Hon Hai Chairman Publicizes Anxiety Towards Taiwan's Future in Wake of Sino-Korean FTA Signing

Terry T.M. Gou, chairman of Hon Hai Group and Foxconn Technology Group, recently expressed at the APEC in Beijing anxieties toward Taiwan's future after China and S. Korea recently wound up negotiations on the free trade agreement (FTA).

Gou indicates the upcoming inking of FTA between China and S. Korea is a warning not to be neglected by Taiwan, also threatening the possibility to  withdraw from Taiwan if the situation worsens to further marginalize the island, and that he would not invest in Taiwan today should he be a foreigner.

According to the Ministry of Economic Affairs (MOEA), Taiwan's seven leading industries will be impacted by the imminent China-S. Korea FTA, including LCD panels, petrochemicals, steel & iron, textile, machine tool, glass, and auto.

Gou says that Hon Hai's operations in Taiwan are closely linked to LCD panels and machine tools, which will definitely meet intensifying competition from S. Korean counterparts in the Chinese market, due to post-FTA tariff of Taiwan's LCD panels exported to China to be 5% relatively higher and that of machine tools 8.87% higher.

Gou says Taiwan's top two LCD panel makers—AU Optronics Corp. and Innolux Display Corp.—are the world's third and fourth largest panel makers, next only to S. Korea's LG Group and Samsung Group, suggesting  Taiwan's panel manufacturers to  cooperate with counterparts in China to head off strong rivals in S. Korea or be left behind. (JL)