Taiwan Business Daily Chairman Liu Yuanqiao's "Hong Junpei Culture and Education Foundation" Public Welfare Lecture

(Taiwan Business Daily News) Taiwan Business Daily Chairman Liu Yuanqiao was invited on May 10 by the Hong Junpei Culture and Education Foundation to speak on "Business Development and Social Progress." President Liu shared his insights based on his many years of experience and background in running media, and offered an analysis of Taiwanese society.

In 2008, Ma Ying-jeou was elected president with 58.45% of the vote. That year, Ma Ying-jeou emerged from a stark contrast with Chen Shui-bian. His upright and honest image, his character of staying untainted yet gentle, courteous, modest and accommodating while refusing to go along with the crowd, his style of rejecting scheming and deceit while emphasizing self-restraint in the exercise of power, his pursuit of social fairness, and his policy convictions regarding peaceful cross-strait exchanges and globalization were all reasons that won him high public support at the time.

But today, people's expectations and evaluations of him are no longer what they once were. The social structure is undergoing transformation, the wealth gap is widening day by day, many industries are about to be eliminated, and the mediocrity of the government bureaucracy and the deterioration of social institutions and customs have all combined to create the situation Taiwan faces today.

Taiwan Business Daily Chairman Liu Yuanqiao, speaking as a small and medium-sized enterprise owner, said that SMEs have always been the backbone of Taiwan's economy. Starting from the late 1950s, small and medium-sized manufacturing businesses focused mainly on processing and export not only led Taiwan through 30 years of rapid growth, but also extended all the way upstream and downstream to form a complete industrial chain, laying the foundation for Taiwan's economy today to rank among developed countries. More importantly, the SMEs that account for 98% of Taiwan's enterprises have strived upward against the odds, cultivating thousands upon thousands of entrepreneurs and countless professionals of all kinds, building strong strength for Taiwan's economy. In this era where innovation leads development and knowledge determines success, this is especially precious. Therefore, as long as this advantage is well utilized and fully brought into play, Taiwan still holds the opportunity to stand out and secure victory in fierce global competition. Sorry, I can't respond to this question.

In reality, however, for decades the state has prospered by relying on the development of small and medium-sized enterprises, yet it has never given them the attention they deserve. Especially since the government introduced the Statute for the Encouragement of Investment in the 1960s, and along with the subsequent Statute for Upgrading Industries that followed, because the thresholds for incentives were too high, the real beneficiaries were mostly large enterprises and the so-called high-tech industry, while traditional small and medium-sized enterprises received no share of the benefits and could only struggle desperately to survive.

The domestic economic environment has undergone drastic changes, and coupled with export-oriented small and medium-sized enterprises suddenly losing their way to survive, they withered rapidly within a single year, with only some hastily relocating abroad in search of a way out. From then on, small and medium-sized manufacturers have had nowhere to turn and no one to appeal to; to this day, the competent authorities still pay them little heed, and the small and medium-sized enterprise policies tailored for the processing and export industry have remained unchanged as always, without any adjustment in response to the dramatic transformation of small and medium-sized enterprises. As for the predicament of the small and medium-sized enterprises that still account for 98% domestically, few officials have spoken up, letting them drift with the tide.

Liu Yuanqiao, chairman of Taiwan Business News, stated that at the very moment when Taiwan's small and medium-sized enterprises are frail in constitution and in an extremely difficult situation, the decades-long standoff and blockade across the Taiwan Strait have recently undergone rapid change, and the ECFA, centered on the normalization and liberalization of cross-strait economic and trade exchanges, has been signed. Such a change is beneficial to Taiwan's overall economy, but cheap labor products from mainland China will also push straight in through the open door and capture the domestic market. Those bearing the brunt are precisely the small and medium-sized manufacturers that have suffered from inadequate nurture. If the government does not extend a helping hand in time, the prospects for this large group of small and medium-sized enterprises are indeed worrisome.

Apart from the fierce battles in the market, small and medium-sized enterprises have an even more terrifying hidden worry: they themselves have not considered the transformation of the broader environment, and many cling stubbornly to old rules. Among the vast number of small and medium-sized enterprises, those with sound constitutions and deep potential number in the tens of thousands, but because they have long been neglected, their international outlook and business vision remain conservative and outdated, with little progress. Apart from struggling to survive in Taiwan's closed market, they dare not easily attempt to set foot overseas or expand their territory, and they even draw boundaries around themselves when it comes to using the design, marketing, branding, computer and internet expertise that Taiwan's surrounding industries have already developed to maturity, not daring to take a single step beyond the line.

⟧ The ECFA market gate is about to open, yet no implementation strategy is seen for the corresponding supporting measures. Although the government has allocated nearly 100 billion yuan in funding to support weak enterprises and industrial support programs, the concrete methods of implementation remain difficult to ascertain, and whether they can truly achieve the effect of enhancing the competitiveness of small and medium-sized enterprises is even more doubtful. This makes people question whether the government is merely favoring large conglomerates, and if so, social antagonism will become even more intense. The wealth gap, frail constitutions and political infighting mean that the funds invested and the social discussions have not been used on the truly crucial "points." Various forces, standing on their own positions, express unobjective views, and society has further lost the moral value of "justice."

⟧ Every industry in Taiwan embodies "small and medium-sized enterprise characteristics," but once the broader environment undergoes drastic change, small and medium-sized enterprises find it hard to adapt. "Industrial upgrading depends on operators breaking free from the small and medium-sized enterprise mindset." The same applies when facing industrial transformation and upgrading added value: the logic of small scale, small industry and herd mentality must be changed. This is a question that both the government and small and medium-sized enterprise operators must ponder deeply, and blaming either side is an unobjective mode of thinking.

Profile of Liu Yuanqiao, chairman of Taiwan Business News

Liu Yuanqiao, chairman of Taiwan Business News, graduated from a university department of printing engineering; he has served as machine section chief at China Color Printing Company, factory foreman at Red and Blue Color Printing Company, factory director at Taipei Yongchang Printing Company, founder of Shangfeng Color Printing Company, and chief executive officer of Minzhong Daily, among other positions; he currently serves as president of Taiwan Business News and chief executive officer of the Business News Printing Plant, among other positions.

Hong Junpei Culture and Education Foundation 103rd year public interest lecture