taiwan

How Taiwan’s History Affects Your Business

Taiwan’s eventful past has impacted its culture. Learning the country’s history gives you an advantage when doing business in Taiwan.

 

The Three Teachings

 

three-chinese-philosophies

Taiwan has been under Dutch, Spanish, Japanese and Chinese control since the 1600s. Each nation has left an impression on Taiwan, but none more than China.

 

The “three teachings” are Chinese philosophies that make up the foundation of Taiwanese culture. They influenced Confucianism concepts such as “face” and guanxi, which are essential to Taiwanese society.

 

 

The “three teachings” are Chinese philosophies that make up the foundation of Taiwanese culture. They influenced Confucianism concepts such as “face” and guanxi, which are essential to Taiwanese society.

 

Face is a mixture of reputation, status and loyalty, and is key to many Asian cultures. Publicly shaming someone causes them to “lose face.” This is considered unforgivable, and could severely jeopardize business negotiations.

 

Guanxi is roughly translated to “networking”, but is so much more than that.

 

Good guanxi is the mutual understanding that if one person helps another, the other person will repay the favor.

 

Not repaying guanxi is similar to not repaying a loan, and could sabotage any future business relationships. In cultures like Taiwan and China, guanxi is considered to be “social currency.”

 

Understanding the three teachings will drastically improve your business success. Personal relationships and social harmony are of the utmost importance in Taiwanese society. Building connections and establishing guanxi with Taiwanese suppliers are key to successful business in Taiwan.

 

Past Conflicts

Despite their colonial past, Japan and Taiwan have a strong relationship.

 

While Japan controlled Taiwan, they reworked the education system, making Japanese a compulsory language. To this day, there are some elderly Taiwanese people that are fluent in Japanese because of this.

 

Plus, Japan was the first modern country to occupy Taiwan, and invested greatly in the country’s economy.

 

Japan was the first modern country to occupy Taiwan, and invested greatly in the country's economy. Taiwan and China don’t have such a relationship.

 

Taiwan and China don’t have such a relationship.

 

When World War II ended, Japan surrendered Taiwan to the Republic of China. In the next few years, Mao’s Communism slowly gained control of China, causing the Chinese government to flee to Taiwan.

 

Since then, there has been conflict over whether the Taiwanese government or the Chinese government represents China.

 

This argument has affected international relations as well. China forbids other countries recognizing Taiwan as an independent country, causing some nations to find unofficial workarounds or to avoid Taiwan altogether.

 

 

China forbids other countries recognizing Taiwan as an independent country, causing some nations to find unofficial workarounds or to avoid Taiwan altogether

 

Your business should avoid mentioning China to Taiwanese business partners, as it’s surely a sore discussion topic.

 

Economic Relationship

With China’s global influence, it’s easy to understand why Taiwan seems to have few allies. If a country has to choose between trading with China and Taiwan, there’s usually only one logical choice.

 

Although the US switched to China’s side during the Cold War to combat Soviet influence, they have made an effort to maintain relations with both Taiwan and China.

One way is through their embassies. US doesn’t have an official embassy in Taiwan, as they don’t officially recognize an independent Taiwan. However, the US has a nonprofit organization in Taiwan that serves similar needs.

 

 

This is what your business should know about the US-Taiwan relationship.

 

First, Taiwan’s economy is sneaky good, with a GDP per capita three times greater than China.

 

Even without China’s invitation to the Asia-Pacific Economic Cooperation, Taiwan still has one of the group’s best-performing economies.

 

Taiwan’s investment potential is certainly there for US businesses. What makes Taiwan even more enticing, however, is how their relationship with the US has progressed in 2017.

The Trump administration broke ground in June 2017 with a $1.4 billion arms package being sold to Taiwan. Considering China strictly forbade countries selling arms to Taiwan, this is a clear indication that the US is willing to bolster its relationship with Taiwan.

 

Considering China strictly forbade countries selling arms to Taiwan, this is a clear indication that the US is willing to bolster its relationship with Taiwan

 

Your business can benefit greatly from this development with Taiwan.

 

Taiwan has a powerful friend in the US. US foreign investment is graciously accepted because of this, especially when US businesses are purchasing supplies from Taiwan instead of from other Asian nations, namely China.

 

Taiwan is a risky business endeavor for other countries that don’t want to upset China. They may be scared to trade with Taiwan, despite the business potential, and decide to do business elsewhere.

 

Your business can take advantage of little foreign competition by establishing early business relations in Taiwan. Considering the importance of personal relationships in Taiwanese business culture, you have the time build guanxi with your business partners and finalize supply deals in Taiwan.

 

Considering the importance of personal relationships in Taiwanese business culture, you have the time build guanxi with your business partners and finalize supply deals in Taiwan

 

If you’re doing business in Taiwan, you should be using Veem. It’s a connected payments platform that allows small businesses to track their money in real time.

 

With Veem, you know where your hard-earned money is at all times, and you avoid the countless fees and delays that tag along with traditional bank wires.

 

Veem makes B2B payments to Taiwan as easy as sending an email.

 

What’s not to love?


6-02