What does the recently signed $500 million trade agreement between Idaho’s wheat growers and Taiwan mean to Idaho’s greater business community? It not only highlights the importance of international trade and export-led growth, it also illuminates the value of the long-standing cooperative efforts between Idaho and Taiwan — our third-largest export market.
Taiwan’s political identity remains a study in progress, but its status as a vibrant, developed economy is indisputable. Why has the unique Idaho-Taiwan economic partnership endured, especially through the ongoing controversy over Taiwan’s political status, and its difficult metamorphosis into a capitalistic democracy?
Taiwan’s market is arguably more accessible than most other Asian markets. Foreign firms are free to set up businesses and form partnerships in Taiwan, where government intervention in foreign trade and investment has continually decreased over the past several decades. And a growing number of businesses have designated Taiwan as a strategic entry point into the Chinese market.
Taiwan has a highly educated workforce that can provide the language skills and cultural acumen to facilitate business dealings with mainland China. Further, with a recognized rule of law, the risk of setting up a business abroad is moderated compared to other Asian markets.
Setting up a business is one feat. Establishing an effective and credible presence is quite another, and can only be achieved through the development of an engaged firm that takes into account local business practices. Taiwanese business culture, much like China’s, thrives on flexibility. In this way, it differs from U.S. business practice, which is relatively straightforward. Chinese communication is subtle and information is provided in bits and fragments, allowing the listener to draw his or her own conclusions.
An Idaho firm interested in doing business in Taiwan needs to establish and maintain the right local connections. This important element in Chinese business, termed guanxi, promotes the development of a network of relationships among a variety of business parties that cooperate together for mutual support. The right partner, agent, consultant or trade specialist would know the appropriate niche to explore and have industry and government contacts.
Such a partner would regularly monitor these contacts for information on developing projects and opportunities. This is one of the vital functions of the Idaho-Asia Trade Office, located in Taipei.
This is but one example of forging a relationship with new or expanding trade partners. While we focused on Taiwan, the messages are similar in other countries: know the culture, understand the laws and identify key in-country partners. The Taiwan example highlights the need to identify the best entry point to new markets, based upon these same leverage points.
In line with the growing Idaho-Taiwan trade relations, and in response to findings from a recent U.S. Scholars & Experts Delegation to Taiwan, the International Business Program of the College of Business and Economics at Boise State, has chosen to start research on and explore cooperative opportunities with Taiwan.
MEREDETH TAYLOR-BLACK Director of Boise State University’s International Business Programs
meredithtaylor@boisestate.edu. Vera Zdravkova, adviser, International Business Programs, BSU College of Business & Economics, contributed.
