Caring for the Elderly �� October 2018 | October Vol

October 2018 | Vol. 48 | Issue 10 THE AMERICAN CHAMBER OF COMMERCE IN TAIPEI TAIWAN BUSINESS TOPICS

Caring for the Elderly October 2018 | October Vol. 48 | Issue 10

INDUSTRY FOCUS

中華郵政北台字第 REAL ESTATE SECTOR BACKGROUNDER TURNING FOOD WASTE TO FUEL 000

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Published by the American Chamber Of NT$150 Commerce In Taipei Read TOPICS Online at topics.amcham.com.tw

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CONTENTS NEWS AND VIEWS 6 Editorial OCTOBER 2018 VOLUME 48, NUMBER 10 Moving Issues Forward 一年月動議題前行」 7 Taiwan Briefs Publisher 行人 William Foreman By Timothy Ferry Editor-in-Chief 12 Issues Don Shapiro The Return of Private Equity Associate Editor Tim Ferry 法基復 Art Director/ 美術/ By Don Shapiro Production Coordinator 後 Katia Chen 國 Manager, Publications Sales & Marketing 告行經理 Caroline Lee 佳 AMCHAM EVENT Translation Kevin Chen, Yichun Chen, Charlize Hung 14 A Party for AmCham’s 67th Birthday

American Chamber of Commerce in Taipei 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 COVER SECTION e-mail: [email protected] website: http://www.amcham.com.tw Caring for the Elderly 台北美國商會工商行所台北美國商會照顧老一輩北1096129706 話2718-8226 2718-8182 16 Ensuring the Longevity of Taiwan Business Topics is a publication of the American Chamber of Commerce in Taipei, ROC. Contents are Long-term Care independent of and do not necessarily reflect the views of the Officers, Board of Governors, Supervisors or members. © Copyright 2018 by the American Chamber of Commerce in Taipei, ROC. All rights reserved. Permission to reprint original material must be requested in writing from AmCham. Production To succeed, the Taiwan done in-house, Printing by Farn Mei Printing Co., Ltd. government’s plan must 台一所美有公 overcome fiscal, talent, and 經商台灣台北108台北華街66 行期中華國一年月 cultural challenges. 中華政北台5000為交撰文／傅長壽 ISSN 1818-1961 By Matthew Fulco 20 Foreign Caregivers Fill the 23 Enhancing Elder Care Chairman/ Albert Chang Vice Chairmen/ Leo Seewald, Vincent Shih Gap through Technology Secretary: Fupei Wang Treasurer: C.W. Chin By Timothy Ferry By Timothy Ferry

2017-2018 Governors: Albert Chang, William Farrell, Revital Golan, Tim Ju, 22 Retirement Homes Struggle 25 Promoting the Silver Seraphim Ma, Leo Seewald, Vincent Shih. to Attract Occupants Economy 2018-2019 Governors: Anita Chen, C.W. Chin, Edward Lack of demand stymies a sector Shober, Joanne Tsai, Daniel Tseng, Fupei Wang. By Timothy Ferry that would seemingly be ripe for 2018 Supervisors: Petra Jumpers, Joyce Lee, Timothy Shields. development in aging Taiwan.

COMMITTEES: By Timothy Ferry Agro-Chemical/ Melody Wang; Asset Management/ Christine Jih, Derek Yung; Banking/ Paulus Mok; Capital Markets/ Nadia Chen, Mandy Huang, C.P. Liu; Chemical Manufacturers/ Charles Liang, Michael Wong; Cosmetics/ BACKGROUNDER Shirley Chen, Julien Jacquet, Abigail Lin; CSR/ Lume Liao, Fupei Wang; Energy/ Randy Tsai; Human Resources/ 27 Taiwan Food Waste – Right Resource, Wrong Approach Vickie Chen, Richard Lin, Monica Han, Seraphim Ma; Infrastructure/ Wayne Chin, Paul Lee; Insurance/ Dan Food waste carries a heavy social, environmental, and financial cost, but Ting, Linda Tsou, Dylan Tyson; Intellectual Property & Licensing/ Jason Chen, Peter Dernbach, Vincent Shih; with the right technology, it can become a stable, low-cost, high-return Marketing & Distribution/ Wei Hsiang; Medical Devices/ source of electricity. Raghavendra Shenoy, Joanne Yao; Pharmaceutical/ Petra Jumpers, Wendy Lin, Lai Li Pang; Public Health/ Joyce Lee, By Tim Heberlein Sophia Lee, Tim Shields; Real Estate/ Tony Chao; Retail/ Ceasar Chen, Mark Chen, Prudence Jang; Sustainable Development/ Kenny Jeng, Cosmas Lu, Kernel Wang; Tax/ Stella Lai, Cheli Liaw, Josephine Peng; Technology/ Cynthia INTERVIEW Chyn, Revital Golan, Hans Huang; Telecommunications & Media/ Thomas Ee, Joanne Tsai; Transportation & 32 A Conversation with Dan Silver Logistics/ (tba); Travel & Tourism/ Pauline Leung, Achim v. Hake. The former AmCham Chairman reflects on his time in Taiwan. By Don Shapiro

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TAIWAN BUSINESS 34 Taiwan’s Other AmChams Many people may not realize that AmCham Taipei is not the only American chamber in Taiwan. By Courtney Donovan Smith

INDUSTRY F CUS

INDUSTRY FOCUS ON THE REAL ESTATE SECTOR Updates on the Property Market

38 Taiwan’s Commercial Real Estate Market: An Improving Outlook By Ping Lee, CBRE Taiwan 42 Taipei’s Affordable Housing Challenge High prices, a dysfunctional rental market, and limited public housing make it difficult for many citizens to find a suitable place to live. By Sophia Cai 44 High Hopes for Smart Housing A massive social housing program is viewed as the means for the Taipei municipal to build an integrated smart city. By Jules Quartly 47 House Hunting: Some Personal Experience By Jules Quartly

SPONSORED CONTENT 30 Edwards Lifesciences The Patient Comes First

48 Taiwan Tourism Bureau: Seeing Taiwan

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10 contents.indd 5 2018/10/5 上午10:44 E D I T O R I A L Moving Issues Forward

ach spring when AmCham Taipei conducts its Door- U.S. agency decided to dispatch interagency representatives to knock trip to Washington DC, one of the most important Taiwan for discussions after all, albeit not at the TIFA Council E stops on the itinerary is the Office of the U.S. Trade level due to the U.S. side’s continuing occupation with NAFTA Representative (USTR) a block away from the White House. negotiations and various high-level trade disputes. USTR is the U.S. government agency responsible for devel- The team that came to Taiwan, led by Acting Assistant USTR oping and coordinating trade policy and for carrying out trade Terry McCartin and including staff members from USTR and negotiations with other countries. Under the Trade and Invest- the Departments of State, Commerce, and Agriculture, spent ment Framework Agreement (TIFA) that the United States and nearly a week here in mid-September. Before the visitors’ meet- Taiwan entered into in 1994, USTR usually engages with its ings with the relevant offices in Taiwan, AmCham arranged for Taiwan counterpart once a year for a high-level TIFA Council Chamber committees to bring them up to date on the status of meeting to enable the two sides to attempt to iron out any various priority issues, including implementing a patent-linkage disagreements that have arisen with regard to trade and invest- system for pharmaceuticals, tackling the problem of digital ment policies and practices. piracy, setting maximum residue levels for rapidly for agri-chem- As the AmCham team prepared for this year’s Doorknock, icals, accelerating the licensing process for medical devices, one of its goals was to encourage USTR to return the TIFA making investment approval procedures more transparent, and Council talks to a regular annual schedule, since no such meeting eliminating any technical barriers to trade. has taken place since the fall of 2016. Another objective was to Although AmCham is not privy to the substance of the ensure that the American authorities were aware of the highly dialogue between the USTR team and their Taiwan counter- positive environment AmCham has recently experienced in its parts, the Chamber’s understanding is that while no dramatic dealings with the Taiwan government on matters of concern to breakthroughs occurred, the groundwork was set for what the Chamber’s various industry committees. In the 2018 Taiwan hopefully will be fruitful continuing interaction in the months White Paper released just weeks before the Doorknock, AmCham ahead. The degree of progress achieved during that time will was able to report that a record 11 issues from the 2017 White undoubtedly be crucial in determining whether high-level TIFA Paper had been successfully resolved, with 21 additional issues Council talks are resumed – and more importantly whether rated as “showing good progress,” another all-time high. there is any realistic possibility for Taiwan to conclude a free- At USTR, AmCham was informed that there was no current trade agreement with the United States. plan to send a U.S. team to Taiwan for trade talks. But the Door- Taiwan is facing an excellent opportunity to make signifi- knock group urged reconsideration of that position, stressing the cant progress toward an FTA and needs to be better prepared vital importance of maintaining momentum on outstanding trade to resolve thorny issues that have delayed progress far too long. issues. In light of the positive attitude on the part of the Taiwan Amid a trade war with China, Washington needs to strengthen government that the Doorknock delegation was describing, the its partnerships with loyal friends such as Taiwan.

推動議題向前行

年春天，台北美國商會的華府敲門之旅當中，最重要忙於處理北美自由貿易協定談判和各種貿易爭端，此團雖未達的一站就是拜訪與白宮一街之隔的美國貿易代表署貿易暨投資架構協定的層級，但已屬可貴。每（USTR）。美國貿易代表署是負責制訂與協調貿易來訪台灣的代表團由美國貿易代表署助理貿易代表助理泰政策以及和其他國家進行貿易談判的美國政府機構。根據台美瑞‧麥卡廷（Terry McCartin）代領，團隊成員包括美國貿易 1994年簽訂的貿易暨投資架構協定（TIFA），美國貿易代表署代表署、美國國務院、美國商業部及美國農業部的工作人員，通常每年會在TIFA的架構下，與台灣高階會晤，嘗試解決貿易代表團9月中在台灣停留將近一星期。拜會台灣相關部會前，投資政策與做法上出現的分歧。台北美國商會安排各商會委員會與代表團會晤以便詳述各問題一如往昔，美國商會團隊今年的叩門之旅目標之一就是敦促的最新進展。討論議題包括施行藥品專利連結制度、解決數位美國貿易代表署恢復每年召開的貿易暨投資架構協定會議，因盜版問題、制定農藥最大快速殘留容許量、加速醫療設備審查為這個會議從2016年秋季後就沒再召開過了。另一個目標是確程序、加速投資審議程序透明化、消除所有技術性貿易障礙保美國當局了解，近期台灣政府就商會各個委員會所關注的議等。題上進行交流時所展望的高度積極氛圍。如叩門之旅幾週前公雖然無法得知美國貿易代表署的團隊與台灣相關部會之間對布的2018年台灣白皮書中所述，2017年白皮書的11個未解決話的實質內容，但商會的理解是即便沒有重大突破，卻已為未議題已經成功解決，加上另外21個議題被評定為「顯示良好進來幾個月有望持續互動奠下基礎。在不確定貿易暨投資架構協展」，這是前所未有的新高。定會議是否恢復之際，這些進展有其重要性。更重要的是它有在見美國貿易代表署時，台北美國商會被告知，現下尚無派助於開啟台美之間是否有可能簽署自由貿易協定的對話。遣美國代表團前往台灣進行貿易會談的計劃。但叩門團隊敦促台灣正面臨於自由貿易協定方面取得重大進展的絕佳時機，代表署重新考慮此一立場，強調雙方在貿易問題上應保持持續更需要做足準備，以解決延宕多時的棘手問題。從華府的角度性的溝通。鑒於叩門團隊對台灣政府積極態度的肯定，美國機來看台灣，在與中國的貿易戰開打之際，華府更需加強與台灣構最後還是決定派遣各機構代表前往台灣進行討論。由於美方等忠誠友邦的夥伴關係。

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— BY TIMOTHY FERRY —

MACROECONOMIC ECONOMIC INDICATORS

U.S.-CHINA TRADE WAR Current Account Balance (Q2 2018)p 17.82 17.34 DRAWS ATTENTION Foreign Trade Balance (Jan.-Aug.) 32.3 34 News reports indicate that at a New Export Orders (Aug.) 43.7 40.8 Foreign Exchange Reserves (end Aug.) 459.9 446.4 number of Taiwanese firms are consider-

ing abandoning their Chinese production Unemployment (Aug,) 3.87% 3.89% bases and returning to Taiwan to avoid Discount Rate (Aug.) 1.375% 1.375% being caught in the U.S.-China trade Economic Growth Rate Q2 2018p 2.55% 2.28% war. Although Taiwan has not been Annual Change in Industrial Output (Aug.)p 1.33% 5.69% directly targeted by either country, many Annual Change in Industrial Output (Jan.-Aug.)p 4.17% Taiwanese manufacturers have moved Annual Change in Consumer Price Index (Aug.) 1.53% 0.96% their production sites to China, and Annual Change in Consumer Price Index (Jan.-Aug.) 1.65% products exported from there would P=PRELIMINARY SOURCES: MOEA, DGBAS,CBC, BOFT be considered Chinese goods under the U.S. tariff regime. So far the impact has ese exports, taking over 28% of the according to the Ministry of Economic been negligible, but the Trump admin- total exports, which rises to 41.3% Affairs, to reach US$43.68 billion, a gain istration’s latest round of tariffs targets when Hong Kong is included. Exports to of 4.5% over the previous month. include high-tech goods that could China/Hong Kong rose 11.8% compared Consumer confidence remained buoy- impact Taiwanese manufacturers. to the same period last year to reach ant, rising slightly in August to 82.56 “Some 20 Taiwanese businesses have US$90.44 billion. Trade with the United from 82.38, as measured by the National already expressed their desire to relocate States was up 6.6% year-on-year as of Central University’s Center for Taiwan here,” Taiwan’s Minister of Economic August to reach US$25.46 billion. As the Economic Studies. Taiwan’s Director- Affairs Shen Jong-chin told reporters on second-largest destination for Taiwanese ate General of Budget, Accounting and September 18, adding that the govern- exports, the United States takes 11.5% Statistics (DGBAS) reports that the ment is offering support for companies of the total. Consumer Price Index dropped slightly, inclined to make the move. Trade with the European Union has from 1.75% in July to 1.53% in August. Regardless of the trade war, Taiwan’s also surged in 2018, with exports to the DGBAS currently forecasts 2018 GDP exports – the key to growth in this trade- EU rising by 11.5% year-to-date to reach growth at 2.69%. dependent economy – have continued to US$19.59 billion, 8.9% of the total. rise, increasing by 8.9% year-on-year for Trade with ASEAN remains significant, INTERNATIONAL the first eight months of 2018 to reach with exports at US$38.76 billion, 17.6% US$220.48 billion. China remains by of the total, but growth has slowed to MCCAIN REMEMBERED far the largest destination for Taiwan- only 1.4% year-on-year. FOR TAIWAN SUPPORT The Machinery and Electrical Equip- John McCain, the longstanding TAIWAN STOCK EXCHANGE PERFORMANCE ment sector remains the key component Republican senator from Arizona and THE BLUE LINE SHOWS CHANGES IN TRADE VALUE AND of Taiwan’s exports, comprising 56.3% military hero who died August 25 of THE SHADED AREA CHANGES IN THE TAIEX INDEX. of total exports for the month of August brain cancer at the age of 81, was hailed POINTS NT$ BILLION 13000 18000 and 55.2% for the year to date, for a in Taiwan as a stalwart supporter of 12000 16000 total of US$119.85 billion in the first strong U.S.-Taiwan relations. His visit 11000 14000 eight months, a 7.2% gain. to Taiwan in June 2016 as the head of 10000 12000 Leading indicators are likewise posi- a seven-senator delegation – the larg- 9000 10000 tive. The Purchasing Managers Index est senatorial delegation in a decade – 8000 8000 (PMI) as measured by the Chung-Hua was deeply appreciated by the Tsai Ing- 7000 6000 Institution for Economic Research wen administration, which had just 6000 4000 declined slightly in August, falling to 56 taken office and was under heavy pres- 5000 2000 from 56.1 in July, but remains in posi- sure from China. McCain was then 4000 0 tive territory. New export orders posted chairman of the Senate’s Armed Services growth of 7.1% year-on-year in August, Committee. In a statement following DATA SOURCE: TWSE

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McCain’s death, President Tsai said: “I'll remember John McCain as a friend and a fighter. He never backed down from his beliefs and forever strived for a more peaceful and prosperous world. On behalf of the people of Taiwan, thank you.”Presidential Office Secretary- General Chen Chu had visited McCain in the hospital in Phoenix on Aug. 16 to pass on the President’s regards.

U.S. RECALLS DIPLOMATS OVER TAIWAN SPLIT To express its concern over the esca- RESIGNATION — Vice chairman of the Transitional Justice Commission Chang lation of China’s efforts to isolate Tien-chin stepped down over inappropriate comments. Taiwan, the U.S. State Department on PHOTO: CNA September 8 announced that it was recalling its top diplomats to three a private meeting that were leaked to current chairman of NTU’s Depart- Central American nations that recently the press, in which he proposed using ment of Finance and former minister switched diplomatic recognition from the TJC to smear a candidate in the of the government’s National Devel- Taipei to Beijing The U.S. ambassadors November elections. The TJC, under opment Council, was elected president to the Dominican Republic and El Salva- the Executive Yuan, is an independent of Taiwan’s top university on January dor, and the chargé d’affaires in Panama, body charged with investigating abuses 5 this year. His election was mired in were instructed to return to Washing- committed during the White Terror controversy after it was revealed that he ton “for consultations related to recent period when Taiwan was a one-party was an independent director of Taiwan decisions to no longer recognize” the state ruled by the Kuomintang (KMT). Mobile Co. at the time, while company island, the statement said. The Trump In the comments recorded August 24, vice president Richard Tsai served on administration is confronting an increas- Chang is heard criticizing KMT candi- the NTU election committee, sparking ingly assertive China on a number of date for New Taipei City mayor Hou allegations of conflict of interest. The fronts, including engaging in an ongoing You-yi as “the worst example of transi- Ministry of Education (MOE) demanded battle of tit-for-tat tariffs that many see tional justice” for Hou’s role as leader of that the university redo its election, as threatening the stability of the global the police team that attempted to arrest economy. The recall of the Central Taiwan independence proponent Cheng American diplomats is the first such Nan-jung in 1989. Cheng immolated instance regarding China’s poaching of himself rather than face arrest and is Taiwan’s allies, and was seen by analysts considered a martyr for Taiwan’s democ- as a sign of U.S. concern over growing racy. Cheng’s remarks were roundly Chinese influence in the Western Hemi- criticized by leaders of both the ruling sphere. Following its diplomatic détente Democratic Progressive Party (DPP) and with Taiwan under the Ma administra- the KMT, and candidate Hou said it was tion, Beijing has since snatched up five of “regrettable” that the TJC was being Taiwan’s diplomatic allies over the past deployed as a political tool. two years, reducing the total to only 17. MOE SEEKS END TO NTU POLITICS ELECTION STANDOFF Education Minister Yeh Jiunn-rong’s TRANSITIONAL JUSTICE efforts to solve the National Taiwan VICE CHAIR RESIGNS University (NTU) presidency stand- CONTINUING CONTROVERSY — At a Vice chairman of the Transitional off have been met with criticism from news conference, Education Minister Justice Commission (TJC) Chang Tien- all sides, and a solution appears to Yeh Jiunn-rong explains his proposal for resolving the dispute over the chin resigned over comments, made at remain out of reach. Kuan Chung-ming, NTU presidency. PHOTO: CNA

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but the university has refused, request- ing that the ministry accept the election results and certify Kuan as president. Seeking a compromise, Yeh on Septem- ber 13 proposed that NTU redo the election from among the five candidates on the original short list, with Taiwan Mobile vice president Tsai abstain- ing. The university responded by calling the request unethical and unlawful. Some NTU student groups, meanwhile, are calling for an entirely new election excluding Kuan.

JAPANESE OFFICE DEFACED

OVER COMFORT WOMEN FUGITIVE NABBED — Texas gun nut and fugitive on sex assault charges Cody A right-wing Japanese politician’s Wilson was deported from Taipei back to the United States. disrespect to a statue honoring Japan’s PHOTO: CNA wartime sex slaves, “comfort women,” outside of KMT offices in Tainan protest group were arrested for defacing Defense announced plans September 7 sparked an uproar in Taiwan that has the building where the Japanese repre- to raise the budget for upgrading the air led to protests and the defacement of sentative office is located with yellow force’s fleet of U.S.-procured F-16 multi- the Japanese trade office in Taipei. Japa- and white paint. Government officials role combat aircraft from NT$129.6 nese politician Mitsuhiko Fujii was accused the opposition KMT of foment- billion (US$4.21 billion) to NT$140.2 filmed kicking the statue, which he ing controversy over the incident in the billion (US$4.56 billion). The fleet of later demanded be removed. The inci- buildup to the November elections, while 115 F-16 jets is being upgraded by dent sparked a protest outside the the KMT has accused the government of Lockheed Martin from the current A/B Japan-Taiwan Exchange Association on ignoring the feelings of the nation. standard to the advanced F-16V version, September 10 that led to a clash between and the added budget will mostly go demonstrators and police. The protes- DOMESTIC towards boosting the number and types tors demanded that Fujii be barred from of air-to-air missiles carried by the jets leaving Taiwan until he kneels before the MORE BUDGET SOUGHT to maintain parity with China’s rapidly same statue and offers an apology. After- FOR F-16 UPGRADES advancing military. Following the crash ward, four members of the anti-Japanese Taiwan’s Ministry of National of an F-16 during the Hang Kuang military exercises last June, the added budget TAIWAN'S JAN. - AUG. TRADE FIGURES will also pay for ground collision avoid- (YEAR-ON-YEAR COMPARISON) ance systems.

HK/China Japan ASEAN TOTAL TEXAS GUN FANATIC 80.9

90.4 FLEES TO TAIWAN A man at the center of a debate over 220.5 38.8 38.2 35.8 32.8 29.6 202.5 27.5 22.7 188.2 the right to disseminate plans for 3D 20.6 15.2 13.5 168.5 printed guns was deported from Taiwan 2018 2017 2018 2017 2018 2017 on September 22 after the U.S. Marshalls .S.A Europe issued a warrant for his arrest on charges of sexual assault of a minor in Austin, 25.5 23.9 22.9 22.3 21 20

19.8 Texas and the American Institute in 18.9 Taiwan revoked his U.S. passport to 2018 2017 2018 2017 2018 2017 prevent him from fleeing. Cody Wilson, NIT: S Billion Exports Imports SO RCE: BOFT/MOEA 30, had been in Taiwan for a little over two weeks when he was apprehended

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by Taipei police. Wilson is described by and systems. launch 10 new medicines by 2021, three Wikipedia as an “American crypto-anar- In related news, the Minis- of which have received priority approval chist, free-market anarchist, and gun- try of Justice’s Investigation Bureau from the Taiwan Food & Drug Admin- rights activist, best known as a founder/ announced that it had “unequivocal istration. It will also triple its spending director of Defense Distributed, a non- evidence” that China was mount- on clinical research and development in profit organization that develops and ing a campaign of disinformation, or Taiwan and create more than 140 new publishes open source gun designs, “fake news,” to disrupt local elections jobs in medical affairs, clinical research, so-called ‘wiki weapons’ suitable for 3D next month and foment internal social and marketing and sales, increasing the printing and digital manufacture.” He discord. The disinformation campaign total workforce to 430 employees. reportedly entered Taiwan on September includes planting false stories in online The company, which specializes in 6 after learning of the investigation into news forums and assigning Chinese medications to treat lung cancer, cardio- the sexual assault. moles to participate in online forums vascular diseases, and diabetes, said the to twist discussions toward Beijing’s investment “reflects our commitment to INCREASED FUNDING perspective while delegitimizing local address the unmet needs in non-commu- FOR CYBERSECURITY views. Media reports indicate that the nicable diseases, to enable high-value The Executive Yuan reportedly is government is considering amending job creation, and to advance biophar- planning to spend more than NT$1.6 the National Security Act to counter the maceutical innovation in Taiwan.” The billion (US$51.1 million) next year to spread of fake news. anniversary ceremony also involved the protect government websites and data- signing of a Letter of Intent with the bases that have been frequently targeted BUSINESS Ministry of Science and Technology to by Chinese hackers. The sites include help develop local R&D talent, those of the Presidential Office, Minis- ASTRAZENECA PLANS AstraZeneca’s precursor company, try of the Interior, Ministry of Foreign MAJOR INVESTMENTS Imperial Chemical Industries, was one of Affairs, and the National Security Observing the 70th anniversary of the first foreign investors to set up oper- Bureau. Government sources say that its presence in Taiwan, pharmaceutical ations in Taiwan. It opened the office in over 23 million assaults were thwarted giant AstraZeneca announced plans to 1948 to launch an anti-malarial drug, last year alone. According to local media invest an additional NT$1 billion (over contributing to Taiwan becoming the reports, the budget will go toward US$32 million) here in the next three first malaria-free area in the Western enhancing digital infrastructure as well years. AstraZeneca Taiwan president Pacific in 1965. as developing local cybersecurity talent Simon Manners said the company will GOGORO AND YAMAHA PLAN COOPERATION Local electric scooter maker Gogoro and Japanese motorcycle maker Yamaha on September 11 announced plans to team up on the development of new lines of electric scooters. Gogoro is a comparatively recent entrant into the market, but has already seen considerable success since its debut in 2011. It has sold over 90,000 units, and its expansive battery- swapping network has gained worldwide attention. Yamaha, for its part, is an iconic motorcycle brand that has recently also moved into the electric bicycle sector. The cooperation would involve the manufacture in Gogoro factories of Yamaha-branded scooters destined for the local market. Those scooters would

GOGORO YAMAHA TIE UP --- Gogoro co-founder and CEO Horace Luke. The also utilize Gogoro’s network of 750 electric scooter maker announced a partnership with Yamaha. battery-swapping stations. PHOTO: CNA

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ISSUES

The Return of Private Equity

Indications from a recent conference are that the welcome mat is back out.

rivate-equity financing in Taiwan appears poised to make a comeback. For a time more than a decade ago, leading global PE firms played P an active role in the Taiwan market, investing in major deals in such 基復 industries as cable television and financial services. Then came a series of high-profile cases in which the investment applications either were rejected outright or dragged on for so long that the PE investor withdrew in frus- tration, complaining that Taiwan’s investment-approval process lacked transparency. The lingering perception that the Taiwan authorities remained opposed to PE participation in the market led AmCham Taipei’s Private Equity Committee to suspend operations. 灣基資有望重 Today the outlook looks quite different. Several cases involving substan- 來。 tial PE investment are currently going forward, and many others are said to 台幾年前，要基 be in the feasibility-study, due-diligence, or negotiation stage. In the biggest 公在台灣場積極的角，在 case, a consortium led by KKR & Co. has entered into an agreement to 有和務等行業有重大交易。 acquire Taiwan’s LCY Chemical Co., a leading petrochemical producer, in a 之後連出現一連備目的投資 deal estimated to be worth US$1.56 billion. For KKR, it is the first foray into ，其中一些投資的不是被 the Taiwan market in more than a decade. In another case currently in the 就是時間被延，以基投資人 approval process, Morgan Stanley Private Equity Asia and associated firms 能，台灣投資審查 are seeking to acquire a controlling interest in medical device manufacturer 程序不透明化。台灣當局對基 Microlife Corp. for about NT$9.3 billion (US$318.6 million). 與場持對見的外在之不 Industry observers are optimistic that these investment applications will 之下，台北美國商會基委員會 not encounter serious obstacles. The cases appear non-controversial, free of 的作時停。 the various issues that complicated previous applications, including involve- 如今有新。目前幾大量 ment in politically sensitive industries such as the media and the financial 基投資正進行，據還有其他投 sector. Moreover, the government has recently made an effort to encourage 資正處於可行性、調查談判 more private equity interest in this market as a means of boosting the low 的階。最大的投資是以R團為 level of foreign direct investment entering Taiwan in recent years. 的，協議台灣要化商 An example of that welcoming attitude was the forum held on September 化工，16美。對R 14, organized jointly by the Ministry of Economic Affairs (MOEA) and the 來，這是他多年來足台灣 American Institute in Taiwan (AIT), with support from AmCham Taipei and 場。目前進審查階的另一投資， the U.S.-Taiwan Business Council. The title of the event – “Private Equity 是根利投資基及關公，正以新台9（186 美）的，醫療商（Micrie）的。業人看，為這些投資不會重障礙。這些投資沒有大爭議，不以前時出現的各問題，不再包括和部門等政行業。此外，政府最近更多人來台投資，以此作為高近年外國投資資的一種手。持這種態度以9月14的論為，由經部（MA）和美國在台協會（AIT），台北美國商會和美台商業協會協，論標題為「基在台灣通往成之」，題就是對 At the forum, AIT Director Brent Christensen poses with Deputy Eco- 基新的展現。政府員代表 nomic Affairs Minister Kung Ming-hsin.

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The forum brought together U.S. and Taiwanese officials, and local and international specialists in investment affairs.

in Taiwan: A Pathway to Growth” – was itself indicative of the new posi- 包括經部政務明、國家展委 tive view of PE. And the government speakers – MOEA Deputy Minister 員會委、理委員會 Kung Ming-hsin, National Development Council Deputy Minister Cheng 天等，強調基投資為台灣 Cheng-Mount, and Financial Supervisory Commission Vice Chairperson 來經、協助業級新以及 Huang Tien-mu – all stressed the value that PE investment could bring to the 場。 Taiwan economy, aiding in industrial upgrading, innovation, and expansion 題告中，美商根利基 of global markets. 安Anre ayar出， In the main presentation at the forum, Andrew Hawkyard, chief oper- 近年來台灣一基所的大 ating officer for Morgan Stanley Private Equity Asia, noted that in recent 投資機會。就有220美的 years Taiwan has been losing out on the huge investment opportunities 投資基，更可投資的 offered by PE. Some US$225 billion in investment funds are based in Asia, 基了。然，基的投資來 not to mention the global funds that can also be invested in this region. Yet 看，台灣在國家的排行已幾。 Taiwan has been near the bottom of countries in Asia ranked by the amount 安強調，基公過幾 of PE investment. 年前經常人「業」的大不相 Hawkyard stressed that unlike the situation of decades ago when PE ，現在的基投資重成。 firms often had the reputation of being corporate raiders, nowadays PE 目標是被投資公的理制度、高 investment is all about growth. The goal is to improve the management of ，以便在出時利了結。 the company being invested in, enhancing its value in order to make a profit 論還包括場討論其中一場由台 when exiting. 灣來投資有公暨台 The conference also included two panel discussions – one of them moder- 北美國商會（e Seea） ated by Leo Seewald, chairman of BlackRock Taiwan and vice chairman of 持，討論成員包括業多位業 AmCham Taipei – with panelists from among local industry leaders. Some of 代表。成員出的要包括 the key points raised by the panelists included: 性的，基投 • With their global reach, PE investors are well-positioned help 資人能助台灣業制定新策、開 Taiwanese companies devise new strategies, develop foreign markets, 國外場、與國際動、 engage in international M&A activity, absorb new technology, and 新技術以及新理工和技 adopt the latest management tools and techniques. 術。 • Many successful family-run companies in Taiwan face an urgent 台灣許多成功的家業面臨的 succession problem. The founding patriarch is now advanced in years 問題。家已經打多 and ready to give up the reins, but the younger generations in the 年，準備好要，但年一代 family may have no interest in taking over the business. Reorganiza- 卻沒家業。與基 tion in cooperation with PE firms can be the most effective way to 公作重可能是確保公未來可 ensure a viable future for the company. Family members can benefit 行最有方。家成員可以從所持 from a continued equity stake without having to take responsibility for 有的中持續無需理 the management. 責。 • Attracting more foreign investment through PE channels will help 透過基更多外國 Taiwan cement its international ties so as to better withstand external 投資將有助台灣國際關係， pressures. 更有利於外部。 In concluding remarks, AIT economic officer Ryan Engen cited PE’s 在結告中，美國在台協會經 ability to unlock innovation while protecting investors, in the process facili- 安瑞（Ryan nen）基 tating Taiwanese companies’ transition to greater competitiveness. 的能除了保投資的時還備解新能，能促台灣業 — By Don Shapiro 過程中高爭。

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A Party for AmCham’s 67th Birthday

ore than 120 AmCham Deputy Assistant Secretary of State Alex Taipei members and guests Wong to speak at the Chamber’s Hsieh M turned out on September Nien Fan banquet. 20 to help the Chamber celebrate the Emile Chang invited AmCham 67th anniversary of its establishment in member companies to avail themselves 1951. The event was held in the elegant of the investment-related services of his Xifu Hall on the 9th ﬂoor of the Grand organization. Mayfull Hotel in Taipei’s fast-growing Members and friends of the Chamber Dazhi District. Attendees enjoyed an are reminded to mark their calendars evening of convivial conversation and for the next big social event on the networking while partaking of spar- AmCham agenda: the 2018 American kling wine and other beverages, as well Ball, “Aloha Hawaii,” November 3 at as a delicious selection of dishes on the the Grand Hyatt Taipei. buffet line. The event was jointly sponsored

by Crate & Barrel, which offered VIP AmCham Taipei Chairman Albert Chang membership sign-up and a gift bag reviews the Chamber's major achievements containing a crystal wine glass, and of the past year. the Ministry of Economic Affairs’ InvesTaiwan office responsible for promoting foreign investment. Taiwan and the United States. Brief remarks were delivered by Foreman related the pride he has American Institute in Taiwan Deputy felt since taking ofﬁce at the beginning Director Raymond Greene, AmCham of this year in leading an organization Taipei President Bill Foreman, Amcham whose members contribute so much Taipei Chairman Albert Chang, and to Taiwan’s economic prosperity and InvesTaiwan Director-general Emile thereby to its security and social sta- Chang. bility. On behalf of AIT, Greene extended Albert Chang called attention to congratulations to AmCham on its some of AmCham Taipei’s signal anniversary and expressed appreciation achievements over the past year, AIT Deputy Director Raymond Greene offers for the Chamber’s unstinting efforts to including resolution of a record number congratulations on AmCham's long history of fostering the U.S.-Taiwan relationship. foster trade and investment between of White Paper issues and arranging for

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Caring for the Elderly

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Ensuring the Longevity of Long-term Care

To succeed, the Taiwan government’s plan must overcome fiscal, talent, and cultural challenges.

BY MATTHEW FULCO PHOTO: OXYLIFE

n April this year, Taiwan passed the after their aged family members – the people over 50 affected by mild dementia, threshold to officially become an government has felt the need to develop and the disabled under 49 (who were not I aged society, with more than 14% of a robust long-term care plan. Currently covered in LTC 1.0). the population older than 65. That trend Taiwan is in the second stage of an ambi- Among the projects under LTC 2.0, is set to accelerate over the next decade. tious two-decade program. The first for example, is one called OxyLife By 2026, 21% of the population will be stage, from 2007 to 2016 – referred to that was proposed by Air Liquide and senior citizens, making Taiwan a hyper- as LTC 1.0 – established state-subsidized approved by the Ministry of Health aged society. care for the elderly and disabled, covering and Welfare (MOHW) this April. It is While the government has tried to home nursing, meals, and transportation, designed to enable the aged and disabled boost the fertility rate, those efforts have as well as rehabilitation and respite care suffering from shortness of breath to largely fallen flat. Taiwan’s birth rate services. become more mobile to prevent even of 1.13 is the third-lowest in the world, Launched in November 2016, LTC more serious ailments from develop- down from nearly 1.8 at the turn of the 2.0 adds a number of community-based ing. After being checked by a physi- 21st century. services, including preventive care, cian, the patients are visited at home by Given the growing number of elderly dementia care, and family caregiver a healthcare professional for training on and the low replacement rate – which services. Under the new policy, cover- the proper use of oxygen to restore their means fewer young people to help look age is extended to infirm seniors over 65, energy levels.

要展的計。台灣大的20年計，目前進階。一階是從2007年2016 確保長照可長可久年，為10，期間立由政府助的人與殘障制度，包括家、、交通以及復與務。 2016年11月展開的20加了多以為基照礎的務，包括保、與延能與家醫療等。在新的政策之下，的對及6以上的能人以及0以上的與49以下的能障礙。 20的計包括由工業有公出的「」，部已在今年4月，它可促的年及能高行動能，以年4月，台灣6以上人過更重的。在經醫查之後，醫療專業 14，正過高會的門，人人會家中如正確，他恢今化的未來10年還會加快。了2026年，復。台灣將會有21的人是，成為高會。中保署目前未將圍，政府試高，但這些成不佳。台灣但經部定，可20定 21的為近18，目前已為11，在得助。工業醫療保業處處數。「的關在於是常出動，未來能由於年人持續成，人（這的可能性就。」表示能家中人的年人），政府為有部以TICS月訪問時，政

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Although the National Health Insur- 55% do not use any caregiving resources, the world’s most advanced economies, ance Administration currently does not while 30% employ foreign caregivers including Japan, Sweden, and Holland, include oxygen within its reimburse- and 15% utilize government-funded LTC pay for long-term care this way. A bill ment coverage, individuals found eligible resources. along these lines, backed by the Kuomin- by MOHW can receive subsidies under tang, then the ruling party, made it LTC 2.0 for the oxygen costs. “The core Funding challenges to the legislature in 2015, but never concept is that the more you go out and passed, lacking support from Democratic get some exercise, the less likely you will MOHW estimates that eligible care Progressive Party (DPP) lawmakers. suffer from a disability in the future,” recipients will grow from 511,000 to Instead, the DPP sought to fund the says Herman Chu, head of the healthcare 738,000 under LTC 2.0, which could program through government appropri- division at Air Liquide Far Eastern Ltd. strain state coffers and human capi- ations supported by tax revenue. “Tax- With LTC 2.0, the government aims to tal. From January to May this year, based funding would facilitate the redis- develop “a high-quality, affordable, and 58,000 people applied for long-term care tribution of wealth to lessen the burden universal long-term care service system services, an annual increase of more than on the public” and “would meet the able to enhance the elderly’s quality of 69% compared with the same period a people’s needs more than insurance-based life and reduce the burden on family year ago, the ministry said. funding,” the then DPP vice presidential members caring for them,” MOHW told The ministry forecasts that long-term candidate Chen Chien-jen told the media Taiwan Business TOPICS in an email care costs will reach NT$73.6 billion in December 2015. response to interview questions. (US$2.42 billion) by 2026, 4.5 times the Of the NT$33 billion annually “The government should be recog- NT$16 billion spent in 2016. In addi- budgeted for long-term care, NT$17.8 nized for achieving a long-term care tion to funds drawn from the govern- billion is from the government budget. system in such a short period of time ment’s budget, the long-term care plan is The government expects it can raise – it’s something that many developed supported by recent increases in the gift, another NT$15.2 billion from the recent countries cannot accomplish,” says Kuo inheritance, and tobacco taxes. Legisla- tax increases. Tsuann, president of the Taiwan Associa- tion passed last year raised both the gift Darson Chiu, deputy director of tion of Family Caregivers and a professor and inheritance taxes from 10% to 20%, the economic forecasting center at the at Zhongshan Medical University in Taic- while hiking the price of a pack of ciga- Taiwan Institute of Economic Research hung. “It’s a very comprehensive plan,” rettes by NT$20. (TIER), expresses scepticism about that she says. “There are lots of services avail- The Ma Ying-jeou administration prediction. TIER reckons that the supple- able for people [in need] to use.” (2008-2016) considered funding long- mental tax revenue will come to only Kuo points out that among Taiwan’s term care through an insurance scheme, NT$11.5 billion. “The government is population of 23 million, 760,000 are similar to how Taiwan’s National Health overly optimistic about the potential disabled or live with dementia. Of these, Insurance (NHI) is financed. Some of revenue from tax increases,” he says. As

府望由20的展「構質、、及的最近調高的與、與應。立法院年務，家屬負，品通過將與和從10調高為20，每包質」。調高20。中華國家關會理、中醫大前政府（20082016年政）考慮出助理安「政府在這的時間內立保，以保的方應經。上，應肯定，這是許多已開國家做不的最達的經這種方，包括、瑞和。」「這是個的計，有許多務可。201年，當時為政的國在立法院出（需要的）。」相關法，但進立委的持，未通安出，在台灣的200人當中，有76人過。能，其中有未資，0 進不持保，是望透過政府與外，1政府的資。應計。201年12月，當時的進人告「利方更能達所得再分，可以負。」在每年新台0的經當中，有178 部計，在20政策下，政府來自政府。政府期，透過最近的施，可以的人數從11人為78人，這可能成政府再12。政，人會。部，今年1月月，台灣經院中達對於這有8人務，年期，年為期表示。台灣經院計，這些外的 69。能11。他「政府對於所能來部出2026年將加新台76 的過度。」他明，因為有的政政（242美），是2016年出經新台160 策，如公設計，不可能分足的的4。除了政府的之外，20 。

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a result of expansionary fiscal policies would see deterioration of long-term care incentive to attract more personnel.” such as public construction programs, quality,” he added. To be sure, foreign caregivers hired it’s unlikely that sufficient budget can be At present the shortage of caretakers is by individual families – these caretakers allocated to LTC, he explains. already causing problems. People in need are not part of the government’s program Given the financial challenges posed of care typically have to wait five to ten – may be content with far less than by the current policy, Taiwan ultimately days for someone to come, Wang says. NT$30,000 a month or less. Most come should shift to insurance-based fund- Currently Taiwan retains only about from Southeast Asian countries such as ing for long-term care, argues Wang Tsu- one-third of all long-term care personnel the Philippines, Indonesia, and Vietnam, chi, president of the Taiwan Long-Term trained annually, according to the minis- where median salaries remain well below Care Professional Association. “It’s more try. Another third retire while the remain- Taiwan’s. But at the same time living realistic than relying on tax revenue. But ing third change to a different profession. costs in Taiwan are higher than in their first we need to prepare the facilities and Most caretakers leave their positions home countries. manpower.” because of low salaries and because they MOHW in April decided to address want to work in a more prestigious field. the salary issue by increasing wages of Raising human capital Indeed, the caretaking profession has long-term caregivers to NT$32,000 a not enjoyed a positive image in Taiwan- month or NT$200 on an hourly basis, Observers say that the toughest chal- ese society. “It’s seen as a low-rung job,” though many observers deem that to still lenge facing Taiwan’s LTC 2.0 program Wang says. “Parents tell their kids not to be inadequate. A better reference point is a lack of qualified personnel. There choose it as a career path, so it’s hard to might be the NT$60,000 that bus drivers are currently about 20,000 professional both attract and retain talent.” are paid on average. Their work is tiring Taiwanese caregivers. The problem will The low salaries also discourage and redundant, but they earn more than only worsen as Taiwan grays, said Minis- people from entering the field. The typi- many office workers. ter of Health and Welfare Chen Shih- cal monthly salary for a Taiwanese care- In a January commentary for the chung in an April interview with the taker is just NT$30,000, well below Taipei Times, Cho Chiung-yu, a physi- Chinese-language Liberty Times. “LTC the median Taiwan income of roughly cal therapy professor at National Cheng personnel must double by 2026 to meet NT$41,000. “It’s tiring work and not Kung University, proposed that instead the surge in demand from the aging very forward-looking,” says TIER’s Chiu. of across-the-board salary increases for population,” Chen said. “Failure to do so “There needs to be a stronger economic caregivers, higher pay should be linked

台灣期專業協會理為，由於現行人，前性不高。要更多人加，要政策來務戰，台灣的最應保制。有更好的經因。」他「這更實際，但需要準備設確實，個家的外看（他在政府施與人。」計下），可能足於每月領更的。這些看多數來自、等國家，這些國家資的中位數於台灣，但另一方面，台灣的消準這些國家高。家表示，台灣20計面臨的最大戰，在因應資的問題，部在4月決定將工於資的人。台灣目前有2務作人員的月調高2，每時200，但員。部時中4月在自由時訪問時表許多家為，這個調還不。好的標示，台灣人化，人不足的問題會更準，是公機每個月領6。公機的工作重。他，人在2026年以前加人，工時，但高過多做公的上一，能因應人化需的局。（。了2026年，台灣有20的人將是6以上的成功大理療一月在台人。）他「如不能達這個目標，品質將會北時表評論，議不要調高資，應。」與家屬度高的務員得高的人不足在目前已經成問題。，需要。的人一要等10天，人需能得足。在中「的一個人國的目前台灣每年的務員當中，有大看，高的，因為這個看、容易溝 1留，有1，另外1行。務員通、在療時會問的問題，助人在家做多數是因為資，是因為要在位高的行業理療的動，人的復可以功。」工作。議台灣法的專業制度。的，專業在台灣會的不好。務員正是「」，如通過國家考試，可「它被為階工作，家告不要這為個理，取得機構的資。個行業，因此要留人有。」部在中出，在相關法法之後，資人不進這個行業。台灣務員一的務員可以為「家員」，但尚不月新台，於台灣月的中位數4 個位能來處。部，部有 1。台灣經院的專家達「這工作經的務員在機構負責人的角。

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to greater patient and family-member satisfaction. “A patient of mine has employed a Taiwanese caregiver and is paying a high salary, because the caregiver is willing to learn, is easy to communicate with, asks serious questions during treatment, and helps the patient do physical therapy activities at home, enabling the patient to achieve double the results with half the effort,” Cho wrote. She suggests that Taiwan refer to Japan’s professionalized long-term care system as a model. Japanese care providers are officially known as “care workers,” and if they pass a national exam they A training program in Hualien County to prepare caregivers to work in an indige- nous village. can be promoted to “case managers,” PHOTO: CNA certified to lead a care-service institution. By email, MOHW noted that follow- develop long-term care courses both in a normal and respectable occupation, ing changes to LTC legislation, senior vocational schools and at the univer- emphasizing that it’s good to help people home caregivers can now be promoted sity level. MOHW and the Ministry of who can’t take care of themselves live to “home supervisors,” although it was Education will share responsibility for better lives.” not immediately clear what benefits that this program. Toward that end, the government has status confers. The ministry encourages Hopefully these initiatives will help launched a media campaign to boost the experienced caretakers to take leadership improve the general image of caretak- public’s impression of long-term care roles in long-term care organizations, the ing in Taiwan. “We need to address the as an occupation. The campaign covers email said. prejudice against caretaking,” Chiu says. outdoor billboards, television, and the Further, the government plans to “The government should promote it as social media channels Facebook and Line.

此外，政府計在業與大開設程，這台灣會不是大家能。如做，人家會計將由部與部負責。不是好，不。」望這些能台灣務業的。「但外看家就沒，是達「需要因應對於務業的見。政府的。」應它當成正常高尚的業來加以，強調對有些台灣的家來，除了政府的計和助不能自理的人過好的是一好。」外看，另一個法是自。每年有大1 為達這個目的，政府已經展開，人工作，家的人，對往往是對於務業的。告方包括外看、。他可能做要不高的工作，以便有告與書和 ine等。時間家人，停上。安，從務的角度來考量，多數人不能易工作，但出於，還是工作了。敦促政府多加，這人員知他在政府的家，未來台灣的計應於人計之下能得務。和務員的品質。目前需要助的家大多部在TICS的中，部在201 外看，不是政府計下的務員。年動「家持務據」，107年在台已安，由於政府的務員人手不足，「有0個據，個理、動、持團、外看，是個快速解決的法」。理協談等持性務。但多數外看沒有過相關，不知如安議政府設法計對更為友，人理，助他持的交。做法包括加強協調、高務的可近性，計安，因此外看可能「有利有」。「許多外可能以家與為中。看的國台不流利，他要確保人安，實上，部，部在在計不人處時可能的人安，但持中的角。為了確保在自家近就可得理重要，是對人來。」務，中政府「將與方政府開因制的對於的人，安議外看要他務資」。人中以及人可以動的公。台灣期專業協會理，的角方便性是外看的一個重要考量因，時，度常重要。「如每個便利商能成為中許多台灣家人留在家，是出於化的，有個家員，對於務的度會有大。安「人院在方常見，但在助。」

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Looking ahead, Taiwan’s long-term family member at home. “Sending some- In its email to Taiwan Business care program should focus on boost- one to an institution for the elderly, TOPICS, MOHW said that in 2015 it ing the quality of life for both patients which is common in the West, is not established a support program for family and caretakers, observers say. At present, widely acceptable in Taiwanese society,” caregivers, which this year was expanded most families in need of assistance opt Kuo says. “If you do that, other people to cover 30 locations across Taiwan. The for a foreign caregiver rather than some- will say you are not a good son or daugh- program offers a wide variety of services, one available through the government’s ter – that you’re not filial.” including support groups that care- LTC plan. Given the shortage of govern- “But bringing a foreign caretaker into givers can join, mental-health support ment-provided caretakers, “It’s easier to the home is fine – it’s contracted filial from therapists, assistance with work on hire a foreign worker – it’s a quick solu- piety,” she adds. specific cases, and activities that help to tion,” says Kuo. relieve stress. Yet most foreign caregivers are not The DIY option Kuo suggests that the government seek trained to emotionally engage with to make its LTC plan more user-friendly their patients or help them maintain For some Taiwanese the alterna- through better coordination, more easily healthy social lives. In that sense, hiring a tive to either using the government’s accessed advisory services, and efforts foreign caretaker can be “a double-edged LTC plan or hiring a foreign caretaker to make its programs more family- and sword,” she notes. “Foreign caretakers is to do the job themselves. Every year, community-centered. – many who are not fluent in Chinese or about 130,000 people quit their jobs to In fact, MOHW says it is working to Taiwanese – are expected to keep their take care of an ailing family member, increase the community focus of its long- patients safe, to keep them out of physi- usually a parent. They may opt to take term care program. To ensure that people cal danger that might occur if they were a less demanding job that allows them can access long-term care services near left on their own. But emotional health is to concurrently handle their caretaking their homes, the central government will very important to maintain too, especially responsibilities, or they may not work “work with local governments to create for the elderly.” at all. services tailored for local conditions,” the For patients who are physically able, Most people cannot easily afford that ministry said. Kuo recommends that foreign caretak- change from either a financial or career Wang of the Taiwan Long-Term Care ers take them to senior centers and public standpoint, but some do it anyway out of Professional Association considers the parks with exercise activities for seniors. a sense of filial duty, Kuo says. She urges community aspect to be paramount. “If While convenience is an important the government to do more to inform every convenience store could serve as a factor in the decision to hire a foreign these caregivers about the services avail- community base and had a home helper, caretaker, many Taiwanese families feel able to them through the government’s it would be very helpful for adoption of cultural pressure to take care of an ill LTC plan. long-term care services,” she says.

Foreign Caregivers Fill the Gap

More than 250,000 foreign caregivers are employed in Taiwan, mostly from Indonesia, the Philippines, and Vietnam. PHOTO: CNA

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he rise in the number of elderly in Taiwan is often broadly couched T as a demographic and economic challenge. But for the millions of families struggling to care for frail and disabled family members, the struggle is all too personal. Confucian cultural values of “filial piety” forbid the placement of elders in retirement homes or assisted- living facilities, which in any case are often financially out of reach. State-sponsored nursing homes are last resorts for the desperate. Yet keeping a disabled elder at home is a burden for most families, with many either stressed by a lack of financial resources with which to care for the aging relative, or the lack of time, or more often both. The passage of the Long-term Care Act 2.0 has expanded the range of services available for such families, Foreign caregiver groups demonstrate in front of the Ministry of Labor demanding a including community care centers and full 24-hour day off each week. subsidized home healthcare. PHOTO: CNA The Ministry of Health and Welfare (MOHW) provides subsidies of NT$180 from Indonesia (193,187), with smaller quently, fewer than 20,000 of the foreign per hour for up to 25 hours per month numbers from the Philippines (31,600) caregivers were directly recruited. for the elderly (and other groups, includ- and Vietnam (28,392). The Taiwan International Work- ing the mentally disabled and disadvan- The salary for these caregivers, who ers Association (TIWA) advocates doing taged aboriginals) with mild disability, often find themselves on duty around the away with profit-focused brokering of 50 hours for those with moderate disabil- clock, is set at NT$17,000 per month. workers in favor of a government-to- ity, and 90 hours for severe disability. The This salary falls far below the mini- government system of direct hiring of range of disability is assessed by profes- mum wage of NT$21,000 per month foreign caregivers, or at least simplifying sional social workers dispatched by the for Taiwanese for a 40-hour workweek, the process to enable Taiwanese house- ministry at the request of the family. but is in fact a significant raise over the holds and foreign workers to connect Services provided included basic physical NT$15,840 provided until 2015, when more easily. care such as bathing, toileting, dressing, Indonesia threatened to bar its workers “If they can simplify the process, etc., as well as helping elders visit medical from Taiwan over the low salaries. that will be a big improvement on the facilities and do shopping. While these salaries seem very low current system,” says a TIWA represen- These services often fall far short of by Taiwanese standards, they are often tative, Wu Jing-ru. She notes that white- the actual needs, however. As many as significantly more than these workers collar migrants do not go through similar 98% of the elderly are afflicted by two can make in their native countries. restrictions. or more chronic conditions, and stud- More onerous are high placement Migrant workers often also pay ies in Japan indicate that fewer than 10% fees that many are forced to pay to labor a “service” fee to a local agent of of males pass away without a life-chang- brokers in their own countries, often NT$1,800 per month in the first year, ing disability; for females, virtually 100% the equivalent of NT$60,000-$120,000. NT$1,700/month in the second year, and suffer from end-of-life disability before Such fees are in fact illegal according to NT$1,500/month in the third. Wu says death. Taiwanese law, but as these brokers are that few migrant workers ever speak with What is required is often 24-hour located outside of Taiwan, Taiwan has their local agent and have no idea why care, but for local caregivers that is little power to control it. they are paying such a fee. prohibitively expensive. Filling the gap The reason for the high fees is that According to TIWA, after payment are foreign caregivers – Taiwan’s angels foreign labor is tightly restricted in of fees the typical migrant caregiver in of mercy that work for far below the Taiwan. While it’s possible for workers in Taiwan earns less than NT$10,000 per minimum wage, often isolated from the Indonesia or elsewhere to apply directly month in the first year of service. public in tedious and occasionally hostile to Taiwan, or for families in Taiwan to Current law requires that foreign living environments. recruit directly from one of these South- caregivers be given at least one day off According to the National Immigra- east Asian countries, the red tape involved per week, and that overtime be paid tion Agency, Taiwan had 253,679 foreign in the process is so entangling that few if they need to work on this day. But caregivers as of August this year, mostly are actually able to accomplish it. Conse- these requirements are often ignored by

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employers. Nearly 70% of foreign care- While TIWA calls for better pay and from these Southeast Asian countries givers have less than one day off per working conditions for foreign caregiv- are eager to work in Taiwan. Condi- month (many in fact have no more than ers, it is also sympathetic to the local tions in other markets such as Singapore one day off per year!). households for which NT$17,000 plus and Hong Kong reportedly are often less Most foreign caregivers are only labor and health insurance – often bring- favorable than in Taiwan. minimally trained in their jobs and are ing the monthly total to NT$22,000 – is Taiwanese are now more accepting of often at the mercy of their employ- a considerable burden. these workers, with lower incidence of ers. Although foreign caregivers are no It urges policy changes to allow abuse and hostility on the job. And the longer totally restricted from chang- greater flexibility in work contracts and caregivers are inclined to look on their ing employees within their three- to permit families employing foreign care- employment in Taiwan as an opportu- year contract, they must wait until the givers to also access subsidized local care- nity to be grateful for. “They often think employer has successfully recruited givers during the daytime to ease the ‘I will be the lucky one, I will be the another caregiver, a process that typi- burden on the single worker. successful one,’” says Wu of TIWA. cally takes months, effectively limiting Despite the downsides to accepting their choice of employment. such employment, many young women — By Timothy Ferry

Retirement Homes Struggle to Attract Occupants

Lack of demand stymies a sector that would seemingly be ripe for development in rapidly aging Taiwan.

he Chang Gung Health and Cultural Village retirement Costs, meanwhile, are surprisingly low, with many residents facility has the feel of a college campus. Set amid the paying around NT$35,000 per month, including rent, meal T wooded hills of Taoyuan County, the sprawling complex plans, and utilities. has numerous sports and leisure facilities, dining halls and Despite these strong attributes, the 2,000-unit facility, affil- restaurants, convenience stores, and activities centers. Fit, active iated with Chang Gung Memorial Hospital, itself associated seniors greet visitors with warm smiles and strong handshakes, with the Formosa Plastics Group, is only half full. Several of the and many of the village’s outdoor recreational offerings are open structures originally conceived for the site remain unbuilt – and to the public to enjoy. are unlikely to be constructed. The original planned capacity of 3,800 units has been shelved for now. The Ruen Fu New Life retirement village, located close to downtown Tamsui, is filled to capacity, but with only 300 rooms is a much smaller complex. And despite having a waiting list, the facility – an investment of the Ruentex Group of Samuel Lin – has no plans for expansion. Unlike other advanced countries that are likewise seeing surging numbers of elderly, Taiwan is not experiencing a recip- rocal rise in senior housing. According to figures from the Ministry of Health and Welfare, as of 2016 there were slightly more than 61,000 living units in Taiwan for seniors, but only 47,000 were occupied – an occupancy rate of 77%. Most experts agree that cultural notions of filial piety tend to deter seniors and their families from considering retirement homes as an option. “In Chinese culture, even today, it is generally not considered respectful to send elderly relatives to retire- Chang Gung retirement village offers homey, comfortable ment homes or other places where they may feel abandoned,” apartments in a campus environment. PHOTO: TIMOTHY FERRY says Chang Tzu-ching, chairman of Ruen Fu Newlife Corp.

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As a result Ruen Fu’s plans initially met with a great deal Many of the seniors who have taken up residence in retire- of public skepticism when it opened in 1996, says Chang, “but ment villages are without close family members in Taiwan, and now a lot of retirees realize that they can get a better quality of Chang Gung reports that up to 40% of its residents actually life here.” lived abroad for most of their lives, most in the United States, Still, “there is not really a large demand for this kind of hous- before returning to the far cheaper environs of Taiwan, with its ing,” says Kevin S. Yeh, Chang Gung’s head of marketing. low-cost medical system and cheaper care. Ruen Fu’s chairman notes that the lack of affordable land and human resources are also major obstacles for expansion of the retirement-home sector. “We do not plan to expand our capacity at this time, until we can secure the right locations and the right staff,” the company noted in written correspondence. Further, unlike the United States where elder care is big business, rates in Taiwan are capped by government regulators. Both Ruen Fu and Chang Gung note that despite their businesses being run as for-profit entities, neither has ever turned a profit and they are both supported by the respective industrial conglomerates that founded them. Nevertheless, those in the industry are guardedly optimistic about the future. “People are getting old and need the care,” says Chang Gung’s Yeh. “Since family members don’t have the ability or skill to care for them, in the future there will be more demand for many diverse systems of care for the elderly.” Ruen Fu's Chairman Chang enjoys a meal at the retirement home he oversees. PHOTO: TIMOTHY FERRY — By Timothy Ferry

Enhancing Elder Care through Technology

Lack of demand stymies a sector that would seem be ripe for development in aging Taiwan.

he Apple Watch was recently monitoring and care, yet they also lack Chang noted in written correspon- cleared by the U.S. Food and mobility, making direct visits with health- dence that many age-dependent diseases, T Drug Administration (FDA) as a care providers difficult. such as dementia, stroke, osteoarthritis, medical device, a landmark for a wear- According to Chang Tsz-yin, divi- cancers, osteoporosis and fractures, and able device aimed at consumers. Able to sion director at the Biomedical Technol- bedsores, “result in physical and mental monitor heart rates and perform elec- ogy and Device Research Lab at Taiwan’s decline, thus a continuous supervision trocardiograms (EKG), the Apple Watch leading private/public research center, and intensive contact with health and is the latest example of advances in the the Industrial Technology Research Insti- social care centers for the elderly is highly Internet of Things (IoT), Artificial Intel- tute (ITRI), as many as 98% of the needed.” ligence (AI), and mobile device technol- elderly have at least two concurrent Technological advances in communi- ogies that are transforming care for both chronic diseases, and the prevalence of cation technology are making it possi- the elderly and the not so old. elderly with multi-morbidity is expected ble to provide “telehealth,” helping the Elderly people often have multiple to increase, leading to functional decline, elderly to connect to healthcare provid- health conditions that require intensive disability, and poor quality of life. ers remotely for medication supervision

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and chronic-disease management. Those collection that will lead to deep changes In addition, machine learning is lead- who don’t drive or have difficulty with in how data is measured and analyzed – ing to the development of better treatment mobility are thus freed from onerous and to advances in health care. of hearing impairment. Unlike traditional visits to the doctor. At the same time, the For example, risks for hypertension hearing aids that simply amplify sound, more frequent contact with the health- and cardiovascular disease are assessed including background noises, this new care provider raises “the chances that the through multiple blood pressure read- technology employs an algorithm that can patient will comply with the provider’s ings throughout the day, resulting in an distinguish the voice of the speaker from recommendations,” Chang says. Tele- average blood pressure reading. Work- background noise. health also decreases disparities in access ing with technology firm Acer Inc., his to healthcare between urban and rural research team has tracked 200 patients Remaining challenges areas. over the years using constant mobile Mobile Health (mHealth) solutions monitoring of blood pressure. The results Despite the promise, there is no assur- deploy mobile devices such as smart- have enabled development of a far more ance that the new technologies can reach phones as well as apps and services, precise assessment of the risks of cardio- their potential in helping with senior opening up new opportunities for vascular disease, allowing the team to care. First, the elderly are less inclined communicating with patients and moni- create a risk profile of each individual to accept new technologies, which stud- toring their condition. Chang predicts patient, rather than relying on a single ies have shown can actually create anxi- that “the smart phone will become the standard for high blood pressure. ety. In addition, the difficulties that preferred solution for collecting and Dr. Chen forecasts that the quanti- older people suffer – including cognitive analyzing health and lifestyle data, and ties of data that can be harvested through impairment, vision and hearing loss, and for providing care support.” In fact, the use of mobile devices have the poten- motor function issues – can all hinder advances in body-sensor networks and tial to greatly enhance research into elders in utilizing such technologies. AI/IoT devices bring the future prospect disease and treatment. “In the past we Also, ITRI’s Chang notes that the that remote monitoring could include had to frame our studies across decades,” elderly “tend to have a strong need connected implanted devices for monitor- he says. “With better devices and better to establish a direct face-to-face rela- ing vital signs. algorithms, we can shorten the time- tionship with the doctor,” preferring Dr. Chen Liang-kung, head of geriat- frame, and will probably need only three “personal contact with health profession- rics at the Taipei Veterans General Hospi- or four years to reach a conclusion that als, which means that telehealth services tal, says that mHealth monitoring devices we might have needed 40 years to reach performed from a distance are often not are spearheading a revolution in data in the past.” perceived as relevant to them.” Chang further notes that removing the direct personal contact with the doctor reduces the patient’s overall level of social interaction. The elderly might also be concerned about the confidentiality of virtual consultations. Remote monitoring of the elderly in their own homes raises ethical issues over privacy, while the reliability of remote monitoring devices has also been questioned. Chang notes that despite the evidence that technology can have a strong positive impact on the health of the elderly, thus far “remote monitoring failed to reduce hospital admissions and emergency department visits.” With 483 hospitals and over 20,000 clinics for a population of about 23 million, Taiwan already has one of the world’s most extensive and dense national healthcare systems, making it “relatively easy for people to access high quality and low cost medical care,” Chang wrote. He added that “in rural The Ministry of Health and Welfare has deployed 970 community remote health sta- areas, where telehealth is needed the tions throughout Taiwan to help the elderly monitor their health. most by the poorest of the poor, it is least PHOTO: CNA likely to be provided because of inade-

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quate infrastructure and high connectiv- in the development and manufacture of further strengthen their cross-sector ity costs.” a number of types of medical devices, partnerships by establishing an ecosys- Despite the challenges, the increased including digital blood pressure monitors, tem with innovative business models to use of technology in the healthcare electric wheelchairs and scooters, and capture the opportunities and gain prof- system is expected to offer great poten- electronic thermometers. its,” said Chang. tial for Taiwan’s IT sector. Taiwanese “Based on these advantages and capa- companies are already at the forefront bilities, Taiwan’s technology firms may — By Timothy Ferry

Promoting the Silver Economy

aiwan is on track to become a “super-aged” society with 20% T of the population over the age of 65 by 2025. This process will have an enormous impact throughout the economy, ranging from healthcare to robotics to housing and the food industry. The discussion of the aging population often centers on the drain that senior citizens will likely have on the society. Already approximately 30% of Taiwan’s total National Health Insurance (NHI) expenditures go toward care for diseases common among the elderly, and this share will only increase as the number of elderly rises. NHI expenditures have increased 4.7% annually on average since its establishment in 1995, with the aging population and increasing prevalence The Silver Economy offers great potential to develop products aimed at meeting the of chronic disease as primary factors, needs of the elderly, such as this walk-in bathtub. according to NHI data. PHOTO: CNA The government has responded by expanding the social safety web through omy as “the economic opportunities aris- good reasons for doing so. the development of Long-term Care ing from the public and consumer expen- “Long-term care is focused on elderly, 2.0, a comprehensive care system aimed diture related to population ageing and disabled, or disadvantaged people, and at encouraging healthy aging. Yet this the specific needs of the population over in Confucian culture you must look after system’s budget is likewise strained and 50.” In 2015, Merrill Lynch estimated them, but it’s considered unethical to debate continues in the legislature over the value of the global Silver Economy at make a profit off of them,” he observes. the best ways to fund the system. US$7 trillion per year – which if it were “But if you look at the aging rather But viewing the aging population only a country would make it the third largest than the aged – those in their forties and as a burden overlooks the market poten- economy in the world – while the Euro- fifties – they are pursuing a better qual- tial this population offers for products pean Commission forecasts that private ity of life for their future. They are look- and services that can stimulate economic spending power in the global Silver Econ- ing at their parents and hoping to have development and reduce the burden of an omy will rise to US$15 trillion by 2020. a better future than them, so that is a aging population on the society, stresses Dr. Chen is a strong believer that market which industry can serve. We Dr. Chen Liang-kung, head of geriat- the scope of the Silver Economy should should promote economic development rics at Taipei Veterans General Hospital. be expanded to include not only those and product development that targets the “The aging population is a crisis but also already elderly, but also younger whole aging process.” an opportunity” in what is being called members of society. Those in their forties As industries likely to benefit from the the “Silver Economy,” he notes. and fifties might be surprised to find increase in elderly consumers, the Euro- In a background paper the European themselves included in the Silver Econ- pean Commission cites cosmetics and Commission defined the Silver Econ- omy, but Dr. Chen explains that there are fashion, tourism, smart homes, service

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robots, health and wellness (includ- encourage positive social interactions. solutions than the medical field, which is ing medical devices, pharmaceuticals, Strong social connections have long been generally organ-specialized and focused and “telehealth”), safety, culture, educa- regarded as vital for healthy aging, and on providing acute care for specific tion and skills, entertainment, personal a recent study published by the Mayo illnesses. Equally important, fostering and autonomous transport, banking, and Clinic Proceedings found that sports the Silver Economy can provide busi- financial services. involving a partner were more beneficial ness opportunities and employment for Dr. Chen is working with a loose to health than activity engaged in alone. younger members of society. consortium of Taiwanese technology For instance, regular tennis playing added Dr. Chen sees the process as bringing companies headed by Stan Shih, the some 9.7 years to a person’s life, far additional social benefits. For business retired founder of Acer Inc., to create surpassing equally rigorous but individ- to develop products and services for the an array of products and services aimed ual activities such as running, which only elderly, he notes, “the younger generation at encouraging exercise, cognition, added 3.2 years. will need to talk to those older people and healthy social interaction. Video “For both mental and physical well- in order to learn how they feel and what game makers, for example, are produc- being and longevity, we’re understanding their needs are, and that facilitates inter- ing games targeted at middle-aged play- that our social connections are probably generational communication.” ers that incorporate Augmented Real- the single-most important feature of living “It’s something that is profit-driven ity (AR) components to both sharpen the a long, healthy, happy life,” said study and career-driven thing,” he says. “It will mind and encourage players to exercise. co-author Dr. James O’Keefe, a cardiol- happen organically, not as a matter of Some of these games include a “silent ogist at Saint Luke’s Mid America Heart government policy, but it’s something that assessment” function that track how the Institute, quoted in Time Magazine. can change the whole society.” gamers are improving in terms of cogni- To meet the needs of the aging, Dr. tion and activity over time. Chen suggests, business and technology — By Timothy Ferry These games are also designed to may be able to provide more relevant

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10_CoverStory.indd 26 2018/10/5 上午10:35 BACKGROUNDER

TAIWAN FOOD WASTE – RIGHT RESOURCE, WRONG APPROACH

Food waste carries a heavy social, environmental, and financial cost, but with the right technology, it can become a stable, low-cost, high-return source of electricity.

BY TIM HEBERLEIN

aiwan generates an estimated collection of home kitchen waste – less plate scrapings were burned at a tax- 16.5 million tons of food waste than 19% of the 3 million metric tons payer cost of almost NT$6.1 billion T a year. That’s enough to ﬁll 182 of the food waste reported by the Envi- (US$200 million) and a very high envi- Olympic-size swimming pools every day ronmental Protection Administration ronmental price. all year, year-in and year-out. For most (EPA) was recycled as compost and pig Also, it is hard to say how or where people, it’s out-of-sight, out-of-mind – feed. That’s down 40% from the peak the many private contractors get rid at worst, someone else’s problem. in 2013. of the much greater volume of school, In reality, food waste costs Taiwan The remaining 2.45-plus tons of hotel, restaurant, night market, super- taxpayers billions of dollars a year. It unwanted produce, past sell-by date market, convenience store, and wet is a significant source of air and water processed food, uneaten buffet and market food waste they are paid to pollution and Taiwan’s already over- sized greenhouse gas emissions. Soil contamination from food waste reduces TAIWAN FOOD WASTE RECYCLING our limited farmland every year. But it doesn’t have to be that way. 2.96 2.84 With the right technology, converting 2.89 2.84 2.92 3.00 2.57 2.77 2.83 food waste to energy epitomizes the cir- 2.30 cular economy. More to the point, it could provide Taiwan much more elec- 1.61 2.18 2.07 2.15 2.00 1.78 1.98 2.31 2.26 2.45 tricity than it now gets from nuclear power…and provide a practical, low- cost / high-return incentive for inbound foreign investment and the retention of local manufacturing. Taiwan truly is a global leader in 0.81 0.83 0.79 0.69 0.72 0.77 0.72 solid waste recycling. Only Korea and 0.61 0.56 0.55 30.0% 24.9% 27.1% 27.4% 29.4% 30.9% 25.9% 20.9% 20.3% 18.4% Sweden do it better. However, when it 2011 comes to handling food waste, Taiwan 2008 2009 2010 2012 2013 2014 2015 2016 2017 punches well below its weight class. In 2017 – more than a dozen years Re c y c l e d In c i n e r a t e d Un i t : M i l l i o n M e t r i c To n s after government mandated the separate SOURCE: TAIWAN EPA

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haul away. This process eliminates harmful demanded by global investors and stra- Arguably, much of that food never methane and run-off now released tegic partners central to Taiwan’s tech should have been thrown away in the from compost and landfill sites. Like- economy like Apple, Microsoft, and first place. But old habits die hard. wise, it avoids the toxic airborne Google. It also can play a role in pro- Bottom-line: Taiwan’s current approach emissions, bottom ash, and energy viding energy security for local tech to food waste disposal is expensive, wastage from incineration. It also helps pillars like Taiwan Semiconductor inefficient, and inadequate to process reduce Taiwan taxpayer-funded govern- Manufacturing Co. (TSMC), which the huge daily volume generated across ment waste disposal subsidies, illegal otherwise might need to move produc- the entire length of the food chain from dumping, and the island’s over-sized tion offshore. plow to plate. carbon footprint. To its credit, Taiwan has plans for There is a better way. Food waste is “Food waste to electricity is ideal anaerobic biological treatment centers a practical, low-cost/high-return source for Taiwan to replace nuclear power,” for food waste in Taipei, Taoyuan, and of truly renewable energy – a modern O’Keefe added. “Why burn more coal Taichung. However, the proposed scale consumer society “co-product,” not or sacrifice farmland for solar when is small – only 200,750 tons a year, less a “by-product” – when you apply the a clean, low-cost alternative not only than 7% of the food waste the EPA right technology: namely state-of-the- is available locally but now is being collected in 2017. Notably, the target art anaerobic fermentation. thrown away?” electricity output from those projects is Food waste to electricity using With the right anaerobic digestion far less than more advanced systems can anaerobic biological treatment already technology, Taiwan’s food waste could generate, opening the door to inferior is commonplace in Europe, Australia, generate an estimated 33 Gigawatt technology and poor return on taxpayer Canada, the United States, and Korea. hours of electricity a year – over 1.2% investment. David O’Keefe, chief scientist for U.S. of Taiwan’s total electricity output in waste technology leader PurposeEn- 2016. That’s over 15% of the elec- The right technology ergy™ described the upside for Taiwan. tricity we now get from nuclear power. “Anaerobic conversion of food waste The cost per kilowatt hour is lower Energy from garbage has been to energy and organic fertilizer turns than wind, and it’s cheaper to install around for centuries, as simple as waste to wealth, the circular economy than both wind and solar. The payback sticking a pipe in buried waste and col- at its best,” he noted. “There always period is as short as 3-6 years. lecting the raw biogas. Today’s high will be food waste. Rather than burning There also are strategic competi- output anaerobic digestion systems are or burying it or for slopping hogs, we tiveness implications for the Taiwan far more efﬁcient, combining advanced can best use it to cleanly and efﬁciently economy. Food waste to electricity microbiology with sophisticated chem- power homes, offices, and factories as and thermal power deliver the large- ical and mechanical engineering. well as reinvigorate farm land.” scale, sustainable green energy supply In anaerobic digestion, bacteria in an oxygen-free tank digest organic waste and convert it to biogas, water, and organic solids. A generator converts the biogas to electricity and thermal energy. The leftover solids are used for compost Electricity and organic fertilizer; the water can be reclaimed for industry. Heat Anaerobic digestion of organic Organics Engines waste was introduced to Taiwan in the 1990s, but has yet to gain market trac- Agricultural tion. Industry experts agree that lack of by-products popularity is mainly an issue of having Biogas Biogas chosen the wrong digestion technology puri cation Food & agricultural for the job, resulting in unappealing processing returns on investment for users. by-products For example, land-intensive, “low- Liquids & solids Anaerobic rate” systems common on large EU digester Catering and U.S. hog farms are designed more outlets for converting manure to liquid fertil- Organics fertilizer Organics Dewatering izer for use on those farms’ adjoining station corn and soybean fields, not for high- efficiency electricity generation. Those farms also rely on expensive mecha- Organics fertilizer nized manure collection to preserve the biogas potential. These basic system-

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fertilizer

biogas farm

fertilizer biogas conditioning

livestock macerator bioreactor

thermal energy home/retail food & factory waste

design assumptions simply do not align moving mechanical parts in the biore- eign buyers and investors increasingly with Taiwan hog farming practices. actor itself that require regular service demand renewable energy-powered Traditional “high rate” bioreactors shutdowns. supply chains, lest they take their busi- found at food and beverage factories That’s where U.S. innovators outper- ness elsewhere. cannot digest undissolved solid waste. form the traditional European systems Although the government’s renew- Since solids typically contain much and can turn the problem of Taiwan able energy policy rhetoric is inspiring, more biogas potential than liquid waste, food waste into a productive asset. Pur- actual progress in upgrading the energy the resulting electricity output is dis- poseEnergy™ of Boston is a prime sector and growing the renewable proportionately lower. To complicate example. The company’s revolutionary power supply to replace nuclear energy matters, the factory must engineer a TriBrid-Bioreactor™ has the world’s has been slow. Meanwhile, Taiwan tax- second process to separate and dispose highest biogas conversion efficiency, payers pay billions of dollars a year for of the solid waste. Taiwan manufac- and thus generates more energy. They the privilege of food waste poisoning turers who have chosen these systems are extremely robust, very low mainte- their air, water, and farmland. use them only for wastewater treat- nance, and occupy very little land. Food waste to energy presents a gen- ment, not energy production. As a result, the company is turning erational opportunity for Taiwan – an Additionally, these systems fre- highly polluting food, farm and fac- opportunity to both meet the challenge quently require high-volume use of tory waste into electricity, compost, of reducing the heavy social, ecolog- expensive chemicals, which increases and fertilizer, and reclaiming water ical, and ﬁnancial burden of food waste operating costs. Likewise, they need from Vermont to Hawaii. Planning for as well as the fast-track rollout of a the chemical composition of the feed- a project in Taiwan to generate power truly low-cost, high-return, high-volume stock to remain stable, impossible when from raw vegetable waste already is renewable energy source. It’s time to dealing with widely variable types of well advanced. put the right resource to work in the food waste. The time is long past when Taiwan right place and tap the enduring green For industrial-scale processing of could afford the luxury of letting nature power of food waste with superior U.S. food waste, the system must be able slowly take its course with food waste technology. to process both liquid and solid waste, and ignore the strategic role it can play as well as withstand “shock loading” in national energy security. — Taipei-based Tim Heberlein surges from more volatile waste like res- Today, Taiwan faces an energy is the founder and president of TS taurant grease, dairy products, yeast, crunch, chronic freshwater shortages, Edgewater Consultants, a strategic and sugary drinks. It also should need and worsening air pollution. Local brand and business marketing little, if any, pretreatment or use of manufacturers need energy supply consultancy specializing in smart pH stabilizing chemicals and have no security or will move offshore. For- cities technologies.

TAIWAN BUSINESS TOPICS • OCTOBER 2018 29

food waste.indd 29 2018/10/5 上午10:09 ADVERTORIAL

Yang to share his clinical experience using the monitoring devices at a surgi- cal congress in Taipei. One of the attendees, Dr. Chiao Hao-Yu of the Division of Plastic and Reconstructive Surgery at Taipei’s Tri-Service General Hospital, soon encountered the need to make use of the technology when another disaster struck on June 27, 2015. A dust explosion at the Formosa Fun Coast water park set off by flam- mable color powder had caused at least 15 deaths and hundreds of injuries. Using hemodynamic monitors, Dr. Chiao and his Tri-Service team successfully treated 23 major burn patients in the intensive care units. The experience and protocol were 華公團隊 published earlier this year by Dr. Chiao Hao-Yu help surgeons and Edwards’ clinical education specialists throughout the Asia Pacific region provide AT EDWARDS LIFESCIENCES, advanced care in critical burn cases. The company also prepared a profes- THE PATIENT COMES FIRST sional video about the Kaohsiung case, not for commercial use in promoting its products but rather to emphasize its series of huge explosions set gency, with lives in the balance. He patient-centric culture. off by chemical pipeline leaks contacted the Edwards Lifesciences Aripped through the southern office in Taipei. Taiwan city of Kaohsiung on the evening “Our corporate culture is that of July 31, 2014, killing 25 people and patients come first,” says Peter Chu, the injured more than 300. Among the Edwards country manager for Taiwan scores of injured were patients in the and Hong Kong. Without hesitation, Burn Center at Kaohsiung Chang Gung the company immediately dispatched Memorial Hospital, some with third- three units of its innovative monitor- degree burns over 60% of their bodies. ing equipment to Kaohsiung. One of The facility, which normally treats only its sales representatives volunteered to two or three intensive-care patients remain in the south to train doctors at

at a time, was equipped with just a Kaohsiung Chang Gung in use of the 醫院醫 single clinical platform for accurately monitors. monitoring a patient’s physiological The innovative devices made all the Citing the Edwards credo – “Help- (hemodynamic) status. difference. “Fluid resuscitation is crit- ing Patients is Our Life’s Work, and Plastic surgeon Johnson Chia-Shen ical for major burn patients to replace life is now” – Peter Chu points to the Yang, MD, FACS, chief of the Burn the water that escaped from blood two incidents in Taiwan as striking Center, and his team faced a dire emer- vessels after burn injuries,” explains Dr. examples of how the company puts its Yang. Under-resuscitation can lead to a philosophy into action. Another exam- shut-down in kidney function or cause ple was Edwards’ co-sponsorship in pulmonary edema, both fatal condi- May last year of the first U.S.-Taiwan tions. The state-of-the-art TPTD (Trans International Patient Day in cooper- Pulmonary Thermodilution) technol- ation with AmCham Taipei and the ogy provided by Edwards on loan for American Institute in Taiwan. The the duration of the emergency ensured company also devotes considerable that the patients received just the right resources to training local surgeons in amount of fluid, keeping them safe while the use of new cardiovascular technol- speeding their recovery and enabling ogy so that Taiwan patients can benefit them to return to normal lives faster. from the latest treatments. 高家醫 Afterwards Edwards invited Dr. Currently celebrating its 60th anni-

30 TAIWAN BUSINESS TOPICS • OCTOBER 2018

Edwards.indd 30 2018/10/5 上午10:10 ADVERTORIAL

versary, the company – originally called Edwards Laboratories – was founded in 1958 by inventor and visionary Miles “Lowell” Edwards. It was later part of American Hospital Supply and then 得2014年7月1間，台灣的高化外的 Baxter International, before being spun 連強大，面目，此外成2人，另有 off as Edwards Lifesciences in 2000. The 00多人。高醫院立即啟動大應機制了 specialty of the Irvine, California-based 大量的，院加中在一時間療多位60面積 company, which is listed on the New 度的重大。中通常一重加， York Stock Exchange, is artificial heart 備一個一臨台，於確的理（動）。 valves and other medical equipment for 高後，高加中家醫和所領的醫療團 fighting cardiovascular disease. Dedicated 隊面臨的，許多人處於交關。他位於台北的台灣 to technological innovation, it annually 華公。 spends a high 16% of revenue on R&D. 華公台灣與經理良表示「公的業 Edwards’ Taiwan office was estab- 化是上。」公不，立即以最快速度將新的設備 lished in 2000. In view of the Taiwan 往高。由一自協助的業務代表留在醫院，以協助確保高 teams’ excellence in implementing the 的醫及醫人員能作這些設備。 corporate credo as well as local market 這些新。家解「對大面積來， development, for the past three years the 復關重要，以後從內往外透的分。」復不足 Taiwan office has been named the top 會功能，會。華公在這 performer among the company’s 100 期間出的設備，最進的經度法技，確保得 branches around the world. 好量的，在持他安的時，能加快速度，能 The Taiwan operation has also been 更快恢復正常。 active in carrying out Corporate Social 後來華公家在台北的一場外醫大會上，分他 Responsibility activities for four consec- 這的臨經。與會的醫院外院醫 utive years in partnership with the 醫不後在另一不中，利高階動技的機 Chung Yi Social Welfare Foundation, 會。201年6月27，上易的，成 which operates a children’s home, offers 1人，另有數人。和團隊利動，成功 adoption services, and provides other 加的2大面積。 services for orphaned and underprivi- 醫院醫今年表動的臨經和程序 leged children. 告，協助華公進行內部與的外醫為 As Taiwan rapidly approaches the 重進的。公還準備一關於高的專業性 status of a super-aged population requir- ，不是於其品的商業，是強調以為中的業化。 ing more attention to healthcare, Edwards 良述華公的「助是的工作， is planning to help more patients and ie i 」，出台灣的前述正是公將理化為行動的 develop talent in this market by invest- 實。另一個是華公年月和台北美國商會、美國 ing more in Taiwan. “We’re eager to 在台協會作，助一美台「國際」動。公還投注可 bring our innovative technologies into 資，持台灣外醫新技的動， the Taiwan market as early as we can,” 能從最新療法中。 says Chu. “We believe Taiwan has a lot 華公目前正立60週年。公華實，由 of talent, but the challenge will be finding 明家見之Mie e ar於198年，後來被美國 people who are just the right fit for the 醫療設備應公，後成為國際公的一部分，2000年分立 Edwards culture in terms of their passion 為華公，在交易所上。華公部位 and dedication in helping patients.” 於加灣，專是人工和其它對的醫療。公於技新，每年將高達16的於進行。台灣華公成立於2000年。由於台灣團隊在業與場展上表現出，過年來被為是公 100個分機構中的表現最。台灣華公和忠基會作，積極業會責的動。忠基會下設有院，務另外基會連續4年，為和其他務。由於台灣快速更注的高會態，華公正計在台灣進行更多投資，以助更多的人與台灣人。良表示「望將公的新技術台灣場。為台灣有許多人，但面臨的戰在於就助的與方面，出正好華業化的忠院人。」

TAIWAN BUSINESS TOPICS • OCTOBER 2018 31

Edwards.indd 31 2018/10/5 上午10:10 INTERVIEW A CONVERSATION WITH DAN SILVER

In recent years, Dan Silver played a central role in the AmCham Taipei leadership. Besides serving as Chairman in 2016, he fulfilled two two-year terms as a member of the Board of Governors (2014-2017) and at different times was a co-chair of two committees, Medical Devices and Public Health.

A graduate of Brandeis University in history and Chinese studies, he earned an M.A. from Harvard in East Asian studies and studied at Peking University in Beijing from 1991 to 1993. Silver was based in Taiwan for nine years, first as country manager for IMS Health and from 2011 as general manager of Abbott Laboratories’ Vascular Divi- sion. This summer he was transferred to Tokyo to become general manager of Abbott Japan’s Structural Heart division. Before his departure he sat down for a chat with TOPICS editor-in-chief Don Shapiro. A condensed and edited version follows below:

What’s impressed you the most Are there ways that Taiwan could do to promote itself. about Taiwan over the time you’ve capitalize on that more than it has? There’s a massive wealth of exper- spent here? On the one hand, it would be good tise and global relationships that exist I’ve lived here since November to make international investors more in that diaspora. If you have X dollars 2009. Before that I had visited a aware of Taiwan’s attributes, but on the to invest in promoting Taiwan, rather number of times when I was living other hand part of Taiwan’s charm is than one of those advertising campaigns in Hong Kong and subsequently, that it doesn’t put a whole lot of stock or another tourism publicity effort, you but I didn’t have any particular in what people expect to see. That’s not might want to find a way to mobilize feeling about the place, despite my its way. It does things that it feels com- that global diaspora and make them speaking Chinese. It was only after fortable with, and it is authentic for champions for Taiwan. Identify what I’d lived here for a while that I began that reason. challenges or aspirations Taiwan has as to understand how special Taiwan There is a tendency among some a country and turn to that group, recog- is. I think the reason is that Taiwan Taiwan officials to think that we need nizing their expertise, and ask: “What doesn’t fit people’s mindset of a major better public relations or global media are your suggestions? Help us figure international center. It doesn’t have relations – that we need to get the things out.” the many flashy building of Singapore word out. But the challenge is that If time and attention are devoted to and Hong Kong, or the same upscale every country in Asia has some similar that group, I think things like devel- shopping. agenda. All of them make themselves oping an Asia Silicon Valley could be What makes Taiwan special is the out to be special and different. You’ve substantially more successful. Ensure people. Until you’ve lived here and seen the ads. In most cases it’s going that there’s an ongoing interaction interacted with Taiwanese people in to go in one ear and out the other, so I between that group and Taiwan. every facet of your life – at work, at don’t think that’s the answer. home, in school, in sports, you name What comes to mind is that unlike What are your thoughts on how it – you really can’t appreciate what Malaysia or Thailand, there is a mas- Taiwan could be an even better location makes Taiwan different. As a visitor sive Taiwan diaspora living and having for those investing here? you’ll have pleasant interactions, but in important roles of different sorts all In terms of working in Taiwan, most cases nothing that’s going to leave around the world. Most of those my experience has been exceptionally lasting impressions. For me the thing people, whether they themselves are good, and that’s because of the people that’s stood out the most from the early from Taiwan or their parents or grand- I work with. In virtually all my interac- days is just how smart, warm-hearted, parents were, feel a strong attachment tions, there’s been a level of optimism and hospitable people here are, as well to the place. Finding a way to tap into and can-do spirit and positivity that is as their open-mindedness and willing- and make use of that very substantial really rare elsewhere. Even when people ness to engage people from anywhere reservoir of good will would probably are facing difficult challenges, the next without bias. be the easiest thing that Taiwan could day they come back in with a smile and

32 TAIWAN BUSINESS TOPICS • OCTOBER 2018

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are happy to be interacting and solving not made on that basis, then the com- problems together. panies that Taiwan is trying to nurture Also, the fact that there’s such a won’t have the knowledge or the data highly educated workforce means that to make their products and their ideas people can instantly understand what successful in global markets. They others are trying to say. And people in won’t ever be able to compete on the Taiwan can be as innovative as in any same playing field as multinationals. place I know, if not more so. It’s a sense of optimism combined with trust that From your experience with makes it possible. It’s a very honest AmCham, what are your impressions place. People try to deal in facts, and regarding the effectiveness of the orga- At his farewell party, Dan Silver receives ultimately that leads to much better, a gift from AmCham President Bill nization and what you’ve gotten out of more practical solutions to problems, Foreman and Public Health Committee co- your participation? and to a better business environment. chair Joyce Lee. It is a fact that the U.S. is by far the The challenge is it’s a comparatively world’s largest economy. The compa- small market, and also a market that acknowledge this reality and then decide nies that come from it tend to bring has its own unique set of complexities if it is ready to make changes in those very competitive practices, oftentimes often imposed by the government. When things that it controls. It cannot control some of the best technology in the the relatively small size is combined population. 23 million is 23 million, and world, and they tend to have a level of with a relatively challenging environ- it’s actually not growing but declining. integrity that has been fostered by the ment, for example in the medical devices But what it can control are practices in system in the United States. industry where I’ve been involved, it the regulatory sphere, especially those AmCham is the voice for that very makes it harder and harder for Taiwan that will make Taiwan an easier, and large and important set of U.S. com- to get resources and attention from I should say a more familiar, place for panies. An American Chamber of parent companies – and so the ability to multinationals to work. Commerce helps raise, as a single voice, truly grow can be very difficult despite There are best-in-class practices the expectations or ideas of this impor- all the good things Taiwan has to offer. that have been established, not just for tant economic group of companies and This could be a misperception, America or Japan but internationally. what they represent, and that’s impor- but it seems to me that officials often Taiwan needs to make a real effort to tant in and of itself. But in Taiwan it believe that if a multinational business study those practices, and then adopt feels even more important because the is making sales and earning revenue in them with enthusiasm. Again, tapping international space and the bilateral Taiwan, then that’s enough. Whether into the Taiwanese diaspora would space in the Taiwan-U.S. relationship the amount is bigger or smaller than help move this along faster. Until that are so restricted. A lot of what we do last year, as long as you’re selling you’re happens you have sort of the worst of between the United States and Taiwan doing well and you should be happy. everything combining in Taiwan: the ends up being in the economic and busi- But so much of business today comes growth rate is not high, the population ness sphere. back to what can you tell your share- is relatively small, and regulations are As a result, as a business community holders, and what they care about is the relatively difficult. we have a disproportionate influence promise for the future, which equates to and an important voice in the relation- growth. If you’re a good-sized business What would you say to people who ship. On that level, what AmCham does in Taiwan but are not growing, you question why an effort should be made in the bilateral relationship is probably aren’t meeting the demands of today’s to make this a better environment for more important here than almost any- multinationals. multinationals? where else that I can imagine. And I And if you aren’t able to show The simplest answer is that these believe it’s vital, whether through pub- growth, and if that growth isn’t substan- best regulatory practices are also impor- lications like TOPICS or the White tial, you will be losing out for resources tant for the local companies that Paper or in person through the Door- to other places. The calculation is: if I Taiwan wants to nurture. They need knock or meetings with senior U.S. invest a dollar extra in Taiwan versus to be competitive in an international officials who come to Taiwan, to make a dollar extra in China or India, what space. In most cases they can’t just clear how much this place matters to us. is my return? And if your return is rel- thrive in Taiwan. It matters to us as individual compa- atively flat growth, why not give that An example in our industry would nies, and it matters to us as industries, dollar to China or Korea? be that reimbursement decisions on and it matters to us as the whole U.S. medical devices or pharmaceuticals business community. Having a way to What conclusions should the author- should be made on the basis of solid express that to so many stakeholders ities should draw from that? clinical data and good analysis of how in the United States and in Taiwan To make Taiwan a place that is that data translates into economic ben- helps to ensure that the relationship moving up the priority chain rather efits for the patients and for the system continues to get the attention and than down, the government needs to in Taiwan overall. If decisions here are resources it deserves.

TAIWAN BUSINESS TOPICS • OCTOBER 2018 33

Interview.indd 33 2018/10/5 上午10:11 TAIWAN BUSINESS

TAIWAN’S OTHER AMCHAMS

TOPICS readers are surely aware of the important role of AmCham Taipei, but may not realize that Taiwan also has two other American chambers.

BY COURTNEY DONOVAN SMITH

ocated in the financial, commer- Besides those involved in shipping, is threefold: to help American and for- cial, and political capital of the trade, and manufacturing, represen- eign business people conduct business L country, AmCham Taipei is the tatives were present from defense more effectively in Taiwan; to provide oldest, largest, and most influential U.S. contractors (Taiwan’s Naval head- increased opportunities for interaction business organization in Taiwan. Since quarters is in Zuoying) and businesses between Chinese and Americans; and to its founding in 1951, its membership related to what was a largescale yacht- utilize AmCham’s international network of top business executives and access to building industry. to promote the relationship between top echelons of government gives the The mission statement prepared at AmCham-Taichung and the people and organization influence felt as far away the founding remains relevant today: governments of Taichung and Taiwan.” as Washington, D.C. “To act as an advocate for American Aside from the then-common usage For residents of central and southern companies with a presence in the Kao- of “Chinese” to refer to Taiwanese, Taiwan, however, the key concerns are hsiung area, to provide them with a this description – like Kaohsiung’s – more local challenges. To deal with such forum to discuss the various issues seen is a faithful description of Taichung local issues, in the early 1990s Amer- as needing improvement for their busi- AmCham today. ican businesspeople in both Taichung nesses, and to create a significant voice From its beginnings until now, and Kaohsiung decided to organize to those issues and their concerns.” AmCham Kaohsiung has stressed its their own independent AmChams. At a meeting attended by both role as a strong advocate for Amer- Although both are undertaking the executive director of AmCham ican business in southern Taiwan. For important roles in their respective com- Taipei and the president of AmCham its part, Taichung AmCham’s greatest munities, these two newer AmChams Kaohsiung, Taichung AmCham strength has been in providing assis- wound up taking quite different paths was launched on January 25, 1994. tance to American and other foreign from each other and from the Taipei Though the published announcement businesspeople, creating opportunities chamber in terms of outlook, identity of the founding boasted about the for interaction and promoting rela- and organizational culture. The cur- city’s rapid rate of growth, it would be tionships across cultures between local rent president of AmCham Kaohsiung some years before then sleepy Taichung citizens and foreigners. is Brian Aiello, while this writer has would overtake Kaohsiung. At the time The Kaohsiung chamber is more spe- the honor of serving as chairman of Taichung was one of the world’s cen- cifically American, while Taichung’s is AmCham Taichung. ters for shoe manufacturing, making it more broadly foreign. Indeed, the Prin- In what was then Taiwan’s second- home to a large number of foreigners ciples section of Taichung AmCham’s largest city, the country’s second from the major footwear companies, Articles of Association refers only to AmCham was founded in Kaohsiung including Nike, Puma, Converse, and “foreigners,” not Americans. on June 1, 1991. At that time the city Adidas. Other foreign businesspeople was the world’s third-busiest con- were there because of the region’s Challenges encountered tainer port. Considerable trade with the bicycle, sporting goods, furniture, hard- United States – then Taiwan’s number- ware, and aerospace industries. Founded in the days of snail mail one trading partner – passed through The public announcement stated that and when fax machines were the height this thriving entrepôt, and there was a “AmCham-Taichung is a fully inde- of high-tech communications in Taiwan, bustling American business presence. pendent organization whose purpose both of the two smaller AmChams

34 TAIWAN BUSINESS TOPICS • OCTOBER 2018

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PHOTO: KHH AMCHAM PHOTO: TAICHUNG AMCHAM

AmCham Kaohsiung President Brian Aiello at a Smart Cities forum organized by the Kaohsiung chamber, left; Taichung AmCham Chairman Courtney Donovan Smith speaks at the Taichung festivities for the U.S. Independence Day, right.

(the Taichung chamber currently has but the loss of major foreign companies what Taichung AmCham should, or 53 member companies, while Kao- (most notably the shoe companies) to should not, realistically be doing.” hsiung’s has 48) have weathered China and the completion of the High In addition, Taichung AmCham was challenges and undergone changes over Speed Rail project led to an exodus of conscious of the need to strike a balance the years, adapting and evolving with expatriate professionals. That depar- in terms of its demands on board mem- the times. ture depressed membership revenue bers’ time. Too little and the organization The two organizations have faced and attendance at events, and impacted withers. Too much and board members many of the same challenges, including the business of local service providers burn out and leave when their term ends, the loss of major sources of member- like restaurants and bars that were also taking institutional knowledge, organiza- ship. “When AmCham Kaohsiung was members. tional experience, and skills with them. ﬁrst established, there were many more Some financial restructuring was Since the late 2000s, Taichung’s boards American businesses in the Kaohsiung required, as well as new initiatives under several chairpersons have explicitly area” and formation of the chamber to attract new members. Fortunately addressed this issue. “created a signiﬁcant value for the com- several trends worked in Taichung Taichung AmCham faced one unique munity,” says Aiello. “As American AmCham’s favor during this period. challenge: the 9/21 earthquake in 1999 companies moved away, membership One was the fading away of the gender that left over 2,400 dead, over 11,000 dropped, and we struggled to exist. divide of the 1990s, when expat men injured, and over 100,000 homeless in We took on a more social character in tended to join AmCham while their central Taiwan, with a high percentage order to attract new members.” wives were involved in other activities in Taichung. In reaction, the early 2000s Following the relocation of sev- and organizations. Another was the rise saw the rise of Taichung AmCham’s eral major American companies from of locally based foreign entrepreneurs, KIDZ charity to raise funds for local Kaohsiung to China several decades and in more recent years the establish- orphanages, with those recently ago, “we decided to open our mem- ment of production facilities in central orphaned by the earthquake particu- bership to Taiwan companies as well,” Taiwan by major companies such as larly in mind. The charity continues to notes Aiello. “This move has given our Corning and Micron. this day. organization a deeper understanding Other challenges encountered and appreciation for the local perspec- would be familiar to many small orga- Making a continuing impact tive, as well as the issues that affect a nizations. Douglas Habecker, an broader spectrum of the community.” original member of Taichung AmCham, Today both organizations are as “Our main goal since 2010 has been chairman in the late 1990s, and a cur- important, or more important, than to raise the bar in terms of AmCham rent board member, notes: “As a they have ever been. Though there is Kaohsiung’s place in the community relatively small organization, Tai- considerable overlap in what they do, in an attempt to regain its significance chung AmCham has at times struggled the two organizations in other respects in southern Taiwan,” he adds. “Most to define what its primary mission operate quite differently. recently, as Taiwan’s energy sector and and focus should be, given its limited One area where they take a strik- the environment have both become crit- resources. As almost all of its human ingly different approach is in working ically important, we have shifted our resources are provided on a volunteer with local government. In recent years, focus to Smart, Clean and Green.” basis, there is always the potential for AmCham Kaohsiung has made a con- In Taichung, the chamber has wel- overreach and exhaustion if it tries to siderable effort in this regard and comed companies and citizens of all fulfill the functions of a larger organi- achieved some noteworthy success. nationalities since the beginning. It has zation. This means that the board of Since 2010, for example, it has pro- always also been a social organization, directors is constantly re-evaluating duced an annual white paper. At first

TAIWAN BUSINESS TOPICS • OCTOBER 2018 35

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the document focused on business con- foreign businesses or organizations to is clear (torrential rain depressed ditions in Kaohsiung only, but the accomplish something innovative. For turnout this year, however). coverage has gradually been expanded example, they recently helped a for- In addition, each year the chamber and now includes Pingtung, Penghu, eign-run charitable organization gain holds several Book Exchanges with Tainan, and Chiayi as well. necessary city government support to bands, artists, and vendors taking part “While we used AmCham Taipei’s host an international synchronized and 100-200 people in attendance. outstanding White Paper as a template swimming competition for both phys- Other unique events include a recent for our own edition, we wanted ours to ically able and physically challenged Fun Run, a family-friendly charitable be complementary and not in competi- swimmers. activity held in a local park. tion,” Aiello explains. “The AmCham AmCham Kaohsiung also stresses While the Book Exchanges and the Taipei White Paper deals heavily with its close relations with the American Fun Run raise money for the KIDZ policy issues, and that is certainly very Institute in Taiwan (AIT) branch in charity, the main fundraiser is an annual important. AmCham Kaohsiung’s white Kaohsiung. “We often work in con- charity Gala held in early December. paper serves to put a southern perspec- cert on a variety of events and topics,” In each of the last few years the fancy tive on the issues and their execution, says Aiello. “One of the key advantages dress event has attracted over 250 since very often the situations in the of this relationship is that while expat guests and raised well over NT$1 mil- north can be significantly different from AIT officers rotate on a regular basis, lion in charitable donations. The charity those in the south. We have been for- AmCham Kaohsiung has been around covers the full-time salary and necessary tunate in receiving great feedback from for decades. We can assist new AIT offi- equipment for a physical therapist at a local and central government officials in cials in getting up to speed, offering local orphanage for physically and men- Taiwan as well as U.S. government and background and understanding into the tally challenged children. business communities.” local nuances that they might not have Taichung also holds two regular At 97 pages, the 2018 white paper, exposure to in their normal day-to-day monthly events: a dinner event and a entitled “Smart, Clean and Green,” activities. As a long-time resident of happy hour. The dinners generally fea- looks at many issues facing southern Kaohsiung and an eight-year member ture a speaker, usually a department Taiwan, but with a particular focus on of AmCham Kaohsiung, serving in my head or higher government official, or sustainable development. It features fifth year as president, I’ve been fortu- someone from the business commu- an in-depth analysis of a wide range nate to enjoy a close relationship with nity. Wine dinners are held twice a year. of topics including smart machinery, AIT over the years.” The happy hours are usually more bois- green energy, water conservation, and Taichung AmCham shines in areas terous and social. Both events normally air quality. that in diplomacy are referred to as draw between 20 and 40 people. Kaohsiung AmCham has also been “soft power” – mainly holding activ- Down south, AmCham Kaohsiung active in the last two years in seeking ities and events and engaging in has not one, but two Gala dinners per collaboration with local governments. charitable activities. Since the 1990s, year. The spring Annual Gala dinner It has secured two memorandums of Taichung AmCham most years has held corresponds to the annual launch of the understanding. “The first was with a large American Independence Day white paper, and a Charity Ball is held Tainan to open access and opportuni- festival (held on the closest weekend in the fall. In total Kaohsiung raises ties in clean energy and infrastructure to July 4) featuring bands and many about NT$1 million a year for chari- projects to American companies,” says vendor booths. The event attracts ties. The Kaohsiung chamber also holds Aiello. “The second was with seven around 1,000 people when the weather up to 10 social mixers annually. southern Taiwan cities and counties for cooperation with U.S. companies in smart technologies.” These efforts Taichung AmCham received official recognition by the U.S. 4F-1, 186 WenXin Rd., Sec. 1, Taichung. Department of Commerce. Tel: (04) 2471-8133, Fax: 2471-5933 Taichung AmCham’s dealings with Contact: Jane Liu local government are more relationship [email protected] driven. City government officials from taichungamcham.com the mayor to major department heads are frequent guest speakers at chamber dinners and join key chamber events. AmCham Kaohsiung Frequently Taichung AmCham serves as 4F, 77 LiWen Rd., Room 112, Zuoying District, consultant or liaison for various govern- Kaohsiung. ment departments on issues relating to Tel: (07) 556-8059, Fax: 974-5589 the Taichung foreign community or in Contact: Emily Y.Y. Chung relations with foreign businesses. [email protected] These relationship networks some- amchamkaohsiung.org times are highly useful in enabling local

36 TAIWAN BUSINESS TOPICS • OCTOBER 2018

other amcham.indd 36 2018/10/5 上午10:11 INDUSTRY F CUS

A Report on the Real Estate Sector

Updates on the Property Market

PHOTO: JULES QUARTLY TAIWAN BUSINESS TOPICS • OCTOBER 2018 37

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TAIWAN’S COMMERCIAL REAL ESTATE MARKET: AN IMPROVING OUTLOOK

BY PING LEE, HEAD OF RESEARCH, CBRE TAIWAN

n August, Taiwan’s Directorate more retailers to open new stores. IN THIS REPORT General of Budget, Accounting & In spite of the U.S. Federal I Statistics revised its GDP growth Reserve’s multiple rate increases in forecast for 2018 upward to 2.69% 2018, Taiwan’s Central Bank kept its due mainly to increasing private benchmark interest rates unchanged, investment. Government invest- with the discount rate standing at ment is also expected to increase this 1.375% since July 2016. It is widely year by 5.06%, with the authori- expected that the bank will keep ties aiming to spend NT$420 billion interest rates stable in the fore- • Taiwan’s Commercial Real Estate Market: (about US$13.8 billion) on infrastruc- seeable future to ensure financial An Improving Outlook p38 ture over the next four years as part stability. Furthermore, the Central of its Forward-looking Infrastructure Bank may continue to hold its policy Development Program. rates steady for a longer period of Under this program, 48% of the time should the domestic economy • Taipei’s Affordable Housing Challenge public spending will be devoted to be affected by the U.S.-China trade p42 public-transportation development dispute. Overall, the persistently projects across Taiwan. New and low interest rates can be expected to extended rapid transit systems in prompt some local enterprises to pur- major cities – including Taoyuan, Tai- chase commercial properties for their • High Hopes for Smart Housing p44 chung, and Kaohsiung – will improve own use. accessibility for residents, enhance the Going forward, the municipal cities’ competitiveness, and provide elections to be held next month are more real-estate development oppor- worth watching closely. Although • House Hunting: Some Personal Experience tunities for investors. the results will not directly impact p47 Private consumption next year is economic activity and real estate forecast to grow 2.47% over 2018 investment, they may indicate on the back of domestic economic whether voters are satisfied with the growth and the stable labor market. performance of the central govern- The unemployment rate fell to 3.8% ment, which could further influence in July 2018, representing the lowest the government’s policy decisions level for the same month in 18 years. over the next few years. The cur- With the monthly minimum wage rent government, inaugurated in about to be raised by 5% in Jan- May 2016, has adopted a cautious uary 2019, Taiwanese consumers are attitude towards cross-Strait rela- likely to be more willing to spend in tions, resulting in a decline in Chinese the coming year, thereby encouraging tourist arrivals.

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Offices: New supply spurs decline to 13.4% by the end of 2018 as a their corporate image and attract talent. demand number of large tenants will move to new Relatively little decentralization offices they have already committed to. activity is expected in the near term due The Taipei Grade A office market Grade A office rents in Taipei are forecast to the tight supply of quality office space recorded positive net absorption of to grow slightly by 0.4% y-o-y in the next in non-core areas in Taipei City. While 10,217 ping (33,775 square meters) two quarters on the back of stable take-up a number of multinational companies in during the first half of 2018 thanks to levels. Landlords of Grade A office build- the financial services and technology sec- strong relocation demand from both local ings in the Xinyi Planned Area will likely tors have shown strong interest in moving and foreign companies. Average Grade A become less flexible on achievable rents to decentralized areas for cost savings, office vacancy, on the other hand, rose to and incentives, while a number of multi- the low vacancy rates in these areas will 14.7% in Q2 2018 as a result of two new national companies will continue to seek likely hinder their movement. office buildings released to the market office space in prime locations to enhance CBRE Research expects that co- over the period. Grade A office rents in Taipei rose OFFICE SPACE modestly by 1.6% year-on-year in the first half of 2018, largely driven by loca- Figure 1: New Supply, Net Absorption, and Vacancy tions in the Xinyi Planned Area, which typically command higher rents. As 200 15% office space in the Xinyi Planned Area continues to be keenly sought after by multinational companies, particularly 150 12% those in the technology and financial service industries, Grade A office landlords in the area generally take a firm 100 9% stance on rents. Average Grade A office rents in Xinyi increased to NT$3,038 Va c a n c y Ra t e per ping (NT$919 per sq. m.) in the 50 6% second quarter of 2018, reaching a Gr o s s F l o o rAr e a ( t h o u s a n d s q .m .) 16-year high. 3% According to the latest Ministry of 0 Labor survey, hiring intentions in Taiwan will remain strong in the upcoming 0% months. About 28% of companies polled - 50 2011 2007 2008 2009 2010 2012 2013 2014 2015 2016 2017 intend to increase headcount in the next 2018f three months as part of their expansion plans. CBRE Research expects demand Ne w Su p p l y Ne t Ab s o r p t i o n Va c a n c y Ra t e for Grade A office space will remain stable in the short- to medium-term, Figure 2: Grade A Office Rent in Taipei given improving fundamentals. While many office occupiers will 10 remain cost conscious in the foreseeable 120 future, leasing activity is anticipated to be solid, driven by relocation and expan- 115 8 sionary demand from corporates in the TMT (technology, media, and telecom) 110 6 and professional services sectors. Further- more, the availability of large contiguous space in central business districts will 105 4 An n u a l Gr o w t h ( % )

remain tight in the next few years, leaving Re n t In d e x ( 2007= 100)

large occupiers with limited options 100 2 for relocation. The three new buildings launched in 2018 – Taipei Nan Shan Plaza, Cathay Minshen Jianguo, and the 95 0 new United Daily News building – will therefore continue to attract companies 90 - 2 looking to upgrade the quality of their 2011 2007 2008 2009 2010 2012 2013 2014 2015 2016 2017 office space. 2018F

Grade A office vacancy is forecast to Re n t a l Gr o w t h Re n t SOURCE: CBRE RESEARCH, Q2 2018

TAIWAN BUSINESS TOPICS • OCTOBER 2018 39

10 IF.indd 39 2018/10/5 上午10:12 INDUSTRY F CUS in the same period. As cross-Strait rela- RETAIL SPACE tions remain uncertain, visitor arrivals from China are expected to post marginal Figure 3: High-Street Shop Rents growth in the next few quarters. Luxury watch and jewelry sales, however, are 12 forecast to post positive growth in the

10 coming months on the back of stronger domestic demand stimulated by promo- 8 tional activity. Most retailers were observed to 6 remain conservative about expansion in

4 the first half of 2018, leading to subdued leasing activity. High-street shop rents 2 therefore declined by 0.8% y-o-y during Re n t a l Gr o w t h ( Y - o - Y % ) the first two quarters of this year. Never- 0 theless, an increasing number of retailers

- 2 have shown willingness to take up space after landlords slightly reduced their - 4 asking rents. CBRE Research expects that high-street shop rents in Taipei will - 6 resume growth in 2019 due to stronger 2011 2008 2009 2010 2012 2013 2014 2015 2016 2018f 2017e demand from foreign retailers compared with 2018. SOURCE: CBRE RESEARCH, Q2 2018 Food & Beverage receipts grew steadily by 4.7% y-o-y in the Jan- working space operators will emerge as Affairs, nearly 50% of department store uary to June period this year, thanks a new source of office leasing demand and shopping center operators view the to robust demand for dining out. F&B in Taipei, with two foreign operators ongoing expansion of e-commerce as a retailers are expected to continue to dom- opening their first co-working centers – major challenge. The first half of 2018 inate leasing activity, led by Japanese Spaces and Kafnu – in the first half of saw sales of non-store retailing grow 6% and local restaurant operators. Some 2018. Some traditional business centers y-o-y, underpinned by the high online retailers in the cosmetics and personal are becoming more willing to provide penetration rate of over 80% in Taiwan. care sector are planning to open new out- flexible, fitted-out spaces to large ten- Visitor arrivals to Taiwan increased lets in the next few quarters, but they ants, since more employers are seeking by 3.6% y-o-y to 6.2 million in the first are selective about location and remain workspaces that encourage collaboration. seven months of 2018, due mainly to cost conscious. Meanwhile, fast-fashion Co-working space will gradually gain the increase in tourists from Southeast retailers will likely adopt a conservative popularity among start-ups as it allows Asian countries, which surged 18% y-o-y approach towards expansion, with many tenants to move in and out, expand, or contract at short notice without requiring INVESTMENT YIELDS any capital outlay for the fit-out. Figure 4: Yield trends Retail: Market sentiment to improve 6%

Taiwan’s retail sales rose steadily 5% by 4.7% y-o-y in the first six months of 2018, thanks mainly to strong sales 3% reported by general merchandise stores. 4% Core retail sales excluding automobiles and gasoline also grew 4.2% y-o-y in the 2% same period, indicating that consumers were willing to spend more amid the eco- 1% nomic recovery.

Department stores and shopping cen- 0% ters recorded mild growth of 2.6% 2011 2007 2008 2009 2010 2012 2013 2014 2015 2016 2017 y-o-y in sales revenue in the first half of 2018f 2018. According to the latest survey con- Of f i c e Re t a i l 10- y e a r Go v e r n m e n t Bo n d

ducted by the Ministry of Economic SOURCE: CBRE RESEARCH, OXFORD ECONOMICS, Q4 2017

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negotiation process will be lengthy, given BUYER TYPE that landlords have slowly adjusted their pricing expectations. Figure 5: Commercial Real Estate Investment by Buyer Type, H1 2018 Insurance companies will continue to adopt a conservative approach toward commercial real-estate investment in 4% Taiwan, as they are seeking higher returns Ow n e r - o c u p i e r from core investments. CBRE Research 8% 78% De v e l o p e r expects to see only sporadic commercial property transactions by local insurers in 8% In d i v i d u a l the next few quarters due to the lack of In s t i t u t i o n investable properties that meet their yield In s u r a n c e Co m p a n y requirements. Local insurers are expected to deploy more capital in development REIT projects in major cities across Taiwan to Pr o p e r t y Co m p a n y attain better returns. Across sectors, office and retail properties are expected to see moderate yield

SOURCE: CBRE RESEARCH, H1 2018 decompression in 2019, with average capital values declining slightly. Although some domestic owner-occupiers are keen of them shifting focus to developing and classes in the first half of 2018 were to purchase strata-titled offices (a form of expanding their online platforms in the mild, due mainly to the fact that ven- ownership devised for multi-level apart- coming year. dors are generally under little pressure ment blocks and horizontal subdivisions In the department store and shopping to soften asking prices. The gap in price with shared areas) in Taipei’s major office center segment, operators will continue to expectations between vendors and buyers districts, they are expected to be selec- adjust their tenant mix to increase traffic, will continue to impede deal flow in tive. Only office properties priced at fair with some groups intending to devote the coming quarters. A number of deals market value and located in convenient more space to F&B and entertainment- closed in the past few quarters were com- locations will be sought after. Owners oriented tenants. A new shopping center, pleted after vendors adjusted their asking opting for disposals are expected to lower operated by Breeze Group, will open its prices downward by 10-15% to speed up asking prices to accelerate the negotiation doors to shoppers in the Xinyi Planned transactions. process. Office yields are forecast to inch Area in late 2018. Several new interna- The land market registered substantial up by 10 basis points to 2.6% during tional brands will likely open their first growth of 81.4% y-o-y in total transac- 2019. stores in Taiwan in this retail facility, tion volume over the first half of 2018. Yield levels for retail properties are given the limited availability of quality The increase was largely attributable expected to increase modestly in the year retail space in Taipei’s major shopping to local developers actively purchasing ahead, attributable to vendors adjusting precincts. development sites to replenish their land asking prices downward to attract buyer banks, while the overall housing market interest. While the overall retail sector Capital Markets: Slight yield remained relatively sluggish. Developers will likely continue to see improving sales decompression are expected to continue to invest in raw amid stronger fundamentals, a few shop- land as an increasing number of land ping malls struggling to sustain growth Total investment turnover of com- owners adopt a more flexible attitude may be put on the market. On the other mercial properties in Taiwan rose 97.3% towards pricing. hand, medium and large-scale shopping y-o-y to NT$46.2 billion over the first As interest rates will likely remain malls, mostly owned by local conglomer- half of 2018. The significant increase in low in the short- to medium-term, invest- ates, will remain tightly held. transaction volume was mainly attribut- ment activity in the Taiwan commercial Industrial properties will remain able to a big-ticket deal worth NT$18.7 real estate market is expected to continue popular among local manufacturing com- billion concluded by the Formosa Plas- to be driven by demand from owner- panies. However, vendors are likely to tics Group in Q2 2018. Local owner- occupiers. An increasing number of local retain realistic asking prices as owner- occupiers continued to drive investment enterprises intend to purchase office and occupiers are generally reluctant to chase activity, accounting for nearly 80% of industrial properties for self-use to avoid prices. Speculative activity in the indus- total investment turnover in the first lease negotiations with landlords, which trial sector is expected to decrease as a half of 2018. Institutional investors, on can often be complex and time con- result of new regulations imposed by the other hand, have remained inactive, suming. However, local SMEs will remain the government in late 2017. With rents largely hindered by the low yield levels in price sensitive as they anticipate the remaining stable, industrial yields are Taiwan. enjoyment of capital appreciation over forecast to remain unchanged at 3.85% Price corrections across most asset the long term. The implication is that the in upcoming quarters.

TAIWAN BUSINESS TOPICS • OCTOBER 2018 41

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TAIPEI’S AFFORDABLE HOUSING CHALLENGE

High prices, a dysfunctional rental market, and limited public housing make it difficult for many citizens to find a suitable place to live.

BY SOPHIA CAI

iu Wei-ting has a graduate degree in urban planning and is six years L into a career as a manager of an engineering consulting firm, but he says he has little hope of ever being able to buy his own home. Even with a monthly salary of around NT$55,000 (about US$1,800), Liu is one of many people – particularly the young, the elderly, and the otherwise disadvantaged – affected by the high cost of housing in Taiwan, the world’s seventh most densely populated country. “Even if I saved into a second lifetime, I might not be able to afford my own home,” says the 31-year-old, who lives with his mother in the 30-ping (1,080 square-foot) New Taipei City apartment where he grew up. Liu’s father, a security guard at the Hsinchu Science Park, and ment has taken steps to try to rectify the experts say. his mother, an accountant at a shipping situation, launching an ambitious social Given the difficulty of becoming company, are both 65 and still working housing initiative and passing new legisla- a home owner, many young people, to pay off the mortgage on their decades- tion in an attempt to address the uneven including Liu, opt to spend their earn- old apartment. supply and demand. But whether those ings on food and travel. “If I can’t buy After food, transportation, and other efforts will be effective is still uncertain. a home, then I’d rather rent or live in basic living expenses, Liu has around Another response to high housing my parents’ home and use the rest of my NT$20,000 left every month, most of costs was the central government’s impo- money to enjoy life,” says Liu. “I mean which he tries to put into savings. His sition of a special luxury tax in July why not? Young people like us don’t have raise of one to two thousand NT dollars 2011, prompted by the penchant of that many options. Our economic situa- every year or two hardly keeps up with wealthy individuals to engage in real tion is such that my parents can’t help me the inflation rate. At this pace, it would be estate speculation due to the low prop- pay a down payment.” Liu has already 1,300 months before he is able to afford a erty-tax rates. Under the scheme, income traveled to Japan and China, and has similarly sized home in Taipei City. from the sale of second homes not occu- trips planned to Huangshan in China and The ratio of housing price to annual pied by the owner and sold within one Bangkok later this year. household income rose from 8:9 to 15:7 year of purchase are taxed at 15%, and Because traditionally most Taiwanese between 2005 and 2014, according to those sold within two years of purchase have considered buying a home to be a survey by Demographia International taxed at 10%. In March 2014, general an important goal, the rental market is Housing. At the current level, Taipei is property taxes on non-owner-occupied usually looked at merely as a stepping- comparable to Hong Kong and San Fran- residential properties were also raised. stone toward that objective. But the cisco, two of the least affordable cities in But despite these measures, the private supply is limited, with only 10.9% of Tai- the world. property market remains largely unreg- wan’s seven million households currently In recent years, the Taiwan govern- ulated and susceptible to speculation, renting their living quarters. “There’s no

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common cultural sense of what it is to be Financial pressures and discrimination value, which is not sufficient inducement a renter or to rent, so there’s a very poor ultimately push many disadvantaged into for some owners to look for tenants, model of a landlord and poor model of lower-standard properties. Even a fair- especially when signing a formal lease the tenant,” says Richard Ronald, a Uni- market, single-room apartment without would expose the landlord to higher versity of Amsterdam professor who has a bathroom in the Wanhua District – income taxes. conducted extensive research on housing the lowest cost area in Taipei – rents for Ronald notes that a “lively thriving issues in East Asia. NT$4,000 to $5,000 per month. At just private rental sector where people move Like most other countries, Taiwan law two ping, such a room would be large in and out easily and where the trans- requires a lease contract to be drafted and enough for only a twin-size bed and a action basis for landlords is quite signed for each rental property. However, small desk. straightforward creates a kind of flywheel the majority of rental units reportedly are Places renting for less than NT$4,000 for the rest of the housing culture and it’s being rented under the table to enable usually include only a mattress and fre- also a solution for the vacancy problem.” the landlords to avoid the higher prop- quently do not meet minimum health and erty tax rates for non-owner-occupied safety standards. Duong’s first indepen- Insufficient public housing homes. This arrangement leaves tenants dent living space in Taipei was a portion unprotected and leads to frequent dis- of an illegally rooftop add-on with a ply- In recent years the government has agreements and misunderstandings. wood interior covered by a mosaic of been looking at expanding the supply of Huyen Duong, a 33-year-old native corrugated metal sheets. public housing as a means of addressing of Vietnam, turned immediately to rental Substandard living options such as the housing challenge. Moving into a housing after leaving an abusive mar- this offer no bathroom and little privacy, social housing unit, for example, would riage, and has now dealt with three and have been the object of vocal pro- give Liu Wei-ting another option other difficult landlords for the three rental tests by housing advocacy groups, most than living with mom or owning a house homes she’s lived in. Her current living notably the Social Housing Advocacy outright. “It would really be a great alter- space – a single room with a balcony Consortium, founded by 13 NGOs in native,” he says. that she turned into a kitchen – includes 2010. The Tsai administration has a washing machine and a refrigerator, There are upwards of a million such announced plans to add 200,000 units to but she is prohibited from using either units that violate the building code, says the social housing stock, with 120,000 to because her landlord wants to minimize Peng Yang-kai, Secretary General of the come from new construction and 80,000 electricity costs. OURSs Urban Reform Organization. through subleases of existing units from Cash strapped and limited by her “Renting out a ton of these substandard private landlords. But implementation has minimum-wage job in the restau- units is obviously more cost effective been slow due to reluctance by landlords rant industry, she has no choice but to for landlords, but it contributes to the to sublet and opposition from commu- comply. “I really just want to have my soaring market, leaves little room for nity residents resistant to having public own place,” said Duong. “I’ve been in other forms of rental housing on the housing in their neighborhoods. too many situations where people want market, and places an added burden on The limited supply of land for con- me out.” tenants,” Peng has written in an article struction sites and the complex design entitled “Transition Mentality: the Root and budget allocation processes have Many challenges for renters Cause of the Rent Crisis in Taiwan.” been further obstacles. The “transition mentality” also has Social housing is relatively rare in Up against high (for them) rent and an impact on the standard of the rental Taiwan compared with other advanced landlords looking to maximize yield, the housing. “It’s only a temporary measure, countries. For example, the proportion socially disadvantaged often have a par- so tenants are generally not as demanding of social housing in Hong Kong is 30%, ticularly hard time navigating the private as to the quality or their rights as ten- in Australia 23%, the United Kingdom rental market. “You want rental protec- ants,” says Lu Ping-yi, director of the 18%, and Japan 6.1%. In Taiwan as tion, but you do want to provide certain Tsuei Ma-Ma Foundation for Housing a whole, social housing comprises just kinds of incentive for people to rent, and and Community Services. “The quality 0.12% of the housing stock. In Taipei I think Taiwan hasn’t really quite found is subpar? ‘I’ll just grit my teeth for two this figure currently is slightly higher at that balance,” says Ronald. years.’ My rental contract is unfair? 0.9%, while the goal is to bring the pro- Landlords are often hesitant to rent ‘Well, it’ll be up in two years.’” portion up to 2.7% by 2022. to members of disadvantaged groups for At the same time, a large number of Taipei Mayor Ko Wen-je’s election fear that they won’t be able to pay the housing units are left unoccupied – the promise in 2014 was to build 50,000 rent or that the death of an elderly person vacancy rate in Taipei City is estimated social housing units within eight years. will impact the property’s fengshui, says to be 14% – because low property taxes The administration says that by the end Zhang Meng-yi, director of the Eden mean landlords suffer little financial loss of this year, nearly 20,000 units at 127 Social Welfare Foundation’s Tainan by declining to rent their property out. sites throughout the city will either have Branch, which provides a small amount The Land Act stipulates that the total been built or started development. A of low-cost rental units to the socially dis- annual rent charged for a housing unit 1,044-unit project near the Yongchun advantaged in Tainan. may not exceed 10% of the property MRT Station in the Xinyi district broke

TAIWAN BUSINESS TOPICS • OCTOBER 2018 43

10 IF.indd 43 2018/10/5 上午10:12 INDUSTRY F CUS ground in January and is scheduled to be The public-housing units already The plans to create more public completed in 2020. available are in very high demand, with housing by subleasing existing units According to Lin Jou-min, the Taipei only 5% of applicants selected through a through government subsidies – known City government’s commissioner in lottery system. After failing in one effort as baozu dai guan (包代) – have charge of urban development, the first to gain a place in a new public-housing been stalled by the dearth of landlords two years of the mayor’s term were complex in the Sanchong District of willing to participate in the program. devoted to budget allocation, planning New Taipei City, Liu recognizes the diffi- Doing so would force landlords to pay design and construction, and communi- cult odds. taxes and comply with rent regulations cating with citizens. This last task proved “If there’s an opportunity, I will defi- for every property under their name. to be the most challenging due to the nitely go for it again,” he says. “But there Some owners also fear that this experi- prevalence of a “not-in-my-backyard” are just so many applicants, it’s basically mental policy may not be sustained over mentality toward housing for low-income impossible. Plus, I don’t have good luck.” the long-term. households, he says. The Housing Act passed in 2011 Having peaked in 2014, housing The city government has tried to requires that the government reserve prices in Taiwan have been gradually change this attitude by curating exhibits 10% of the social rental housing for low- dropping, making home-buying slightly and holding at least two public hearings income and other disadvantaged groups. more affordable for middle and upper for each project being proposed. It has Nearly 80% of social housing residents middle-class families. “There aren’t a ton also sought to accommodate reasonable in Taipei have an annual income of less of people investing in [residential] real demands from the public – for example, than NT$600,000 per month. In 2016, estate here anymore,” says real-estate it widened the sidewalk in one project the proportion was raised to 30%, but agent Chen Tai-yuan. “Only if you really in response to complaints that a garage housing advocates believe this proportion don’t have any other place to park your driveway was obstructing a nearby is still inadequate. money will you buy a house.” Most of walkway. On August 1, an online plat- “The purpose of public housing policy the buyers currently in the market are form with live updates on each public should be to prioritize and support the looking for a property for their own use housing project was made available to socially disadvantaged,” says Lu. “Thirty rather than investment,” he notes. the public. percent is better but still on the low side. The situation “may get better for Lin emphasizes the positive social Forty to fifty percent would be more some people, but it won’t be a drastic dif- impact of the planned housing proj- appropriate.” ference,” Lu predicts. “Housing is one ects. “It’s more than a home for the low- For Liu’s family, the rental fees for social of the most basic rights and most basic income. It’s a functional public space for housing might still be a reach even if he is needs. If you can allow young people every citizen living nearby.” He notes that lucky enough to receive a slot. The amount and socially disadvantaged folks to settle each of the 36 complexes will include a of rent varies by location and apartment down in a stable living environment, then park, kindergarten, home for the elderly, size, but generally is 15-20% lower than you’ve already solved 50% of all social public library, and other facilities. the market rate for a similar unit. problems.”

HIGH HOPES FOR SMART HOUSING

A massive social housing program is viewed as the means for the Taipei municipal to build an integrated smart city.

BYJULES QUARTLY

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he development of smart housing min, Taipei City’s Commissioner of – utilizing Taiwan’s strengths in Urban Development and an interna- T the ICT (information and com- tionally recognized architect who has munications technology) sector – is worked at a number of high-profile central to the Taipei City government’s New York practices. “We are applying blueprint for the future. The plan also the concept of the circular economy to matches the national government’s objec- architecture,” Lin explained to Taiwan tive under its 5+2 Innovative Industries Business TOPICS at his City Govern- initiative to promote a circular economy ment office in Xinyi district. “Given a in which waste is reduced to the absolute NT$95 billion housing project, you have minimum. to follow the right way and ensure the The goal is for the capital city to optimum outcome.”

become a “living lab” taking into account Besides erecting smart buildings, he Above, a rendering of one of the planned such functions as communications, sees the principles of a circular economy smart public-housing complexes. Below, energy management, mobility, education, as encompassing recycling, upcycling Taipei Commissioner of Urban Development Lin Jou-min. medical care, i-voting, and environmental (defined by Wikipedia as the “process of PHOTO: JULES QUARTLY improvements. transforming by-products, waste mate- This urban regeneration plan, part of rials, useless, or unwanted products into the Taipei 2050 Vision Project, calls for new materials or products”), and means intelligent systems, such as the latest the use of big data and GIS (geographic of saving energy and reducing waste water, electricity and gas metering sys- information system) tools to improve the and emissions. Implementation of these tems to ensure optimum efficiency. The city’s housing stock, amenities, and public principles should start with the design buildings will also feature solar energy welfare. At the heart of the initiative is a process and continue throughout the life installations on the rooftops, and the NT$95 billion (US$1.1 billion) program of the project by means of maintenance latest computerized and internet-of-things designed to benefit the less well-off by and repair. (IoT) systems for centralized control of building social housing [see the accompa- “Taiwan has one of the most lighting, elevators, air-conditioning, ven- nying article for more details]. impressive 3C industries (computing, tilation, security, temperature, and many The initiative is also expected to spur communication, and consumer elec- other factors. private-sector activity and urban renewal, tronics) in the world, so how can we not “We are bringing in content and as the city’s aging and somewhat ram- incorporate the 3C industry in building extending the content of intelligent indus- shackle housing stock is replaced by public housing in the era of smart cities?” tries in the building industry. Again, this smarter buildings. Lin asks. He notes that 3-5% of the is groundbreaking. By doing this, skills The project is being led by Lin Jou- entire building budget will be spent on will be upgraded and it will create a vir-

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10 IF.indd 45 2018/10/5 上午10:12 INDUSTRY F CUS tuous circle. There’s no limit to growth furniture, promoting greater efficiencies is to make Taipei a hub for innovation and what can be achieved,” Lin com- and cost savings. A model for this type and a “proof-of-concept venue” for smart ments. of system is one at Schiphol Airport in housing-management projects, among Assuredly, with the heft of the city The Netherlands that features “lighting other ideas. government and a huge budget behind as a service.” Dutch-based multinational As part of this initiative, the city gov- the social housing program, businesses Philips owns the fixtures and fittings and ernment has set up the Taipei Smart City and institutions are keen to get involved takes responsibility for performance, Project Management Office (PMO), and develop systems and applications. maintenance, and replacement. Schiphol which is developing a reference manual “My belief from the beginning has been simply pays for the light it uses. for smart community services in public that housing is a necessity, not a luxury,” Smart housing essentially means using housing. Other smart-building ideas says Lin. “So it is not just a question of automated processes to control the build- being tried out range from using QR the price but also of the quality and the ing’s operations, such as temperature, code stickers on toilets to give feedback legacy you are leaving.” ventilation, security and so on. Although on cleanliness and repairs to a City Hall Lin adds that housing should not be not a new idea, it has come of age with robot reception service. seen in isolation, but rather as part of the emergence of the Internet of Things Among the local businesspeople at the the solution for a truly smart city. For (IoT) technologies, and more recently Smart City Expo was James Yih, general instance, given the rapid aging of the with the Artificial Intelligence of Things manager of Full Enterprise Corp., which population, it is increasingly impor- (AIoT). is at the forefront of developing the con- tant to provide smart medical care, The latter has become a touchstone nected home market. The company offers which requires systems within buildings issue for the government. Speaking at the an array of gateway-to-end devices, app- enabling hospitals or caregivers to be 2018 Smart City Summit & Expo at Tai- to-cloud platforms, and modules to kept informed about the health status of pei’s Nangang Exhibition Hall in March, control security, energy efficiency, and the residents. President Tsai Ing-wen set out a vision other functions. Parking is another issue. Lin says the of how Taiwan could use its expertise Full’s booth at the event was designed government hopes to provide “U-cars” in software and hardware integration to show what can be done through tech- and charging stations at public-housing to build its potential in the AIoT field, nology in the house of the future to developments, much like the ride-sharing thereby stimulating economic growth and enhance comfort, convenience, flexibility, rental option for U-bikes. “You wouldn’t infrastructure development for the next environmental protection, and money have to own your own car or a parking generation. saving. The company is also developing space,” he explains. Also present at the Summit was Taipei DIY kits so that individuals – and not just Another element in smart housing Deputy Mayor Charles Lin, who is put- builders and businesses – can be involved could be constant upgrades in facilities ting together a global organization of in making their homes smarter with the such as air-conditioning units or even smart cities known as Go Smart. His aim help of standardized communication pro- tocols. Further, with the development of voice activation assistants and home robots from Amazon and other sources, there is plenty of scope to improve care for the elderly and physically challenged. Yih’s company has worked with a number of elder-care centers in Taiwan and China to provide smart solutions, such as modules in lamps enabling them to be turned on and off or dimmed, simply by making a verbal request. In the future, Full plans to turn phones into voice-control devices to control home appliances. While we are not yet in the futuristic realm of The Jetsons, with their flying cars and houses on stilts, the vision of life first brought to the small screen in 1962 doesn’t look that far off any more. Smart appliances, robot vacuum cleaners, and voice commands are already here and there’s a lot more to come. Taiwan’s A booth at the 2018 Smart City Summit & Expo at Taipei's Nangang Exhibition Hall. smart home and smart cities initiatives PHOTO: JULES QUARTLY will ensure that it is an active participant in these developments.

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HOUSE HUNTING: SOME PERSONAL EXPERIENCE

BY JULES QUARTLY

ome time ago my mother-in-law started urging me to buy a house. She did so by relating the Chinese folk tale “Five S Sons” (), from which derive the five modern “necessities of life”: silver (money), wife, children, house, and car. Without doubt, housing has been the most expensive and One of the "unpretentious" units in Taipei's housing stock being fraught of the five necessities. First off, the weight of traditional offered for sale. PHOTO: JULES QUARTLY values brings pressure to purchase a residence. Renting just won’t do. As a result, Taiwan’s home ownership rate in 2017 was 87%, one of the highest in the world, according to Global agent representing the property. Direct talks are a no-go. Usu- Property Guide. ally the contract will entail putting up NT$100,000 as a sign of Another factor is the house-price-to-income ratio in Taipei, “good faith.” The money goes into escrow, and if you buy the which Taiwan Ratings Corp. puts at 15:1. This represents the house it goes toward the cost. If you renege on the agreement, number of years the average person needs to save without however, the sum goes to the owner (or if the owner backs out, spending on anything else to buy a house of median value. It is it goes to the would-be buyer). more expensive than London or New York – but not as bad as What you’re not always told (“you have to ask”) is that Hong Kong’s 18:1. there’s a “yaoyue shu” (要書) document backed by the force Added to which – and this is a personal observation – the of law that does not involve paying down a deposit, but has the housing stock is generally old, badly maintained, and as real- identical effect of ensuring that both parties proceed in good estate agent-speak puts it, “modest” or ”unpretentious.” faith. To concentrate minds, a time limit on negotiations of Basically, the median price for two new-built houses in, say, about a month is imposed. Utah will cost the same as a small, decrepit apartment in Taipei In practice, the system works fairly well. Negotiations typi- that was built in the 1960s. cally take place with the real-estate agents doing their level best Like acquaintances in a similar position, we are searching for to reach an amicable agreement between the two opposing par- homes ever further from the city center, since the house-price-to- ties, generally over copious amounts of tea. income ratio in New Taipei is nearer 13:1. Ideally, we hug close House surveys are relatively rare in Taiwan, as most people to MRT stops for ease of access to our downtown workplaces. buy apartments and figure that if their place has a problem, it’s If not, we would be forced to embrace hour-long-plus commutes one shared with everyone else in the complex. Also, the house from satellite towns or mega suburbs like fast-growing Taoyuan. buyer tends to rely on the mortgage valuation to identify major Even then, it’s not easy to buy because the market is inflated. problems. If the house falls down or floods soon after the sale, House prices rose sharply from the 1990s to around 2014, then the seller and real-estate agent are contractually responsible dipped for a while, and are now leveling off. House owners, for costs. understandably reluctant to accept the new reality, mark up their The operating models for real-estate agents vary widely. properties by as much as 20-30% over the market rate. Some work totally on commission, whereas others are paid a Real-estate agent Angus Ke at the Renai-Guangfu office of basic salary, with added commission income when they make H&B Housing has watched the housing market rise and fall a sale. Some agents are franchise operations, which may mean over the last few decades. He characterizes the current situation paying commission both to the franchiser and the franchisee as “stable,” attributable to a combination of government policy, after you have bought your house. So, buyer beware. an anemic economy, low wages, and a declining population. “My advice to buyers is don’t worry so much about the price, “Rich people will always buy houses,” he says, because they just find the house you like,” says Ke. are good investments. “As for wages increasing, that’s a problem It’s good advice, but hasn’t helped my house hunting so far. for the government and bosses.” We got a survey on one house we liked and it turned out to have Ke reports that business is brisk and cites two main rea- serious structural problems. At another place, the owner was sons why. First, the leveling off of house prices means sellers are in no hurry to sell and wanted to hold out for a higher price. A no longer holding out for more money, “so they sell.” Second, third option turned out to be the scene of a bitter battle between buyers aren’t waiting for house prices to drop any further, “so the seller and neighbor about whether the property could be they buy.” redeveloped or not. Negotiations can only begin after a mediation contract We will carry on regardless, taking to heart another piece of known as “woxuan” () has been signed with the real-estate advice from the mother-in-law: “Be patient.”

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NANGAN Touring the Former Front Line

ccording to many history from Taiwan, but at low tide a mere of which carried up to 5 kilograms of books, the Chinese Civil War 1.8 kilometer of sea separates it from leaflets, flags, food, toys, and house- A ended in May 1950 with the the nearest part of the People’s Repub- hold goods. They even sent cassettes Communist capture of Hainan Island. lic of China (PRC). For much of the featuring the music of Teresa Teng, a By then, Chiang Kai-shek and his Cold War, the Nationalists mainly Taiwanese vocalist whose songs were Chinese Nationalist (KMT) government hurled propaganda at the enemy. Huge immensely popular on both sides of had relocated to Taipei, and the world loudspeakers installed on Kinmen, the Taiwan Strait. Pamphlets were also was beginning to refer to Taiwan as for example, broadcast messages loud sealed in beer bottles and thrown into “Free China.” enough to be heard across the waters on the ocean as the tide was going out. For Nationalist soldiers stationed the Communist-controlled mainland. Kinmen and Matsu are no longer on several islands within artillery range By the late 1960s, the KMT govern- war zones. Since 2001, in fact, regular of the Chinese coast, however, the war ment had dispatched more than 100 direct ferries have connected Kinmen was far from over. Chiang had vowed million balloons to the mainland, some with the PRC city of Xiamen, and to defeat the Communist “bandits” Matsu with Fuzhou on the mainland. and retake the mainland, while Mao What were for years frontline islands Zedong was promising to defeat the are now very much on the tourist trail, remnants of the KMT forces and “liber- thanks to an appealing combination of ate” Taiwan. Until well into the 1970s, splendid scenery, traditional architec- the islands’ garrisons and civilian popu- ture, and fascinating history. lations suffered frequent bombardment. For anyone with a strong inter- Throughout the postwar period, est in East Asian politics and what every healthy Taiwanese male was has happened in this part of the world drafted into the Republic of China since VJ Day (August 15, 1945), a few armed forces, and many of them days spent in Kinmen or Matsu can be served on the Kinmen or Matsu archi- immensely rewarding. pelagos. Chat with a group of senior Kinmen County consists of two citizens anywhere in Taiwan, and you well-developed islands and several unin- will probably find at least one who can habited islets. Kinmen proper has an remember patrolling the beach on a airport, four townships, and a popu- front-line island, carrying a rifle loaded lation of around 125,000. The formal with live ammunition, and searching for name of the other major island is enemy frogmen sent to spy or sabotage. Lieyu, but it is better known as “Little

Kinmen is 277 kilometers away BEIGAN Kinmen.” By the end of 2019, it will

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be possible to drive between Kinmen proper and Lieyu by means of a 5.4-kilometer-long bridge. Lieyu, whose official population was a little under 13,000 as of mid-2018, is replete with reminders of the Nation- alist-Communist standoff. One of the most interesting is a short walk from Jiugong Port, where ferries from the main island dock. Under the granite promontory beside Jiugong Port is the Jiugong Tunnel (open 8 a.m. to 5 p.m. seven days a week; admission free), which leads into Kinmen’s largest underground military installation. Excavated in response to

what Taiwanese call “8-23” – a period TUNNEL/KINMEN of terrifyingly intense bombardment that commenced on August 23, 1958 of China, and the bronze statues on top serves as a homestay. and marked the beginning of the Second honor seven Nationalist soldiers who Beigan’s most picturesque settlement Taiwan Strait Crisis – the tunnel was a died on the wall in 1933 after holding is Qinbi. Many of the village’s distinc- place where patrol boats, landing craft, back thousands of Japanese troops for tive stone cottages have been empty and small civilian vessels could shel- five days. for years, but they look like they will ter from Communist attack. The main Beigan is to the Matsu Islands what last for eternity. On walls around the chamber here is 790 meters long, 11.5 Lieyu is to Kinmen. Around 2,400 village, one can still find four-char- meters high, and 15 meters wide. people live there, the population of the acter slogans that date from the Cold Located in a tiny village on the side entire island chain being a mere 13,000. War. One urges “military-civilian coop- of Lieyu closest to Communist-held Visitors can arrive by ferry from the eration.” Another is explicit about the territory, the Hujingtou Battle Museum busier island of Nangan, or directly by ultimate goal of the KMT in that era: details some of the Nationalist Army’s plane from Taipei. “Recover the mainland!” most heroic moments. Such was the military’s domina- Beigan’s principal settlement is At the very center of the island, tion of life here that the island’s most Tangqi, and visitors will find the nearby which covers 16 square kilomters, one historic structure, the gorgeous wood- War and Peace Memorial Park Exhi- can find a military monument that has and-stone Banli Old House, was bition Center worth a detour. Even nothing to do with holding back the requisitioned by the army from 1949 to those with no interest in the soldiers’ Communists. Bada Memorial is an 1992. Following a government-backed uniforms and ordnance displayed here imitation of a tower on the Great Wall restoration, part of the complex now will enjoy the superb views of the peninsula to the south. Also within view is an islet whose name translates as “Murex Mountain” because its shape resembles the tapered shell of a type of sea snail. For information about Kinmen County, visit the website of Kinmen National Park (www.kmnp.gov.tw). For travelers heading to Matsu, the website of Matsu National Scenic Area Admin- istration (https://www.matsu-nsa.gov. tw) is particularly useful. For general information about Taiwan, including how to travel between Taiwan proper and the outlying islands, take a look at the Tourism Bureau’s website (www. taiwan.net.tw), or call the 24-hour tourist information hotline 0800-011-765 MATSU (toll free within Taiwan).

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Caring for the Elderly ����� October 2018 | October Vol

Caring for the Elderly �� October 2018 | October Vol