Sunday, September 18, 2016

Articles of Business Overflowing

The Shigang Dam against a steel typhoon sky. The dam's north abutment (right) was destroyed when the 921 quake lifted the entire dam 12 meters but left the north abutment in its original location.

Rupert Hammond-Chambers writes in the WSJ under the title Taiwan's President Must Prove She Can Lead:
In fact, Ms. Tsai’s primary external challenge so far has been Chinese intransigence to her election. Along with the constant drumbeat of Chinese military modernization, China has poached a diplomatic ally, had Taiwan citizens deported from third countries to China and reduced by up to one-third the number of Chinese tourist groups visiting Taiwan.

Yet China’s provocative behavior has been calibrated to avoid a downward spiral of exchanges with Taiwan from which it would be difficult to recover without losing face, while at the same time to avoid rousing the U.S. into making a show of support for its longtime ally. Ms. Tsai has been careful to refuse China’s “one China” policy, but she has also stated that no outcome is off the table so long as Taiwan gets to determine its own future. This new normal in cross-Strait relations is unlikely to change in the next six to 12 months, with both sides focusing on higher priorities.
In the top paragraph, two of the assertions are just plain wrong. China did not poach a diplomatic ally in Gambia -- it had nothing to do with Taiwan at all -- and the deportation policy was settled on long before Tsai came into office. It is one of the conventional double standards of media and commentators to attribute all perceived negative moves by China to the desire to punish the DPP, never the KMT. *sigh*

The second paragraph shows that Hammond-Chambers, like many who watch Tsai, doesn't get her style. The leadership style of Tsai Ing-wen is characterized by a complete lack of drama. Tsai is quietly effective. Many observers confuse this lack of drama with a lack of leadership. False. Tsai does not need to demonstrate leadership. She simply leads. Part of this also is that leadership in the two societies is different -- simply put, in Taiwan a leader is the one who gives orders that others must obey, in the US a leader is one who proposes ideas that others choose to follow. Fundamentally, Tsai is leading, according to her cultural practices.

One thing that's really sharp is H-C's observation that China is constrained by the US -- if it harms the Taiwan relationship too much, it might make the US more active in supporting Taiwan.

Hammond-Chambers argues that Taiwan needs the TPP, but hopefully Congress will kill that corporate power grab, which will be a disaster for Taiwan's exports, environment, economy, and national health insurance system. What Tsai should be doing is negotiating with the intention of never joining. I am not of the school that trade treaties are absolute goods, and this one is a destructive stinker.

Tricky Taipei publishes the 5 Least Business-Friendly Practices in Taiwan, in response to another one of Ralph Jennings' Forbes laughers. Tricky discusses things that many of us have seen over the years, though I can't understand why anyone thinks Gogoro scooter is so great. You just have to look at the pictures and it's obvious: Taipei. Heavy on the styling and light on the substance -- can you put 3 sacks of bamboo shoots and tie six large lead pipes across the rear? Can it carry four natural gas tanks? Doesn't look like it. At present it is an overpriced toy redolent of the Taipei moneyed mentality -- if you are looking for the real thing, IMHO try something like a Kymco Queen 3.0, which I drove a couple of years ago on Green Island. Why not support that? But then -- it lacks the kind of status associations that brands attempt to create. To me Gogoro is what happens when things are designed as brands from the start: they are but overpriced status markers with little real worth, which describes essentially the entire world that branding creates.

Speaking of that, Mark Stocker, who works to create the branded world that created the OEM system in Taiwan by offshoring jobs from developed countries, writes in an irony-free post on how Taiwan doesn't know what it wants to be when it grows up (foreigners who write in these tropes of Taiwan's immaturity really set me off, brace yourself). Stocker's been peddling this stuff for ages (here), and his answer is, of course, positive thinking and branded firms (in an astonishing coincidence, Stocker sells branding advice). Stocker attacks the "pessimism" over Taiwan's future -- a future that itself is the creation of the sick surfaces-are-everything branded world in which "things are constantly asserted that smart people know are false" that Stocker has fought to build, and writes:
It surprises me that instead of supporting the world’s first fully-automated toll collection system (ETC), we attack the system for minor technical issues on launch day. Meanwhile, few people recognized that what Taiwan had achieved was a world’s first that could lead to interest in the technology from countries around the world.
The world's first? Wiki says it was Norway in the 1980s, while the tech itself was first proposed in the 1950s. "Minor technical issues on launch day" was not why the ETC was attacked. This kind of misrepresentation is why so many of us despise the branded world. Stocker simply ignores over all the problems with the ETC, especially when it was first implemented -- so obviously a rip-off designed to line someone's pockets. Initially the cost to drivers was high, and the bidding process on it stank. Who on earth could support that? In fact it was boycotted by consumer groups and carriage firms, who were furious that the MOTC slashed their subsidies via ETC. Then came the accusation that Far Eastern Transportation Corp had gotten the bid through bid-rigging and leaked documents, with the usual indictments. No wonder consumers are pessimists! Sure, after a decade, ETC kinda works. Stocker writes:
Anyone of these companies might have achieved what Sony achieved for the nation of Japan, but they were never given a chance because we the public didn’t support them. To the converse, we slowed and worse yet stopped their ascent. By jumping on the ‘criticize’ bandwagon, we have collectively crushed the very ideas and opportunities that could have driven the next generation of economic opportunities for this nation.
No Mark, it was not our criticism and lack of support that stopped them from becoming the next Sony. Rather, it was their corruption, their preference for surfaces over reality, and their indifference to the needs of Taiwan that has kept so many big firms from emulating the success of Sony for Taiwan.

I don't want to end this post on a negative note, so let me guide you to Martin Hiesboeck's excellent open letter to Tsai Ing-wen on 5 Bold Steps for Taiwan's future, including:
5) Last but certainly not least, swing open the gates and welcome international talent. Everyone with a science degree, some achievement in business, or money to invest, should be given free work permits and unlimited visas. Perhaps it's time to abolish work permits altogether. Why do 'foreigners' need separate ID cards? If they have worked and paid taxes for 5 years, they should automatically be eligible to apply for a Taiwanese passport. It is a farce that 90-year-old retired professors have to leave the country in which they have spent their entire lives every 3 months just because of antiquated immigration laws. Taiwan is not a Han-Chinese nation. It has one of the lowest birth rates in the world. The only way to keep up with your neighbors economically is by building the most diverse workforce in Asia. Taiwan's leading companies are stifled by lack of international talent, just ask their marketing teams. Foreigners meet unnecessary obstacles every step of the way, from work permits to ID cards to access to bank credit. Taiwan's universities cannot find good teaching staff, because salaries are ridiculously low and restrictions on hiring foreigners extremely cumbersome. Learn from Sweden, which welcomes talented people from around the world with open arms and therefore has the most vibrant tech sector outside the US.
To all those I would add that Taiwan needs to re-open its voc-ed institutions, which supplied so many of its small- and medium-sized business entrepreneurs in the heyday of the Miracle Economy.

Many other things could be said, but this post is already too long... back to work tomorrow *groan*.
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18 comments:

Tricky Taipei said...

Ha. Gogoro isn't targeting the rider who's looking to transport large lead pipes and natural gas tanks. Bamboo shoots could fit in a backpack though. Thanks for the mention.

Michael Turton said...

Of course it isn't. That's the whole point. It's producing a vehicle with very limited functions and range, for extremely high prices, in order to confer status on its owner. A complete waste of money and effort.

Tricky Taipei said...

"It's producing a vehicle with very limited functions and range, for extremely high prices, in order to confer status on its owner." Great observation. Except you just described the global consumer auto industry. P.S. There's probably no-one more qualified to talk about Taiwanese brands and their potential -- in English or Chinese -- than Mark Stocker.

Mike Fagan said...

Shihgang dam, not Shihmen dam.

Anonymous said...

Abhishek bhaya (the "Indian" article) seems to have based his research primarily on a trip to aboriginal culture village.

Michael Turton said...

"It's producing a vehicle with very limited functions and range, for extremely high prices, in order to confer status on its owner." Great observation. Except you just described the global consumer auto industry.

Yes. And? That's a non sequitur. Main point is, Gogoro is a waste. It isn't doing well because it is an overpriced toy that addresses no genuine need.

P.S. There's probably no-one more qualified to talk about Taiwanese brands and their potential -- in English or Chinese -- than Mark Stocker.

LOL no. There's a whole cadre of researchers and designers out there. A vast scholarly literature. Reams of articles.

In any case, Stocker disqualified himself when the misrepresenting began (I note that you evaded any discussion of Stocker's misrepresentations). That's the essence of the branded world: a world where shit is repackaged as a status token by smart liars via misrepresentation and emotional appeals. That whole world, from end to end, is sociopathic. It needs to die.

Your stuff was good. More please!

PS: Does Stocker's firm work with Gogoro? He pimps it constantly.

Michael Turton said...

Shihgang dam, not Shihmen dam.

Thanks. Argh!

Steven Chen said...

As the owner of an E-Moving electric scooter, I have to respectfully disagree about Gogoro. The Kymco Queen has several problems - the battery degenerates after around 3 years, and replacing it is expensive. For my e-Moving, I have to purchase a new battery for $15000 every 3 years (the old one is still usable, but my range has been cut in half by this point), so there are no savings in cost compared to a gas scooter, and cost per kilometer really isn't much cheaper than Gogoro. Second, the battery isn't removable on the Queen, meaning you can only charge it if you have your own garage with an outlet, which many (especially in Taipei) do not have.

With Gogoro, the most attractive thing to me is the battery swap system, which is something that none of the other electric scooters offer. If we could one day solve the issue of deteriorating batteries and replacement, I would definitely consider something like the Queen.

Anonymous said...

Shirley Kan Shirley Kan. Damn she writes well: her thoughtful, clear-sighted and seriously detailed analyses of Taiwan defense issues and US policy bottlenecks are the best reference possible on these subjects. Her work previously at the Congressional Research Service on US-Taiwan policy issues should be required reading for anyone with concerns about the real nuts and bolts of future US-Taiwan relations. Her clear descriptions of China as the primary belligerent, criticisms of the US administration's pro-China policy creep in the absence of congressional approvals or oversight, her commentaries on strategic priorities and necessary changes to US policy and congressional participation to keep the administration honest, and finally her analyses of the issues on Taiwan Govt's side are extremely insightful.

Michael Turton said...

We had the same problem with our electric scooter. After about 3 years its pathetic range dwindled to nothing. But then we could have purchased four such scooters for the price of an overpriced Gogoro.

The issue isn't really whether one particular scooter is better than another and for what reason. It's that the Gogoro is consistently misrepresented when Stocker and others write about it. Want "support"? Offer something useful at an affordable price, without the bogus premium that is charged for "brand value." At the moment Gogoro is a toy at an inflated price, only useful in some areas of Taipei (actually in many buildings in Taipei you can park your scooter in the 1st floor stair space and recharge it) and not at all useful for how human beings actually use scooters in Taiwan.

There's a reason it is not a success. It is not a lack of "support". It is because the object was designed as a brand and not as something people could actually use, with one useful gimmick -- the detachable battery.

Steven Chen said...

I certainly won't argue that Gogoro inexpensive, but I really don't think it's that much more expensive than your typical 125cc gas scooter. Again, perhaps my problem is that I'm using my electric scooter as a base of comparison, where taking into account the need to purchase new batteries, I'm getting significantly worse performance for roughly the same price.

Full disclosure, I do live in Taipei with a GoStation right next to my apartment, so that probably colors things a bit in terms of how practical a Gogoro would be in everyday life. I agree that they're trying to establish a brand in order to eventually be in the energy distribution business, and using more expensive materials (at least, according to my roommate who was a mechanical engineer) probably isn't the most practical method, but it solves my biggest problem with electric vehicles so that's where it's attractive.

Anonymous said...

Good one, MT: That's the essence of the branded world: a world where shit is repackaged as a status token by smart liars via misrepresentation and emotional appeals.

On the reverse side of the same coin another beef I have with these brand shysters/ODM consultants is their standard moronic phrase: "The concept is 1%, the execution is 99%...blah, blah, blah fvcking non-sense.

Michael Turton said...

I certainly won't argue that Gogoro inexpensive, but I really don't think it's that much more expensive than your typical 125cc gas scooter. Again, perhaps my problem is that I'm using my electric scooter as a base of comparison, where taking into account the need to purchase new batteries, I'm getting significantly worse performance for roughly the same price

Yeah, that's everyone's beef. It's why I am waiting for next upgraded battery on the Kymco before I buy it. Range is still too low. It's all impractical.

Thanks for your comments, they have really helped me understand more about Gogoro. Also I read on Reddit some great comments about their battery approach.

Anonymous said...

Michael:

I am interested to understand your views on TPP. You are evidently strongly opposed to Taiwan membership in TPP.

In terms of economic diversification and deepening commercial and diplomatic ties with key international partners aside from China, it seems like a compelling and positive thesis for Taiwan in sync with Tsai's foreign policy (insofar as anyone aside from herself can claim to understand it - she strikes me as very thoughtful and extremely subtle).

So I was surprised to see your wholesale reaction to it as "a destructive stinker." What is your beef with TPP for Taiwan?

From what I can tell, Ma and the KMT were against it; which typically is a hint that a sane Taiwanese should be for it. But you are against, i.e. in line with Ma, which pretty much never happens.

So ... What's up? Are you concerned about specific elements of TPP that you think need improvement for a small member country, or with the entire thing?

Michael Turton said...

Fundamentally, I see several problems.

1. the special courts set up to protect corporations and immunize them from legal strictures.

2. the demand that, if a patented drug exists, a generic drug with same function NOT be purchased. Instead, higher price patented drug be used. Could be expensive for NHI

3. the restrictions on internet hosting/ISPs that turn hosts into censors and turn the internet over to corporate control.

4. the restrictions on environmental and labor laws.

etc. It's going to be very bad for taiwan. to the extent that it brings Taiwan into the US security fold further, it's good. otherwise, no. I am hoping congress saves us.

Anonymous said...

Thanks Michael. Those are concrete and clear points to be alert about in TPP (I'm glad you didn't say something like "protect our proud pig farmers!").

I am not familiar enough with the detailed text of the pact but on a big picture level taking the "good" aspects of international engagement, deepening of diplomatic and security ties, diversification of trading partners and opening of new markets, I am generally a proponent. This is also taking Tsai's stated desire to join at face value (I can't tell if she has other agendas or if this is a big foreign policy feint), as I believe she has a thorough and balanced view of all bilateral and multilateral relationships for Taiwan.

Going forward though I will pay close attention to the points you raised. On first glance they strike me as mostly - optimistically - solvable rather than writing off the entire exercise as a "destructive stinker". Your initial comment had me worried that I had missed some gigantic overall wrong, but that doesn't seem to be the case. Let's see:

1. Special courts. I'll check into this more; I doubt that countries like Japan, Canada, New Zealand and Singapore would entirely give up on their legal systems without some comfort that the arbitration system works and is balanced. Maybe I'm wrong; but personally, as a private sector participant who has been through a terrible Chinese expropriation, subjected to an environment where the local "rule of law" was abused by corrupt local officials with collusion from Chinese SOEs to destroy a US business, I'm in favor of any multilateral and enforceable arbitration process that provides a higher degree of transparency and judiciary independence. Then again, I view Taiwan's rule of law as far superior to that, and on par with US, Canada, NZ, Australia and Japan at least. So I'm curious how they've designed the arbitration process. Will check.

2. Patented vs. generic drugs and impact on national health care system. Your point here is wonderful, and its excellent healthcare system is indeed something fundamental and worthy of careful protection by Taiwan. On the other hand, Japan, Canada, Australia and New Zealand all have not too dissimilar public healthcare systems and all use generics to some degree for cost control. Canadians for example are just as passionate about their NHI as Taiwanese, and similarly cost conscious in light of pressure on their healthcare and pension systems. So it's hard to believe that they and others are all happily throwing that away to join TPP. It feels to me like there must be something more to this one. Again, I will pay attention to this point when I see the details, and appreciate you pointing out the potential concerns.

To be cont'd...

Anonymous said...

... Cont'd from above

3. ISPs. I have no idea about this one. TPP features internet censorship? I'm generally a fan of internet freedom within the same bounds as freedom of speech and short of libel, hate speech, etc. Will have to check this one.

4. Environmental and Labor Laws. From its reputation and its signatory countries, I would guess that the TPP standards for environment and labor should be very high: after all, you've got not only the US but Japan, Canada, Australia, NZ and Singapore in there, all arguably first class in these categories. Do you have specific issues with them from a Taiwanese perspective? Or you think Taiwan might not be able to comply without adding significant costs? I'm curious what the issue is. Maybe you're reading it as "restrictions" that would somehow lower Taiwan's own standards? Usually this stuff in pacts like TPP is written from the perspective of identifying and eliminating non-tariff implicit trade barriers while maintaining high standards.

At least its authors call it "aspirational" in terms of setting high common stadards. They could all be full of shit with hidden agendas of course, but taking them at face value that's what they say. Former US Asst Sec of State of Asia Pac, Kurt Campbell, just published a book on the "pivot" to Asia in US foreign policy, with a heavy emphasis on TPP ... as a formidable leader in US foreign policy, he is hardly a disinterested party and certainly has his own perspective of national interests in mind; anyway his book is worth a read. It's all very big picture though, no category-level analysis on the impacts for a specific new potential member like Taiwan.

Thanks again for taking a moment to identify specific perceived problem areas in TPP for Taiwan, I will keep these in mind in future when looking at it more. I do think there are some clear positives from a diplomatic, trade and security perspective, as long as those are balanced carefully with any impact on things like you mention such as healthcare and environment that are fundamental aspects of Taiwan, it seems like a gambit worth considering very carefully.

Best,

J said...

Really not sure why any electric scooter should receive support, when there is already a fast, high-capacity electric transportation system available in Taipei that has the additional benefits of not cluttering sidewalks or requiring parking (a requirement that is especially onerous in dense cities), is exceptionally safe, and is available to anyone regardless of age or physical impairment.