring foreign nesses, onerous paperwork and arcane part of the government’s plans to make employees is rare, even in international rules and requirements, such as having to Taiwan an Asia-Pacific financial hub. companies operating in Taiwan. use a company chop – or official seal – The work experience requirement for “There’s a bit of a gap between are also impediments. senior financial executives applying for what the government is trying to do “The process of opening a company the Employment Gold Card – a special and what they’re talking about, and is very old-fashioned,” says Marco Mira- work visa that incorporates an alien res- the effects it’s having on the ground,” bella, Chief Strategy Officer of Taipei- ident certificate, open work permit, and says Alan McIvor, practice leader at based search engine startup BigGo. re-entry permit – was shortened from 10 staffing and recruitment firm Paul Wright “Taiwan is one of the few places that still years to five. In addition, the requirement Group. “We’re seeing very little foreign requires a seal to approve documents. for financial professionals and those talent being locally hired in any finance The entire process is very troublesome working in finance-related fields was capacity.” and it is not digitalized like in Singa- shortened from five to three years. To bridge that gap, says McIvor, local pore,” he says. The number of foreigners currently corporate attitudes need to change. “I As a result, the entire registration working in Taiwan’s financial services think it’s rare to find Taiwan companies process could take a month in Taiwan sector is not high, totaling merely 449 in that value diversity in the workforce,” compared to just a few hours in Singa- 2020. Many of these are entrepreneurs he says. “If you have a sales team of 20 pore, where documents can be signed or work in emerging areas like fintech. people, you can almost guarantee that digitally without requiring a chop, says Taiwan’s authorities are encouraging all of them will be Taiwanese. It’s rare Mirabella, who is also a cofounder of the development of fintech and trying to to find one with a guy from Germany, Cartesi, a blockchain firm with opera-

TAIWAN BUSINESS TOPICS • MARCH 2021 35

3 IF.indd 35 2021/3/3 6:14 PM INDUSTRY F CUS tions in Singapore and Taiwan. with capital and, increasingly, are inter- Other barriers to attracting more for- ested in emerging trends such as ESG eign finance professionals to Taiwan (environmental, social, and corporate include its high tax rate, relatively low governance).” salaries, and limited English proficiency. Encouraging the proliferation of Mandarin is still the industry norm. For family offices in Taiwan would help example, tests for obtaining industry cer- develop the domestic investment sector, tifications are conducted in Chinese. says Cottorone. It might also improve “Foreign brokers may still face chal- Taiwan’s chances of attracting more for- lenges in pursuing some licenses locally if eign family offices, which are currently they cannot read or write Chinese,” says mostly concentrated in Hong Kong and Chris Cottorone, Vice President of Tri- Singapore. Orient Investments, and a member of While Hong Kong and Singapore AmCham Taiwan’s Private Equity com- host much larger fintech scenes, Taiwan mittee. “This is one of the areas our is considered to have strong poten- committee is interested to work on as it tial in this area due to its robust tech would help attract international financial sector. In addition, several major plat- talent to Taiwan.” forms to develop tech startups have been Cottorone says that Taiwan should launched, including Taiwan Startup Sta- also be more open to family offices, dium and Taiwan Tech Arena, which which are private firms that manage the provide office space and training for investment and assets of wealthy fami- startups and facilitate connections with Recruiter Alan McIvor says that in order lies. “What I hope is that family offices international accelerators and investors. to attract more foreign finance talent to will start to be viewed as a special kind Ashley Reeves, Director of Strategic Taiwan, local corporate attitudes regarding workplace diversity need to change. of entity, as they are in Singapore, Hong Partnerships at blockchain firm Decent, PHOTO: ALAN MCIVOR Kong, the U.S., and Europe,” says Cot- says that for Taiwan to reach the next torone, whose firm is a family office level, companies should be more recep- but operates in Taiwan as a financial tive to working with startups. ability and cost of talent. “Taiwan has institutional investor (FINI). “Family “The local companies, at least the a lot of engineers and it’s easy to find offices can play a more significant role big ones, let alone those in the banking talent,” he says. “In Shanghai, the cost of in Taiwan’s economy in terms of invest- sector, are very traditional and very cau- hiring engineers has skyrocketed. They ment as they tend to be more patient tious about who they will work with,” demand quite a lot of money, and it’s a says Reeves. “They will gladly speak to competitive environment since you’re you, but a POC (proof of concept) is very competing with [the likes of] Baidu and difficult.” Alibaba.” Reeves, who is from the UK, also Mirabella also points to the more highlighted excessive banking regu- approachable attitude of government offi- lations, citing the case of a charitable cials in Taiwan as another plus. He sees donation transparency platform that his a lot of positives in the fintech sector due firm had developed and wanted to launch to more talent coming in and more spaces in Taiwan. “The platform itself shows devoted to the sector being opened. strong transparency and ethics, but the “The entire ecosystem is improving problem is we can’t operate as the banks a lot,” he says. “They have boosted refuse to deal with this kind of product. investment into local accelerators and They can’t settle payments into or from companies, and they have also facilitated the charities,” Reeves says. an international community for startups Some foreign finance professionals and tech firms, making it easier for have come to Taiwan recently through people to come here.” the Employment Gold Card program. Reeves of Decent makes a sim- Mirabella of BigGo is one such Gold ilar observation. “It might be easier [to Card recipient. He is from Italy and operate in Hong Kong and Singapore], arrived in Taiwan four years ago on an but the competition is a lot bigger as entrepreneur visa before applying for and well,” he says. “In many respects, Taiwan Blockchain professional Ashley Reeves receiving his Gold Card. can be looked at as some form of an notes that while doing business in Tai- Having worked in Shanghai before untapped market. A lot is changing; one wan may not be as easy as it is in Singa- coming to Taiwan, Mirabella cites several by one, the doors are opening up.” pore or Hong Kong, things are gradually improving. advantages of doing business in Taiwan PHOTO: ASHLEY REEVES compared to China, such as the avail- — By Hilton Yip

36 TAIWAN BUSINESS TOPICS • MARCH 2021

3 IF.indd 36 2021/3/3 6:14 PM SPECIAL REPORT

Demand Surges for International Education in Taiwan

An influx of families fleeing the pandemic has created a supply crunch at international schools.

BY MATTHEW FULCO

PHOTO: KANG CHIAO

aiwan has stood out as one of seeing a record number of applications. getting lots of calls from foreign fam- the few countries able to keep At Kang Chiao International ilies who want to know about our schools open during the coro- School, which has campuses in Xin- school,” says Andy Chang, director of navirusT pandemic. Some families in dian, Linkou, and Hsinchu, a rolling Kang Chiao’s College Counseling and the West with ties to Taiwan and the admission policy previously meant Language Center. means to relocate have returned here that recruitment could continue into Besides those wanting to wait out because of the safer, more normal con- the summer before the start of the aca- the pandemic in Taiwan, other expat ditions. Foreign professionals have also demic year. That changed with COVID- families have been coming here for been increasingly interested in moving 19, as an uptick in demand enabled the job opportunities. Chang says that the to the island, as seen by the record school to fill all vacancies for the cur- growth of industry near Kang Chiao’s number of Employment Gold Cards rent academic year in May 2020. For campuses has increased demand for issued in 2020. the upcoming 2021-22 academic year, international education nearby. “Expat The influx of overseas Taiwanese Kang Chiao ﬁnished recruitment before families are more willing to live in New and expat professionals is heightening the recent Lunar New Year holiday. Taipei City and Taoyuan than in the demand for international education, in Many new students come from Tai- past because more major companies are some cases exceeding available spots. wanese families who have returned located there now.” To be sure, schools like the Taipei from abroad, and there is also growing At Taipei’s Lih-jen International Pri- American School (TAS) and Taipei interest in Kang Chiao from expats vate School, “class sizes are completely European School (TES) have long had with no familial links to Taiwan. “In maxed out,” says Laura Peterson Fein- waiting lists. But others that usually the past, it was difficult to recruit so tech, an American expat whose two have room for qualified students are many overseas students, but now we’re children have been enrolled at Lih-Jen

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for four years. “Normally, they take everyone, but this year they are turning people away.” At Kaohsiung American School (KAS), “the challenge is our waitlist for enrollment is the largest it’s ever been, and so for students who are here for a shorter period of time, it can be difﬁcult to register and find space unless they register really early,” says Benjamin Ploeger, KAS Superintendent. Families with a connection to Taiwan but based in the U.S. for some time are returning “because they see this as a safe place and they want that American education for their children,” he adds. At Taipei Youhua in the city’s Beitou District, enrollment has increased as well since the pandemic began. Some International schools are often able to offer a better teacher-to-student ratio, as well as families had planned to go to China, a variety of school clubs and activities. They are thus a more attractive option for many expat families. but stayed in Taiwan instead due to PHOTO: KANG CHIAO the coronavirus. Others returned from North America, says Shih Po-Huei, site, TAS has a 9:1 student to faculty was originally similar to that of a U.S. principal of Youhua’s high school. ratio; 82% of faculty have advanced public school, but has become less Enrollment at Morrison Academy, degrees and the school offers 133 dif- accountable to parents over time. Cur- an international school with campuses ferent sports, clubs, and activities. TAS rent and former parents that spoke to in Taipei, Taichung, Chiayi, and Kaoh- has also won gold medals five years TOPICS noted that certain members siung, has remained stable throughout in a row at the international synthetic of the Board have become embedded the pandemic, says Susanna Myburgh, biology iGEM competition. and that tuition has skyrocketed in principal of the Taipei campus. “A few Hodowany and his Taiwanese wife recent years. Parents of children at TES students who were originally coming originally enrolled their children in a have raised similar concerns about from the U.S. are no longer coming due local elementary school to ensure they that school, citing board structure and to COVID-19.” got a strong foundation in the Chinese tuition as major frustrations. language. The plan was for the kids to TAS can cost more than NT$1 The gold standard stay in local school through sixth grade. million (US$36,000) a year, and However, the family found that they TES is only slightly less expensive. For expats who want a top-tier were not satisfied with the teaching In years past, multinational compa- Western education for their children methods in local schools. nies would cover those fees as part in Taiwan, TAS and TES have pride “There’s an emphasis on rote mem- of packages offered to expatriate of place. If cost is no object, it comes orization and passive learning, and not employees. Today such benefits are down to choosing between an Amer- much balance between academics and less common. Multinationals fill ican or European-style education. TES everything else,” he says. more positions locally, with expats has British, French, and German tracks. At TAS, Hodowany says his chil- typically only at the country manager Among Taiwan’s international dren are happier than they were at local or vice president level. schools, TAS is considered the gold schools, and able to pursue their inter- standard in Taiwan for preparing a ests. For instance, his son has a deep Choosing the right school child to study at a top American univer- interest in robotics. At TAS, that subject sity, says Jon Hodowany, a Taipei-based is a part of the curriculum alongside Fortunately, for expat families business executive and father of two core subjects such as mathematics, looking for alternatives to TAS and children enrolled in the Lower School. social studies, English, and science. TES, there are many options. For TAS’s resources – both physical and Further, since both Hodowany chil- instance, Morrison Academy has served in terms of talent – are unmatched in dren plan to pursue college degrees in the missionary community in Taiwan Taiwan, he says. “TAS has outstanding America, he and his wife believe that along with others seeking a quality teachers whom it pays well, and facil- TAS is the best choice. education in an international school ities that would make most elite TAS’s critics acknowledge the setting, says Taipei campus principal universities jealous.” school’s strengths but are wary of its Myburgh. According to data on its web- governance structure, which they say “I think our school is a little dif-

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ferent than the other international Taiwanese public elementary schools Chiao has different programs, with an schools because of our core values,” finishes before 1 p.m. international track for students who Myburgh says. Consequently, while Lih-Jen does adhere to the Tai- plan to attend university overseas. academics is important at Morrison, wanese tradition of assigning lots of College counseling director Chang the school also focuses on the emo- homework, even at the primary level. says that Kang Chiao offers foreign tional, social, and spiritual aspects of Fortunately, Feintech has advanced Chi- families the chance to experience local children’s lives. “We really focus on nese-language skills and is able to help culture in Taiwan without the language building a caring community and pre- her children with their homework from barrier. “Because we are a bilingual paring our students to know how to the Chinese curriculum. For expatriate school, the environment is comfortable care for those around them,” says families with less advanced Chinese- for expat students and their parents, Myburgh. language abilities, Lih-jen might not be and the students are able to learn Chi- Morrison graduates typically go on the best option, she says. nese as a second language,” he says. to study at universities overseas in a Lih-jen may also not be optimal for Taipei Youhua is another bilingual number of countries, she adds. families looking for the newest athletic school known for its strong Chinese Laura Peterson Feintech and her facilities, Feintech says. “The campus curriculum, taught the morning of each husband could have sent their chil- is a bit old; there is no swimming pool, school day. The English curriculum is dren to TAS because she worked at the and the gym is not the best.” taught in the afternoon, when students American Institute in Taiwan (AIT) for Still, overall, Feintech and her hus- also study an additional foreign lan- several years – children of AIT staff are band are happy with Lih-jen. “My kids guage: German, French, Japanese, or given top priority for enrollment – but are getting a great bilingual education,” Spanish. they decided Lih-jen would be a better she says. “We’re not aiming for them to Youhua, which has both a junior choice. test into Taiwan’s high school or univer- high and high school, historically has “We wanted our children to have a sity system (her family plans to return to had more local than foreign students, bilingual education in Taiwan,” which the U.S. before the children begin high but the latter are beginning to increase would be difficult at TAS where courses school), so it is perfect for us.” in number. “Youhua is a good place for are taught predominantly in English She adds: “If I wanted to send my expat students to learn firsthand about and there is no Chinese immersion pro- kids to a bilingual Chinese-English pro- traditional Chinese virtues,” says prin- gram, she says. gram like this in the U.S., it would be cipal Shih. “We teach Confucian values At Lih-jen, students receive a bilin- difficult to find and very expensive.” and character education.” gual education that includes both By U.S. standards, Lih-jen’s tuition Meanwhile, some expats prefer to Taiwan’s standard curriculum and an fees of roughly NT$320,000 per aca- send their children to public school. international curriculum. The school demic year are modest. Richard DeVries, managing director of day runs from 7:30 a.m. to 4:20 p.m. Kang Chiao also has a fully bilingual Geber Brand Consulting, has two kids with after-school activities until 6 p.m., curriculum from kindergarten through in the Taipei public school system. He so parents do not need to worry about sixth grade, with half of the day taught and his wife, who is Taiwanese, are sat- finding something for their children to in Chinese and the other half in Eng- isfied with the results so far. do in the afternoon. The school day at lish. From middle school on, Kang While the kids may end up attending university in DeVries’ home country of Canada, he and his wife want their children to gain a strong grounding in Chinese. “The kids really need to build up their Chinese and the public school system is the best place to do that,” he says. Duncan Smith, an energy consultant and co-owner of the CraftHouse pub in Taipei, has three children in New Taipei City’s public school system. He and his wife, a Taiwanese-American, believe that international schools here are too costly, especially for big families. “Is the quality of education they provide really worth the amount they’re charging? I just don’t see the value in it,” he says, adding: “They seem to Much of the recent interest in Kang Chiao International School has come from Taiwan- have become a status symbol for the ese families returning from abroad. PHOTO: KANG CHIAO very wealthy.”

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Intl schools.indd 39 2021/3/3 6:15 PM ADVERTORIAL

MSD’s Vision of Putting People First

aiwan has been under the international spotlight since T its early intervention in the COVID-19 crisis, and its comprehensive virus-prevention measures have made it one of the world’s few safe havens during the pandemic. The increased visibility of this island powerhouse has also drawn attention to its strengths in the area of healthcare, including clinical research. Such recognition has been welcomed by international pharmaceutical firm Merck Sharp & Dohme (MSD), given the company’s significant investments in clinical trials in Taiwan. According to MSD Taiwan’s newly arrived Managing Director, Jae Yeon Choi, the Taiwan operation boasts the largest in-person clinical trials team on the island, with over 100 personnel currently working – not for profits, which follow naturally antiviral – is currently being evaluated in on more than 90 studies, mainly in from a sustained focus on helping patients. Phase III clinical trials, while the other, oncology. In 2020, MSD invested MSD’s adherence to that philo- an “investigational infusion” for the NT$800 million in research and sophy makes it a great partner for the treatment of patients hospitalized with development in Taiwan, an increase of government, says Choi, who looks COVID-19, is undergoing Phase II and approximately 40% from 2019. forward to exploring areas for collabora- III clinical trials. Choi says that these Choi, who served as the Executive tion with the public sector in her new role. treatment candidates, which are the result Director of MSD Korea’s Oncology She notes that the COVID-19 pandemic of partnerships with and acquisitions of Business Unit before coming to head underscores the need for MSD and the leading biopharmaceutical companies, the Taiwan team, says that the Taiwan healthcare industry to continue to invest in will give MSD the opportunity to have a government’s assertive response to the research related to the greatest threats to meaningful and direct impact on patients pandemic is illustrative of its dedication health security. suffering from the coronavirus. to ensuring the health and safety of its To that end, MSD has contributed Speaking of her goals while heading people, a goal that MSD shares. She to the global pandemic response by MSD Taiwan, Choi says that while quotes MSD founder George Merck, who advancing the development of two continuing to expand the company’s emphasized that medicine is for people treatment approaches. The first – an oral R&D efforts is of utmost importance, working with the Taiwan government to improve patient access to innovative medicines and treatments is also a critical piece of the puzzle. “The pace of innovation is fast,” she notes, “but the access-related regulations and policies do not always keep up with that pace.” To maintain Taiwan’s current visibility on the world stage, it is critical for the government to ensure patients have access to the latest innovations in healthcare. Choi's vision of putting people first also extends to the cultivation of Taiwanese talent. MSD is dedicated to enhancing the talent pool through initiatives such as the General Manage- MSD Taiwan employees attend a volunteer day in support of the MSD for Mothers program.

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ment Acceleration Program (GMAP), “The team here is already very solid, but and working with the Taiwan government MSD’s flagship talent program, and the we want to aim higher. I would like to and other industry leaders to improve MSD Fellowship for Global Health, bring our outstanding talent in Taiwan patient access to new medicines and treat- a three-month, field-based corporate onto the world stage,” she says. “I’m ments, MSD is striving to carry out a volunteer program. Such programs interested in exporting Taiwanese talent shared vision of putting people first in the demonstrate MSD’s commitment to to other markets in the Asia-Pacific and healthcare field. cultivating and promoting future leaders beyond, to bring their know-how and Choi takes that vision seriously, across the global enterprise. expertise to these new markets and draw concluding that she looks forward to Choi aims to apply that spirit to her more attention to Taiwan more broadly.” collaborating with all stakeholders in tenure at MSD Taiwan, and says she looks By continuously advancing innovative Taiwan, and to staying connected with the forward to further developing her staff. products, focusing on disease prevention, international community.

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MSD advertorial.indd 41 2021/3/3 6:17 PM EXECUTIVE SUITE

Meet Mike Wong of Kraton

With over three decades of experience in the chemicals industry across markets in the West and Asia-Pacific, Kraton Formosa Polymers Corp. President Mike Wong knows how to run a successful business in a sometimes controversial sector. From negotiating and overseeing the successful formation of a joint venture, to ensuring the health, safety, and environmental standards at large chemical plants, Wong is a go-to source of knowledge not just regarding the industry, but about management in general.

Kraton Formosa Polymers is a joint venture between Houston-based Kraton Corp., a 2000s spinoff from Shell Chemicals, and the Formosa Petrochemicals Corporation of the Formosa Plastics Group.

Wong met with TOPICS Senior Editor Jeremy Olivier and AmCham Publications Intern Jason Wu in February to discuss his decision to pursue a business career, his views on Taiwan’s chemicals industry, and how he has honed his management style over the years. An abridged version of the conversation follows.

Although you received your MBA graduate studies to my current career. ability of raw materials – usually the from Northwestern University’s Kel- Middle East for hydrocarbons or the logg School of Management, you first What are some notable characteris- U.S. for shale gas – or closeness to the obtained a bachelor’s degree in chem- tics of Taiwan’s chemicals industry? market, for which China is the most istry from UC Berkeley. Did you This industry has been around for a obvious choice. originally plan to go into business, or long time, and a lot of people working did you develop that interest later on? in it are very knowledgeable. The major What effects have the U.S.-China I originally chose chemistry as a companies are local enterprises, such trade dispute and COVID-19 had on major because I wanted to work in as the Formosa Group, USI Far East, this industry? research post-graduation. After my and Chimei. These primarily family- To be honest, the impact of the trade sophomore year at Berkeley, I was lucky run companies are very well-established dispute on the chemicals industry is enough to be chosen for an internship and very financially strong. This aspect secondary to that of cross-Strait rela- at Chevron’s headquarters in San Fran- makes the industry here quite different tions. Given the regulatory issues I just cisco. I was working in the company’s from other markets in Southeast Asia mentioned, the scale of production in business group, with the marketing and China, where it is more of an up- Taiwan is limited – the plants here are and commercial team. That experi- and-coming, highly leveraged sector. not huge. So, when China is unable ence really opened my eyes, and I ended The flipside is that there is very little to purchase products from the U.S. interning with the company the fol- growth in Taiwan’s chemicals industry, because of high tariffs, South Korean lowing two summers as well. largely because of legislation. Given suppliers have actually been the ones After getting some exposure to the certain political concerns, Taiwan’s reg- taking advantage of the situation due to business world, I decided that I was ulatory system is not as favorable to their huge capacity. probably more suited to working in that growth in this sector as it is to other For Taiwan petrochemicals firms, field, since I am generally more inclined industries, such as semiconductors and the impact of the Economic Cooper- to work with people. I enjoy dealing IT. As a result, not as many people ation Framework Agreement (ECFA), with customers and suppliers, as well as want to go into this industry, and that signed between the Taiwan and China the financial aspects of running a busi- is a problem. So, rather than try to governments in 2010, was significant ness. And although I never spent a day in expand in the market here, most chem- for Taiwanese chemical producers who the lab, I was able to apply some of the icals enterprises end up going overseas, wanted to export to China. Although basic knowledge I got from my under- choosing locations based on the avail- it is a 10-year agreement, we in the

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industry would like to see it continue in you might commit too many resources perpetuity. to something that is not actually that big As for the pandemic, initially the of a deal. It can also lead you to become impact was huge, largely because of the too conservative and you might miss out commodity price swing. Oil prices in on some opportunities. It can be quite Q2 2020 dropped significantly. Under difficult to find the right balance. such circumstances, people stop buying because they don’t know what the Did you have a mentor during the future will hold. early stages of your career? How did However, since then, demand has their guidance shape you as a profes- gradually returned. Certain segments sional? might not be back to pre-pandemic I always thank my very first boss levels, but the industry as a whole is not at Chevron, when I was starting out doing too badly. This is because chem- What are some of the unique chal- in commercial sales and marketing. ical products go into a lot of things lenges of leading large chemical and Having the right mentor makes a big we use in our daily lives – garments, petrochemical firms? How do you work difference, and mine taught me the cleaning products, and medical gloves to overcome such challenges? importance of planning and organi- and equipment, among others. Internally, the challenge is always zation. For instance, before you go to The latest challenge is actually ship- about getting your team to focus on visit customers, you need to have a spe- ping. The orders are in the books but it’s safety. Chemicals factories are haz- cific objective and do your homework very hard these days to ship products, ardous – it’s just the nature of the because the last thing you want to do is especially given the lack of sufficient business. But we need to make sure waste your counterpart’s time. containers. A lot them are stuck in U.S. every single one of our employees fully You want to establish that you’re ports because of staff reductions. appreciates and understands that, and representing a successful and reliable that requires lots of training. supplier that they would be willing to You were directly involved in the Externally, the main issue is public buy from, and you’ve got to have some- establishment of Kraton Formosa Poly- image. Since everyone is watching us, thing of value that you’re bringing to mers’ hydrogenated styrenic block and what we do impacts people’s lives, the table. copolymer (HSBC) plant at the Mailiao we have to run our factories safely. We complex in central Taiwan in 2017. don’t want to have accidents or injuries, What are your thoughts on the con- What lessons did you learn from your nor do we want to have our operations cept of work-life balance? How do you experience overseeing such a large-scale contaminate the local environment. like to spend your own leisure time? project? Strong public scrutiny of chemicals I think work-life balance is impor- I had two takeaways from that expe- companies is a certainty – rightfully so tant, but I also think it’s a function of rience. Number one was how to get considering the industry’s spotty record how smart and efficient you are in your permits to build something as big as and inherent risk. work. I’m definitely not someone who our plant in Mailiao. There is a lot of spends 24 hours a day on my work, but uncertainty throughout this process, Do you have a particular manage- then I also try not to procrastinate and and it sometimes gets political given ment style or philosophy? What do you instead take care of the immediate issues the chemicals industry’s public image see as your strengths? right away. There are of course things regarding environmental impact and I would say I’m a pretty open indi- you cannot address immediately, but safety. A convincing argument needed vidual. I like to work collaboratively you can organize a plan and ensure that to be made for why the project was with my team, and I encourage input things are resolved in a timely manner. being undertaken. from team members. I want the people The same goes for my team. It doesn’t Once that hurdle is cleared, to begin I work with to take ownership of what matter if you’re sitting at your desk for building an US$200 million facility is a they do, and I don’t like to constantly eight hours a day or you decide to work huge undertaking with a lot of moving be looking over their shoulders. from home for six. As long as the job parts. You need a lot of resources, I’m also a pretty good team builder. gets done, that’s what’s important. and managing all of that in addition To motivate your team to reach your In my leisure time, I like to play golf, to forming a good team is quite chal- standards, you need to give them the but more for the enjoyment of being out lenging. One of the benefits of this space to do what they need to do. But on the green and getting some exercise, being a joint venture, though, is that at the same time, you need to know rather than getting a good score. When the Formosa Group has been a great how to delegate wisely and understand I’m not playing golf, I like spending partner. They know the market, they when to intervene when necessary. time outdoors with my wife – walking know suppliers and vendors, and they Of course, I have weaknesses, too; or cycling. Although the COVID-19 know how to deal with the banks we all do! I tend to overestimate prob- pandemic has prevented us from trav- and project financing. Having a local lems. That might not sound like a eling abroad, in normal times we also partner like that is crucial. weakness, but when you overestimate, enjoyed skiing in the winter in Japan.

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Mike Wong.indd 43 2021/3/3 6:17 PM A MESSAGE FROM UBER EATS Do Gig Workers Want to be Employees? New Survey Results May Surprise You

ood delivery is serious business in Taiwan. Although the government’s F superb handling of the COVID-19 pandemic has allowed most restaurants to remain open across the island, the National Credit Card Center reported that in April 2020, 6 million transactions were logged on Online Food Delivery (OFD) platforms, a sevenfold increase from the same month a year earlier. And while orders in subsequent months did not reach that record amount, numbers have remained very high. The rapid rise in food delivery orders has also raised some important questions regarding the people who make the deliveries. The issue that has gained the most attention in this discussion is that associated with being an independent delivery partners generally seek is that of of how to define these workers. Are contractor, and would prefer not to be an independent contractor, rather than an they gig workers – and thus independent pigeonholed into certain categories. employee bound by relevant restrictions contractors – or should they be considered A recent survey of over 14,000 and conditions. employees of the companies that operate Taiwan-based couriers conducted by In terms of the demographics of the platforms? major food delivery platform Uber Eats survey respondents, 92% were age 50 This issue is not specific to Taiwan. found that overall, respondents desired or younger, and were mainly men living The passage last January of California flexibility over stability in their work with in metropolitan areas. Most had at least Assembly Bill 5 (AB5), a state law that the app. Couriers cited “flexibility and a high school education. In choosing to extended employee classification status freedom” as the top reason for choosing undertake OFD work, they prioritized to certain gig workers, was met in OFD work, followed by “supplemental income (79.3%), accident insurance November with Proposition 22, which income” and, thirdly, their ability to (9.1%), and other benefits (i.e. vehicle legally designates drivers for app-based handle other responsibilities (caretaking, maintenance/gas subsidies) (4.7%). ride-hailing and delivery platforms as household chores, school, etc.) in addition However, one interesting finding was independent contractors. Prop 22 passed to their work with the app. that while 82% of respondents are aware with nearly 60% of the vote, indicating Around 60% said that they would not of the Group Insurance plan provided that most voters rejected the government’s consider taking a full-time job, with 72.4% by Uber Eats, 73% had also purchased rush to introduce a rigid classification citing as a reason the incompatibility of supplementary insurance related to system for workers in a changing economy. a formal full-time job with their lifestyle. OFD work. This was especially true of In Taiwan, labor authorities have Such results indicate that the majority of those over the age of 40, as well as more taken a similarly conventional approach the couriers who partner with Uber Eats experienced couriers and those who to categorizing gig workers. In late 2019, choose to work in the OFD business, logged longer hours on the platform. Taiwan’s Ministry of Labor (MOL) rather than do so out of necessity. The results of the Uber Eats survey conducted labor audits of OFD platforms In addition, couriers value their ability shed some new light on the discussion and determined that in several cases, an to arrange their own time (96.2%) – as surrounding food couriers and how they employment relationship existed between opposed to being assigned work or shifts should be viewed under Taiwan’s labor couriers and the platforms. The MOL (3.8%) – as well as their freedom to reject laws. Particularly, they highlight that on then introduced guidelines and a checklist orders (90.1%). They also enjoy being the whole, such workers are not invested to determine whether a given labor able to choose how the work they do is in being classified as employees of a given agreement constitutes an employment or conducted (83.6%), versus being required company. Government agencies should independent contractor relationship, yet to follow company directions (16.4%). thus listen to their voices on this matter many of the checklist’s items are present They prefer to be paid by task (81.2%), and refrain from viewing their work across various work arrangements. rather than be required to clock in and relationships through a conventional lens. Furthermore, new data suggests that most out at designated times (18.8%). In other In addition, Taiwan’s government gig workers themselves enjoy the freedom words, the type of work arrangement should work with industry to codify

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into law the concept of “safe harbor” gig workers without jeopardizing the November 4, 2020. A total of 14,348 for app-based companies, as doing so preexisting independent contractor model. unique responses were collected, making would allow these companies to provide The Uber Eats survey was conducted this the largest survey of its kind in and extend benefits and protections to online between October 30 and Taiwan.

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Pfizer and Taiwan’s National Health Research Institutes Sign Precision Medicine Agreement

The company hopes to benefit citizens and shed new light on the treatment of cancer.

and analysis application plan, which targets lung cancer and gastrointestinal stromal tumors (GIST). It is one of the multinational pharmaceutical companies to join the new alliance. The NHRI notes that this initiative fulfills an important objective under the government’s “Sustainable Big Data Platform for Precision Health” program, which integrates the resources of government, industry, and academia to build an environment that strengthens clinical research of personalized treatment methods, and spurs the development of Taiwan’s healthcare industry. This agreement is just the beginning; other partners are welcome to join the effort to implement precision medicine in Taiwan. More important, however, are efforts to promote the development of Taiwan’s domestic biotech industry and provide better treatment to patients. “Our mission is one of continuous innovation to change the lives of patients,” says Pfizer’s Country Manager, Cellina Yeh. Pfizer has long devoted itself to research regarding precision medicine, including genetic treatment options. Even for less-common diseases such as GIST or ALK/ROS-1 non-small cell Cellina Yeh, Dr. Liang and Dr. Shau Wei-Yi (from left to right) lung cancer, Pfizer is actively conducting relevant academic research as a basis for developing treatments. Yeh emphasizes that Pfizer is fortunate fizer Taiwan and the National research and development on testing and to take the lead in this endeavor, along Health Research Institutes precision medicine treatments for gene with its two partner companies. Through P (NHRI), along with two other mutations that cause cancers. Through this cooperation, Pfizer not only wishes partnering companies, recently signed a this collaboration, the alliance hopes to to benefit patients across the country, precision medicine cooperation alliance provide the most precise treatments for but also to catalyze breakthrough agreement, officially launching a joint cancer patients and enhance Taiwan’s developments in cancer treatment initiative to develop precision cancer precision medicine development. research. Yeh also urges other players treatments in Taiwan. The agreement Pfizer stood out in the NHRI’s strict in Taiwan’s biotechnology industry to commits all parties to the promotion of selection process due to its genetic testing partake in the joint effort and realize the

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full potential of government-industry- actions. New technological developments tailored to individual patients. As a major academia cooperation in this area. have enabled Pfizer to redefine its research participant in medical research, Pfizer Rochelle Leah Chaiken, Chief Medical methods. Precision medicine utilizes will invest in precision medicine across Officer, Pfizer Emerging Markets, stresses the most advanced science to better the entire organization and extend the that precision medicine is not merely understand the biological basis of diseases, approach’s advantages beyond cancers a strategic undertaking at Pfizer, it is a information that Pfizer then applies to to rare diseases and immunology, among core principle that guides the company’s its development of innovative new drugs other relevant fields.

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