Wednesday, December 21, 2016

Taiwan’s Export Processing Zones: Forward-looking at 50 (Taiwan Business Topics)

Free trade zones of one kind or another have been around since at least the 1930s, but when the Taiwan government created an export-processing zone (EPZ) in Kaohsiung in December 1966 – half a century ago this month – it was still a very bold move.

“Two major psychological barriers and a number of minor problems had to be overcome before the idea evolved into an actual program,” the late K. T. Li, the technocrat given much credit for Taiwan’s economic transformation, wrote in his 1988 book The Evolution of Policy Behind Taiwan’s Development Success.

The first obstacle was that “resentment of the extraterritoriality (freedom from local jurisdiction) enjoyed by foreigners in prewar China created opposition to both free trade zones and EPZs,” said Li. “Although it is true that the zones allowed investors to operate under a different set of rules than those outside – which was the whole point – they were nonetheless [Taiwan’s] rules.” The second barrier was the fear of exploitation – “the sale of relatively cheap Taiwanese labor for the enrichment of foreign investors,” as Li put it.

There was also a concern that companies inside the EPZ would have an unfair advantage over exporters operating outside the zone. But as Li pointed out, enterprises that invested in the EPZ had already established their export markets, so they posed little threat. “Indeed, during the early years they helped promote Taiwan as a supplier of light consumer goods and not merely as a source of agricultural products,” Li explained. “In fact, after visiting factories located in the EPZs, foreign buyers would necessarily come to Taipei to examine products produced by firms outside the EPZs. In this way, new business connections were established. Consequently, I have always regarded the EPZs as showcases for our industries.”

The EPZ was created just as Taiwan was beginning its export-driven economic takeoff, and it became a source of national pride. Among early investors in the zone were companies that helped established the foundations of Taiwan’s information, consumer electronics, optics and TFT-LCD industries, including Philips Electronic Building Elements Industries (now known as NXP Semiconductors Taiwan Ltd.), Hitachi, and Canon.

According to an August 1972 report, of the 161 factories in Kaohsiung’s EPZ, 37 were electronics manufacturers, 23 made textiles, 21 produced handicrafts, and 14 were garment manufacturers. Only the first of these sectors is still important. Nowadays, the EPZs’ most important tenants are semiconductor testers-and-packagers and LCD companies. Electronics production no longer means TVs and radios, but flat-panel displays for mobile phones and components for photovoltaic arrays. Intangible goods like apps, as well as animation and cloud-computing services, are coming out of the zones’ software parks.

Over the years, EPZ tenants have became important customers for Taiwanese companies outside the zones. Back in 1967, a mere 2.1% of the inputs shipped into Kaohsiung’s original export-processing zone were of local origin. By 1973 that figure had risen to 17%, and in the 1980s it reached 33%. Last year domestic inputs equaled 48% of the zones’ total export value, according to the Ministry of Economic Affairs’ Export Processing Zone Administration (EPZA).

Today several hundred export-processing zones operate around the world, and many of those set up in the 1970s and 1980s were directly inspired by Kaohsiung’s success. The original site, a 68.3-hectare plot next to the city’s harbor, filled up so quickly with factories that within five years new zones had been designated in what are now Taichung City’s Tanzi District and in former sugarcane fields in Kaohsiung’s Nanzi District.

Between late 1967 and 1976, total employment in the zones grew 13-fold. Since then, the number of workers has fluctuated, but the current tally of 81,045 (12.4% of whom are foreign nationals) is the highest it has been in this century. The most recent nadir was in 2009, when employment came to 58,002. In addition, the workforce is far better educated than ever before, with recent data showing that 7.5% of zone employees hold graduate degrees.

First-mover advantage was one reason for the EPZs’ initial popularity with investors. In a 1992 issue of Asian Survey, Canada-based academics Jing-dong Yuan and Lorraine Eden wrote: “EPZs in Taiwan and South Korea were established in the late 1960s when the first wave of global industrial restructuring was taking place. A new international division of labor was created as multinational enterprises in labor-intensive, non-complex, light industries began to move offshore to reduce production costs… There were few other countries with EPZs, so they faced little direct competition.”

As Yuan and Eden explained: “Both countries had already achieved a measure of economic growth by the late 1950s so that labor-intensive industries were relatively well developed, making it possible for zone enterprises to establish linkages with domestic producers.” Japanese colonial rule was a recent memory in both countries, making them “natural sites for Japanese FDI.”

Half the NT$138.2 billion total foreign investment in Taiwan’s EPZs between their creation and October 2016 came from Japan, according to EPZA data. Although the zones’ contribution as a proportion of the island’s exports has declined since 1974, when they stood at just over 9%, the 2014 figure of 4.7% was the highest for some years. Cumulatively, exports from EPZ tenant enterprises have earned Taiwan around US$76 billion.

The EPZA now supervises seven EPZs, a logistics park, and two software parks. In all, they cover 530.3 hectares. The number of tenant companies now totals 602, up from 568 at the end of 2013. Manufacturing tenants pay a service charge of 0.08% to 0.22% of turnover (to reward success, the rate is regressive).

Both software parks have made notable progress. Total sales volume of the Kaohsiung Software Park approached NT$15 billion in 2015, 30% higher than in 2014, and 100% of the land (but not all of the office space) in the Taichung Software Park has been rented out. In the past, the zones offered a very different business environment compared with the rest of Taiwan. The infrastructure was better and the paperwork less onerous, but until 1986 the tenant manufacturers were required to export everything they produced.

The science parks in Hsinchu, Taichung, and Tainan nowadays enjoy a higher profile than the EPZs, but the former undoubtedly benefited from Taiwan’s experience with the latter. "The statute for the establishment and administration of the science parks, as well as the systems of one-stop services and factory-building land, are all copied from the export-processing zones," says EPZA Director-General Huang Wen-Guu.

Even though the rest of the island has caught up in terms of simplified procedures and efficient transportation links, the EPZA still strives to accommodate every qualified investor. "The main challenge is that we lack space," says Huang. "We need to expand, or figure out how to relocate older buildings to make space..."

To read the whole article online, follow this link. To see the article I wrote about Taiwan's EPZs half a decade ago, go here. The photo is courtesy of, and shows a new factory belonging, Advanced Semiconductor Engineering, one of the zones' key tenants.

Monday, December 19, 2016

New life for Taichung's old buildings (Compass)

I’ve long been captivated by architecture, concerned about the environment, and fascinated by Taiwan’s past. These interests converge neatly at dozens of locations where the authorities or private landowners have decided to preserve old buildings, and adapt them for modern uses. Thanks to surging interest in local history, sites becoming available as old industries wither, and Taiwan’s booming tourism industry, several such projects have been completed in recent years.

These repurposed buildings add diversity and beauty to the cityscape. At the same time, the environmental argument is compelling. Professor Lin Hsien-te, one of Taiwan’s leading practitioners of sustainable architecture, points out that many buildings on the island are knocked down before they’re 30 years old. This obviously represents a massive waste of resources. 

The great majority of new buildings in Taiwan are reinforced concrete (RC). Not only does cement have a huge carbon footprint, but on average each square meter of floor area for an RC structure generates 1.8kg of dust and 0.14m3 of solid waste during construction, and then another 1.23m3 of solid waste when the building is demolished. Even the most thorough of renovations, therefore, has a smaller environmental impact than destroying a building and starting again from scratch. 

In Taichung, one of the first repurposing projects transformed a row of warehouses immediately behind the old railway station. What’s now called Stock 20 was built around 1917; since 2000, they’ve been made available to artists for exhibitions and performances. Air-conditioning and modern bathrooms were added, and if you look up while inside you’ll notice a lot of work has been done to make the roof safe.

How much you’ll enjoy Stock 20 depends a lot on whether the current events appeal to you. If industrial heritage rather than art floats your boat, walk five minutes southwest to Taichung Cultural and Creative Industries Park. It’s quite easy to spend an hour or so looking at and inside the buildings which dot this 5.6-hectare former winery.

Since 2011, the complex has served to nurture startups in various fields such as broadcasting, design, and digital content.  A couple of sizable new structures have been added to the site, but the original infrastructure - including 50,000-liter tanks in which rice wine was fermented - remains in place. Bilingual information boards explain how the architect took into account both Taiwan’s hot, humid climate and the frequency of earthquakes. Even if none of this interests you, you’re sure to enjoy wandering around in search of photo ops.

Aficionados of Japanese-style architecture should head next to the Natural Ways Six Arts Cultural Center, a landmark so gorgeous it’s hard to believe it was once part of a prison. The main attraction here is the dojo where, before and during World War II, prison staff practiced martial arts such as kendo. The building now hosts classes and lectures on a variety of subjects; its current name alludes to the six disciplines Confucius regarded as essential to a good education.

While here, it’s worth taking a quick look at the old dormitory buildings a stone’s throw to the south. Several dates from around World War I, and only a few are still occupied. One of the uninhabited bungalows is being torn apart by an immense banyan tree. If preserved, it could easily be turned into a smaller version of Tainan’s Anping Tree House.

In a different part of the city, not far from National Taiwan Museum of Fine Arts and the Calligraphy Greenway, is Shen Ji New Village. The buildings here aren’t especially old, but they’re very typical of the housing provided for government employees and their families between the 1950s and early 1970s. Each has two floors, and there are two housing units per building. Unlike more modern homes, there are no balconies, and no external shelves to hold air-conditioners...

I wrote this article at the same time as this piece about repurposed buildings throughout Taiwan. To read the entire article, pick up the December issue of Compass (a very useful bilingual city guide for Greater Taichung), or visit the publisher's website. I took the top photo at Taichung Cultural and Creative Industries Park; it also appears on the cover of Compass. The lower photo was taken at Natural Ways Six Arts Cultural Center.

Tuesday, November 22, 2016

Bussing Through Taiwan's Bucolic East (Taiwan Business Topics)

After World War II, Taiwan’s western lowlands saw rapid economic and social development. Cities like Taipei and Kaohsiung multiplied in size, and factories producing “Made in Taiwan” goods proliferated. Families which had farmed for generations exchanged village existence for the excitement, convenience and opportunities of urban living. On the roads, cars and motorcycles replaced ox carts and bicycles. But in the east, it was a very different story. Isolated from the majority of their compatriots by the strikingly rugged Central Mountain Range, Hualien and Taitung lagged far behind. Not until the north, central and southern cross-island highways were completed, and rail links constructed, could residents of either county reach a major city in less than a day. 

Getting to the east still takes time, but it is worth every minute spent on a train or an airplane. The scenery is fantastically varied and largely unspoiled. Hualien and Taitung account for more than a fifth of Taiwan’s land area, yet have just 2.4 percent of the country’s total population of 23.3 million. Unlike the western portion of the island, citizens of Hoklo (Fujianese) descent are not the majority. There are a great many Hakka families. In the late 1940s, thousands of newcomers arrived from mainland China. But what gives the east its special atmosphere, fascinating festivals and unique cuisines are the nine Austronesian tribes [represented by this young musician pictured top left, playing the nose flute] who have called this region home since time immemorial.

Thanks to road improvements, driving a rental car from the west to the east is no longer such a daunting prospect. Whether one takes Highway 9 from the southwest to Taitung, or the Suhua Highway from Yilan towards Taroko Gorge and Hualien, the mountain, forest and ocean views along the way are very rewarding. That said, many tourists are happy to outsource the stress of driving and navigating, especially now that express trains from Taipei can reach Hualien in just two hours, and Taitung in three and a half. 

So long as you book your train or plane tickets well in advance, getting to the east is straightforward. But once there, exploring is a bit trickier. As in other parts of Taiwan, local public transportation is set up for the benefit of commuters, not excursionists. 

Ever sensitive to the needs of visitors, Taiwan’s Tourism Bureau has over the past decade refined a network of specialized bus services called the Taiwan Tour Bus. Working with several licensed tour companies, the Tour Bus system provides access to many places which, for tourists who do not speak Chinese and do not wish to drive themselves, would be difficult or impossible to reach. Each bus is accompanied by a guide who introduces attractions along the way (in English, Japanese or Chinese), answers questions, and ensures no one gets left behind. 

The geological-hydrological marvel known to English speakers as Taroko Gorge is the east’s no. 1 attraction. An astonishing combination of solid rock and rushing water, the 19 km-long gorge and the surrounding national park draw hikers and ecotourists as well as mainstream sightseers.  An easy way to see the best of the gorge is to join the one-day Taroko Gorge tour (NT$1,600 per person if an English-speaking guide is needed). Pick up is from Hualien City, and among the dramatic spots introduced are the stunning oceanside Qingshui Cliffs, Changchun Shrine, plus the short but intensely beautiful Yanzikou (Swallow Grotto) Trail.

Those unable to devote more than a day to the east may want to sign up for a daylong Taroko tour departing from Taipei. These are more expensive (NT$5,200 for adults, NT$4,200 for children up to the age of 12) but save time with a morning flight from the capital’s Songshan Airport. The return journey is via the scenic railroad through Yilan and along the northeast coast.

Also departing from Hualien is the East Rift Valley one-day tour. Sandwiched between the Central Mountain Range and the Coastal Mountain Range [seen in the lower photo], the valley is said to grow Taiwan’s best rice. Over the past century, this lovely area has seen two industries based on its natural advantages emerge, then decline. At the first stop, Lintian Mountain Forestry Center (Lintianshan), tourists will learn how millions of trees were removed from Taiwan’s mountains until logging was completely halted in the early 1990s.

After a look inside Fuyuan National Forest Recreation Area, renowned for its fabulous butterfly population, the tour calls in at Hualien Sugar Factory. The landmark refinery buildings still dominate the small town of Guangfu, but most of the surrounding sugarcane plantations have been afforested. No English-speaking guide is available on this tour, but an English audio guide is provided at no extra charge. The price (NT$988 per adult, NT$900 per child) is the same on weekdays and weekends.

Visitors interested in farming and food production, and those basing themselves in Taitung City rather than Hualien, should consider the Taitung Yuli-Changbin Highway one-day tour (adults NT$1,400, children NT$1,200; no English-language guide available). In addition to stops at a tea farm and an area now synonymous with organic rice, this adventure roams from the hilly interior to the rugged coast. One halt is at a place known as Water Running Uphill. The toponym aptly describes a beguiling optical illusion which draws tourists by the busload. 

There is also a one-day Taitung City tour (NT$1,300 per adult, NT$1,100 per child; no foreign-language guide available) focusing on cultural and ecological attractions within and around this city of 106,000 people. For part of the tour, visitors swap their bus seats for bicycles, exploring Taitung Seaside Park and its public art installations on two wheels. The tour also includes a look at one of Taiwan’s most important archaeological sites, Beinan Cultural Park. Named for the Beinan people who inhabited this part of Taiwan from approximately 5,300 years ago until perhaps 2,300 ago, the park is where  archaeologists unearthed 1,523 slate coffins, plus skeletons and priceless jade items such as knives and arrowheads. One of the original excavations has been preserved and is open to the public.

Anyone planning to visit the eastern part of the country should peruse the websites of the East Coast National Scenic Area and the East Rift Valley National Scenic Area; both are especially useful for details of upcoming events such as festivals in indigenous communities.

Since the beginning of the year, I've been writing advertorials like this for Taiwan Business Topics, promoting Taiwan Tour Bus services. This is a slightly modified and shortened version of the advertorial that appeared in the magazine's November issue, and also on the website of the publisher, the American Chamber of Commerce in Taipei.

Sunday, October 16, 2016

Shared on The News Lens

Sadly for folks like myself, The News Lens International doesn’t seem interested in commissioning original work from freelancers (although I did one profile piece for them soon after they launched), but at least so far they’re making a good job of selecting and sharing items published elsewhere. A lot of the articles and blog entries they’ve posted deserve a wider audience, and it’s gratifying to see features I wrote for both Taiwan Business Topics and Life of Taiwan appear on their site. 

Tuesday, October 11, 2016

Writing about Taipei and Kaohsiung for Scoot

For the October/November issue of Scoot, the inflight magazine of the Singapore-based airline with the same name, I wrote two short columns on what to do, see and eat in the cities of Taipei and Kaohsiung. 

For the capital, among the tips I give are to visit the National Museum of History if you want to see some ancient Chinese artefacts without having to fight your way through the crowds which often pack the better-known National Palace Museum; and to enjoy cocktails at AlchemyThe two highlights I chose for Kaohsiung are Maolin's spectacular butterfly migration, and Gangshan's wintertime signature dish, mutton hot pot.

The October/November issue, as well as previous issues, can be read online here. The photo here is one of mine and shows the old harbor mouth and Qihou Lighthouse.

Monday, October 3, 2016

Taiwan's Old Buildings Get a New Lease on Life (En Voyage)

Not long ago, if an abandoned building occupied prime real estate in one of Taiwan’s cities, demolition so the site could be redeveloped was almost inevitable. Between the 1960s and the 1990s, when the island’s economy was white hot, countless structures of historic or aesthetic importance were bulldozed. Attitudes have changed, fortunately. Taiwanese people now embrace their architectural heritage, and are trying to carry the best if it into the future. Rather than consign old homes and factories to the wrecking ball, dozens of places have been done up and given new roles.

One of the best known examples is Huashan 1914 Creative Park in downtown Taipei. This former winery was established in 1914 (hence the name) and slated for razing when, in an episode much celebrated by social activists, a theater troupe marched in and took over. The actors argued that the warehouses were ideal spaces for rehearsals and performances. The government relented, and the Creative Park was born.

There’s a similar story behind Songshan Cultural and Creative Park, 4km to the east. The surviving part of a 1930s tobacco-processing complex (much was cleared to make way for not-yet-finished Taipei Dome), the park hosts the Taiwan Design Museum as well as temporary exhibitions. The pond and surrounding foliage sustains valuable biodiversity in a neighborhood dominated by concrete and motor vehicles. As society becomes more health conscious, it’s very appropriate that places which used to make booze and cigarettes are given new and entirely wholesome reasons to exist. 

The main part of National Taiwan Museum was built in 1913-15 to commemorate the achievements of Japanese officials who ruled Taiwan soon after it came under Tokyo’s control in 1895, but the museum’s expansion makes innovative use of nearby landmarks. The NTM first took over a columned monolith that served as a bank branch between 1933 and 2006. Inside, there’s lots of information about dinosaurs, fossils, and the land reforms which had a radical impact on rural Taiwan in the 1950s. More recently, the NTM opened its Nanmen Park campus, just over 1km away on a site where the Japanese colonial authorities processed camphor and opium. The oldest extant building there is the two-story “White Palace.” It dates from 1902, and was constructed using stones retrieved when the Japanese authorities demolished Taipei’s city wall.

For decades, sugar accounted for more than half of Taiwan’s exports by value. However, because other countries are able to produce the commodity far more cheaply, the industry has gradually dwindled to almost nothing. The number of active sugar refineries across Taiwan has fallen from 49 to just three. Several have been demolished, but some are now cultural facilities. Two of the latter in southwest Taiwan are easy to reach by train.

Between 1901 and 1999, the refinery at Qiaotou in Kaohsiung processed up to 1,000 tonnes of sugarcane per day. The 20-hectare complex - which includes staff dormitories and air-raid shelters, as well as buildings in which the cane was stored or crushed - is almost totally intact. Baroque and Japanese features excite architecture buffs, but go unnoticed by many visitors. Most of the latter come for a short ride on one of the narrow-gauge trains which used to bring in cane from nearby plantations, or to see a performance by the resident Ten Drum Art Percussion Group.

Qiaotou is the second former sugar refinery utilized by Ten Drum. Since 2007, the group’s main base has been what’s now called Ten Drum Culture Village in Tainan’s Rende District, near Chimei Museum. Under the terms of their contract with Taiwan Sugar Company - the state-run corporation which still owns most of Taiwan’s refineries, as well as a great deal of land - Ten Drum is also responsible for preserving the local ecosystem and the site’s sugar-industry relics. One of the performance spaces at Rende is brick-lined cistern where water heated during the refining process was left to cool. Another is inside the principal building; as the audience enters or leaves, they pass immense vats and a tangle of pipework.

In terms of visitor numbers, one of the most successful (and in design terms quite radical) building-repurposing projects of recent years is Miyahara Ophthalmology. Built in Taichung’s old downtown for Takekuma Miyahara, a Japanese-born ophthalmologist, this 1927 red-brick structure long served as an eye hospital. By 2008, however, it was in a terrible state due to neglect compounded by typhoons and tremors. Then a local confectionery company saw an opportunity, purchased the ruin, and gave it a thorough makeover. 

The facade was cleaned and preserved, but missing corners were not replaced. Inside, holes in the brickwork which once held wooden beams were left unfilled. However, the building was extended upward to make space for a restaurant above small shops which sell pineapple cakes, tea and other edible souvenirs. If one looks only at the street-level arcade, Miyahara Ophthalmology resembles an “old street” like that in Kaohsiung’s Qishan District. But from across the road, its hybrid personality is obvious.  

In the same part of city, the government has established Taichung Cultural and Creative Industries Park (where both photos here were taken), part of its efforts to nurture startups in broadcasting, design, and related fields. Many of the park’s buildings used to form part of a winery, and this aspect of the site’s history is celebrated in the Liquor Culture Museum (admission free; displays in Chinese and English). As at some other ex-industrial sites, artists have been invited to add vibrancy and color to what would otherwise be drab infrastructure. It’s easy to spend an hour exploring the park. 

Kaohsiung’s cultural-creative industries hub is its old waterfront where, thanks to the relocation of the harbor’s cargo-handling facilities, a great deal of land has been freed up. A warehouse here once used solely to store bananas (another of yesteryear’s major exports) is now known as Banana Wharf; the shops inside are often the first place visited by disembarking cruise-ship passengers. 

Another set of warehouses has been refashioned into Pier-2 Art Center. It’s a venue for performances and exhibitions, but real work also gets done. Among the digital-content outfits which have established a physical presence near Pier-2 are companies from the US and Japan. Pier-2 is the location of another interesting structure. It isn’t a repurposed building as such, but a building made of 12 recycled intermodal shipping containers. The lower part of this experiment in “cargotecture” is a lounge for tourists waiting to join boat excursions. Atop two vertically-positioned containers, there’s an observatory which offers good views over the harbor and the ocean. 

In addition to alluring edifices which have gained a new reason for being, there are also old buildings which, after an interval of decades, have had both their appearance and original function restored. One is the 92-year-old Xinhua Butokuden in Greater Tainan, on which almost US$700,000 was lavished between 2011 and 2013. In the daytime, visitors take photographs of this graceful and quintessentially Japanese structure. During the evening, the springed floor shakes as young people practice kendo and judo, just as it did in their grandparents’ childhood.

This is the unedited longer version of the article I wrote for October's En Voyage, the inflight magazine of EVA Air. To see the published version, click here.

Sunday, September 4, 2016

Life of Taiwan's blog

I've been writing web content and marketing materials for Life of Taiwan since the British-owned tour company was established in 2011, and at a the end of last month I took on a new responsibility. I now provide content for the company's just-launched blog. I expect to write a mix of seasonally relevant and 'evergreen' content, the former sometimes answering questions we've received from people contemplating a trip to Taiwan ('Is autumn a good season for visiting Taiwan?'), the latter highlighting intriguing facets of the country's culture, history and natural splendour. The blog will also feature occasional interviews with travel writers, photographers and others who have interesting things to say about Taiwan, and we're open to ideas for guest posts.

Thursday, September 1, 2016

Navigating Rough Waters: Taiwan’s Yacht Industry (Taiwan Business Topics)

Taiwan has long been an important producer of yachts and sailboats, though it is only recently that recreational boating has finally begun to catch on. One in every three new yachts sold in the United States between 1977 and 1981 was made in Taiwan. In 1987, the island exported 1,755 vessels worth US$190.8 million. Over 100 yacht-builders operated in Taiwan during that period, even though regulations initiated in the martial-law era made it illegal for Taiwan residents to own leisure craft until 2010.

After the initial boom came two busts. Between 1986 and 1992, the NT dollar appreciated 58% against the US dollar, substantially raising the cost of Taiwanese vessels in their most important market. At the beginning of 1990, in addition, the U.S. government imposed a luxury tax on yachts and private airplanes. And like other manufacturing enterprises in Taiwan, boat builders faced rising land and labor costs. By 1994, dozens of boatyards had gone out of business.

Taiwan’s yacht sales rebounded to US$323.5 million in 2008. But exports crashed in the wake of the global financial crisis, bottoming out at US$144 million in 2010. Since then, the industry has clawed its way to slightly better health.

According to U.S.-based yacht magazine ShowBoats International, in 2015 Taiwan was the no. 6 builder of yachts in the world, behind Italy, the Netherlands, Turkey, Britain, and the United States. In 2014 – when Taiwan’s exports totaled US$172 million – the country ranked no. 7. Two Taiwanese companies appeared on the magazine’s 2015 list of the world’s 30 leading yacht builders. Ranked according to total length of new builds the previous year, the Horizon Group was no. 10 (up one spot from 2014), while Ocean Alexander was no. 14 (up from no. 22).

“These rankings show the quality and technology of Taiwan’s yacht manufacturers has gained international recognition,” says Hsueh Po-yuan, chief of the Marine Industries Section of the Kaohsiung City Government Marine Bureau. Both Horizon and Ocean Alexander are based in Kaohsiung.

Yet many of the 39 yacht-building member companies of the Taiwan Yacht Industry Association (TYIA) continue to struggle. “There’s been a shakeout in Taiwan,” says Johnny Chueh, head of sales at Ocean Alexander, which does business in the United States as Alexander Marine International. “Two companies – we’re one, Horizon is the other – generate 80% of Taiwan’s yacht-building revenue. The smaller yacht makers are fighting over the other 20%.”

Chueh argues that if Taiwan’s yacht builders are to thrive in the face of rising costs, they must build ever-larger yachts. “As you go upmarket, your track record and brand become increasingly important,” he says. “Price isn’t the main factor determining purchasing decisions.”

He attributes Ocean Alexander’s success to never having built yachts for other companies. “From day one, we worked on our own brand. That has given us a deep understanding of customers’ needs and trends. Also, we’ve been among the first in the world to introduce certain technologies to yachts, such as resin vacuum infusion, aerospace electrical systems, and aerospace-grade paints.”

In 1980, Ocean Alexander sold 29 yachts with an average length of 45 feet. In 2000, it built 25 yachts averaging 62 feet each, and in 2010 the output was 10 yachts averaging 74 feet. The number of boats sold in 2015 was the same as 2010, but the average size had increased to 92 feet. “We’ve seen a reduction in units, but a steady growth in revenue,” says Chueh, whose father, the late Alex Chueh, founded the company in 1977. “For the price of a single 90-foot yacht, you can buy 20 45-foot vessels.”

Longer boats are invariably wider and taller, and larger boats tend to have more expensive fittings, he points out. “In recent years, none of our boats have gone to Taiwan customers. Most of our sales have been to the U.S., with 10% to 20% going to Europe.”

When Boat International Media Ltd. published its 2016 Global Order Book in late 2015, Ocean Alexander was working on 35 yachts, the largest being a 155-foot vessel for delivery in 2018. The smallest were 85-foot boats. According to the same source, Horizon was building 21 yachts. Only one other Taiwanese company had more than three projects underway: Kha Shing Enterprises Co. Ltd., with seven orders. Kha Shing, which trades as KSE / Monte Fino Yachts, was the world’s no. 9 yacht builder in 2004. As recently as 2013, it ranked no. 17. Kha Shing, which like Horizon and Ocean Alexander is based in Kaohsiung, also renovates old yachts.

Whereas Ocean Alexander has continued to focus on the U.S. market, Horizon responded to the challenges of the late 1980s by seeking customers in other parts of the world. “After 1989, we started to target the European, Australian, and Asian markets,” explains John Lu, Horizon’s CEO. “During the early 1990s, more than half Horizon’s output went to Europe, but sales to Australia and Asia have increased steadily since 2010,” says Lu. “In 2015, the U.S. accounted for over 60% of our sales volume, with Australia being the second largest market. Since our establishment, about one in three orders have come from repeat customers...”

To read the rest of this lengthy article, go to Taiwan Business Topics' webpages here, or to the version posted on The News Lens. The photos are courtesy of Horizon Group.

Sunday, August 7, 2016

Chiayi: Visiting the City of 'Commendable Righteousness' (Taiwan Business Topics)

Which city has two botanical gardens compared to Taipei’s one, a reservoir said to have been dug by the Dutch in the 17th century, and Taiwan’s only Japanese colonial-era former jail [pictured right] open to the public? If your answer is Chiayi, you almost certainly live there.

The city (population: 271, 000) is surrounded by yet administratively separate from Chiayi County. Whereas the county stretches from abandoned saltpans on the coast to the western slopes of Yushan, Chiayi City covers a mere 60 square kilometers. It has no shoreline, and no point is more than 99.4m above sea level. 

Chiayi is also the hometown of the first Taiwanese artist to win fame beyond the island. In 1926, Chen Cheng-po (1895—1947) became the first Taiwanese painter to have a work included in Japan’s most prestigious art exhibition. Chen’s works, which embody both Chinese landscape-painting conventions and aspects of Modernism, continue to be very popular; his 1935 Sunset at Danshui fetched US$6.5m when auctioned in 2007. But these days he is remembered as much for the way he died as for his artistic achievements.

Chen was a member of Chiayi’s city council when the February 28 Incident erupted. With other local leaders, he approached Nationalist Army units, hoping to begin negotiations. He and three others were immediately arrested; on March 25, 1947, they were marched to the train station and shot dead. The military authorities forbade their families from collecting the corpses immediately; the remains of Chen and the others were left to decompose on the street for several days. Surprisingly, there is nothing at the station — not even a simple plaque — to memorialize this grisly event.

Tourists need not go out of their way to see Chen’s paintings. Reproductions have been set on steel easels at various points around the city, including several in the park across the road from the small Chen Cheng-po Cultural and 2-28 Museum (228-12 Guohua St; open: 9am to midday and 1pm to 5pm, Mon—Fri; free admission).

The front section of the Chen Cheng-po Cultural and 2-28 Museum displays duplicates of more than 30 of Chen’s paintings, along with bilingual commentaries. The back room is given over to Chinese-language information about the 2-28 Incident in Chiayi. Chen also makes an appearance at Chiayi Municipal Museum (275 Zhongxiao Road; open: 9am to 5pm, Tue—Sun; free admission), where visitors will also find some interesting fossils and a great deal of geological information.

More unusual is the ceramics collection in the basement of the Cultural Affairs Bureau building between the museum and the main road. The Koji Pottery Museum (open: 9am to 5pm Tue—Sun; free admission) is a good introduction to the gorgeous art form that is sometimes called Cochin ware, and which is a key element of Taiwanese temple decoration.

Unfortunately, the municipal museum says little about Chiayi’s past. The city’s written history begins in the 1640s, when Dutch East India Company officials passed through an aboriginal village hereabouts. The Dutch — who are said to have later created Lantan, the 2km2 scenic body of water in the city’s eastern suburbs — spelled the village’s name Tilaossen. Fujianese settlers called it Tirosen, and rendered it in characters which Mandarin speakers pronounce Zhuluoshan. Because Zhuluoshan’s inhabitants successfully resisted Lin Shuang-wen’s anti-Qing rebel army in 1786, Emperor Qianlong in Beijing rewarded them with a more distinguished toponym name: Jiayi in Mandarin (Kagi in both Taiwanese and Japanese), meaning “commendable righteousness.”

After an earthquake flattened the city in 1906, the colonial authorities reorganized the city, giving it the straight but narrow roads it has today. The following year, work started on the narrow-gauge railroad which eventually reached Alishan. Large-scale logging around Alishan was halted in the 1960s, but the impact of the timber trade on the city remains very visible. The pond outside the Cultural Affairs Bureau is far older than the building; red cypress trunks from the mountains were kept in it so they would not crack or warp in the heat of the lowlands.

All over Taiwan, individual wooden bungalows from the Japanese era or just after have been restored and repurposed. What makes Hinoki Village (aka Cypress Forest Life Village) unique is the scale of the project. The village comprises 28 buildings, most of which were dormitories for forest-management officials and their families. The most elegant, however, is a 1914 cream-colored former clubhouse [pictured immediately above] with Tudor architectural elements. The village does not have much historic atmosphere, but it is photogenic, and a good place to stop for a coffee. 

A string of minor attractions links Hinoki Village with Chiayi TRA Railway Station, 1.6km away. At the time of writing, Chiayi Lumber Factory was closed for renovation, and Chiayi Motive Power Wood Sculpture Museum — a former power station — was between exhibitions. The narrow-gauge rolling stock on display at Alishan Garage Park will appeal to rail enthusiasts, and Beimen Station’s wood-walled, tile-roofed ticket office/waiting room looks as quaint as ever.

Beimen Station is less than 10 minutes’ walk from the Former Chiayi Prison (140 Weixin Road; open: Wed—Sun; free admission). Between 1922 and 1994, this jail held up to 300 male convicts, plus 30 women in segregated facilities. Inmates were held in three wings arranged so the corridors could be surveilled by a single officer from his desk. The main doors, made of yellow cypress from Alishan, the workshops in which convicts labored, and the bathhouse where they washed, have all been preserved. Visitors can only enter at certain times (9.30am, 10.30am, 1.30pm and 2.30pm) and must stay close to the guide. Call (05) 276-9574 in advance and it may be possible to arrange an English-language tour.

Among facts often related by the guides are that male staff, including the warden himself, were forbidden from entering the women’s section; and that inmates trying to escape over the wall often hurt themselves jumping down on the other side. Some limped around the corner to St Martin de Porres Hospital (founded in 1966 using money donated by American Catholics), where they were treated before being returned to captivity.

The city’s liveliest religious site is Cheng Huang Temple (168 Wufeng North Rd; open: 5.30am to 9pm daily), which was founded exactly 300 years ago. As its name suggests, the main deity here is the city god, Chenghuangye, and his effigy is in the very centre on the first floor. The temple was important enough to escape the ravages of the Kominka Movement in the late 1930s; that campaign by the Japanese authorities to “Nipponify” its colony resulted in the demolition or conversion to secular use of at least sixty shrines in Chiayi. Among the 600-plus icons inside Cheng Huang Temple are representations of Mazu and Guanyin, as well as heaven’s matchmaker, the Old Man under the Moon. 

Beizihtou Botanical Garden is adored by birdwatchers but gets few other visitors, despite having such arboreal wonders as Garcinia subelliptica and Canaga odorata. The first, sometimes called the Happiness Tree, bears a fruit resembling the satsuma and related to the mangosteen. However, the leaves are more valuable; in the Taiwan of yore they were used to produce a yellowish dye. In Chinese as well as English, the second is also the Perfume Tree. Stand downwind, and you will notice a pleasant fragrance.

Like Beizihtou, Chiayi Arboretum was established during the early years of Japan’s 1895-1945 occupation of Taiwan. At 8.3 hectares, it is nearly twice the size of Beizihtou. Almost all the trails are shaded; the canopy is impressively dense thanks to a range of tree species, including teak, mahogany, and hoop pines (Araucaria cunninghamii Sweet).

Chiayi Park, adjacent to the arboretum, includes a few notable structures. Near the bland Confucius Temple is the 62m-high Chiayi Tower (open: 9am to 5pm Wed—Fri, 9am to 9pm Sat). If the weather is clear, do buy a ticket for the tenth-floor observatory (NT$50 for adults; children NT$25). The Shinto shrine that once stood here was demolished long ago, but the shrine’s former office survives in the form of Chiayi City Historical Relic Data Museum [lower picture in this post]. The displays inside are unlikely to engross you, but the sublime exterior is perhaps the city’s single most beautiful spectacle. Admission is free.

Few new museums have been as highly anticipated as the Southern Branch of the National Palace Museum (NPM). Rather than simply provide additional exhibition space for the world-renowned NPM in Taipei, the Southern Branch’s stated mission is, according to the Executive Yuan’s website, to be “a world-class museum of Asian art and culture.”

According to the original plan, the museum was to have been designed by US architect Antoine Predock and ready by 2008. But Predock quit the project before construction began. He was eventually replaced by Kris Yao, a Taiwanese architect best known for Lanyang Museum. Another deadline came and went in 2012, but Yao’s edifice — which some compare to a giant black slug — was given a soft opening on December 28 last year.

The Southern Branch offers five permanent exhibitions, among them a brief and mostly monolingual look at the history of Chiayi, and a multimedia gallery where three videos introducing Asian art are played (none has English subtitles). Far more engaging are the sections on tea culture in East Asia, in which you will learn that steeping tea leaves in hot water is a relatively modern method of preparing the drink, and on Buddhist artifacts drawn from the NPM’s collection. The highlight of the latter is a kangyur (a compilation of Buddha’s sayings) in Tibetan script created for the Emperor Kangxi in 1669. Although the individual pages are quite plain, the boards made to protect and separate parts of the canon are quite fabulous, and call to mind the illuminated manuscripts drawn by Christian monks in medieval Europe.

Of the temporary exhibitions, the most remarkable continues until October 12 this year. Treasures from Across the Kunlun Mountains: Islamic Jades in the NPM Collection features dozens of lustrous tea cups, spittoons, Quran stands, and other items fashioned from nephrite or jadeite. Several are inlaid with precious stones or gold thread. Some originated from Mughal India or the Ottoman Empire, and were gifted to Qing Emperor Qianlong (reigned 1735 to 1796), who then had poetry inscribed on many of the bowls and plates.

For details of forthcoming exhibitions, see the museum's website. Like Chimei Museum, access to the NPM Southern Branch is limited to those who make online reservations in advance. Standard admission is NT$250, but until June 30 residents of Yunlin and Chiayi counties and Tainan and Chiayi cities can get in for free, so long as they hold ROC citizenship. Opening hours are 9am to 5pm, Tuesday to Sunday. The southern branch is located in Chiayi County’s Taibao City. Every half hour, a shuttle bus connects the museum with Chiayi HSR Station, 4.6km away (NT$24 one way). The museum’s bus stop is 530m from the entrance — the parking lots are not significantly closer — so visitors get a good look at the 70-hectare grounds before stepping inside. In a few years, when the trees have grown a bit, the surroundings should look magnificent.

This isn't the version which appeared in the magazine's recent travel and culture special issue, but rather a shortened version of the article as I submitted it. The editor decided the National Palace Museum Southern Branch was the most newsworthy element, so moved that segment to the front. The published piece (and some excellent articles by other writers) can be read online.

Friday, July 22, 2016

Chimei Museum's Violins and Tools of Violence (Taiwan Business Topics)

If an exhibition center wants to be taken seriously – yet displays a stuffed polar bear across the corridor from medieval Indian weaponry, while oil paintings by the likes of Anthony van Dyck share the upper floor with jukeboxes – it had better state its mission clearly. Chimei Museum, which reopened in a purpose-built landmark building at the start of 2015, does all of these things.

Since the early 1990s, bentuhua (“localization”) has been a powerful force in Taiwan’s cultural sphere. The National Museum of Taiwan History, 14 kilometers from Chimei Museum in another part of Tainan, is the finest expression of this trend. But despite being founded by a man who served as a senior presidential advisor to Chen Shui-bian, Chimei Museum tacks in an utterly different direction.

Shi Wen-long, the tycoon behind the museum, was born in 1928. He founded what is now the Chi Mei Group in 1960. In addition to manufacturing acrylics, resins, and consumer electronics, the group operates three hospitals.

Shi has been passionate about museums since his youth. He was fortunate enough to attend an elementary school near one, and recalls in the preface to the book Highlights of the Chimei Collection: “For a child, free admission to a museum full of wonderful treasures was so fascinating that I spent most of my time after school there. This museum not only gave me vivid childhood memories, but also inspired me to later build a museum for the public. The founding essence of the museum has always been ‘to promote music comprehensible to the common ears, and to collect paintings beautiful to the common eyes.’”

The young Shi also fell in love with the sound of the violin. Because his family was unable to afford an instrument, he fashioned his own, taught himself to play, and eventually became a talented musician.

“Chimei Museum aims through its collection to demonstrate art history and the lineage of violin luthiers. Our current acquisition policy focuses on completing the mapping of these historical puzzles,” says Patricia Liao, the museum’s deputy director. “Mr. Shi’s dream is to start a cultural renaissance in Tainan. He has selected artworks which Taiwan residents would otherwise have to spend an enormous amount of time and money to view in person. This is why his collection is mostly Western works of art. Our job is to help him choose works that enhance the museum’s educational functions.”

The museum holds approximately 12,000 items. By comparison, Taipei’s National Palace Museum (NPM) has close to 700,000. Despite having a brand-new, specially designed building, Chimei Museum shares one problem with the NPM: Not enough space to put everything it owns on display...

The complete article appears in the July 2016 issue of Taiwan Business Topics, and is online here.

Wednesday, June 22, 2016

Instead of a Caffeine Kick, Try Curdled Soy Milk in the Morning (Roads & Kingdoms)

A few days before Dr. Tsai Ing-wen took the oath of office to become Taiwan’s first woman president - and the first female national leader in Asia who wasn’t the widow, daughter or sister of a previous leader - I went back to Kaohsiung to witness the scattering of a friend’s ashes.

A decade earlier, he’d told us he wanted his remains sprinkled in the shade of a huge banyan tree that overlooks the harbor. He eventually passed after years of ill health, some of which could be attributed to bad habits when younger. En route to the ceremony, I made a slightly dubious lifestyle choice of my own. I detoured to a breakfast establishment famous in Taiwan’s second city for adulterated soy milk. Once hailed as a protein-rich, low-calorie alternative to cow’s milk, unfermented soy products like soy milk are now linked to health problems including hypothyroidism, kidney stones, and male infertility. And if that isn’t bad enough, at Guo Mao Lai Lai the beverage is best enjoyed when it’s slathered with oily condiments and salty toppings.

But it’s fresh, meaning the beans are soaked the evening before, steamed before sunrise, blended, then pressed through a cheesecloth. Drunk hot and neat, just-made soy milk is quite unlike - and quite a bit stronger than - its bottled, refrigerated supermarket counterpart. For first-timers, the experience is akin to trying coffee prepared by a good barista after a lifetime of drinking instant. But raw soy milk isn’t to everyone’s taste, so many Taiwanese stir in sugar. In Mandarin Chinese, the non-sugared variant is called xian doujiang (鹹豆漿). This means “salty soy milk,” but at Guo Mao Lai Lai, only the finest of palates can detect brackishness beneath the various pungencies...

To read the second half of this story, go here. I first visited Guo Mao Lai Lai when researching this article, thanks an entry in this excellent blog.

Thursday, June 16, 2016

Taiwan, an Undiscovered Retirement Destination

Few Americans consider Taiwan when planning their retirement, but those who've moved here aren't shy about naming the reasons they're staying: A welcoming society; high-quality yet inexpensive medical care; efficient transportation; and a fascinating diversity of urban and natural landscapes.  

If safety is a criterion, Taiwan is an excellent bet. In early 2015, US magazine Presscave rated Taiwan as the second-safest country in the world, behind Iceland. Taiwan is densely populated, and this means housing isn't cheap in Taipei and other big cities. Apartments are small by North American standards, but if – like me – you're the kind of person who prefers short hikes, bike rides and exploring ancient shrines to the “Great Indoors,” you won't be at home very much.

The cost of living drops dramatically when you reach the south of the island. In Tainan, it's possible to rent a well-located apartment suitable for a couple for US$400 per month. You'll need the air-conditioning that's standard between June and September, but you may never use your kitchen, as tasty meals can be had on every street corner for US$3. Getting proficient with chopsticks takes some practice, but soon enough you'll have a favorite beef-noodles eatery, and know who makes the best papaya milkshakes in your neighborhood.  

Tainan was Taiwan's capital for over two centuries until 1885. It's a treasure-house of Dutch-built forts (the Europeans came in 1624 and were kicked out in 1663), Taoist and Buddhist temples, and architectural landmarks left behind by the Japanese, who ruled Taiwan from 1895 to 1945. Very few of these attractions charge admission. Notwithstanding its living-museum personality, Tainan – like every Taiwanese city – is thoroughly wired. High-speed internet allows folks living here to keep up with loved ones, or clients, in every corner of the world. And it helps blunt an inconvenient truth: Outside Taipei, not much English is spoken. That said, the kind of expatriate who thrives here treats the language barrier as a two-pronged opportunity. 

Firstly, it forces you to learn a bit of Taiwan's official language, Mandarin Chinese. Learning the numbers in Mandarin isn't difficult, and comes in very useful when shopping in neighborhood morning markets for superb local mangoes, pineapples and guavas. Secondly, many Taiwanese hope to improve their English, and they're willing to pay for tutoring. While it's true that many language schools prefer younger teachers, older Americans who look respectable and get along well with the locals will soon find themselves asked: “Could you teach me English?” Tutoring work pays at least US$18 per hour. Not all foreign residents are allowed to work, but if you speak with a clear, standard American accent, doors will open for you. 

There's more good news on the language front. Most doctors, especially those in major medical centers like Tainan's world-class National Chengkung University Hospital, have taken courses in the US and speak excellent English. English-speaking dentists aren't hard to find. Products in supermarkets and drugstores are almost always labeled in English as well as Chinese script. At airports and train stations, you'll find visitor centers where helpful English-speakers will plug any gaps in your knowledge of local transportation systems or tourist attractions.

Taiwan's proximity to Tokyo, Seoul and Hong Kong – together with visa-free entry rules which allow Americans, Canadians and most other Westerners to stay 90 days each time, no questions asked so long as they hold an air or sea ticket out – make the country an excellent base for anyone itching to explore Asia at an unhurried pace. 

I wrote and got paid for this article by a US website, but they've yet to publish it. They told me it's OK to post it on this blog first... so here it is. I took both photos in Greater Kaohsiung. 

Wednesday, June 8, 2016

Pounding the Pavements of Old Taiwan (En Voyage)

Getting around Taiwan is exceptionally easy. In addition to the bullet trains which zip between Taipei and Kaohsiung, domestic flights to the east coast and outlying islands, commuter and rapid-transit trains, there are hundreds of bus routes. Visitors who want greater freedom can rent a car, a motorcycle, or a bike.

There’s also walking. Nowadays, humanity’s original means of transportation isn’t much favored by people making their way to work, school, or a place where they can have fun. This is especially understandable in Taiwan’s warm, wet summers. Yet more and more tourists - both domestic and international - are eschewing the tour bus, and opting to explore parts of the island on foot.

Ambulation makes total sense in the old heart of Tainan, Taipei’s Wanhua District, and much of Lugang. These places were settled long before the invention of the motor car. Until well into Japanese colonial period (1895-1945), ordinary people walked everywhere, while the wealthy traveled in sedan chairs carried by servants. Despite the best efforts of modernizing mayors, each place retains fascinating alleyways impenetrable to those who won’t get out of their cars.  

As part of a broad shift toward what Europeans call “slow travel” - but Taiwanese often label LOHAS (meaning “lifestyles of health and sustainability”) - walking tours are catching on in Taiwan, thanks in part to three organizations which take it upon themselves to organize regular, short-distance pedestrian excursions that free of charge.

One of these operates in Tainan, which even now is sometimes called Fucheng, or “government city.” This honorific acknowledges that, for more than two centuries until 1887, Tainan served as Taiwan’s administrative capital. In terms of current economic and political importance, it ranks behind Taipei, Kaohsiung, and Taichung. But many people find it the most interesting of Taiwan’s major cities, thanks to a stupendous density of historical and cultural attractions. A local idiom, “there's a major temple every five steps, a minor shrine every three,” is hardly an exaggeration. 

As a service to those who want to give the city’s captivating neighborhoods in the attention they deserve, Tainan City Government has thrown its weight behind a project called My Tainan Tour. This pairs knowledgeable, bilingual Tainan natives with small groups of tourists eager to dig a little deeper into local history and culture

Tourists heading to Taipei have a range of options. Some are offered by Like It Formosa, which describes itself as “an independent organization committed to promoting Taiwan and facilitating intercultural exchange.” Their guides are young, and bi- or trilingual. One of Like It Formosa’s most popular walkabouts is the Historic Tour held each Sunday. This kicks off at Longshan Temple in Wanhua, a famous house of worship in a grittily authentic part of the capital. There, the guides explain aspects of Taiwanese folk religion (“males should enter a sacred site left foot first; females should enter right foot first”) before moving onto the restored old street known as Bopiliao [pictured here]. 

The next two stops both date from the Japanese era. After a look at Ximending’s Red House, and a few words about its intriguing shape and varied history, it’s on to the Office of the President. The latter was completed in 1919. The tour culminates at Chiang Kai-shek Memorial Hall, three hours and 4.5km later. Like It Formosa’s Facebook page lists other Taipei tours, including a pub crawl, a LGBT-themed walk, and a look around history-rich Dadaocheng. There’s also a hike up Elephant Mountain, timed to enjoy the setting sun and superb nighttime views of Taipei 101.

Tour Me Away covers some of the same ground. Their Old Town Taipei expedition, however, also stops by Zhongshan Hall, a concert venue which embodies the dramatic twists and turns of Taiwan’s history in the 20th century. This Spanish-Islamic style building, completed in 1936, was commissioned to celebrate the coronation of Japanese Emperor Hirohito. It was here in 1945 that the Japanese civilian authorities and armed forces in Taiwan signed an instrument of surrender. Soon afterward, it was renamed “Zhongshan” in honor of Sun Zhongshan, aka Dr. Sun Yat-sen, the founding father of the Nationalist Republic of China.  

Tour Me Away’s Taipei Chill Out Tour roams through Taipei’s Flower Market and along nearby roads including Yongkang Street. Two of Asia’s most famous xiaolongbao (soup-filled steamed dumplings) restaurants are located here, as are several other excellent eating options...

To read the complete article, click on this link to the online version of the magazine.