Taiwan becoming major L.A. force with series of low-key buys.

While the L.A. economy has taken a nose dive, Taiwanese investment in L.A. County has remained constant, said foreign trade officials.

Taiwanese investment in Los Angeles probably now rivals Japanese investment, which boomed in the 1980s but has now slowed considerably. But Taiwanese investors are very discreet about their business dealings, said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.

"Japanese investment is more in-your-face, while Taiwanese investment is, whoops, excuse me," he said.

Currently, Taiwan is L.A. County's second-largest foreign trading partner, based on combined dollar value of imports and exports, said Kyser. Taiwan did $11.3 billion in two-way trade with L.A. in 1991 (the latest figures available) vs. Japan's $35.4 billion.

Besides funneling goods through L.A. ports, Taiwan is also making plenty of outright purchases of L.A. real estate.

However, instead of going for trophy office and hotel properties in L.A., like the Japanese did, the Taiwanese are investing in an electric mix of properties, said Kyser.

"These people are looking at warehouses in La Mirada, small suburban office parks and land in the Inland Empire," said Kyser. "This is patient money."

Randy Lee, an executive with Lilly Enterprises, a real estate brokerage and property management firm in Hancock Park, said the Taiwanese are one of the major purchasers of L.A. industrial properties, such as warehouses and distribution centers. He said Taiwanese investors own the "lion's share" of buildings in the City of Industry, which is located near the Chinese-dominant neighborhoods of Hacienda Heights, Rowland Heights, Diamond Bar, Walnut, Monterey Park and Alhambra.

"Not only are they (Taiwanese) cash rich, but they have the backing of financial institutions," Lee said.

Because Taiwanese business owners have access to a cheap labor pool in China, they generally aren't interested in manufacturing in the United States, especially in L.A. County where they have to deal with workers' compensation issues and environmental regulations, said James Lin, first vice president at Cathay Bank in L.A.

In fact, the Taiwanese typically avoid all types of labor-intensive businesses in the U.S., said Lin. But they do usually hire Angelenos for marketing jobs.

While many countries are bleeding red ink, Taiwan has stockpiled more idle assets available for immediate investment than any other country in the world, pointed out John Huang, vice chairman of Lippo Bank located in L.A.'s Chinatown district. (Lippo Bank is owned by a group of Chinese investors, who bought the bank in 1984.)

At the end of 1992, Taiwan had $90 billion in such idle assets, formally known as "foreign exchange reserves," Huang stated.

This huge reserve can be used to lend to other countries.

Huang said that he knows of at least four Taiwanese banks itching to open up for business in L.A. County, but their licensing has been tied up in the Federal Reserve. Currently about a dozen Taiwanese banks operate in L.A., according to Huang.

Taiwanese banks have an opportunity to fill the financing void for L.A. County real estate developers, a void that became even more pronounced with the Japanese retrenchment from the United States, Huang pointed out. But Taiwanese banking officials in L.A. County still need a better knowledge of the market, and they need to be linked up with local real estate experts to get a better understanding of the L.A. real estate industry.

"There is a great potential for financing from Taiwan because there is a lot of money there," said Huang.

What makes L.A. County especially attractive to the Taiwanese, said foreign trade officials, is that L.A. County has a large Chinese population.

With an uncertain political climate in Taiwan and a mountain of money available for foreign investment, many foreign trade experts said they were not surprised that Taiwanese investors have continued to pump money into L.A. County. But now mainland China is competing for those investment dollars.

A faction in Taiwan has long been advocating independence from the People's Republic of China and the mainland has threatened to use violence to keep Taiwan part of China.

That inherent struggle between the two factions for some 45 years has lent an air of instability to Taiwan.

"China is now the hot spot for investment," said Lee of Lilly Enterprises. "But the Taiwanese are here (in L.A.) and always looking."

"Any money the Taiwanese are not investing in China, they are taking to California," said Frankie F.L. Leung, an attorney with the L.A. law firm Lewis, D'Amato, Brisbois & Bisgaard.

The California recession really hasn't caused the Taiwanese to lose their appetite for investing in L.A. County, said Lee. But Taiwanese investors are mostly interested in properties on which they can negotiate deep discounts.

Eric Ek, managing director of the L.A. and Tokyo-based investment banking firm Takenaka & Co., said that, although the Taiwanese are enjoying "their day in the sun," the next real big news in foreign investment in Los Angeles County and throughout the U.S. will come from China. Taiwan will become like Korea and Hong Kong by taking a back seat to China," he said.