Taiwan Taps Into Market Opportunities Beyond China

At its biennial plastics and rubber machinery event (which included shoe technology for the first time), officials from the Taiwanese plastics industry and its government shed some light on progress the island nation is making with its Southbound Policy. Announced on Sept. 5, 2016, that initiative seeks to “strengthen Taiwan’s trade and economic ties with members of the Association of Southeast Asian Nations (ASEAN), South Asian countries, as well as New Zealand and Australia,” according to a government press release.

Included in this effort are four key components:

Promote economic collaboration
Conduct talent exchange
Share resources
Forge regional links

James Chih-Fang Huang, chairman of Taiwan’s trade development group (TAITRA) reported that in 2017, Taiwan produced more than $1.4 billion of plastics and rubber machinery. Of that figure, fully $1.1 billion was exported. Exports were up 12.8%, and the production total makes Taiwan the sixth largest plastics and rubber machinery producer in the world. While lots of that equipment still makes the short trip across the Taiwan Strait to mainland China, an increasing amount is heading to points south.

According to TAITRA, China (including Hong Kong) is still the top destination for Taiwan-made plastics and rubber equipment, accounting for 21.3% (up 27%) of total exports. Out of the top 10, half—including Nos. 2-5—come from Southeast Asia, including Vietnam (No. 2), India (No. 3), Indonesia (No. 4), Thailand (No. 5), and Malaysia (No. 8). The top 10 is rounded out by Japan (No. 6), the U.S. (No. 7), Mexico (No. 9) and Turkey (No. 10). The largest growth rates from 2016 to 2017 came from Southeast Asia as well, lead by India (+44.1%), Indonesia (+25.8%), Thailand (+20.4%) and Malaysia (+19.4%).

In addition to the Southbound Policy promoting new markets for Taiwan’s plastics sector, the country’s government is also seeking to boost the sector by including it in its “5+2” initiative. This program has the Taiwanese government emphasizing seven industries—Asia-Silicon Valley, Biomedical, Green Energy, Smart Machinery, Defense, High-Value Agriculture, and Circular Economy—building research facilities and additional infrastructure in regions where clusters for these sectors exist, while providing funding and capital access for businesses within them.

In his Taipei Plas comments, Alex Ko, Chairman of Taiwan’s Machine Tool Association (TAMI), noted the government’s presence at the show—the legislature’s speaker, the government’s finance minister, and the country’s vice president were all in attendance. “The government has put a lot of emphasis on Taiwan’s machinery industry by marking smart machinery part of the 5+2 Industrial Transformation Plan,” Ko said. “We, as the industry, appreciate this commitment and are excited about the prospects.”