Subic Bay zone sees no exodus of Taiwanese firms to China

There is no indication that Taiwanese exporters in the Subic Bay Freeport Zone are prepared to relocate to China if Taiwan and China sign a proposed framework trade deal, a top executive of the Subic Bay Development Management Corp. (SBDMC) said Tuesday.

SBDMC President Jeff Lin was responding to a report given by Augusto B. Santos, director-general of the Philippines National Economic and Development Authority, which predicted that some of the 135 Taiwanese companies in the freeport zone will move to China if the trade deal is signed, leaving thousands of Filipinos out of work.

In fact, Lin said, the freeport zone has become more attractive to Taiwanese investors because of the positive effect of the free trade agreement between China and the Association of Southeast Asian Nations (ASEAN) that took effect at the beginning of the year.

In 2009 alone, SBDMC signed new contracts with seven Taiwanese companies that intend to invest US$5.97 million there. Four of the companies entered the zone in the fourth quarter of the year, just before the China-ASEAN FTA came into force, according to Lin.

Taiwanese enterprises have not filed any applications to move out of the zone, Lin said, and some are even preparing to expand their facilities.

Tong Lung Metal Industry Corp., for example, which began operations in the freeport zone in 1998, plans to invest US$5 million to expand production, which is expected to create 600 new jobs.

Lin said that stricter U.S. anti-dumping measures making it more difficult for Chinese products to be exported directly to the United States will also deter Taiwanese exporters now operating in the Philippines from relocating to China.

The freeport zone also has some major competitive advantages over China, Lin said, including preferential tax treatment, low-cost, hard working workers proficient in English, and a safe and comfortable living environment.

SBDMC, a joint venture between Taiwan's United Development Corp.

and the Subic Bay Metropolitan Authority, was established to develop the 300-hectare Subic Bay Gateway Park that is located in the freeport zone.

A number of big Taiwanese companies, including Wistron Infocom, Hitachi Taiwan, Tong Lung, Sanyo Denki Taiwan, and Taian Electric, have operations there.

(By Emerson T. Lin and Y.L. Kao) etaiwannews.com