Cho, Shih Chao Director General Bureau of Foreign Trade, Ministry of Economic Affairs Chinese Taipei August 16, 2011 APEC Symposium on Enhancing SME Capacity of Managing the Risks Associated with Trade Liberalization APEC Symposium on Enhancing SME Capacity of Managing the Risks Associated with Trade Liberalization

Chinese Taipei’s SMEs OVERVIEW All Enterprises SMEs % of SMEs No. of enterprises1,277,5851,247, Total employment (thousands of persons) 10,4938, Total Sales (US$ million) 1,252,232370, Domestic Sales (US $ million) 905, , Direct Export Sales (US $ million) 346,35355, Source :White Paper on SME 2010

 Strengthening Bilateral Relationships  Signing Free Trade Agreements (FTAs)  Establishing a stable cross-strait economic and trade cooperation framework (ECFA) Deploying Globally Trade Development  New Chen Ho Plan (Global Market Expansion Plan)  MVP Project (Project to Promote Most-Valued Products) in Emerging Markets)  Green Trade Promotion  Branding Taiwan Plan Strategies and Prospects OVERVIEW SMEs account for 97% of the total number of business enterprises in Taiwan. Foreign trade has been the major engine for economic growth in Taiwan over the past several decades.

Mainland China (including Hong Kong), ASEAN, Japan, the US and the EU are Chinese Taipei’s major trading partners. Major Trading Partners Strengthening Bilateral Relationships Deploying Globally  In 2010, Taiwan’s top trading partners, in order, were mainland China (including Hong Kong), ASEAN, Japan, the US, and the EU. Together these trading partners accounted for more than 85% of our exports and over 65% of our imports.  To strengthen bilateral economic and trade relations by developing specific plans for different regions.  To increase two-way trade by signing of agreements with trading partners.

 Signing the the Cross-Strait “Economic Cooperation Framework Agreement” (ECFA)  Promoting the signing of Taiwan-EU “Economic Cooperation Agreement” (ECA)  Negotiating the “Agreement between Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Partnership” (ASTEP)  Joint Feasibility study on a Taiwan-India Economic Cooperation Agreement (ECA) Participated in Regional Economic Integration Deploying Globally

MERCO SUR NAFTA EU-Mexico Free trade Area ASEAN-China Free Trade Area EU ASEAN-Japan ASEAN-Korea Free Trae Area Japan-Singapore (EPA) EU- ASEAN ASEAN-Australia-New Zealand Free Trade Area China-HK 、 Macao （ CEPA ） ASEAN Free Trade Area （ AFTA ） US-Korea FTA CAFTA － DR The deadlock of WTO negotiations has accelerated the surge of regional economic integration in recent years EU-S.Korea Global Economic Integration Deploying Globally

 Mainland China (including Hong Kong) is Taiwan’s largest trade partner, export market, source of trade surplus and second largest source of imports. Taiwan’s two-way trade with mainland China has continuously increased. Cross-strait trade relations Source: Ministry of Finance % ECFA Deploying Globally

1. The main objective of ECFA is to maintain the competitiveness of Taiwanese products in the mainland market. 2. The scope of the agreement includes reducing tariffs, eliminating non-tariff trade barriers, promoting trade and investment contacts, and boosting economic development and employment. 3.The early harvest list for Taiwan’s exports to the mainland includes 539 products, eight service industries, and three financial service sectors. The mainland’s list for exports to Taiwan covers 267 products, eight service industries, and one financial service sector. Significance of ECFA Deploying Globally

ECFA is only a framework agreement. Since ECFA came into effect on September 12, 2010, the two sides conduct four follow-up negotiations. 4. More open and systematic cross- strait economic relations Significance of ECFA Deploying Globally 5. Based on ECFA, the two sides established a cross-strait Economic Cooperation Committee The purpose of this committee is to promote follow-up negotiations. 6. Near 80%of the SMEs benefit from the early harvest program.

Utilizing Taiwan as a base for exploring both mainland China and other overseas markets. Investing in Taiwan by industries that benefit most from the opening of the Chinese market with a focus on “early harvest” items. Investing in Taiwan’s next-wave “star industries” such as lithium batteries, electric vehicles, cloud computing, e-books, tablet PCs, and 3D displays. Listing on the Taiwan stock market for issuance of Taiwan Depository Receipts (TDRs) and boosting Taiwan’s development into an “Asian NASDAQ.” Signing letters of intent (LOIs) to invest in Taiwan and cooperate in the joint development of the Chinese and Asia-Pacific markets. The Strategy of Using Taiwan as a Gateway to Enter the Mainland China Market ECFA Opportunities for SMEs Deploying Globally

In order to assist Taiwan’s SME’s in expanding overseas markets, the BOFT has implemented the following trade promotion plans : ─ The New Cheng Ho Plan ─ Most –Valued Products in Emerging Markets ─ Green Trade Promotion ─ The” Branding Taiwan” Plan Trade Measures for SMEs Trade Development

Upgrade the competitiveness of service industries Upgrade the competitiveness of service industries Creating a new procurement domain Creating a new procurement domain Invite foreign buyers to purchase in Chinese Taipei Invite foreign buyers to purchase in Chinese Taipei Assist companies in pursuing business opportunities among WTO GPA contracting parties Assist companies in pursuing business opportunities among WTO GPA contracting parties Assist companies in promoting trade in mainland China and emerging markets Assist companies in promoting trade in mainland China and emerging markets Intensifying the soft power of exports Intensifying the soft power of exports Expanding marketing strategies Expanding marketing strategies Expanding into the mainland China market and emerging markets Expanding into the mainland China market and emerging markets Promote re-lending plans and export insurance Promote re-lending plans and export insurance Perfecting the trade finance environment Perfecting the trade finance environment New Chen Ho Plan( ) (Global Market Expansion Plan) Chen Ho Market Explorer in the Ming Dynasty (A.D )

Key IndicatorsChinaIndiaIndonesiaVietnam Population (million)1,3411, GDP Growth Rate (%) Average PPP (US$)7,2393,1764,3803,104 Investments of Taiwanese Firms (US$) 97.3 billion52.7 million*14.0 billion22.5 billion Key Economic Indicators in MVP Project Countries (2010) Population=Market Size GDP Growth Rate= Economic Potential Average PPP= Purchasing Power Adaptability of Taiwanese firms to local environment Targeting Emerging Markets Targeting Criteria Source: IMF World Economic Outlook Database 2010 According to the Economic Division, Taipei Economic and Cultural Center in New Delhi, investment of Taiwanese firms in IndiaAccording to the Economic Division, Taipei Economic and Cultural Center in New Delhi, investment of Taiwanese firms in India is around US$1 billion. is around US$1 billion. Taiwan ChinaIndia Indonesia Vietnam ( ) MVP Project (Most-Valued Products) Trade Development

14 Deliver the concept and encourage manufacturers to develop and market the most- valued products in emerging markets Plan and execute international marketing activities to promote products Explore consumer needs of target markets through in- depth surveys Concept Communication & Consumer Research Concept Communication & Consumer Research Integrate resources from all related subordinate units of the MOEA and provide comprehensive support and assistance to Taiwanese firms, including R&D, production design and branding R&D and Application Design  Overseas channels development  Marketing and promotion toward emerging markets  Brand image development and promotion  Buyers from emerging markets come to Taiwan for procurement  Experiential marketing  International online shopping center Marketing and Promotion Information Feedback Market Application Promote the Concept MVP Project (Most-Valued Products) Elements of Most-Valued Products Customer Trust in Brands Acceptable Function & Quality Marketing Channels Affordable Prices Trade Development

15 APEC Consulting Services National Green Trade Image Building Provide Green Trade guidance and assistance to industries & SMEs Help SMEs in accessing related government resources Consultation Platform Chinese Taipei, Greening your Life Chinese Taipei, Greening your Life Carbon Footprint Disclosure MICE Industry Freight Services Internationalization Invite international organizations, trading partners & global corporations to share experiences Assist scholars & experts in participate in green trade related conferences & activities Enhancement of Competitiveness Promotion & Marketing Talent Training Hold summits and seminars; Provide training courses Produce a Short film for green trade promotion Set up an award for the best of Chinese Taipei’s green products & services Launch integrated marketing communication campaigns Various Marketing Campaigns Publish green product catalogs Hold video conferences for business match making Develop e-marketing plans Set up green product pavilions in international trade shows 15 Cross-Sector Collaboration Green Trade Website Definition: Trade of green products and services. Trade Development Green Trade Promotion( )

16 Branding Taiwan Plan ( ) -- Creating a favorable environment for brand development --Establishing a branding consultation and information platform --Expanding the branding talent pool --Raising the international image of Taiwan products and brands the Taiwan Excellence Awards is held every year winners of the Taiwan Excellence Awards are able to represent the country’s innovative image in the world markets. Main Purpose Trade Development Taiwan Ecellence Main m easures for SM Es -- foster an environment conducive to branding -- raise the awareness of international branding among domestic enterprises Future Goals -- Encourage Taiwan SMEs to move towards branding -- Bring more renowned brands into the world markets, and become the pride of Taiwan

17 CONCLUSION While foreign trade has been the driving force for Taiwan’s economic development, SMEs serve as the engine of Taiwan’s economy. Taiwan’s government will continue implementing a series of trade measures to assist SMEs in enhancing their competitive advantages and developing international markets. The signing of the ECFA between Taiwan and mainland China not only represents a milestone for our two economies, but also provides significant trade opportunities for our trading partners to explore the mainland China’s markets in the future. As a result, Taiwan will continue making every effort to maintain stable and close bilateral trade relationships with its key trading partners, particularly of those in the Asia-Pacific region.

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