Vietnam-Taiwan economic cooperation has increased significantly in recent years, especially in the areas of investment and trade. On the occasion of the special issue on Vietnam-Taiwan economic cooperation, VIB Forum reporter interviewed Mr Chen Sanlin, Head of Taipei Economic and Cultural Office in Ho Chi Minh City on its achievements and prospects.
What impresses you most about Vietnam?
I have been working in Taipei Economic and Cultural Office in Ho Chi Minh City for the past eight months. This is my second stay Vietnam. The first time was in 1995. My deepest impression is the change from bicycles to motorbikes and old streets to high-rise buildings. The Vietnamese economy is developing very fast. The cultural exchanges between Vietnam and Taiwan have also developed beyond my expectation.
What was the trade value between Vietnam and Taiwan in 2004 and the first half of 2005 and what are your expectations for the second half of the year?
The total Vietnam-Taiwan trade value in 2004 was over US$4 billion, almost 30 per cent more than the previous year. In the first half of 2005, it was US$2.4 billion, nearly 24 per cent more than the same period of 2004. Meanwhile, it was only US$1.6 billion in 1998. The growth is mainly due to the increase of Taiwanese investment and business efficiency. In 2004, Taiwanese investment increased 45.9 per cent against that of 2003 and the trade value in 2005 is expected at US$4.5 billion.
Does the fast development cause any problems?
The rapid Taiwanese investment in Vietnam is due to several advantages: the openness of the economy, stable socio-political stability, low production costs, and the close geographical proximity between Vietnam and Taiwan. However, there remain certain problems for investors, some have stated that the Vietnamese market is not yet fully opened up, particularly in banking, insurance, tourism, and trade. There is a shortage of workforce in labour-intensive industries, especially in Binh Duong, Dong Nai and HCMC. The workers keep changing from enterprises to enterprises causing difficulty for the employers. Some labour strikes were inconsistent with the law and the local authorities failed to intervene in time causing losses to the investors. Some environment criteria are even higher than those in Taiwan making it impossible for the operation of Taiwanese factories. Though Vietnam has a good legal framework, it is implemented differently in different localities, causing difficulties and losses to the investors. Administrative formalities remain slow especially in land clearance affecting the implementation of projects and business efficiency.
At the meeting with Dong Nai People’s Committee, small Taiwanese enterprises complained that they could not have equal contact with the press on labour strikes resulting in misinformation, what should the Taiwanese business association do?
Thank you for your concern. The Taiwanese business association in Vietnam and its branches have recently improved management, providing correct and timely information to the press.
What area in Vietnam you would advise Taiwanese investors to do business ?
Most Taiwanese businesses have invested in traditional industries such as footwear, garments, plastic, construction and attained high economic efficiency. Taiwan has little investment in hi-tech industries because Vietnam does not have supporting industries and specialised workers. It requires some upgrading for hi-tech development.
In comparison with China, Vietnam has cheaper labour and better security but higher land rent and difference in languages. With lower land rent and more preferential treatment, Vietnam can compete in attracting investment. Some training in Chinese language would also help in relations between employers and employees.
I just met with the chairman of a Taiwanese company’s management board investing in AMAT IZ (Dong Nai). He said that the Korean government has offered him preferential treatment for a CD-ROM project with full exemption of land rent, a 7-year exemption of income tax and 50 per cent reduction for the following 3 years. Every country is improving its environment to attract foreign investors.
Your office has just organised a seminar on investment opportunities in Taiwan, what are the prospects for Vietnamese investors?
Vietnamese investment in Taiwan is so far rare and small. To balance economic cooperation, we organised that seminar to provide information and assist Vietnamese businesses in investing in Taiwan. In Taiwan, the service sector is wide open for foreigner investment. Vietnamese businesses could establish trade companies and representative offices to promote trade between Vietnam and Taiwan. The second important area is tourism. Each year, some five million Taiwanese visit other countries, mostly Thailand, Australia, the US, and Hong Kong with only a small number coming to Vietnam. Tourist and travel companies and offices can be established in Taiwan to introduce Vietnam’s tourist industry to the Taiwanese public. In general, trade and tourism are the most promising areas in Taiwan.
Thank you very much!
Vietnamese
