How do Taiwanese machinery makers view the US-China trade war?
At the recently held 2018 International Plastics and Rubber Industry Exhibition, many people expressed their views on the Sino-US trade war.
Business executives said that in the short term, the outlook is good. Larry Wei, president of Taiwanese blow molding equipment maker Fung Chi International Machinery Co., said his company sold three units to U.S. customers for $1.6 million last month. Tool and die makers are also seeing a positive side. "The trade war provides a good opportunity for us to enter the US market," said Eric Li of mold maker CNN Plastic Systems Co LTD. This is a common view among exhibitors at the fair.
But some American buyers are more skeptical about the trade war, and Taiwanese manufacturers have not been smooth in selling their products to them. Their views are also more pessimistic.
Machine manufacturers interviewed at the 2018 International Plastics & Rubber Industry Show
at the show, which was held from Aug 15 to 19, said they were well aware that when production engineers consider paying a high price for a product, price is far less important than service, support and the promise of a long-term stable relationship.
They said they knew that China's big machinery manufacturers had done the hard work of building up local sales teams, support staff and technical centers. These services will not disappear overnight.
Fuqiang Xin Precision Industry Co LTD, a Taiwanese injection molding machine maker, and its rival in Taiwan, Zhongshan Quanlifa Machinery Co LTD, are big players by Taiwanese standards.
Both companies have factories on the mainland and in Taiwan. But for now, neither has the U.S. market at the top of their list.
" This is an opportunity for some Taiwanese plastic machinery makers. But for us it is not." Jeff Guo, a sales expert at Quan Lifa.
Meanwhile, Fuqiang Xin is also focusing on the European market, and its distributors are busy setting up a sales and support network covering the whole continent.
Deputy sales manager Hank Wu said the tariffs hit small Chinese manufacturers the hardest. He noted that local competitors with global reach have the flexibility to move assembly operations overseas.
"Big companies like Haitian are already producing in other countries." "He said.
Some Taiwanese businesses said they were still uncompetitive on price despite the tariffs.
" Our machines are three times more expensive than those on the mainland, "said Sandy Kuo, deputy general manager of Jumbo Steel Machinery in Taichung. Jumbo is a manufacturer with 33 years of experience in the production of straw machines.
Jumbo's machines supply chains in the United States for brands such as Starbucks and McDonald's. Sandy Kuo says that for those big straw makers, reliability always trumps price.
Of course, the generation gap also leads to different perceptions. An older generation of industry workers who have experienced macroeconomic shocks over the past few decades. — The eurozone debt crisis of recent years, the Great Recession of 2008, the Asian financial crisis of 1997-98 and even Black Monday in 1987. More cautious about their own prospects.
Many of them are directors of the Taiwan Machinery Industry Association.
" In the longer term, we think the trade disputes may affect investment intentions." "Said Alan Wang, chairman of the Plastics and rubber machinery committee at the Taiwan Regional Machinery Industry Association.
Even diametrically opposed rivals are divided on the outcome. "The trade war is good for us because it makes mainland products so expensive," said Ray Wu, director of the US office of Taoyuan-based Hi-More Robot.
Still, Tenso Machinery, a maker of small robotic arms with annual sales of about US $7 million, worries about a ripple effect.
" Many of our customers are auto companies in the mainland, and the trade war will affect their production." Ivan Chen, marketing manager at Golden Claw Machinery.