TAIPEI, Taiwan (BRAIN)—Taiwan voters’ re-election of President Ma Ying-jeou for a second and final term over the weekend bodes well for the future success of island bike manufacturers.
Ma and his Nationalist Party’s win against main challenger Tsai Ing-wen of the Democratic Progressive Party is expected to lead to further warming trade relations between Taiwan and mainland China, a key political initiative from Ma’s first term. The two split in a civil war in 1949, and China still considers Taiwan a renegade province.
Taiwan’s manufacturers will benefit from a stable cross-strait relationship, said Tony Lo, chairman of the Taiwan Bicycle Exporters Association and CEO of Giant, the island and the industry’s leading frame maker.
“Taiwan’s high-end bike export to China has grown 87 percent in 2011. It could double again in 2012. This will have a positive influence of the transformation of the Chinese bike market toward recreational and sport in the future,” Lo said in an e-mail.
Lo cited Ma’s ECFA, or Economic Cooperation Framework Agreement, which eliminated duties on bikes shipped between Taiwan and China as of January 1. Since Ma signed the ECFA in June 2010—gradually reducing duties on bicycles and other consumer goods exported from Taiwan—the trade pact has already boosted business in China for Taiwan manufacturers like Giant, Merida and rim maker Alex Global.
Most Taiwanese manufacturers also have factories on the mainland to serve the domestic low-end and electric bike market, but the growing demand for $2,000 and higher bikes in China has generated more business from the Taiwanese plants, which are focused on higher quality, lower volume production.
Ma captured 51.6 percent of the vote to win the election, edging out Tsai’s 45.6 percent. A third candidate, James Soong Chu-yu of the People First Party won 2.8 percent of votes. Tsai and her party appealed to voters worried that closer trade relations with China could lead to Taiwan’s loss of independence and an eventual reunification.