2016 Summer CWEF
The Way Forward for Asian Enterprises
The Brexit vote; new turmoil in the South China Sea; China full of uncertainty. At such a volatile time, the 2016 Summer CommonWealth Economic Forum focused exclusively on searching for the best forward for Asian businesses.
The Way Forward for Asian EnterprisesBy Kuo-chen Lu
From CommonWealth Magazine (vol. 602 )
On July 12, CommonWealth Magazine held the 2016 Summer CommonWealth Economic Forum under the theme "The Future of Asian Enterprises." That same day in the Hague, the Permanent Court of Arbitration issued its ruling in a case brought by the Philippines against China in a dispute over China's claims in the South China Sea.
The tribunal found that Beijing's claims to sovereignty over nearly 90 percent of the region did not have a legal basis and that Taiwan-held Taiping Island (Itu Aba) was not an "island" and therefore not entitled to an exclusive economic zone, setting off a new wave of anxiety in the already contentious South China Sea.
Just as the waters of international politics were being muddied, the "New Southbound Policy" announced by Taiwan's government soon after it took office on May 20 quickly faced a challenge. At the end of June, the Formosa Plastics Group's steel plant in Vietnam was fined US$500 million by the Vietnamese government for allegedly discharging toxic waste during a trial run that killed large numbers of fish off Vietnam's east coast. Nikkei Asian Review reported a few days later that a source close to the company said it was coerced into pleading guilty.
Amid this climate of growing uncertainty, CommonWealth Magazine President Wu Yin-chuen told an audience of 300 people, 16 media outlets and speakers from Singapore, China, Japan and elsewhere at the forum that Taiwanese companies needed to take on the challenges and search for new momentum for growth rather than sit by patiently.
Two veteran entrepreneurs who have each experienced many economic cycles during careers spanning four decades – Acer founder Stan Shih and MiTac-Synnex Group Chairman Matthew Miau – opened the day-long conference with a discussion on where Asian enterprises were headed.
Shih said Taiwan had the opportunity to play the role of Asia's Silicon Valley, as the country's new government has proposed, but he cautioned that Silicon Valley no longer has "silicon" but is transitioning to software and the internet. The keys to forging an Asian Silicon Valley, he said, were creating an environment featuring talent and industrial clusters, diverse sources of capital, livable communities with good schools, a culture tolerant of mistakes, constant innovation, and the ability to attract high-value emerging companies and industries.
Miau stressed that companies were being held back by regulatory constraints. Citing the example of Uber running afoul of the law in Taiwan, he said new economy technology businesses have created countless opportunities around the globe, but found themselves hindered by the regulatory environment if they developed their businesses too quickly in Taiwan.
He also suggested that the government should not only consider "going south" but also try to attract more southern countries to "head north" and invest in Taiwan.
An Evolving China
In any discussion of Asia, China cannot be left out, and the Summer CWEF delved into how China is changing. Academia Sinica Academician Chu Yun-han said it could not be ruled out that Xi Jinping would break with precedent and seek a third five-year as the general secretary of the Communist Party of China, a sign of his growing hold on power there.
Ha Jiming, the vice chairman and chief investment strategist for Goldman Sachs in China, said the number of variables affecting China is growing, but one thing is certain: it has evolved from an era when "talent has no value, money has no value, but work has value" to one where "talent is worth more, money is worth more, but it's hard to earn money working."
To earn renminbi, Ha said, businesses will have to closely monitor issues related to China's aging population.
The conference also looked at the growing trend toward replacing human labor with robots and artificial intelligence. Yen Jui-hsiung, the chairman of the Tongtai Group, one of Taiwan's leading machine tool makers, tried to calm concerns about the future by revealing that even big companies such as Toshiba and Toyota are presently limiting their ambitions to "machines connecting to people."
"Don't make this overly complicated. Only then will everybody have the motivation to get involved (in the field)," Yen urged.
Facing a changing world, taking action as early as possible is the best approach, argued Dan Vlasceanu, commercial vice president in the Asia-Pacific region for Schneider Electric. He issued a warning to Taiwan's small and medium-sized enterprises, which form the backbone of the country's economy, saying they needed to embrace new concepts now because if they did not change, they would be phased out by the market.
Translated from the Chinese by Luke Sabatier
Following are excerpts of speeches given by four speakers in the Forum: