Jason Hsuan Interview:
A Six-Month Lead Means Power
Display industry magnate Jason Hsu considers the way forward for cross-strait high-tech, the impact of a new administration in China, and the advantages Taiwan still enjoys in the game.
A Six-Month Lead Means PowerBy Elaine Huang
From CommonWealth Magazine (vol. 512 )
Is the rise to power of China's new leader Xi Jinping good or bad news for Taiwan? Jason Hsuan, chairman and CEO of Taiwanese display solution provider TPV Technology Limited and one of the key speakers at the upcoming 2013 CommonWealth Economic Forum, has known Xi for 17 years. He has witnessed Xi's intimate knowledge of Taiwan's political and economic situation as well as his eagerness to hear different thoughts and opinions. In this exclusive interview with CommonWealth Magazine, Hsuan foresees great potential for cross-strait synergies and win-win relationships under Xi.
Following are the highlights of the interview:
Managing the company and my relationship with China's national leader are two different things.
He (Xi Jinping) spent 17 years in Fujian Province, so it's only natural that we got to know each other very well. In the beginning, when we set up our factory in Fuqing City (on the coast of eastern Fujian Province). It was Xi who signed the agreement. He watched our monitor output grow from 1 million units to 80 million units.
He's the kind of leader who rose up through the ranks from the grassroots level. He isn't a bureaucrat. From village to county, city, province, centrally controlled municipality – he really understands things at the local level. For instance, he has a deeper understanding of Fujian Province than many Fujian natives, because he has toured the entire province.
He also knows Taiwanese politics and our economy quite well. Over the past decade or two, numerous politicians of Taiwan's two major political parties have visited Fuqing. As a Fujian official, Xi has exchanged views with all of these visiting Taiwanese. I was very surprised to find that he had met a number of people that I have not yet met at all. He told me, "I want to hear different voices." So his rise to power means that China is led by a leader who understands Taiwan.
The two sides of the Taiwan Strait need to chart a win-win course. In many industries Taiwan and China have already begun to engage in homogeneous competition. If you don't cooperate with them, they come poaching your employees, and it's very easy for a Taiwanese company to have several hundred employees lured away. It's better for both sides to sit down together and jointly develop the next generation of products, to jointly establish companies with a view to developing products for the future and taking advantage of the Chinese market. That's why I think we should quickly seize the opportunity.
Taiwan still has a competitive edge. Industrial change happens so quickly now that one year equals (what used to be) a period of three to five years. A lead of just six months suffices as a bargaining chip in negotiations over cooperation. That's Taiwan's soft power. Cross-strait cooperation will create synergies.
Taiwan has still managed to catch up to international standards somewhat earlier (than China). They will need another five to ten years before they have cultivated globalized talent as we have done, which is not an easy task. That's Taiwan's opportunity.
But for certain industries such as the LCD and LED sectors, if they fail to move forward in the coming two years, if they don't come up with win-win ventures involving concrete cooperation and the two sides go their separate ways, then the future will get tougher. That will lead to homogeneous competition.
Taiwan's LCD makers could embark on a course of diversification. Taiwan's display makers could, for instance, take advantage of their currently still leading position to first cooperate and develop (new products). They could expand more globally to prevent excessive overproduction. Since investments in the panel industry are very large, in the end it's all the banks' money or society's money. In the high-tech industry, in particular, you will eventually be bought up (by a competitor) unless you rank among the top three worldwide.
TPV Technology grew its business in China quite early. We went there in 1989 and began to sell in the domestic market in 1993. Back then we thought we definitely needed to expand our sales network to second- and third-tier cities to be able to make money. Therefore, we drew up three- to five-year plans and expanded our presence step by step from 7,000 or 8,000 sales points to 10,000. These locations didn't materialize overnight.
As far as we're concerned, next year will be a growth year even if the economy is somewhat sluggish.
In the past, everyone poured their energy into the European and North American markets, but growth in the Asia-Pacific region is not bad at all – just look at Indonesia, India and Thailand. Everyone has seen that the members of the Association of Southeast Asian Nations (ASEAN) are joining hands. Government efficiency in these countries is increasing day by day, and their purchasing power keeps going up. We will also devote more energy to making this market segment a growth point next year.
Translated from the Chinese by Susanne Ganz