The buck doesn't stop at R&D. In Taiwan, the saying goes that from a strategic standpoint, the fastest route to Beijing is
through Taipei. Marietta Wu, who heads the Taiwan subsidiary of US-based venture capital firm Burrill and Company, calls the
country an "enabler." An enabler for large multinationals, but principally an enabler for the second tier: small to mid-size
Marietta Wu, Managing Director Taiwan, Burrill & Company
"When these companies attempt to penetrate the Chinese market, they inevitably face various hurdles," says Wu. "Especially
now that ECFA is in place, Taiwanese partners can serve as a springboard. Taiwan understands Western business practices, can
offer a strong talent pool to the industry, and also has very strong IP protection and transparent governance—all issues that
Western companies care about deeply."
One common approach for international companies, according to Audrey Tseng, deputy chairman at PwC Taiwan is to "undertake
R&D in Taiwan and use China for market and commercial purposes".
Audrey Tseng, Deputy Chairman, PwC
For companies moving from East to West, it may be that the fastest route to Washington is through Taipei as well. Wu mentions
a China-based Burrill portfolio company that is looking to establish an operation in Taiwan. Why? Wu explains, "As the company
has grown and established itself in the Chinese market, it has decided to try to reach the US. They found that Taiwan is a
great place to do clinical studies, and a great place to bridge to the West."
Taiwan is known for meeting international standards at a time when China still lags behind. "A good partnership in Taiwan
can enable a Chinese company to attain US FDA compliance. FDA certification is a long process—having an already-certified
Taiwanese partner can help them to climb that ladder much faster," Wu says. Where once Taiwan outsourced to China for low-value
manufacturing, China is increasingly outsourcing to Taiwan when it needs to climb up the value chain.