Remarks by AIT Director Christensen at the Mergers & Acquisitions and Private Equity Council of Taiwan (MAPECT)

AIT Director W. Brent Christensen
AIT Official Text# OT-1926
May 23, 2019

Remarks by AIT Director Brent Christensen at the
Mergers & Acquisitions and Private Equity Council of Taiwan (MAPECT)
Taiwan Industrial M&A and Transformation Forum
Wednesday, May 22, 2019

(As Prepared for Delivery)

Chairman Lu, Minister Chen, distinguished guests, thank you for inviting me to join you here today for this important discussion.

And this is a great excuse to come back to AIT’s old neighborhood.  I think most of you know that AIT finally moved into our new offices in Neihu just three weeks ago, after what one might call a rather lengthy period of preparation.  Our new office complex is an impressive, state-of-the-art structure, a testament to the U.S. commitment to Taiwan, and a worthy symbol of the strength of the U.S.-Taiwan relationship.  We are very proud of it, and proud to have had so many distinguished visitors attend our opening ceremony there last month, including President Tsai and former U.S. Speaker of the House of Representatives Paul Ryan.  While we are making the most of our new facility and appreciate the new suburban surroundings, I must admit that we still very much miss our former location in downtown Taipei.

This is my first time participating in a MAPECT forum, but not my first time talking about the role of investment, which is a topic that AIT has focused on for many years.  The U.S. Department of State’s annual Investment Climate Statement and USTR’s National Trade Estimate have long addressed the U.S. perspective on Taiwan’s investment environment.  Our many distinguished U.S. government visitors have also discussed the topic at length.  Just last month, State Department Deputy Assistant Secretary for Economic and Business Affairs David Meale in remarks to an audience at the American Chamber of Commerce in Taipei emphasized the role of private equity and how investment is a “two way street” that supports jobs in both our economies.  AIT also co-hosted a large event with the Ministry of Economic Affairs in September last year on how private equity contributes to economic growth.

I feel strongly that all of this public discussion about investment and private equity provides a great service to the public and to Taiwan’s leaders, policymakers, and regulators.  The ongoing dialogue on this topic helps decision makers understand which investment policies are most likely to contribute to a flourishing domestic economy.  I am pleased to add AIT’s voice to that of MAPECT and many others in urging continued enhancements to Taiwan’s investment climate, particularly with regard to M&A and private equity.  Simply put, private equity matters.  We understand that revisions to the Statute for Investment by Foreign Nationals are under consideration in the Legislative Yuan.  Some of the proposed changes would help improve the transparency and predictability of the investment climate, two factors that matter a lot to foreign investors.  We welcome these changes.

Now, I would freely admit that I have limited experience as an investor – if I were a professional investor, I would be sitting with you rather than standing here – but I do talk to a lot of foreign investors.  And when I talk to these investors, they tell me that they need more assurances that when they enter the Taiwan market they will be treated fairly and predictably.  That if they choose to exit the market that they will be able to do so as easily as they would in another advanced economy.  The need for these assurances is not just a matter of convenience or incentive for these foreign investors.  It is really all about Taiwan maintaining its competitive edge as it vies for foreign direct investment with other markets around the region and the world.  Taiwan is an advanced economy, and as such, foreign investors will have very high expectations of Taiwan.

Fortunately, the evidence shows that Taiwan is up to the challenge.  When I learned that Taiwan in 2018 had a banner year for inbound FDI, it did not come as a surprise to me, because Taiwan already has so much to offer: strong intellectual property protections, a highly educated, talented, and innovative workforce, and a free and open economy underpinned by the rule of law.  These features make Taiwan an attractive place to do business, and have for decades also made Taiwan a close trading and investment partner of the United States.  They are also the keys to Taiwan’s transformation from a consumption and export-led manufacturing economy into an innovative, high tech and services — oriented economy.  It is important that Taiwan keep striving to improve its investment climate, including through the passage of relevant laws and regulations such as the investment statute amendments I mentioned earlier, trade secrets amendments, and patent linkage regulations.

And the Taiwan authorities are providing important support.  For example, the Ministry of Science and Technology and its constituent offices as well as the Ministry of Economic Affairs’ Taiwan-USA Industrial Cooperation Office are helping to lead the way in developing new partnerships among foreign investors, Taiwan businesses, researchers, and academia.  AIT is pleased to see that so many U.S. investors are collaborating with Taiwan through these partnerships.  In fact, we believe that public private partnerships such as these are essential to advancing investment goals in Taiwan as well as the United States.

One particularly important vehicle for advancing partnership has been the annual SelectUSA Summit.  This year, we look forward to welcoming a large group of Taiwan investors to Washington in June to engage with U.S. officials and state economic development leaders.  Like Taiwan, the United States also has so much to offer foreign investors.  AIT’s Commercial Section stands ready to assist anyone here today who is interested in learning more about SelectUSA.

Recently I announced a new partnership, called the Talent Circulation Alliance, that will also play a role in deepening our economic ties.  As all of you know, much of Taiwan’s early industry was established by young people going to study and work in the United States.  These talented individuals then came back to Taiwan to found or work for some of Taiwan’s most successful global companies.  The Talent Circulation Alliance seeks to recreate this story for the digital age.  We intend to work together with the public and private sectors, academia, research labs, non-governmental organizations, and others to facilitate a steady flow or circulation of talent between our economies.  This effort will aim to satisfy industries’ hunger for innovation and new thinking, while bringing opportunities to promising young people.  As we release more details about this effort, we will welcome inquiries from U.S. and Taiwan companies interested in joining us on this journey.

As most of you have no doubt heard, throughout 2019 AIT is celebrating its 40th birthday and 40 years of friendship and partnership between the United States and Taiwan since the signing of the Taiwan Relations Act.  As part of AIT@40, we are highlighting a different area of U.S.-Taiwan cooperation each month.  In April we held events marking the U.S.-Taiwan trade and investment relationship.  May is Immigration & Exchange Month, and in June we will focus on the technology and digital economy aspects of the U.S.-Taiwan relationship.  On June 4, we will be hosting our first Digital Dialogue Public Forum on the topic of Taiwan’s global engagement.  Before that date, we welcome comments from the public through AIT’s website about how the United States and Taiwan can work together to promote Taiwan’s presence and leadership on the international stage.

Taiwan’s international leadership is a great point on which to conclude my remarks.  I am not only referring to Taiwan’s leadership as a prosperous democracy, or as a force for good in the world through the capacity building, development aid, and technical assistance that it provides to countries around the globe.  I believe there is also great potential for Taiwan to take on a more prominent international leadership role on trade and investment.  I believe this because of Taiwan’s extraordinary capacity for innovation and its deep bench of SMEs and corporate champions.  By welcoming private equity investment from all corners of the globe, and across many sectors of the economy, I am confident that Taiwan will indeed realize its potential as a world leader in this area as it charts new pathways to economic prosperity.

Thank you.