Deck: Panelists discuss green economy, cross-strait financial cooperation
Tax Cuts Wrong: Morris Chang
Morris Chang, chairman and CEO of Taiwan Semiconductor Manufacturing Co. (TSMC), yesterday urged businesses to rely on entrepreneurship -- instead of tax breaks -- to achieve continued growth and success.
Tax Cuts Wrong: Morris ChangBy The China Post news staff
Chang made the remarks on the second and final day of the CommonWealth Economic Forum, held at the Grand Formosa Regent Hotel.
In his keynote address, Chang said the role of the government should be to create a fair competitive environment and to embrace openness of market. "What the government should never do is to cut taxes," he emphasized. "Tax cuts are wrong."
He also said amid the global downturn, enterprises should rely on themselves, not the government, adding businesses should operate with a positive, optimistic attitude that they had in the 1970s and 1980s.
He said businesses should rekindle the spirit of "entrepreneurship," which he said was the "courage and spirit to do something big and something difficult."
Chang said in times like these, businesses should not just save every penny. Rather, they should do everything to raise their competitiveness.
Using his own company as an example, Chang said in the first quarter of 2009, TSMC sales were just about 40 percent of those of Q3 2008, and profit was almost zero. Yet last year, TSMC increased its capital expenditure from 2008's US$1.8 billion to US$2.7 billion.
This year TSMC is expected to increase its capex even further, Chang said, adding he cannot give the details at this stage, as the company is still working on its budget for 2010.
Meanwhile, TSMC last year increased its spending on research and development to NT$21.6 billion, or 7.3 percent of total revenue, he said. This was an increase of the 6.5 percent for 2008.
Chang also said the IT industry has been experiencing a recovery since Q3 of 2009, and "this has been a strong recovery." He said 2011 will also be a good year.
Yesterday's forum also saw speeches from other industry heavyweights.
Greater China's economic importance was emphasized by three speakers: T. B. Song, Chairman of Ogilvy & Mather Greater China; Silas Siu-Shun Yang, Chairman of PricewaterhouseCoopers' Asia-Pacific operations; and Lu Xiongwen, Dean of the School of Management of Fudan University.
For Taiwan firms to enter China, they must have a deep understanding of the country, said Song. Speaking the same language and sharing the same culture are not going to cut it, he said.
One way to gain a further understanding of China is to read lots of novels written by the Chinese, he said.
Yang cited Hong Kong's success story after its return to China in 1997, an event that further spurred the region's growth and that contributed to China's closer linkage to the world community. This was a win-win situation, he said.
He said Taiwan, Hong Kong and China should work together to achieve a triple-win situation.
Lu said Taiwan has a lot of "soft power," such as knowledge about business and a sensitivity to new technologies and trends.
"China has a lot to learn from Taiwan in this area," he said.
Jack Ma, chairman of Alibaba Group Holding Ltd., was applauded for the various zingers he made during a panel.
Ma said he hasn't heard from Yahoo! Inc. since Alibaba criticized its U.S. shareholder as "reckless" in supporting the position adopted by Google Inc. in China.
K. Y. Lee, chairman of AU Optronics, said in order for Taiwan to win, it must take a foothold in China, where demands for new technologies and applications are stronger.
Lu Shyue-ching, chairman of Chunghwa Telecom, said China and Taiwan can complement one another. Taiwan is strong at innovation and infrastructure, and China is better at economic stability and size of market.
In another panel, experts discussed the importance of environmental protection.
C. S. Kiang, Director-General of the Environment Fund of Peking University, said developing green energies is the only way to resolve the dual crises of the financial downturn and global warming. Taiwan can play an important role in this area, he said.
Johnsee Lee, president of Industrial Technology Research Institute, mentioned the innovations his institute has made, including alternate-current LED lamps and safety-enhanced lithium batteries.
Hu An-gang, Professor of Tsinghua University, said China needs to shift its focus from a "black economic development" characterized by high-pollution and high-energy consumption to a "green economic development" characterized by environmental protection.
Charles L. F. Lo, Vice Chairman of Chinatrust Financial Holding Co., said in another panel Taiwan banks, with their parent corporations' strong financial backing, can compete effectively with their mainland counterparts.
Jianqing Jiang, Chairman of Industrial and Commercial Bank of China, said Asian financial institutions should not become complacent over the fact they were relatively unharmed amid the financial storm. Instead they should raise their efficiency and risk management to ensure continued growth.
Lee Chi-chu, vice chairman of the Financial Supervisory Commission, said that she was optimistic about cross-strait financial cooperation, and that Taiwan could help China in various areas including exchange rates liberalization.
(The China Post)