Insurance Committee Presentation Focuses on Fintech

According to the World Economic Forum, the growing use of financial technology (fintech) is expected to bring disruptive innovation to the world of finance, increasing efficiency and lowering the costs of financial services. Fintech is already the focus of serious attention in many countries, and Taiwan is no exception.

At a luncheon meeting organized by AmCham Taipei’s Insurance Committee at The Sherwood Taipei on December 14, Jennifer Wang, Vice President and the Distinguished Chair Professor of National Cheng-Chi University, gave attendees an update on current developments in fintech in Taiwan. Since introducing the relevant regulations early this year, the Taiwanese government has been encouraging enterprises, both financial institutions and start-ups in various industries, to participate in this new field. Having more companies involved in the current experimental stage for fintech in Taiwan is seen as enabling the authorities to refine the regulations to make them as effective as possible.

From left to right: AmCham Taipei President Andrea Wu; Speaker Professor Jennifer Wang; AmCham Taipei Insurance Committee co-chairs Dan Ting, Chairman of Hotai Insurance and Linda Tsou from Cigna Taiwan Life Assurance.

Wang, a former Vice Chairman of the Financial Supervisory Commission, said fintech offers hope of bringing the following benefits:

  • Lowering the costs of financial services
  • Collecting big data and financial information to analyze
  • Providing customized financial services based on the collected data
  • Enhancing supervision of the financial sector and preventing financial crimes

Strong Outlook for the Semiconductor Sector

2017 was a landmark year for the global semiconductor industry. Due to an astounding 57% rise in sales in the memory sector, total revenue in the industry is poised to surpass US$400 billion for the first time. In addition, after 25 years as the global leader in the semiconductor field, Intel will be losing that title to Samsung.

From left to right: AmCham Senior Director Don Shapiro, Editor-in-Chief; Speaker Ben Lee, Principal Analyst at Gartner Group Taiwan Ltd.; Technology committee co-chair Revital Shpangental Golan, CEO of Anemone Ventures.

Ben Lee, principal analyst at Gartner Group Taiwan, sought to shed light on those and other recent developments at a luncheon meeting of AmCham Taipei’s Technology Committee at The Sherwood Taipei on December 8. Most of the growth this past year was due to a rise in selling prices – spurred by an undersupply of product in 2016 – rather than increased production volume, Lee explained. As a result of the changed market dynamics, memory now accounts for about 30% of the total semiconductor market, up from 24% a year ago.

Lee sees continued growth, though at a more moderate pace, in 2018, driven by heightened demand in such categories as automotive-electronics and robotics. The development of products centered on the Internet of Things will help make up for the decline in such areas as PCs and smart phones.

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2017 Trade Secrets Act Forum

Taiwan has had Trade Secrets legislation on the books since 1996, but the law has been strengthened substantially in recent years in response to the increased number of cases of theft of confidential commercial information.

On December 6, AmCham Taipei’s Technology Committee and Intellectual Property & Licensing Committee jointly sponsored a seminar at the Westin Taipei to review the latest trends in trade secrets protection. Specialist Chen Hsin-ru (陳信儒) from the Ministry of Economic Affairs’ Intellectual Property Office opened the session with a definition of what constitutes a Trade Secret, followed by describing the detailed steps involved in filing a lawsuit if one’s trade secretshave been infringed upon.

Citing real-life cases as examples, Prosecutor Liu Yi-jun (劉怡君) from the Hsinchu District Prosecutors Office shared the process of investigation, including what evidence was required and what could help reinforce a case, as well as what corporations can do to prevent the violation of trade secrets. Special Investigator Pan Ji-xiang (潘季翔) from New Taipei City’s Investigation Bureau concluded the discourse with enforcement and litigation statistics.

From left to right: Speaker Special Investigator Pan of the New Taipei City Investigation Bureau; Speaker Specialist Chen of the Taiwan Intellectual Property Office; Speaker Prosecutor Liu of the Hsinchu District Prosecutors Office; and AmCham IP&L Committee co-chair Peter J. Dernbach of the Winkler Partners law firm.

During the Q&A session, attendees raised numerous questions about the coverage of the Act and its enforcement. This seminar helped build a communications bridge between the business and law enforcement communities in the hope of enhancing regulative efficiency and strengthening the protection of valuable intellectual properties.

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Note: AmCham events are intended primarily for AmCham members and their guests. Many events are open to members’ guests and other non-members, but the attendance of any non-member must be approved in advance. AmCham reserves the right not to admit a non-member to any event without explanation.

Gain More Shoppers for Your Brand 

Every day, we pass by hundreds of products, advertisements, and business logos, on the streets or on the internet, but only a few of them catch our eyes. What is the difference between the brands that capture our attention and those neglected? For a company, how to stand out among millions of brands – and most of all, what is the secret to owning a sustainable brand in this ever-changing world?

On November 30, the AmCham Retail and Cosmetics Committees jointly invited Marcy Kou, CEO of Kantar Worldpanel Asia, to break down the secrets behind a successful brand. On the topic of “Gain More Shoppers for Your Brand,” Kuo pointed out that the key to building an influential brand is the ability to recruit incremental shoppers.

From left to right: AmCham President Andrea Wu; Speaker Marcy Kou, CEO of Kantar Worldpanel Asia; AmCham Retail Committee Co-Chair Mark Chen, General Manager of Abbott Laboratories Services Corp., Taiwan Branch.

Kou presented five tips to expanding the number of shoppers:

  • More moments – Associate your brand with a special moment, and encourage shoppers to share their moments. This is a prevailing approach on the internet.
  • More presence – Recurring presence reinforces brand images on customers’ minds, and thus differentiates your brand from your competitors.
  • More targets – Reach out to new groups of shoppers. For example, vegan flavors help an ice cream brand obtain new customers.
  • More categories – Diversify product lines for various types of consumers, such as kids.
  • New needs – Create or discover new features from existing products. For instance, a company that sells probiotic beverages extended their business into beauty masks made from the same ingredients as the beverage.

Providing new incentives for consumers to make a purchase and further share their user experiences are what enable a brand to stay at the top of the game.

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Note: AmCham events are intended primarily for AmCham members and their guests. Many events are open to members’ guests and other non-members, but the attendance of any non-member must be approved in advance. AmCham reserves the right not to admit a non-member to any event without explanation.

The Dismal Science Got a Bit Cheerier at AmCham’s Economic Outlook Event

While economics might be called “the dismal science,” on November 17 AmCham Taipei members were treated to a lively presentation and discussion by a decidedly charming economist – Chen Shin-hui, assistant research fellow at the Center for Economic Forecasting, part of the Chung-Hua Institution for Economic Research (CIER). Chen’s major role at CIER is to compile the monthly Purchasing Managers’ Index (PMI), a monthly survey of Taiwan’s major industries that is widely viewed as a leading indicator of the economic health of the manufacturing sector.

From left to right: AmCham Capital Markets Committee Co-Chair Chung-Ping Liu, Executive Vice President, Fubon Financial Holding Co., Ltd.; Speaker Shin-Hui Chen; and Governor & AmCham HR Committee Co-Chair Seraphim Ma, Senior Partner, Baker & McKenzie

In her presentation entitled, “Taiwan’s Economic Situation and Outlook,” she was therefore able to offer unparalleled insights into Taiwan’s economy.

Chen started with an overview of the global economy and how Taiwan has benefited from the recent upturn in growth and trade. The global economy is looking to post higher growth rates in 2017 in the vicinity of 3.6% on the strength of modest growth in the United States (2.17%), the Eurozone (2.22%), and China (6.8%), according to the Global Insights website, as reported in late October. Chen noted that Global Insights remains particularly bullish on anticipated tax cuts and business growth in the United States. The OECD, meanwhile, though more cautious, likewise sees broad-based recovery throughout the economies it tracks.

This global recovery has resulted in a 20-month long expansion in Taiwan’s exports, up 13% in year-to-date annual comparisons as of October, according to the Bureau of Foreign Trade under the Ministry of Economic Affairs (MOEA).

The PMI tracked by Chen reflects this upward trend, coming in at 57.7, although it fell a slight 1.7% from September’s 58.7. Anything over 50 is considered expansion. Chen noted that both New Export Orders and Industrial Production Indexes also recorded healthy scores of 58.6 and 57.9, respectively, although both were down slightly from the previous month. What’s more, this expansion was seen in all of Taiwan’s major industrial sectors.

However, Chen reminded attendees that despite these rosy numbers, Taiwan’s economy remains fragile and so far incapable of meeting its potential.

She noted that despite the massive contraction Taiwan experienced in the recession of 2009, it failed to diversify its trade partners to reduce its overreliance on cross-Strait trade, resulting in a downturn in exports whenever China’s economy slows, and leaving it vulnerable to trade declines as China’s domestic supply chain upgrades and gains competitiveness on Taiwanese manufacturers. Taiwan experienced this situation in 2015-2016 when it saw 17 months of export contractions.

Even more significantly, Taiwan’s non-export sectors remain underdeveloped and sluggish. More than two-thirds of Taiwan’s economy is comprised of service-related industries, but more than two-thirds of the economic growth results from its exports, pointing to weakness in the service economy and an overreliance on trade.

Taiwan’s Non-Manufacturing Index (NMI) which tracks the service economy, is likewise up, to 53.6, with growth seen in several major components, including Finance and Insurance, Transportation and Storage, and Education. But costs have also risen this year by 2 percentage points, indicating upward pressure, causing a decline in activity in several categories, including Construction and Real Estate. Cross-Strait tensions are also playing a role, with Chinese tourism down significantly. Chen noted that while many have observed that the drop in Chinese tourism numbers has been offset by visitors from other countries, the Chinese tourists are particularly lucrative for the Taiwan market, as they tend to stay longer and spend more.

She also noted that recent legislation, particularly the newly amended Labor Standards Act, is also impacting costs across the economy in both manufacturing and service industries.

Chen’s diagnosis of the problems facing Taiwan came complete with some suggestions for how to improve its prospects. Liberalizing the financial sector was one, as well as encouraging the government to consult more with industry on how to improve conditions.

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New Horizon in Liver Disease Management: Taiwan’s Experience

For many years liver disorders have been seen as Taiwan’s national disease. As a result, liver disease management has been identified as the government’s top public health priority. Hepatitis B virus (HBV) and Hepatitis C virus (HCV) are the two key risk factors for liver cancer. How can the government, physicians, public health experts and the pharmaceutical industry work together even more closely to decrease liver disease in Taiwan?

At a November 7 luncheon presentation sponsored by AmCham Taipei’s Public Health Committee at the Regent Taipei, Dr. Chen Ding-Shinn, an Academician of Academic Sinica, and Dr. Pwu Raoh-Fang, Director of the National Hepatitis C Program Office under the Ministry of Health and Welfare, shared their experiences on liver disease management.

From left to right: AmCham Public Health Committee Co-Chair Joyce Lee, General Manager, Bristol-Myers Squibb (Taiwan) Ltd.; Speaker Dr. Pwu Raoh-Fang Director of the National Hepatitis C Program Office, Ministry of Health and Welfare; Speaker Dr. Chen Ding-Shinna, an Academician of Academic Sinica; and AmCham Taipei President Andrea Wu

Dr. Chen introduced Taiwan’s Viral Hepatitis Control Program that was implemented in the 1980s and explained factors that contributed to the success of the program. But educational programs designed to inform citizens of the importance of vaccinations and treatments are not enough, said Chen. He noted that several challenges remain, as the prevalence of liver disease is still on the rise:

  • Most people who contract HBC or HCV infections are unaware that they are infected
  • Many with known chronic infections are reluctant or refuse to receive treatment
  • Reimbursement of medical treatments is not ideal
  • The screening of HBV/HCV infection is still inadequate
  • Existing data on subjects who have previously been screened for HBsAg (also known as the Australia antigen) /anti-HCV is not well-utilized
  • The number of physicians participating in the treatment program is still inadequate

Following Chen’s presentation, Dr. Pwu provided an overview on how Taiwan will meet the ambitious target of the World Health Organization (WHO) for ending viral hepatitis. He identified two key strategies for achieving this goal: 1) setting a target number of patients to be treated, and 2) aligning with the WHO and improving cross-department collaboration. In closing, Pwu reminded the audience that Taiwan has both the ambition and ability to become a world leader in hepatitis elimination by 2030. It will take both passion and wisdom to achieve this goal, however.

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A Visit to Logistic Republic – Taiwan’s Most Modern Logistics Solution

AmCham Taipei members and staff spent a fun and informative afternoon exploring Taiwan’s most innovative and modern logistics hub.

Although Taiwan is one of the most trade-dependent economies in the world, its exports and imports often pass through warehouses that are poorly designed, of substandard condition, or even illegally constructed. Taiwan’s small size means that industrial-zoned land is simply too valuable to be used for warehouses and an estimated two-thirds of Taiwan’s warehouses are illegally located on agricultural land without proper building permits and little investment into modern logistics.

Ally Logistic Property (ALP) bucks this trend by offering modern, innovation and technology-driven warehousing and logistics services to the Taiwan market, as AmCham members learned on their visit Nov. 3 to ALP’s Logistics Republic (LR) massive smart warehouse and logistics hub in Ruifang. Providing logistic services to customers using the Port of Keelung, LR is only in Phase 1 but already encompasses 171,400 square meters.

Hosted by Warren Wang, Executive Assistant to Charlie Chang, Managing Director of ALP, AmCham members were first treated to a tour of the site’s central office. With its modern design and warm wood finish, it resembles a high-end café more than the bland, utilitarian space more typical of the industry – and it even has an espresso bar. Wang told AmCham members that several of ALP customers have been so impressed by the design that they contracted ALP to design their own workspaces as well.

From left to right: AmCham member Warren Wang, Executive Assistant to Managing Director of Ally Logistic Property and Andrea Wu AmCham President

ALP was established just three years ago, with US$1 billion in investment from Cathay Financial Holdings Corp., but is already well on its way towards its goal of building and managing one million square meters of modern smart warehouse and logistics infrastructure. Wang explained that ALP’s LR site is a warehouse solution that maximizes operational efficiency and minimizes transportation needs by co-locating various players in the logistic service industry together with their clients. The company continues to drive innovation in the logistics sector with ambitious expansion plans to meet the needs of Taiwan’s manufacturers, retailers, e-commerce businesses, and third-party logistic service providers, he said.

Following Wang’s briefing, AmCham members piled into the bus once more to visit the actual warehouses. First on the agenda was a tour of French sporting goods maker Decathlon’s distribution center. Decathlon is a maker of a wide range of sporting goods, from weightlifting gear to racing bicycles and badminton racquets. Jimmy Correia, Decathlon’s Taiwan Logistics Leader, led AmCham members on a tour of the distribution center, where Decathlon’s youthful and sporty logistics workers “pick and pack” – with the help of advanced technology – sporting goods for shipment to Decathlon’s stores in Taiwan and around the world.

Following these tours, AmCham members were treated to some of Dyna Logistics’ wares – a wine tasting sponsored by Dyna Logistics and ALP.

A tour of the LR Wine Hub followed, led by the General Manager of Dyna Logistics, James Pong. In marked contrast to Decathlon’s distribution center, which bustled with youthful staff, Dyna Logistics’ cavernous wine hub was eerily quiet. Pong told AmCham members that the entire warehouse was staffed by fewer than a dozen workers, with most of the wines picked from the tall racks soaring 20 meters above by huge vertical machines that traversed the aisles. With fragile, irregularly shaped bottles and strict temperature requirements, wine is notoriously challenging to ship and store, yet Dyna Logistics’ automation and climate control enabled the warehousing operation to function with smooth precision.

Following these tours, AmCham members were treated to some of Dyna Logistics’ wares – a wine tasting sponsored by Dyna Logistics and ALP. AmCham conveyed its special thanks to ALP for sponsoring the roundtrip bus ride to the Logistic Republic Park in Ruifang.

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Note: AmCham events are intended primarily for AmCham members and their guests. Many events are open to members’ guests and other non-members, but the attendance of any non-member must be approved in advance. AmCham reserves the right not to admit a non-member to any event without explanation.

Visit of Cosmetics Trade Specialist Tonya Kemp

Since its establishment early this year, AmCham Taipei’s Cosmetics Committee has kept in close touch with the Taiwan Food & Drug Administration as TFDA drafts amendments designed to modernize the Control of Cosmetics Hygiene Act. The Committee and TFDA have been in agreement that regular two-way communication between government and industry is the best way to ensure that relevant laws and regulations are as effective and practical as possible.

In line with that goal, the Cosmetics Committee recently arranged for a U.S. expert in cosmetics industry affairs, Tonya Kemp, to visit Taiwan in late October. Kemp was formerly Senior Director of International Trade Policy at the Washington, DC-based Personal Care Products Council (PCPC), the leading national trade association representing the global cosmetic and personal care products industry. Currently she is Senior Principal Trade Policy Advisor for Amway Corp., while also serving Chairman of PCPC’s Asia Pacific Subcommittee and an Advisor to the International Trade Administration of the U.S. Commerce Department.

From left to right: Susan Chao, Managing Director, MindShare Communications Ltd., Taiwan Branch; AmCham President Andrea Wu; AmCham Cosmetics Committee Co-Chair Abigail Lin, Manager, Global Product Stewardship, Taiwan, Procter & Gamble Taiwan; Pei-Weng Tu, Director, Division of Medical Devices & Cosmetics, Food and Drug Administration, MOHW; Speaker Tonya Kemp, Senior Principal Trade Policy Advisor, Amway Corporation / Chairman of Asia Pacific Subcommittee, Personal Care Products Council, USA; Speaker Kuo-Teng Hung, Section Chief, Division of Medical Devices & Cosmetics, Food and Drug Administration, MOHW; Jen-Ni Yang, Director General, Bureau of Foreign Trade, Ministry of Economic Affairs.

Kemp was one of two presenters at a luncheon meeting of the Cosmetics Committee held at the Mandarin Oriental Hotel on October 27 on the topic of “U.S. and Taiwan Cosmetics Regulation.” Explaining the Taiwan regulatory structure was Kuo-Teng Hung, Section Chief of TFDA’s Division of Medical Devices and Cosmetics, who outlined how it will be transformed under the new law from a pre-market registration system to one of post-market surveillance through notification and the use of Product Information Files (PIF). Kemp’s presentation reviewed the American experience with post-market surveillance and the benefits of industry self-regulation.

During Kemp’s stay in Taipei, the AmCham Cosmetics Committee also arranged for her to pay courtesy calls on the Commercial Section of the American Institute in Taiwan, where she met with Deputy Director Mark Lewis and his staff, and on TFDA Director General Wu Shou-mei and her colleagues. The Director General expressed keen interest in increased contacts with PCPC to help TFDA keep abreast of international best practices.

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Note: AmCham events are intended primarily for AmCham members and their guests. Many events are open to members’ guests and other non-members, but the attendance of any non-member must be approved in advance. AmCham reserves the right not to admit a non-member to any event without explanation.

Ramifications of the New Southbound Policy

Since taking office in 2016, the Tsai administration has promoted its New Southbound Policy as a key element in stimulating the Taiwan economy and providing Taiwan with more international space. What does the policy entail? Will this new direction compromise business investment in China? How will the government assist Taiwan’s corporates to expand their business to Southeast Asia and South Asia?

At a special AmCham Taipei luncheon meeting held at the Grand Hyatt Taipei on November 1, Tsai Chi-Chang, Deputy Speaker of the Legislative Yuan, gave a Chinese-language presentation explaining the basic framework of the policy and how it relates to current conditions in cross-Strait relations.

Form left to right: AmCham Governor & Telecom & Media Committee Co-Chair Joanne Tsai, Executive Vice President & Managing Director of Taiwan and China, Fox Networks Group; Tsai Chi-Chang, Deputy Speaker of Legislative Yuan; AmCham President Andrea Wu; AmCham Telecommunications & Media Committee Co-Chair Thomas Ee, Chairman, Taiwan Broadband Communications, Co., Ltd.

Tsai’s main points included:

  • Stable Relationship with China – Maintaining stable cross-Strait relations remains the government’s top priority. Promoting the New Southbound Policy is not meant to discourage Taiwanese companies from investing in China.
  • Additional Business Opportunities – The primary purpose of this policy is to increase investment options for Taiwan’s businesses.
  • Leveraging Taiwan’s Advantages – Taiwan continues to be one of the top investors in Southeast Asia, while the number of workers, students, and tourists from Southeast Asia has been growing steadily over the years. Taiwan should seize the chance to turn these relationships into a business advantage.

Economic growth remains the core goal for the government. Although there are many obstacles, the government is determined to keep improving investment environment for Taiwan’s companies.

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Strategic IP Considerations on Industry Innovations in the Digital Era

Cloud-fueled digital transformation is driving innovation, touching every individual and industry, in what some call the Fourth Industrial Revolution. Companies around the world are racing to transform their business and succeed in the new digital age, or else face the risk of disruption.

AmCham Taipei’s IP&L Committee invited Erich Andersen, Corporate Vice President & Chief IP Counsel of Microsoft Corp., to deliver a presentation on “Strategic IP Considerations on Industry Innovations in the Digital Era” at a luncheon at the Mandarin Oriental Taipei on October 23.

Andersen referred to Johnson Controls as an example of a company that uses sensors from a building or environment to generate data such as temperature, humidity, and air quality so as to provide services based on customers’ needs. Using Azure, a cloud computing platform and service solution by Microsoft, Johnson Controls can store valuable data from connected buildings in a centralized computer or cloud server without having to worry about service interruption.

From left to right: AmCham Intellectual Property & Licensing Committee Co-chair Peter J. Dernbach, Partner of Winkler Partners; Speaker Erich Andersen, Corporate Vice President & Chief IP Counsel of Microsoft Corporation; AmCham President Andrea Wu; Chris Neumeyer Special Counsel, Duane Morris & Selvam Taiwan, Foreign Legal Affairs Law Firm; and AmCham Intellectual Property & Licensing Committee Co-chair Vincent Shih, Assistant General Counsel, GM, Corporate, External & Legal Affairs, Microsoft Taiwan Corp.

As companies shift from traditional computing to the cloud, they need to rethink the business risks involved as data is digitalized. These risks include 1) security, 2) intellectual property protection, 3) compliance issues, 4) data privacy, and 5) data sovereignty. Andersen shared with the audience some of the risk mitigation strategies:

  • Review the terms of service provided by cloud technology suppliers to protect your business from third-party IP claims, and ensure that you understand the implication of limitations of liability and use of open source software on the products and services covered.
  • Develop your own patent portfolio to secure your innovations, especially technologies relevant for your competitors, and to deter or defend against patent lawsuits.
  • Obtain licenses to third-party IP to reduce your business risk, increase business flexibility, and provide basic defense against non-practicing entities (NPEs).

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Note: AmCham events are intended primarily for AmCham members and their guests. Many events are open to members’ guests and other non-members, but the attendance of any non-member must be approved in advance. AmCham reserves the right not to admit a non-member to any event without explanation.