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Taiwan trade teems with possibilities.

They call it "whipping the corpse." But some dare to criticize the still larger-than-life presence of former Chairman Mao Tse-dong, China's revolutionary titan who unified the country under communism. For one, China's present paramount leader, Deng Xioa-ping, struggles to abolish the old hard-line socialist policies. Not long ago, on a visit to southern China's booming "free enterprise" zones, a frail-looking Deng declared, "To be rich is glorious."

Mao must have spun in his tomb. But the hopes of many people in the worldwide Chinese community, especially in Hong Kong and Taiwan, were rekindled. Alaskans should be pleased, too.

For Taiwan, a kind of treasure island in the South China Sea, the current signals from China suggest the possibility of a Chinese common market that could include the two rich southern provinces Guangdong and Fujian of China -- plus Hong Kong, Hainan Island and Taiwan. Taiwan could have its ceremonial moon cake and eat it, too, by remaining an engine of capitalist autonomy for the region, while gaining access to more than 1 billion new consumers.

From 1988 until March of this year, Alaska maintained an office in Taipei, Taiwan. The Taiwanese were glad to have us, particularly because the U.S. government closed its embassy there in 1979. The communist government of the People's Republic of China pressured the United States and most of the rest of the world to "de-recognize" Taiwan, which became the Republic of China after the nationalists retreated to the island following defeat by Mao's communist armies.

The People's Republic of China regards Taiwan as a province that it lost to Japan in a 19th century war. Beijing's leaders believe Taiwan's reunification with the mainland would start China back on the road to resuming its self-proclaimed status as the Middle Kingdom, or center of the world. Taiwan, for its part, has sought to drive the communists out of the mainland.

Although a non-country in the eyes of the People's Republic of China, Taiwan at least had the Alaska state office and offices of other U.S. states interested in trade opportunities. Taiwan is not a poor, imitation country. The industrial revolution arrived late, but wielded firecracker power.

Taiwan has become an export powerhouse with reserves of $82 billion, a current account surplus with the United States of $12 billion, and an affluent population with an interest in conspicuous consumption. Taiwan is one of the "minidragons," a collection of former colonies and city-states that has dazzled the world with double digit economic growth during the past decade.

Now Taiwan wants to spend more than $300 billion over the next six years cleaning up after its successful industrial revolution. The Taiwanese want cleaner air and water, modern sewage systems, homes in the country, Western foods and vacations to exotic places. Things Alaskans could help supply.

Resolved to abandon their dreams of conquering China by force, the Taiwanese are intent on building their economy and that of the mainland as well. They are capable of supplying Alaskans with coattails to take them into mainland China in the form of joint ventures, capital, tutelage and guangxi -- personal connections that serve as the lubricant of Chinese commerce.

During a March seminar at the University of Alaska Anchorage, a Taiwan specialist with the U.S. Department of Commerce, Paul Carroll, spoke enthusiastically about Alaska's chances to cash in on the nation's economic growth. Here's a summary of ideas discussed:

* Energy-efficient homes. As in Japan, Taiwan's housing suffers from decades of neglect. Exports had been the priority, not creature comforts.

Washington-state home builders scored big in Japan when they built a demonstration home over there, then received a contract to construct an entire subdivision. Alaska could do the same in Taiwan.

* Rural power generation and construction. Taiwanese are starting to develop the mountainous central and eastern sections of the island. Products and methods that help generate power for these areas soon will be in big demand. Similarly, methods for efficient liquid and solid waste disposal are needed. Add the Taiwanese fondness for natural wood, and you may have a market for log-home kits that could be manufactured in Alaska and assembled in Taiwan.

* Aerospace. The Hickel administration has made much over the prospects for Alaska as a player in the business of launching commercial satellites. Taiwan has the deep pockets needed to develop Poker Flats as a launch center and wants to get into this business but lacks the know-how. Business people in Taiwan want to buy up to 40 percent of McDonnell Douglas. Joint ventures in Alaska may prove similarly attractive.

* Cooperation in the Russian Far East and Mongolia. Taiwan's minister of economic affairs, Vincent Siew, has expressed interest in cooperating with American firms in doing business in the Russian Far East. Alaskans could work with the Taiwanese government and private sector in energy exploration, fisheries, tourism and other areas. Taiwan is cash-rich but experience-poor.

Also a Far East-Taiwan-Alaska trade and investment region could result and in turn serve as a springboard to commerce with Northern China as it begins to modernize. Transportation links to China already exist. Taiwan's China Airlines stops in Anchorage seven times a week. Also, this summer, Alaska Airlines begins tours from Khabarovsk in the Commonwealth of Independent States to nearby Harbin in China's Hei Long Jiang province.

* Energy. An island without fossil fuels, Taiwan could become an importer of Alaska coal. One way Taiwan can reduce the trade deficit with the United States is to convert its old-style burners to those that will burn Alaska's high-moisture coal. Taiwan also is a candidate to purchase Alaska's natural gas and to invest in pipelines and liquification plants.

* Tourism. A marketing plan that offers Alaska as the embodiment of the traditional concepts of purity and beauty should help attract tourists from Taiwan. The people there want to escape their dreary, polluted winters. Because young Taiwanese often copy trends from Japan, where skiing is enormously popular, ski packages might be attractive.

Among political influences increasing American exports to Taiwan are government pressure, a "Buy American" campaign, favorable exchange rates and efforts by the U.S. Department of Commerce's Foreign and Commercial Service and state offices such as Alaska's. But the Taiwanese are tough negotiators and picky buyers. Also, some tariff and non-tariff barriers remain in place.

Further, the Japanese know Taiwan well and are present in force with good products and a reputation for excellent after-sales service. Listening to customers, pricing goods competitively and taking the time to build solid relationships are what count in Asia.

Considering all this potential, it may come as a bit of a surprise that Alaska closed its office in Taiwan, citing budget cuts and lack of effectiveness, Taiwan-born Chen-Shen Yen, a professor of Asian studies at Alaska Pacific University, says Taiwan officials in Seattle felt closure of the office was "a slap in the face." Losing state offices is a blow when you're a non-country with hundreds of billions to spend -- some of it intended to buy good will from the United States.

Yen points out that this was the second "slap" from Alaska. The first came during the Cowper administration when a young woman from mainland China was sent to run the office in Taipei.

So now Taiwan is left with representatives of Montana, Idaho and some other states, plus South Africa. The state of Alaska is expected to announce the appointment of an honorary representative to Taiwan, no doubt a senior local Taiwanese.

An honorary representative may be like doing honorary business. Unbusiness in a non-country. It's a strange way to operate in a culture that values personal relationships, sincerity and long-term commitments.

Doug Barry is deputy director of the Alaska Center for International Business and the World Trade Center, both operated by the University of Alaska Anchorage.
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Title Annotation:promise of a Chinese common market
Author:Barry, Doug
Publication:Alaska Business Monthly
Date:Jun 1, 1992
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