An official website of the United States government

Remarks by AIT Director W. Brent Christensen at the MAPECT 2020 International Investment Forum
August 26, 2020

Director W. Brent Christensen
Director W. Brent Christensen

Remarks by AIT Director W. Brent Christensen at
Mergers & Acquisitions and Private Equity Council of Taiwan (MAPECT) 2020 International Investment Forum
Tuesday, August 25, 2020  

  (as prepared for delivery)


Chairman Lu, Honorary Chairman Huang, Fu suozhang, Minister Kung, distinguished guests, ladies, and gentlemen, wu an!

Thank you for inviting me here today to join you for this important discussion.  It is my pleasure to come back to meet many of the old friends in this year’s MAPECT forum.  MAPECT has been a very important partner of AIT.  Because of your continuous efforts in advocating for the strong role of investment, we continue to see significant improvement in Taiwan’s investment environment, including in the private equity industry.

For example, the Taiwan government’s increased approval of private equity cases over the past few years signals the gradual change in attitudes in Taiwan towards private equity investment.  This can be attributed to the numerous discussions between officials and organizations like MAPECT over the past several years.

I am confident that today’s forum about supply chain restructuring and merger and acquisition opportunities in a post-pandemic environment will provide important insights to the public, Taiwan’s business leaders, and policymakers.

As many of you already know, the COVID-19 pandemic and geopolitical uncertainties continue to impact supply chains around the world.  The pandemic has exposed the risks of over-reliance on one country or supplier for not only critical materials like medical supplies and pharmaceuticals, but also for industries that are of strategic importance to our shared economies.  And the COVID-19 pandemic and its knock-on effects will likely change the calculus of many companies regarding the wisdom of continuing to invest so heavily in any one country, including China.

Today, I would like to share with you the United States government’s perspective on supply chain restructuring and the opportunities for Taiwan industry in the coming years ahead.

The U.S. government is undertaking a whole of government approach to address supply chain restructuring, and we want to work with Taiwan on this effort.  We often describe the U.S.-Taiwan relationship as “real friends, real progress” [真朋友, 真進展].  And over the past eight months, AIT has engaged with our counterparts in Taiwan government, industry, and academia to explore how the United States and Taiwan can work together on supply chain restructuring.

Simply put, securing and reinforcing supply chains is one of our shared priorities.

As part of this effort, the United States is focused on three areas:

First, diversifying and bringing supply chains closer to the end user, including to the United States.  Second, ensuring countries like China do not hold supply chains hostage for political purposes.  And third, working with like-minded partners, including Taiwan, Japan and the European Union and others, to develop new supply chains based on shared values, standards, environmental, and labor practices.

We believe that Taiwan has a unique opportunity to reshape global supply chains for the betterment of the world.  Taiwan is at the center of regional high-technology supply chains, ranging from the major original equipment manufacturers and original design manufacturers to companies manufacturing and designing components to chipsets to those that are building the future internet of things, AI, and 5G networks.

It is worth noting that Taiwan firms are the leading industry players that helped to develop ICT and other supply chains in the PRC over 30 years ago.  But in contrast with PRC-backed companies, Taiwan firms adhere to the rule of law and protect intellectual property.  As Taiwan firms have experienced rising labor costs and a less hospitable work and investment environment in China, they have started to seek alternative production and manufacturing centers. Moreover, Taiwan firms increasingly recognize the dangers of tying their futures to the PRC.

The Taiwan government has already recognized this phenomenon and is taking steps to bring investment back to Taiwan. With Minister Kung here, it is incumbent upon me to note that Taiwan businesses reshoring programs of the National Development Council and the Ministry of Economic Affairs  have successfully attracted more than one trillion New Taiwan Dollars of investment that is being reshored to Taiwan since the program was launched in January 2019.  Many of these firms are bringing back their most automated and advanced production to Taiwan.

However, at the same time, we have also heard that not all of these companies’ operations can be brought back to Taiwan, especially because of the limited supply of certain production factors in Taiwan.

As a result, many Taiwan firms are seeking partnerships in the United States and in other like-minded economics in the Indo-Pacific to build out the new supply chains of the future.  And in this regard, Taiwan firms can be a major enabler of FDI to the rest of the world.

In fact, I was pleased that after the creation of the U.S.-Taiwan Trade and Investment Networking Center last year with TAITRA, we just launched a digital U.S.-Taiwan Business Alliance Platform that will deepen U.S.-Taiwan economic ties, contribute to securing supply chains, and increase investment from Taiwan into the United States.

Indeed, Taiwan is one of the most active investors in the United States and in the past two years has sent the largest delegations to the SelectUSA Investment Summit, ensuring that economic ties between the United States and Taiwan will remain strong for decades to come.

Most notably, TSMC, the world’s largest semiconductor company, recently announced plans to invest US $12 billion to bring cutting edge semiconductor technology and supply chains back to the United States. We believe this move sends an unmistakable signal that the future of high-tech supply chains remains in the U.S.-Taiwan nexus.  TSMC’s investment in the United States further reinforces the view that Taiwan is a critical node in global high-tech trade and U.S. technology supply chains.

The message on supply chains seems to have made its way to the top of Taiwan’s leadership.  President Tsai mentioned the important role Taiwan can play in restructuring global supply chains during her recent inauguration speech.  It will take, however, a coordinated effort from all of us to help different economies, sectors, and companies to build out new secure supply chains that are based on principles of trust.

From the U.S. government side, my colleagues in Washington have begun to focus on the creation of an Economic Prosperity Network, which is a network of countries, economies, companies, and civil societies that would aim to come together in areas of digital infrastructure, energy, research, investment, trade, commerce to operate under shared values.  We would call these American values.  We would also call them Taiwan values.  These are also known as “trust principles.”

What are the trust principles as we restructure supply chains? Integrity, accountability, transparency, reciprocity, respect for rule of law, respect for property of all kinds, respect for human rights, respect for the planet.  Taiwan shares these qualities as well as a common economic purpose and vision with the United States.

Moreover, as we endeavor to collaborate on global supply chain restructuring, our new Development Finance Corporation (DFC) is coming out with new authorities.  These will aid in developing infrastructure in low and middle income countries, helping to develop regional energy security, developing better standards, providing professional architecture and engineering services, and offering technical assistance on projects, which will help enable supply chain restructuring to like-minded economies in the Indo-Pacific.

The United States and Taiwan are not alone in our goals and efforts on supply chain restructuring.  For example, the European Union has a big focus on supply chain resilience.  Japan a few months back also created a US $2.2 billion fund to aid in supply chain restructuring.  While much of that is intended for Japanese firms to move from the PRC back to Japan, it has also allocated funds for these firms to move to Southeast Asia.  Together, our economies can achieve so much more to bring about secure trusted supply chains for the post-pandemic economic future.

In conclusion, I congratulate MAPECT again for hosting such an important forum, which signifies how the United States and Taiwan can “strive together and thrive together” to create a resilient supply chain network against future crises.  We at AIT look forward to working with all of you.  Thank you.