To help domestic manufacturers regain strength globally amid the ongoing recession worldwide, the Bureau of Foreign Trade (BOFT) under the Ministry of Economic Affairs (MOEA) in Taiwan is setting in motion the four-year "Global Market Expansion Plan" or "New Zheng Hoeh Plan," budgeted at about NT$8.53 billion (US$258.48 million at US$1 = NT$33) and officially scheduled from September 2008 to December 2012.

The New Zheng Hoeh Plan, named after the legendary Chinese mariner and adventurer during the Ming Dynasty (1368-1644 A. D.) who commanded a 260-ship fleet crewed by some 30,000 sailors to sail Asia and Africa, aims to inspire Taiwan exporters to brave difficulties in the midst of challenging times.

The BOFT`s expansion plan not only focuses on meeting domestic demand in China, but also emerging markets as India, Russia, Central & South America and the Middle East, as well as aiming to build Taiwan into a global supply and marketing hub for machine tools and parts, textile, and auto & motorcycle parts.

Organized by the BOFT, the trade expansion plan is being executed by the Taiwan External Trade and Development Council (TAITRA), the government-backed trade promoter, and consists of over a hundred sub-projects, said Chiang Shih-huang, deputy director general at the BOFT, at the presentation in Taipei on June 12, adding that suppliers would be well advised to tap such official resources to enhance marketing effect.

Five Sub-projects
The new export building plan is made up of five sub-projects, including enhancing suppliers` financing via import-export loan insurance (budgeted at NT$5.58 billion or US$169.09 million), boosting export to China (NT$1.09 billion or US$33.03 million), tapping the potential in emerging markets (NT$1.86 billion or US$56.36 million), attracting more export orders (NT$65 million or US$1.97 million), and signing more global government procurement agreements or GPAs (NT$20 million or US$606,060), with each earmarked according to need.

The BOFT trade promotion fund will back the Export-Import Bank (EIB) with NT$4 billion (US$121.21 million) in loans to enterprises, with the bank expected to lend NT$10 billion (US$303.03 million) to enterprises within two years. In addition, the BOFT is going to set up a refinancing reserve fund of NT$3 billion (US$90.9 million) and the credit to be offered to exporters is estimated to reach NT$13.4 billion (US$406.06 million), which may raise NT$12 billion (US$363.64 million) in exports as a result.

Chiang notes that the import-export loan insurance project may underwrite export insurance valued at NT$108.4 billion (US$3.28 billion) in two years. Currently 45 banks in 18 countries are cooperating with counterparts in Taiwan to offer refinancing services to enterprises here.

Eight-fold Increase
Since implementing the plan last September, the number of applications for preferential export loans offered by the EIB has jumped eight-fold by the end of May this year, according to Chiang, and the number for export refinancing has surged 250%. The export-insurance project is expected to help boost exports by NT$50 billion (US$1.52 billion) in two years, 70% of which would be shipments to emerging nations.

Chao Yuen-chuan, president of TAITRA, points out that TAITRA takes various approaches to help domestic manufacturers expand global markets. In terms of tweaking overseas exhibitions, TAITRA sets up Taiwan pavilions and Best of Taiwan zones, as well as organize industry seminars and Taiwan-themed socials for global visitors and suppliers.

Rental Subsidy
Also the BOFT subsidizes Taiwan suppliers up to 50% of booth rentals at overseas trade shows, coupled with putting to work trade offices abroad to arrange 20 buyers to meet each exhibitor personally.

The BOFT points out that, as part of the plan to boost exports to China, the focus is to promote quality Taiwan-made foods, including helping suppliers to build distribution channels, inviting buying groups to Taiwan, organizing sales promotion groups to go to China, and taking part in global food shows.

BOFT Director General Huang Chih-peng points out that the trade promotion group that headed to central China as part of the new export expansion plan looks to generate follow-up businesses worth US$6.27 million in the coming year, and the group that headed to South America has landed some US$6 million on-the-spot orders just on its first stop in Brazil.

As for trying to land more export orders, the "Sourcing Taiwan 2009," held in March of this year by the BOFT, attracted 543 international buyers. TAITRA, the organizer of the event, organized some 13,000 procurement meetings between the buyers and local suppliers, which created an estimated NT$144.8 billion (US$4.39 billion) in business.

Eagerly Eyeing China
Taiwan suppliers evidently are eagerly eyeing the China market. The Taiwan`s Best Products Fair to be held in Nanking this September, originally with 200 suppliers occupying 500 booths, has been flooded with applications from 550 suppliers who will take up some 1,783 booths. To tap the domestic demand in China estimated at around four trillion renminbi (RMB) or NT$19.2 trillion (US$581.82 billion), TAITRA, under the New Zheng Hoeh Plan, will organize 15 trade promotion and exhibition groups to go to China this year, focusing on home appliances, medical care, construction, solar energy, environmental protection engineering, automotive, agricultural and machinery sectors.

As part of the effort to tap the food market in China, TAITRA will help Taiwan suppliers work with chain supermarkets in cities, department stores etc. to set up exclusive shelves for Taiwan-sourced products. More than 200 supermarkets, department stores and shopping malls across China are reportedly planning to hold the "Taiwan Food Festival," putting on sale 800 Taiwan-supplied foods.

Taiwan Food in Shanghai
City Shop, a leading food retailer in Shanghai, has become the first partner to work with Taiwan suppliers: for its Time Square outlet, it has imported more than 580 food items from Taiwan, which is forecast to generate 8 million RMB or about NT$39 million (US$1.18 million) in revenue in the first year.

Other than setting up brick-and-mortar distribution channels, TAITRA is also strategically cooperating with China`s leading e-marketing web sites: Taobao, Eachnet, and Sina. Online selling is suitable for agricultural products, garments, musical instruments, gift & stationery, toys etc., with the effort expected to help more than 300 Taiwanese manufacturers expand e-tailing markets, realizing annual sales of NT$500 million (US$15.15 million).

Regarding the GPA project, the BOFT has so far collected, analyzed more than 780 cases related to global government procurement projects, doubling its original goal of 350. At least 10 winners of government tenders will be invited to Taiwan on procurement missions to help local suppliers tap such opportunities, and the BOFT aims to create businesses worth US$50 million this year.

(by Judy Li)