Agriculture

Westward Journey

• Byline:OSCAR CHUNG
• Publication Date:12/01/2010

Shanghai’s People’s Square subway station. Opportunities for Taiwanese businesses in the mainland are growing as that market’s 1.3 billion consumers gain purchasing power. (Photo by Huang Chung-hsin)

As it transitions from its role as a super factory to that of a super market, mainland China continues to attract entrepreneurs from Taiwan.

Among the modern high-rises along the Pudong side of Shanghai’s Huangpu River, the eye-catching building belonging to the Taiwan-based Aurora Group vies for the attention of tourists from around the world. Across the river, Shiatzy Chen, a luxury Taiwanese fashion brand, opened its mainland China flagship store in 2005 in one of the historic buildings in the famous Bund area. Even the mascot for the 2010 Shanghai Expo, which was ubiquitous in the city during the recent event, was the brainchild of a Taiwanese designer.

In Xiamen, Fujian province, which was one of the first places where Taiwanese investors established a presence in the mainland, Taiwan is just as visible as in Shanghai. Today there are about 3,500 Taiwanese enterprises in Xiamen, Fujian’s economic center, a figure five times that in 1991, when the official ban on Taiwanese firms doing business in the mainland was lifted. “Guangdong [in southern China, bordering Hong Kong] and Fujian are known for attracting Taiwanese investors early on, but they came to Xiamen even earlier—before any other mainland city, in fact,” says Tseng Chan-jaw, chairman of the Taiwanese Chamber of Commerce Xiamen. In Xiamen, Tseng notes that Taiwanese enterprises now contribute about 40 percent of the city’s industrial production and about 60 percent of its export value.

Taiwan’s mainland-bound investment rose from US$174 million in 1991 to US$7.1 billion in 2009, according to the Ministry of Economic Affairs. Shi Zhengfang, an associate professor in the Taiwan Research Institute at Xiamen University, says Taiwanese investment in the mainland can be divided into four stages. The first stage came when investment was concentrated mainly in labor-intensive manufacturing sectors in the late 1980s. Back then, investors found that land was cheap and large tracts were plentiful, while a seemingly inexhaustible labor force was willing to work for low wages. “Extremely preferential measures such as tax incentives were also put in place for the express purpose of attracting non-mainland enterprises,” Shi adds.

The next stage occurred around the mid-1990s, when Taiwanese investors interested in capital- and technology-intensive sectors like petrochemicals and machinery manufacturing ventured to the mainland, followed in turn by those focused on the information technology (IT) and other high-tech industries around 2000. “Now we are entering the fourth stage, characterized by investments in the service and cultural creative industries,” Shih says. “Nearly all major local governments in the mainland are saying they want to develop their cultural creative sectors because the industry uses fewer natural resources and has great growth potential.”

Venturing Overseas

Like many other Taiwanese business owners around 1990, Tseng, who has been involved in manufacturing electronic products since 1981, began to consider venturing overseas because of the rising cost of labor in Taiwan. Thus, at the age of 40, he departed for Southeast Asia in search of a new location for his company, Doowell Electron Co., but soon discovered that the region’s challenges included poorly motivated workers, unstable political systems and risky public security environments.

After taking such issues into account, Tseng finally decided to head for Xiamen. “I chose Xiamen because I felt more at home here, compared with the rest of mainland China,” says Tseng, who, like the majority of people in Taiwan, can trace his ancestry to the southern part of Fujian province, or the southern Min area, where Xiamen is located. “The southern Min dialect they speak here is familiar, and so are the food and traditional architecture,” he says.

Xiamen was also attractive because it was one of the four export-oriented special economic zones the mainland government designated at the beginning of the 1980s. All of the zones featured tax incentives and better infrastructure than other areas in the mainland. “If you look at the four special economic zones, Xiamen is the second most successful case,” Tseng says, noting that Shenzhen, another special zone adjacent to Hong Kong, is considered the most impressive for its economic development.

It was not always easy, however, to uproot a business and move it across the Taiwan Strait. “I was not the only one who was moving to the mainland,” Tseng says. “To operate the enterprise here, I had to ask its executives to come along. Whether they could adapt to the local environment or not was an important issue for the company.”

Tseng’s decision to move to mainland China has proven to be a good one. In 1992, the company’s first year of doing business in Xiamen, Tseng’s exports, mostly bound for Japan, reached US$1 million in value. By 2007, prior to the recent global recession, the value had grown exponentially to reach nearly US$400 million.

Drivers pass signs promoting the Straits Forum in downtown Xiamen. More than 10,000 Taiwanese participated in this year’s forum. (Photo by Huang Chung-hsin)

As prosperity has increased in mainland China, however, the factors that initially lured Taiwanese businesses have become less attractive. “The piece of land on which this building is standing was given away for free by the local government a dozen years ago,” Tseng says of the 12-story building housing the Taiwanese Chamber of Commerce in downtown Xiamen. The building is owned by the Taiwanese organization and several individuals from Taiwan. “But now the land itself is worth more than the building,” he says.

Almost all investors from anywhere the world were welcome in the mainland when Taiwanese enterprises first began exploring the business environment across the Taiwan Strait, Tseng adds, but the situation gradually changed as the mainland attracted more and more international players. “In the beginning, you could come here with an investment of as little as US$50,000,” he says, “but now it is much more. Taiwanese businesspeople still continue to come to mainland China, but now not everyone who wants to come is qualified to come.”

Tax breaks have also been reduced for international businesses operating in the mainland. Prior to 2008, all overseas and Taiwanese enterprises operating in mainland China enjoyed the privilege of paying just 15 percent corporate income tax, compared with 33 percent for local companies. Since 2008, however, all enterprises, whether foreign or local, must pay a 25 percent tax, which has had the effect of increasing the tax burden for overseas companies and lessening it for mainland enterprises.

The trend toward greater protection of local workers’ rights has also made it more challenging for Taiwanese and other foreign businesses to establish a foothold in mainland China. The Labor Contract Law promulgated by Beijing in June 2007 and taking effect in January 2008 was designed to give mainland employees more rights and make sure those rights are upheld. The law demands that employers use written employment contracts with their employees and sets standards for terminating employment. It also allows employees to take labor-related legal action against their employers.

Payrolls are also increasing in the mainland, although the minimum wage varies from place to place. The official minimum monthly wage in Shanghai, for example, is currently RMB1,120 (US$167), up from RMB750 (US$100)—a 49.3 percent increase—prior to September 2007. In fact, mainland China’s central government is constantly talking about increasing employee wages these days, says Justin Lee, vice president of Shanghai Maxim Garment Accessories Co. “It’s starting to encourage workers’ unions to negotiate with employers over wages,” he says. “This is an issue entrepreneurs will have to face more and more in the future.”

The situation was further complicated by the global recession that hit in the fall of 2008, especially for export-oriented companies like most of the Taiwanese operations in mainland China. “Because of the Labor Contract Law and the recession, thousands of Taiwanese enterprises in Dongguan [a manufacturing hub near Shenzhen] alone have closed down,” says John Hsu, president of Encounters Products Corp., an electronics manufacturer in Xiamen.

Labor issues concerning Taiwanese enterprises operating in the mainland became front-page news following a string of worker suicides at Foxconn Technology Group starting from January this year. All told, 12 employees of an electronics plant in Shenzhen operated by Foxconn, which is headquartered in Taiwan, jumped to their deaths. With the incidents causing some media outlets to label the Taiwanese IT contract manufacturer a sweatshop, Foxconn increased workers’ monthly wages from RMB900 (US$135), to RMB1,200 (US$180) in June this year, and was scheduled to raise them to RMB2,000 (US$300) in October. Foxconn’s moves have inevitably created a ripple effect for other enterprises. “Thanks to the Labor Contract Law, my operational cost increased by nearly 40 percent. It’s grown another 10 percent since the Foxconn incidents,” Hsu says.

Proactive Measures

The impact of the events at Foxconn varies across manufacturing sectors, however, with the electronics sector being affected the most, according to Lu Xiao-yan, vice president of the Association of Shanghai Taiwan Businessmen Invested Enterprises. Still, business operators in many fields have taken note of the incidents at Foxconn and have begun taking proactive measures, such as establishing a mechanism for increasing wages.

Growing emphasis on the need to protect the environment is also boosting costs for manufacturers in the mainland. Justin Lee says stricter environmental regulations have made factories in Shanghai clean up their operations to survive. Lee’s company, Shanghai Maxim, began taking steps toward greener operations in 2009. It not only has designed in-house training sessions for employees on green production, but is also working with the Chunghwa Institution for Economic Research in Taiwan in an effort to reduce carbon emissions by 10 percent this year from the 2009 level. “The value of our company lies in its ability to seek maximum profits without sacrificing the environment,” Lee says. In addition to building the company’s corporate image, this environmental attitude also helps improve business. “We’ve been supplying Wal-Mart, which is concentrating on making its operations greener, and our effort in environmental protection should help us take top position on the retailer’s supplier list,” he says.

Encounters Products’ electronics factory in Xiamen. Labor costs are rising significantly in the mainland, posing a major concern for Taiwanese-owned businesses. (Photo by Huang Chung-hsin)

Maxim’s experience demonstrates the flip side to the mainland’s growing emphasis on the environment—that while the new rules pose a challenge to businesses they also constitute a stimulus for change and create opportunities. Kao Ming-shu is the president of Pro-tek Electroplating Development Co., a firm that does electroplating and also treats water after it is used in the electroplating process. Since 1995, his company has operated an industrial park that houses about 40 factories in the Guannan Industrial Zone of suburban Xiamen. Kao says he is happy to see the growing environmental awareness as, in the past, some electroplating businesses were deterred from setting up shop in his park due to the relatively high rent it charges as a result of its higher environmental standards. “But the official environmental standards in mainland China are getting stricter and stricter, which is good for my business,” Kao says.

Increased competition is another major change facing businesses in the mainland market, especially in the service sector, which is becoming ever more crowded. “You have to innovate and change constantly, especially in places like Shanghai. Here your rivals from around the world are fiercer and consumers are pickier,” says Lo Tien-an, the Taiwanese founder of Shanghai Christine Foodstuff Co., which has been in business for 18 years and has become a household name in the city and neighboring areas because of its high-end pastry products. Lo began investing heavily in redesigning his bakery shops when 85^oC Café, a rival from Taiwan, opened in Shanghai in 2007. He also launched an innovative restaurant featuring bread dishes as the main course in downtown Shanghai this past summer. “We have to create trends to stay ahead in this business,” Lo says.

Meanwhile, under the pressure of rising labor costs, manufacturers are facing the choice of innovating to remain competitive or moving again to other countries or the mainland’s less expensive interior provinces. In the challenging business environment in the mainland’s coastal areas, home to the majority of Taiwanese businesses, most have chosen to follow new directions in management or production. “Many Taiwanese enterprises in the mainland have visited cheaper places such as Vietnam and India, but few decided to leave mainland China,” Tseng Chan-jaw of the Taiwanese Chamber of Commerce Xiamen says, because old problems persist in those places, such as poor infrastructure and an unstable political environment. As for the interior, Tseng says he currently has no plans to shift Doowell Electron’s operations inland, but would consider doing so if his clients made the move.

“Small and medium-sized enterprises can’t afford to set up totally new operations in other places,” says Tsai Shih-ming, a Taiwanese lawyer at a law firm in Shanghai. “Larger players can, and they’re welcomed and offered great incentives to move by local governments in the interior since their arrival can create many job opportunities.”

Encounters Products in Xiamen is another Taiwanese manufacturer that has elected to stay. President John Hsu knew that changes would be needed for the company to survive, however, and in mid-2008 decided to begin paying employees by the piece, rather than by the day, to enhance production efficiency. “I didn’t do so earlier since my company could still get by before the recession,” he says. Hsu’s company also began to develop plans for manufacturing cell phone cameras in mid-2008 in a bid to diversify its product line, which originally focused on remote-control components.

Meanwhile, although the cost of labor is rising, the pockets of mainlanders are becoming deeper, says Tsai Shih-ming, referring to the huge business potential in the expanding domestic market. Tseng Chan-jaw concurs, saying “It’s not logical to move away from a big emerging market.”

John Hsu is aware that his company needs to focus less on exports and more on the mainland market. “I’ve definitely got to shift attention to the domestic market and develop products for it,” he says. “To serve such a large market, my business has to be stronger and bigger in scale.”

At the same time, the mainland’s economic policies are accelerating this shift in focus to the domestic market. Some of those policies were designed to counter the impact of the recent financial crisis on the mainland economy, which has long depended on its export sector. Nevertheless, they have had the effect of helping Taiwanese firms operating in the mainland. Companies like Encounters Products, for example, benefited from a policy the central government put into place in December 2008 to subsidize the purchase of home appliances in rural areas.

Meanwhile, in 2008 the mainland government also began to reduce its support for exports by reducing rebates. “If Taiwanese as well as mainland businesses can look to and explore the domestic market, they should be more capable of coping with crises from outside,” says Xiamen University professor Shi Zhengfang.

Staff at Pro-tek Electroplating Development in Xiamen engage in the electroplating process. The firm also treats water used in the electroplating process and has benefited from the growing environmental awareness in the mainland. (Photo by Huang Chung-hsin)

The manufacturing sector is not the only one to benefit from mainlanders’ growing wealth, as domestic buyers are also purchasing more services. “The vast majority of visitors to my golf course in the 1990s were Taiwanese, Korean and Japanese businesspeople, but now about 70 percent of them are mainlanders,” says Chiang Pzung-ting, who has operated the Kaikou Golf Club in Xiamen since the early 1990s. Similarly, May Chen, general manager of Mark Agronomy Co. in suburban Xiamen, which grows and sells plants and does landscaping work at private residences, found herself serving newly wealthy customers at the tip of the economic pyramid in the late 1990s. That has changed, however, with the emergence of a stronger middle class. “Today I have a broader customer base,” she says. “In general, local people are spending money more sensibly now. So I make profits by selling a comparatively larger amount of less expensive products.”

Meanwhile, the easing of tensions in the cross-strait relationship and closer interaction between Taiwan and mainland China since the election of Republic of China President Ma Ying-jeou in March 2008 has given Taiwanese businesses even more opportunities to grow in the mainland. Taking place roughly every six months since June 2008, meetings between Chiang Pin-kung of the Taipei-based Straits Exchange Foundation and Chen Yunlin, representing the Beijing-based Association for Relations Across the Taiwan Strait, have normalized cross-strait relations and made things easier for business owners. One result of the so-called Chiang-Chen talks, for example, has been the establishment of more convenient transportation links between the two sides.

Businessman Kao Ming-shu, who has also operated a hotel in downtown Xiamen since 1995, credits the improved airline connections between Xiamen and Taiwan with increasing his business. Kao says his hotel revenue grew 15 percent within months of Ma’s election and the expansion of direct flights.

More Flights, More Business

Occupancy rates at Kao’s hotel have also increased, from around 60 percent before 2008 to more than 80 percent currently. That figure rose even higher during the Straits Forum based in Xiamen in June this year. “It was fully booked, mostly by Taiwanese people,” he says of the especially high occupancy rate during the event. This year, more than 10,000 Taiwanese representing various social and business sectors attended the annual series of meetings, which began in 2009 and is co-organized by groups in mainland China and Taiwan.

The improving cross-strait climate has allowed lawyer Tsai Shih-ming to make career strides in Shanghai as well. Tsai says the mainland government began allowing Taiwanese to take its licensing examination for lawyers in 1994—three passed it—but then suspended the exams in 1995 as the cross-strait relationship began to sour. The suspension continued when the independence-leaning Democratic Progressive Party controlled the presidency from 2000 to 2008. Within one month after Ma’s election, however, Tsai learned that Taiwanese would be given the chance to take the licensing examinations again. Thirty-seven Taiwanese lawyers passed the exam in 2008, and the number increased to 56 in 2009, with Tsai among them.

A law major from Fu Jen Catholic University in Taipei County, Tsai actually began trying to practice in the mainland market in the early 1990s. Because he could not take the exam and thus could not obtain a certificate to practice law for many years, he could only provide counseling services for Taiwanese businesspeople, his target clients. Today, however, he can represent clients in court just like his mainland counterparts. Tsai is handling many more cases than before, partly because of his being admitted to the mainland bar and partly because of the growing number of Taiwanese people in the mainland, who tend to seek help from Taiwanese lawyers.

With the fifth Chiang-Chen meeting in June this year, which climaxed with the signing of the Economic Cooperation Framework Agreement (ECFA), cross-strait relations moved to a whole new level. ECFA is expected to deepen cross-strait economic ties by facilitating bilateral trade and broadening market access for companies on both sides of the strait.

Tsao Yu-nan runs a business in Xiamen that imports Taiwanese goods. At a food exhibition in Xiamen in June where there was a section exclusively for items from Taiwan, Tsao remarked on the greater number of booths selling Taiwanese products at this year’s show. “They’re testing the waters of the local market because people are expecting lower tariffs to help them enter the mainland market,” she said, referring to the tariff reductions at the heart of ECFA.

Tseng Chan-jaw echoes the point, saying that tariffs are also a crucial issue when it comes to sourcing equipment and raw materials, and one that makes ECFA an economic necessity. In the past, Taiwanese manufacturers based in Taiwan bought most of their supplies from other Taiwanese companies, a practice that continued when manufacturers moved to the mainland, Tseng explains. But these days more and more countries are signing free trade agreements with mainland China, meaning that Taiwanese suppliers would face a great disadvantage if their products were to remain subject to trade tariffs.

Already a household name in Shanghai and neighboring cities, Christine Foodstuff plans to gain listing on Taiwan’s bourse soon. (Photo by Huang Chung-hsin)

“Taiwan is not the only source of supplies,” Tseng says. “If Taiwanese imports become more expensive compared with those from other places, we would have to turn to other suppliers. In that case, our suppliers in Taiwan would have no choice in the end but to move to the mainland, too.”

ECFA has also broadened access to the mainland market for Taiwanese service providers. Lu Xiao-yan of the Association of Shanghai Taiwan Businessmen Invested Enterprises notes that the agreement’s influence on Taiwan’s financial institutions and hospitals has been especially significant. Six Taiwanese banks are scheduled to set up branches in the mainland by the end of this year—one in Shenzhen near Hong Kong and five in Shanghai and the neighboring city of Suzhou—thanks to the signing of ECFA. “This is very helpful to Taiwanese people seeking financing on the mainland,” Lu observes. “Taiwanese enterprises trust Taiwanese banks, as they originally formed strong relationships with them back in Taiwan.”

There is also much more room for Taiwanese hospital chains to develop in the mainland under ECFA. The island’s hospitals have provided services across the strait for years, including five operating in Shanghai alone, but all of them have had to operate as joint partnerships with mainland investors. Under ECFA, however, hospitals can now operate as wholly Taiwanese-owned entities in Shanghai, Hainan Island and the provinces of Fujian, Guangdong and Jiangsu. Taiwanese hospitals could make further inroads in the mainland pending the outcome of the sixth Chiang-Chen meeting, which is scheduled to take place at the end of this year. Those meetings are expected to touch on cross-strait medical issues such as whether healthcare expenses paid by Taiwanese in the mainland are covered by Taiwan’s National Health Insurance. “Financially independent, wholly owned hospitals have a better chance than partially owned ones to be included in Taiwan’s health insurance system,” Lu says.

Success and Risk

Although Taiwanese entrepreneurs in mainland China have created numerous success stories over the past 20 years, they have also encountered risks, especially in joint ventures. Before the mainland entered the World Trade Organization in 2001, the government required all overseas investors in the service sector to work with local ones to establish business ventures, lawyer Tsai Shih-ming says. “Joint ventures have been the major reason Taiwanese sometimes found themselves in trouble in the mainland,” he says. “You know, Taiwanese and mainland investors don’t always see eye-to-eye in terms of managerial methods and business goals, not to mention how to split profits and risk.”

Copycat competition is another problem for Taiwanese businesses in mainland China. May Chen of Mark Agronomy Co., for example, complains that some of her employees have not shown much loyalty. “They made contacts with some of my company’s customers and then just quit to set up their own businesses,” she says. “The customers’ orders went with them.” Golf course operator Chiang Pzung-ting has found that mainlanders learn very fast from Taiwanese businesses that do not go high-tech. Mainlanders easily become fierce competitors, he says, adding that he is facing more competition these days from homegrown golf course developers.

Some entrepreneurs believe that the lack of deep local connections is also a major hindrance for Taiwanese businesses. Chiang Pzung-ting and May Chen both say that the long history of cozy social relations between members of the Xiamen business community and local government officials makes the path much smoother for locally owned enterprises. “Many Taiwanese businesses have gone back to Taiwan because they cannot compete in this respect,” Chen says.

Tsai Shih-ming, however, believes that connections can be overemphasized. Out of the belief that good connections lead to good business, many Taiwanese businesspeople in the mainland spend a lot of time building connections with government officials, the lawyer says. As a result, they often ignore the need to seek legal assistance to explain the details of contracts they sign with local partners. After the contracts are signed, however, the Taiwanese businesses could find themselves in a poor position in any lawsuit against local partners. According to Tsai, connections are helpful in mainland China, but their effect is limited when the law clearly has been broken.

When asked whether he thinks there are more frustrations than success stories, or vice versa, in regard to Taiwanese doing business on the mainland, Tsai finds it impossible to give an answer. “You know, what a doctor sees every day is patients,” the lawyer says, meaning that just as healthy people rarely visit doctors, those without legal problems usually do not seek out lawyers. He does point out, however, that the ongoing Chiang-Chen talks are giving Taiwanese businesses more reason to feel confident when operating on the mainland. Along with ECFA, the fifth Chiang-Chen meeting resulted in the signing of the Cross-Strait Agreement on Intellectual Property Rights Cooperation and Protection, which will improve protection for patents, trademarks and copyrights, as well as rights for specially bred plant varietals. The upcoming sixth meeting is expected to involve the discussion and signing of a bilateral investment protection accord.

Despite the challenges, Taiwanese businesses continue to see promising opportunities in the mainland, especially with the improving economy and better cross-strait climate. “I saw business opportunities when I was in Taiwan, but I didn’t take advantage of them,” says Lo Tien-an, the bakery magnate who is planning to expand his business to northern mainland China and go public on Taiwan’s bourse next year. “So when I saw them again in the mainland, I knew I needed to cherish them.” Lo is seizing one of those opportunities in Nanjing, 300 kilometers west of Shanghai, where he is planning to build a Disneyland-style amusement park featuring cartoon figures whose names are related to pastry. He expects to generate significant revenues from the park and spin-off products such as cartoons and comic books that he hopes will surpass the earnings of his current business some day.

“So many people left mainland China to seek opportunities across the Taiwan Strait hundreds of years ago,” Tseng Chan-jaw of the Taiwanese Chamber of Commerce Xiamen says. “Today so many of their descendants are returning to the mainland. They’re moving again in search of opportunities.”

Building an Impressive Presence

The Aurora Building by the Huangpu River is one of the most visible features of Shanghai’s skyline. (Photo by Huang Chung-hsin)

Since 2003, the six large red letters spelling out the name “Aurora” have drawn attention to the 180-meter-tall Aurora Building by the Huangpu River in Shanghai. The building rarely fails to impress people strolling in the city’s historic Bund area, especially at night, when the logo is illuminated. Founded by Chen Yung-tai in 1945, the Aurora Group’s development in mainland China since 1993 is just as impressive as the building itself.

In Taiwan, Aurora first became known to corporate customers as a source of imported Japanese office equipment such as punch clocks and copy machines. The company began selling calculators under its own brand in 1978 and launched its first line of office furniture in 1990. In 1997, Aurora began setting up shops across the island that sell cellphones and service plans to individual customers.

In 1993, the enterprise made its debut in mainland China by establishing a plant in suburban Shanghai to produce office furniture as well as electronic items like calculators, with the former targeting the mainland’s domestic market and the latter the export market. In 2003, Aurora set up a network of sales outlets and began selling copiers under its own brand in the mainland, although they are still all made in Japan. It began selling electronic items in the mainland market at its existing sales outlets in 2009.

“Japanese copy machine brands tend to work with different sales agencies in various mainland provinces, instead of a single one responsible for the whole market. But in the long term, we want to establish a single nationwide sales network for our products,” says Ernest Ma, one of Aurora’s chief operating officers, referring to the major reason the company decided to sell copiers under its own brand.

Seven years after Aurora began selling its own copy machines across the strait, they have already taken a 5 percent share of the total market in the mainland. Meanwhile, Aurora’s office furniture, which focuses on medium-to-high-end items that are mostly made in the mainland, also has grabbed about a 5 percent share of its market. That is a significant number, as office furniture revenues in mainland China annually amount to around RMB100 billion (US$15 billion), according to Aurora. “These figures suggest that there is still a lot of room for us to grow,” Ma says. “In Taiwan, we’ll maintain what we’ve already achieved, whereas the enterprise’s expansion will mainly occur in the mainland.”

For now, Aurora is focusing its business on mainland China’s coastal areas, but the inland regions are increasingly drawing its attention, according to Ma, who believes the central part of the country will see the next big economic boom, partly because of the newly built network of high speed railway lines there.

The thaw in cross-strait relations over the past two years, which led to the signing of ECFA in June this year, has also benefited the company’s development. “For now, our Taiwan office makes purchases of raw materials in Taiwan and our mainland office does it in the mainland. But we’re now reviewing the possibility of our Taiwan office purchasing materials from the mainland and the mainland office buying from Taiwan. That could reduce our costs [because of reduced or eliminated tariffs in the post-ECFA era],” Ma says.

Meanwhile, the increased vibrancy of economic activity on both sides of the Taiwan Strait since ECFA’s signing has already had an indirect but positive effect on Aurora. “The economic boom since the agreement means we’ll have more opportunities to sell our products targeting corporate customers,” Ma says.

Meanwhile, Aurora’s participation at the 2010 Shanghai Expo, where it had its own pavilion, has further boosted the company’s name recognition. “We’re here in the mainland to build our brand. We take note of any opportunity that can help in this respect,” Ma says. By establishing a presence at the expo, the company seized the opportunity to make its brand name known to the 1.8 million attendees who had visited the Aurora Pavilion as of early October. Through its expo participation, expanding network of sales and services and the red logo lighting up the night in downtown Shanghai, Aurora is well on its way to establishing a solid brand name throughout mainland China.

—Oscar Chung

Write to Oscar Chung at oscar@mail.gio.gov.tw