How to Do Business in Taipei
Doing business in Taipei? Bring your sense of adventure, an open mind and plenty of business cards.
Editor’s Note: A correction was made to this article on September 26, 2012, which is not reflected in the print edition.
Despite its prominence in technology and manufacturing, Taiwan remains relatively unknown in the U.S. Many assume the teardrop-shaped island off of mainland China’s southern coast is actually part of China, or confuse the island with Thailand, and the island receives few Western tourists. But experienced business travelers in Asia know that Taiwan is more than just a center for manufacturing. From stunning beaches to steep mountains draped in lush jungles to a warm and welcoming people that many count as the friendliest in the region, Taiwan offers a thriving export-oriented economy and fascinating leisure opportunities.
Officially known as The Republic of China, the little island of Taiwan split from mainland China in 1949 at the end of the Chinese Civil War. Considered a bulwark against Maoist expansionism, Taiwan became a major recipient of U.S. military and economic aid. No banana republic, though, Taiwan developed considerable footprints in electronics and petrochemicals and is now a center for not only manufacturing but also R&D.
Taipei, located at the northern tip, is Taiwan’s political and economic center. The city of 2.5 million is modern in many ways, with a clean and efficient subway (MRT) system and lots of familiar brands occupying space in luxury shopping malls and department stores. But the city, spared the ravages of the Cultural Revolution on the mainland, retains its traditions. Taoist and Buddhist temples permeate the island, and few Taiwanese would consider making a major decision without first consulting a fortune-teller. For business travelers, this means the city is at once familiar and exotic—comfortable in many ways, but rarely boring.
And the city continues to go from strength to strength.
In 2008, Taipei and Beijing signed long-awaited treaties that for the first time in 60 years allow direct cross-strait shipping and liberalized trade. While this doesn’t sit well with Taiwanese independence activists, the two economies have become ever more entwined. With a stable political system, an educated and reliable workforce, and strong legal and financial institutions, Taipei effectively serves as a gateway for businesses looking for opportunities in China. Under the stewardship of President Ma Ying-jeou, reelected to a second four-year term in January, the economy recovered from a deep trough in 2009 to post over 10 percent annual growth in 2010 and another 5 percent in 2011.
Still, it’s not all smooth sailing for the island, and the economy faces headwinds as lingering doldrums in the U.S. and EU weigh on exports. But Taipei’s agile industrialists have found success by diversifying into emerging technologies; Taiwan dominates in LED production, and its solar PV makers now account for nearly 20 percent of the global markets.
U.S. businesses have had long-standing and thriving relationships with Taiwanese firms, and the business cultures are very similar, notes Don Shapiro, senior director and editor in chief for the American Chamber of Commerce (AmCham) Taipei’s Taiwan Business TOPICS magazine. Shapiro says many Americans enjoy doing business in Taiwan because “Taiwanese simply love to do business.”
Stewart Haston, marketing specialist with Taiwanese PC hardware manufacturer Gigabyte, notes that Taiwanese have a more “mature” attitude toward business than their Chinese compatriots. Unlike those in less-developed China, “many Taiwanese are educated, they’ve traveled and they’ve been around the block,” he says. “They know how to do business with foreigners.”
Nevertheless, differences exist, and cultural misunderstandings can imperil even the most well-intentioned exchanges. Bill Bryson, partner with international law firm Jones Day, says Taiwanese and American business cultures diverge on the relative weight given to personal relationships and legal contracts in business exchanges. Unlike their U.S. counterparts, for whom a legal document “seals and defines” a business relationship, Bryson says, Taiwanese consider a document as “a sort of a guide for how a certain part of the relationship is going to run, but as the relationship changes, the document might, too.”
With personal relationships taking priority, the trick for doing business in Taipei is meeting people and fostering friendships. Bryson advises newcomers and old hands alike that when seeking new business partners, “The simple expedient of a mutual friend is really, really useful for creating a favorable relationship.”
AmCham’s Shapiro concurs, but also notes that institutions such as AmCham and the European Chamber of Commerce Taipei can help newcomers gain these introductions in Taiwan. Taiwanese governmental agencies such as the Taiwan External Trade Development Council can also be instrumental in setting up meet-and-greets between U.S. and Taiwanese companies.
One blunder to be avoided is to decline a social invitation. Even at the end of a hard day of negotiating, Bryson says, “When your Taiwanese counterpart asks you to join him for dinner, it’s a sincere offer to go to dinner and you should look at it that way.” While turning down the invitation might not be seen as a snub in the American sense, nevertheless, he cautions, “the relationship is going to get harder.”
One question that business travelers will likely encounter is, Who pays for a dinner out? Bryson agrees there are some “face” issues involved—“that’s why it’s always a discussion. If you can find a good reason to be the one who pays for the first dinner, then your Taiwanese host will accept that without any loss of face,” he advises, noting that the polite thing to do is to argue about it. “At one point,” he adds, “someone has to say, ‘Okay, I’ll get it next time.’” Generally, that’s the foreign businessperson.
And be prepared for some unique dining experiences. Taiwan is infamous for several dishes that have made it on the gross charts; congealed pig’s blood on a stick and fermented bean curd, aptly dubbed “stinky tofu,” are national favorites. While trying either can be an exercise in extreme dining, “you have to show a willingness to be adventurous,” says Bryson. “You don’t want to offend your host.”