CEPD Minister Christina Liu
The Strategy behind Investment Promotion
In her year heading the Council for Economic Planning and Development, Christina Liu has been aggressively promoting investment, but she has attracted her share of criticism. What's the real economic strategy she's got in mind?
The Strategy behind Investment PromotionBy Sara Wu
From CommonWealth Magazine (vol. 474 )
Inside the Baoqing Rd. headquarters of the Council for Economic Planning and Development (CEPD), Room 612 is a VIP room, its walls adorned with portraits of the 19 previous CEPD ministers. Among the faces on the wall are a mother-daughter pairing, their tenures steering Taiwan's economy separated by two decades: Dr. Shirley Kuo and daughter Dr. Christina Liu.
But times have changed. Circumstances are not as in Kuo's era. What course can the 56-year-old Liu take to chart a new path to economic growth for Taiwan?
Liu is full of emotion yet with a capacity for cool calculation. She conjures a portrait not of delicate refinement, but of vivacious spirit. As she speaks from the podium, one notices the fire in her eyes and spirited body language while taking no note of the unremarkable suit she customarily wears.
But when she speaks, the logic in her discourse reveals a nimble intelligence and a systematic macro-view that still sweats the details. She's adept in international affairs yet remains intimate with local issues.
President Ma: She's Taiwan's Top Business Promoter
Addressing an investment promotion conference in Los Angeles in late May, Liu tossed her script and went ad lib, delivering a discourse on the huge impact the signing of the Economic Cooperation Framework Agreement will have on Taiwan and how that makes Taiwan the best entry point to China for world business. She also related how a visitor from China had told her how stunned he had been to hear Taiwanese taxi drivers openly critiquing public events, and to see the proliferation of political news and commentary programs on television. When the American investors in the audience heard her anecdote, they not only understood the underlying value of investing in Taiwan, but also sensed the deep-seated democratic values the two countries share, and they broke out in applause.
That's also why Liu accompanied President Ma Ying-jeou when he hosted the CommonWealth Economic Forum, a confab of political and economic leaders from nine nations, where he introduced her as "Taiwan's top business promoter."
Yet she's taken her share of criticism, too. In the Legislative Yuan, she's come under fierce attack, as when KMT lawmaker Ting Shou-chung demanded: "Isn't the CEPD in charge of economic planning? What are you doing promoting investment? Isn't that the job of the Ministry of Economic Affairs?"
The DPP's Lin Tai-hua carped: "Investment promotion doesn't count until the funds are in place. Don't try to carve out high hopes from thin air."
"If everybody feels investment promotion should not continue, then we'll stop," Liu responded from the floor of the legislature on May 27.
When the news reached business and banking circles, a lot of CEOs were dismayed. During the past year, the CEPD had not only been aggressively hitting Taiwan's various counties and cities, but also forging out on missions to Singapore, India and the United States – the first such campaign by a government agency to effectively employ the contacts and prowess of global enterprises.
For example, the CEPD joined forces with local offices of major foreign banks to pool resources, inviting clients of such international banks as OCBC of Singapore, Standard Chartered, and Citibank to Taiwan-investment conferences, and expanding the list of potential investors.
Aaron Hsu, chairman of emerging game company XPEC Entertainment Inc., tagged along on the Singapore mission, and through this Taiwanese government-organized forum, he gained a sit-down with Temasek Holdings, Singapore's largest sovereign wealth fund. Temasek Holdings eventually decided to visit XPEC Entertainment Inc. in Taiwan to check out the company firsthand.
The U.S. mission at the end of May provided the opportunity for Keystone Game Studio CEO Jeffrey Chiao to travel to Silicon Valley to meet with global social media titan Facebook and discuss ways of developing game software applications for the Facebook social networking platform.
"Along with visiting American computer animation giants Rhythm & Hues Studios and MTV, this is the kind of opportunity a Taiwanese gaming company could not arrange on its own," said Deputy Minister San Gee, who was shepherding a group of small and medium-sized business owners.
In a show of support, Citibank Taiwan regional chairman Victor Kuan arrived in the U.S. ahead of time to personally invite Citibank global vice chairman Hamid Biglari to appear, hosting a reception at the American Stock Exchange on Wall St. to make investment contacts.
Actually, many people in business and finance circles fully grasp that investment promotion will not create instantaneous, immediate business opportunities, but it can certainly raise Taiwan's international visibility.
But there are areas in which Liu's high-profile investment promotion efforts could be improved. The Ministry of Economic Affairs has more experience in investment promotion, yet seldom cooperates with other governmental agencies, says one CEO who took part in the trip. On the other hand, the CEPD is adept at bringing together the combined energies of different ministries and the private sector to make a bigger pie, but it needs to strengthen its expertise in industry and business dynamics if it is to direct, select and achieve arrangements with higher-level companies and individuals, he concludes.
Another businessman hoped the CEPD would go beyond serving as a mere introductory platform, rooting out, negotiating and eliminating the many impediments to investment and shedding other costly efforts.
Liu has a distinctive personality and comes off as very sharp, commanding her team with both paternalistic discipline and maternal compassion, says CEPD specialist Huang Chia-wei, formerly a student in the Netherlands and the United States who left a job in banking with Chinatrust to take a position in international and external affairs with the CEPD.
"This is meaningful work," he says. "The minister has high expectations, and she'll point out your faults. But she'll teach you, and I've learned a lot while doing my job."
Ministry colleagues joke about how Liu saw a notice for an inter-ministerial singles mixer, and immediately signed up three unmarried aides.
The rapid-fire pace at which Liu conducts business can also leave underlings in various departments at all levels of the ministry on edge. For example, Deputy Minister Hwang Wang-hsiang found himself poring over research materials the entire time he was being driven from Taichung high-speed rail station to Yunlin as part of the islandwide speaking tour "Business at Home, A Home for Business."
Aides have also found themselves working round-the-clock to square away the paperwork of some businessman who suddenly decides to come along on an overseas investment promotion mission a week before departure, securing a U.S. visa on three-days notice and arranging plane tickets and accommodations a day in advance. Traveling with a 90-strong investment promotion delegation to India, CTCI Group vice chairman Lin Chun-hua was impressed with the dedication and administrative efficiency apparent in the handling of the group's travel arrangements and itinerary.
"I've always believed private-sector operations are more efficient than government-run operations, but on this trip I found government efficiency on par with the private sector – very professional," he enthused.
What Industries Can Taiwan Develop?
Aside from global investment promotion, one of the issues most important to Liu is developing new local industries.
"The past export-driven developmental model has gone out of balance. Now we hope to drive local industries to provide employment opportunities," she says.
In Yunlin County, for instance, what industries could be developed outside the starring role petrochemicals played by the sixth naphtha cracking facility at Mailiao? On June 7, Liu and Yunlin County deputy magistrate Lin Yuan-chuan held a joint "Business at Home, A Home for Business" session in an effort to create future business opportunities in the county.
On the eve of the Yunlin trip, the American Chamber of Commerce released its annual Taiwan White Paper, noting that the Taiwanese economy was at risk from excessive dependence on a single market (China). Although Liu is battling to develop diversified trade relations and strengthen bilateral investment cooperation with Singapore, India, the United States and Japan while coordinating and integrating local industrial development, the main question remains one of time.
Can Taiwanese society afford to wait for investments that require "fermentation" and a "maturation" period before showing a return? And how much longer can Christina Liu keep going with her unconventional approach?
Translated from the Chinese by Brian Kennedy