President Ma Ying-jeou met on November 1 with members of the e-commerce industry at a seminar and exchanged opinions on a broad array of topics, including "future development strategies for the nation's e-commerce industry," "establishing third-party payment services," and "follow-up assistance to the e-commerce industry in conjunction with the Cross-Strait Trade in Services Agreement."
In remarks, the president stated that the topics discussed at the seminar are extremely important to the future development of the e-commerce industry, and are also the subject of close public scrutiny. Also, this is the 15th public forum he has held since last year on public issues with private groups, he said.
President Ma stated that decades ago representatives from Taiwanese companies would travel around the world with suitcases full of product samples to look for buyers. Nowadays, however, people can use the Internet to sell their products throughout the globe, he said. As a result, e-commerce applications are now among the most common services on the Internet, the president added. He noted that according to a report by an American research institution, online purchases of goods throughout the world in 2013 are expected to reach US$1.2 trillion, up 17% from the previous year. In addition, the number of consumers around the world that purchase items over the Internet has already topped one billion, and over 40% are in the Asia-Pacific region, he said. President Ma cited data showing that in the ethnic Chinese market, 270 million consumers in mainland China buy products over the Internet, versus 160 million in the United States. This points to the enormous development potential and business opportunities of the e-commerce market in the ethnic Chinese market and the Asia-Pacific region as a whole, he said.
President Ma told the visitors that the government places enormous importance on the development of Taiwan's e-commerce industry, and has designated it as one of the ten service industries pegged for development. In recent years, he said, Taiwan's e-commerce market has grown annually at a double-digit pace—30% in 2010, 22% in 2011, and 17% in 2012. The size of Taiwan's e-commerce market in 2012 topped NT$660 billion, the president noted, adding that e-commerce is expected to reach the NT$1 trillion level in 2015.
President Ma further explained that the e-commerce consumer to consumer (C2C) market creates business opportunities for individuals and micro-enterprises. Pointing to mainland China as an example, the president said Internet sales in 2012 stood at 1.3 trillion yuan, and C2C transactions comprised 70% of those dealings. President Ma stated that C2C transactions in Taiwan at present account for only 40% of total Internet purchases, meaning that there is enormous room for growth in this area.
The president commented that the e-commerce industry touches on a wide variety of fields, and in working to launch innovative services, business can face limitations due to the existing regulatory framework. He remarked that the Executive Yuan, with assistance from many quarters, has overcome hurdles, especially in the area of third-party payments. This constitutes an important step forward, the president said. In addition, in the face of global competition, the government will work as quickly as possible to liberalize policies and take deregulatory measures that are required for the development of e-commerce and emerging industries, he stated. Also, the government is formulating regulatory mechanisms for the payment, logistics, customs clearances, tax, and consumer protection aspects of the industry, President Ma remarked.
The president further explained that the Cross-Strait Trade in Services Agreement is awaiting review and ratification by the Legislative Yuan. This agreement, he said, contains many provisions that are beneficial to the development of Taiwan's e-commerce industry. However, the president acknowledged, of the 16 public hearings planned by the Legislative Yuan to communicate with the public on the agreement, only two weeks were spent in completing the first eight of them. Hearings began to be spaced two weeks apart starting with the ninth hearing, he explained, which means that it will take four months for all 16 hearings to be held. He stated that the economic benefits of Taiwan's economic cooperation agreements with mainland China may rapidly diminish as other countries catch up. "Time is of the essence," he said. "This issue transcends a single party or single industry. It is important for the future of Taiwan as a whole," the president added.
After listening to the opinions of the participants and summarizing the suggestions, President Ma responded to the topics brought up during discussion. As for "future development strategies for the nation's e-commerce industry," the president said, e-commerce constitutes a revolution in the manner of consumption. Besides having a lasting impact on the future development of Taiwan's service and manufacturing sectors, e-commerce will also be crucial in helping Taiwan's information and communications technology industry overcome current challenges, he noted, so the government should strengthen integration among various ministries and agencies and enhance related strategies. The first step, he commented, will be taken by the Executive Yuan, which will establish a special task force to promote e-commerce. Next, he said, government agencies will draft a set of "Guidelines for the Development of e-Commerce," and the opinions of young entrepreneurs will be solicited to make sure that the guidelines are pragmatic, wide-reaching, and feasible.
With regard to participant concerns as to whether Internet sales of alcohol, medicines, and other controlled products will be allowed, the president said, the government won't ignore this issue. It will understand how developed countries have dealt with the sale of such items via the Internet. At the same time, he said, conditions that are unique to particular countries have to be considered, so appropriate mechanisms will be drafted to safeguard the health and safety of the public.
As for "establishing third-party payment services," the Executive Yuan will complete the enactment of a special law for third-party payments before the end of this year to hasten the development of Taiwan's e-commerce industry, the president stated, adding that because Taiwan is a small and liberalized economy, it should seek not just to catch up with Europe and the United States, but even to surpass them. For instance, he said, when he was mayor of Taipei City, Taipei was able to become one of the world's best cybercities. The government has the ability and the ambition to continue working with the youth of the nation and overcome the barriers facing Taiwan's e-commerce industry, and to create unlimited business opportunities, the president remarked.
Taiwan Internet and E-Commerce Association Chairman Chan Hung-chih (詹宏志) during the seminar recognized the important boost that the Cross-Strait Trade in Services Agreement with mainland China will give Taiwan. He said that even though the China (Shanghai) Pilot Free Trade Zone allows foreign entities to hold a 55% stake in e-commerce companies, thus partially offsetting the advantage that the Cross-Strait Trade in Services Agreement accords to Taiwan e-commerce providers seeking to establish companies in Fujian Province, it still constitutes good news for Taiwan. Chan noted that Taiwan companies will now be able to decide whether they want to do business in Shanghai or in Fujian. Regardless, this is an important breakthrough for companies wanting to expand their business in mainland China, he commented.
The president stated that mainland China previously announced that it would allow foreign entities to hold a maximum 55% stake in companies in the China (Shanghai) Pilot Free Trade Zone. According to the Cross-Strait Trade in Services Agreement, he said, Taiwan enterprises can apply for Internet Content Provider operating licenses in Fujian Province and hold a 55% stake in these companies. He expressed hope that if ruling and opposition party lawmakers could come together on the Cross-Strait Trade in Services Agreement and ratify it as soon as possible, Taiwan would be able to integrate into the regional economy at a faster pace.
Among those participating in the event were Taiwan Internet and E-Commerce Association Chairman Chan Hung-chih, Chinese Non-store Commerce Association Chairman Shang-Wen Liao (廖尚文), AllPay Financial Information Service Co., Ltd. Chief Executive Calvin Lin (林一泓), Barclays Bank PLC Taipei Branch Managing Director I-Cheng Liu (劉奕成), Institute for Information Industry Executive Vice President Gary Gong (龔仁文), AppWorks Ventures Founding Partner Jamie C. Lin (林之晨), Taiwan Stock Exchange Corporation Chairman Sush-Der Lee (李述德), Vice Minister of Economic Affairs Shih-Chao Cho (卓士昭), Deputy Minister of Finance Wu Tang-Chieh (吳當傑), Deputy Minister of Health and Welfare Tzou-Yien Lin (林奏延), Deputy Minister of the Council for Economic Planning and Development Chen Chien-Liang (陳建良), and Vice Chairperson of the Financial Supervisory Commission Tien-Mu Huang (黃天牧). Also in attendance were Deputy Secretary-General to the President Hsiung Kuang-hua (熊光華) and Presidential Office Spokesperson Li Jia-Fei (李佳霏).