Tourism sector protests falling China arrivals
Hit hard by plunging visitor arrivals from China, members of Taiwan’s tourist industry staged a demonstration September 13. Tourist arrivals from China have fallen some 22% since Tsai Ing-wen of the independence-leaning Democratic Progressive Party (DPP) was elected to the presidency, and Beijing has apparently responded to her refusal to embrace a “one China” policy formulation by reducing the number of tourists it allows to go to Taiwan. As Chinese visitors account for some 40% of all arrivals, the industry has been hit hard. Despite rainfall, the protest attracted an estimated 20,000 tourism workers to a three-hour march that ended before the Presidential Office on Ketagalan Avenue. The government has announced NT$30 billion (US$1.3 billion) in loans to help the struggling sector, but industry professionals have argued that money is not the answer. Among other demands, the demonstrators called for a resumption of cross-Strait talks to improve relations. This year’s Chinese arrivals are expected to be less than half of last year’s.
IC industry bullish despite global dip
Nicky Lu, chairman of the Taiwan Semiconductor Industry Association (TSIA), forecast that Taiwan’s IC industry will see 7.2% growth in production value this year despite a projected 2.4% decline in global trade in the sector in 2016. Lu said Taiwan IC production this year is expected to be worth US$75 billion, accounting for a 23% share of the worldwide total. According to TSIA, Taiwan’s foundry sector led by Taiwan Semiconductor Manufacturing (TSMC) last year generated US$31.6 billion in value, while the output in the design sector led by MediaTek was worth US$18.6 billion. Chips aimed at the augmented reality (AR) and virtual reality (VR) segments of the IT market are leading Taiwan’s growth.
Foreign investment doubles in 2016
The Investment Commission under the Ministry of Economic Affairs announced that approved foreign investment in Taiwan doubled in the first eight months of 2016 compared to the same period last year. According to the commission, foreign investment surged 143% to US$6.62 billion. Approved investments from China likewise rose in the same time period, climbing 114.7% from last year, to US$170 million, the commission said.
Mega troubles hit Mega Bank
Taiwan’s Financial Supervisory Commission (FSC) levied a NT$10 million (US$315,000) fine on Mega International Commercial Bank for violations of U.S. anti-money laundering laws, the first such fines imposed on a Taiwanese bank. The FSC also forced the removal from the board of Mckinney Tsai, former chairman of Mega Financial Holding Co., and ordered the bank to dismiss its CEO Wu Han-ching, New York branch General Manager Huang Shih-ming and Deputy General Manager Liang Mei-chi, Auditor General Liu Hsiao-ling, and Chief Compliance Officer Chen Tien-lu for negligence. The FSC lambasted the bank for poor governance and management. On August 19, the State of New York’s Department of Financial Service (DFS) slapped a US$180 million fine on Mega Bank for violating U.S. law by failing to report suspicious transactions by clients. Tsai and his aide Wang Chi-pang were both released on bail after questioning by prosecutors.
EXPEC executive held for failed tender bid
The Taipei District Court approved prosecutors’ request to detain chairman Aaron Hsu of beleaguered gaming software firm XPEC in connection to the firm’s botched tender. In a deal valued at NT$4.86 billion, Japanese firm Bai Chi Gan Tou Digital Entertainment had offered to purchase a 25% stake in XPEC at NT$128 per share, a 22% premium over the share price at the time. Once the tender offer was announced, retail investors poured into the market and by June had driven the price to over NT$110. On August 30, Bai Chi Gan Tou walked away from the deal, resulting in a settlement default. XPEC’s shares immediately tumbled and eventually wiped around NT$10 billon off the firm’s market cap.