Confidence in Ma but Urgent Attention to the Economy Needed: Lawyers

JH: I would also agree but with a touch of caution, I mean 8 years ago we were in a similar position with the election of President Chen, and with this came the promise of a new direction and opportunities were to present themselves. I recall at President Chen's inauguration speech there was a positive feeling to his administration and we have seen since that things haven't gone to plan. Now with Ma coming out with his margin, a lot of people have a lot of expectations and he is seen as the good guy, but whether or not he can deliver and turn the economy around, nobody knows. I think the three months after May 20 will be a key in determining just which way the mood and the economy will go.It will depend on his cabinet. China will give him a hand but I don't think China will give him everything.

CB: Aside from the economy what do you see as the major challenges for the newly elected administration?

EY: I think there are a number of areas and sectors that need to be addressed in order to get Taiwan's economy and the business sentiment back on track. From a legal perspective I think M&A activity, particularly from Hong Kong and China is a key, and whether or not the Taiwan economy or businesses directly benefit from any possible increase in M&A activity remains to be seen. Our capital markets as well need regeneration and whether this can be fuelled by M&A activity or not is another issue.

LC: I think industry in general has quite a lot of expectations of Mr. Ma, they appear to be concerned about less flexibility of Mr. Ma and in the past the President hasn't had such pressure on him in terms of the overall environment. The markets are in a dilemma at the moment and the industry needs to take more aggressive strategy for cutting cost and raising efficiency in particular for their operation related to market in China, so I think this will be a major issue for the new President. I also think the economy will benefit greatly from direct flights to China which is an issue that has been spoken about for some time.

JF: I think the main issue is managing expectations, the Taiwan economy has for some time been struggling and people will come to expect a change as a result of the new administration. But expectations are so high at the moment that I am not sure how he is going to handle that. For instance a lot of his election promises centred around opening up the Taiwan economy, such as IPOs in Taiwan of Taiwan invested China entities as well as direct flights between Taiwan and China, I mean these are all designed to bolster the economy but the reality is the economy is a long-term goal and not something he is going to be able to turn around in a short amount of time. The other issue is how Taiwan is able to protect its own economy in the face of the rapid growth of China's.

SL: Let me put this into some sort of perspective, we have represented Ma personally in the past and in my dealings with him, I can say with utmost confidence that he is a very very clever man. The thing that struck me about the election is that Taiwan has a very healthy democracy in place and what this means is the KMT party has to be very careful about what they do over the next 4 years. As Jack mentioned we were feeling so optimistic 8 years ago and today we are feeling the same way, but no businessperson or lawyer for that matter is going to be thinking the politicians and only the politicians can turn things around. But one thing I would hope that can be achieved is peace and harmony with China, we must, and this goes without saying, ensure we are not at war, in whatever form that may take place.

CB: Is the focus for Ma just on China or does he need to take a regional look at Taiwan's role and relationships?

VC: Taiwan can comfortably place itself as a place where deals happen and deals can be made. Our financial structures are such that. Our firm is very Taiwan focused, so for me to make a comment on what Taiwan needs to do outside Taiwan would not be wise, but I would like to say that I think Taiwan needs to become less political and less reliant on the regulators. Ma has a mandate he won comfortably and he needs to address the economy against the other issues.

LC: I think what Mr Ma needs to do is putting together a talented cabinet with more energy and take a wider view to look at Taiwan and not concentrate solely on Taipei as a business and political centre. Among the issues as a lawyer that I think need addressing are the lack of mergers and acquisitions being attracted here for integration of business operation taking advantage of Taiwan's superior location and management talent, and China is attracting a lot of this sort of activity at Taiwan's expense.

JH: Taiwan's economy has to become more global and the companies here need to become more global enterprises rather than just China enterprises. But first thing first, lifting the 40% cap of a Taiwanese company's net worth on China-bound investment is a key issue that will allow companies to be able to become more competitive, regionally and globally. Hopefully what Ma can do is to open more two- way activities between China and Taiwan and liberalize investment flows between Taiwan and China. By this I mean lifting industry investment restrictions as well as opening direct flights which will allow for greater opportunities for companies here. The second issue I think is for these companies that have found success overseas to return to do things in Taiwan. And finally I'd like to see Taiwan becomes a more attractive place for those with the right management skills. I think all these are the issues that need to be addressed by Ma in order for Taiwan to become more global and competitive.

CB: Many governments enjoy a 100-day “honeymoon period”, what does Ma need to achieve in this time or does he need longer to in order to be judged fairly?

EY: I think it is the responsibility of not only Ma but the KMT party as a whole to deliver and I will be looking at the financial reforms or at least initial activity in this sector that will be the major area where the new government will be under initial pressure. Attracting European investment and liberalizing the business channels in and out of Taiwan are also areas need addressing. But if Taiwan really wants to entertain the idea of becoming a regional player or even a global one, I think is reforming of the tax system in Taiwan, this should be a priority.

JF: I think one of his short-term goals should be flights to and from China, as this would send a message to people that one of the major issues that people in the street and in their homes talk about has been addressed. I also think the China travelers to Taiwan to improve Taiwan's tourist business may be realized shortly. I think both of these things will show the message that the Ma administration is serious about improving ties, and addressing economic growth.

CB: How important is the election of Ma in relation to how you go about your business as lawyers in Taiwan?

LC: I think Mr Ma has already given a lot of people hope and it is how this is translated into business confidence. I have already heard a number of clients saying they are doing business planning, some staged planning in relation to what Mr. Ma may or may not bring to office. More business structuring and planning from industry will certainly bring more opportunity and business for lawyers.

VC: In terms of our firm's practice I am not really sure how much of an impact Ma will have on it, we are more focused, as I have said on internal Taiwan issues, but I think there is a fundamental trend in Taiwan of increased activity, so maybe more foreign investors will be looking at Taiwan because of the currency issue maybe some Taiwan will be seen as a better value prospect.

SL: Our firm has seen that in the weeks directly following the election result there have been more and more contacts. The general impression I have is that people will be waiting until May 20 before making any moves or decisions. I expect there to be major activity on the mergers and acquisition side and therefore more and more business for law firms. There has been considerable interest from Japan both before and now after the election which I think is interesting.

EY: My hope is that Ma will bring a corrupt free outlook to government and as a result attract more open and outward looking opportunities. I think either way law firms will be affected whether it be for local, regional or global developments, particularly when it comes to capital market activity.

JH: We lawyers thrive on activities and transactions, so irrespective of whether the economy is good or bad we expect there to be work to do. Hopefully Ma can bring with him stability in government policy so there will be an environment whereby business people can confidently do business. Hopefully he can also help reinstate a value system that will attract quality investments and quality people interested in doing business in Taiwan.

JF: I think what Ma can bring is a consistency to the policies and decision-making processes of the parliament and to government which is an important facet that Taiwan needs right now. In the past we have seen a lot of multinational companies who have been adversely affected by the transfer of power and change of policies and I think the Ma administration may be able to encourage further growth in investments by such multinational companies as a result of consistent and transparent policies.