07.2020 Leader's Remarks
Achieve Sustainable Growth and Competitiveness by Adapting to Changes and Advanced Preparation
Chairman of Far Eastern Group / Douglas Tong Hsu
The era of the New Economy in which phenomenal growth in AI, IoT, big data, and 5G has been galvanized by a variety of trends, including Industry 4.0, digital revolution, environmental sustainability, protectionism, the transparency and traceability of supply chains and energy transitioning, has revealed Far Eastern Group (FEG) as poised to add a new chapter of remarkable performance to its 70-years of sustainable prosperity. By proactively undertaking transformational initiatives, we will overcome constantly-evolving challenges, while adhering to our overarching principles of sincerity, diligence, thrift, prudence and innovation.
The world economy entered 2020 with precarious prospects and mounting challenges on the heels of a tumultuous year punctuated by trade wars, the resurgence of protectionism, geopolitical skirmishes, growth deceleration in the world’s four major economies—the US, EU, China and Japan - and a seeming worldwide exhaustion of economic impetus. The COVID-19 pandemic has wrought havoc across the world. In the face of these unprecedented challenges, governments have attempted to contain the viral spread with border closures, but the resultant restrictions on human movement and transportation of goods have paralyzed economic activities from supply to consumption globally. The spillover effects of this pandemic not only threaten to derail the world economy, but have also put countries’ abilities to respond under the microscope. In March 2020, the world suffered a further blow when oil prices took a historic nosedive. Saudi-led OPEC and Russia found it difficult to reach a new deal and the Middle East’s complicated geopolitical conditions and an epidemic-triggered decrease in demand combined to cause the tumble in oil prices, which in turn brought about some of the toughest obstacles to business survival in recent decades.
Politically, the United States’ trade dispute with China escalated into full-blown tensions on various fronts ranging from trading and finance to technology and human rights, which has jeopardized the stability of global supply chain. Massive protests against the government’s proposed amendment of extraditions laws in Hong Kong have drawn worldwide attention while Japan and Korea were embroiled in legal battles over the issue of forced labor during WWII, ratcheting up tensions in East Asia for several months. Developments during the lead-up to the US presidential elections in late-2020 and the results afterwards are expected to send ripples throughout the world.
Financially, Brexit and Germany’s flat-lining economy have weighed down Europe’s recovery, while China, one of the world’s economic powerhouses, is mired in economic woes due to the coronavirus outbreak that erupted amidst the trade war with the US. Its economic growth continues to decline as exports plunged, consumption slowed and debts have ballooned and financial risks skyrocketed. However, this trade-triggered crisis is also projected to add fuel to China’s economic transformation focusing on high-tech industries and the digital economy and ushering in further deregulation of capital markets for foreign investors and substantial financial reforms. The world’s leading economies are at least on the same page with regard to monetary policies. The US Federal Reserve has preemptively lowered interest rates to sustain the economy. The EU central bank is once again implementing quantitative easing policies. Japan intends to keep interest rates in the negative territory. RTAs (regional trade agreements) dictate trading activities of the global market and CPTPP and RCEP have initiated negotiations for zero-tariffs among regional members, exposing international market participants to uncertainties. As the world economy starts to lose steam, Taiwan’s growth has also slowed. Facing threats from international trade conflicts and East Asia’s ongoing FTA-based integration, exporters can expect challenges, but, despite rising tensions across the strait, antagonism in domestic politics, policy uncertainty and the continuing brain drain, there are still a raft of reasons to be optimistic about Taiwan’s economic outlook. Internally, it has launched industrial upgrading across the board. In terms of management of external factors, it has managed to minimize the Covid-19 epidemic’s threat to public health, cushioning the economic impact, while recording massive inflows of capital from overseas and a resultant increase in investment amid the benefits from trade diversification efforts. Business opportunities abound as its development of industrial innovation accelerates.
Environmentally, on the environmental protection front, climate change and resource depletion have underscored the urgency of continuing energy transition and the importance of sustainable development. This intensive pursuit of an environmental agenda is bound to rapidly enhance the maturity of the green energy industry.
FEG, headquartered in Taiwan but with a global footprint, aligns its strategic direction with the latest global trends. As one challenge after another arises in this hyper-connected world, we are constantly on the lookout for signs that foretell significant changes in the business environment and calibrate our positioning in the marketplace accordingly in order to reshape our corporate vision and mission. We will establish a solid foothold and stake a substantial claim in the new economy to demonstrate FEG’s ever-increasing value for years to come.
Far Eastern New Century Corporation (FENC) has developed into three major business segments – production, investments, and property development, with diversified investments across different industries, optimized property development and forward-looking investment strategies. FENC’s solid performances were seen across business segments in 2019. FENC stayed innovative with continuous commitment to R&D and maximized brand value with lucrative intellectual property, stood out from the competition with an environmental commitment paving the way to a successful global green economy, delivered impressive CSR records domestically and internationally, and invigorated the local economy with its property development projects.
Asia Cement Corporation (ACC) demonstrated significant growth in earnings. Due to its remarkable performance in China, it has been recognized as FENC’s record-high investment income. ACC has undertaken great efforts to transform into an environmentally friendly company.
Far Eastern Department Stores Limited intends to advance its dominance in the sector of department stores by engaging intensely in smart retail with the latest technology. Its innovative operations are certain to fortify its iconic stature in Taiwan’s retail industry. Taipei’s Xinyi A13 is an intelligent shopping mall that connects consumers to fashion and the Chubei New Century Shopping Mall is scheduled to open next year.
FarEasTone Telecommunications Corporation Limited (FET) has aggressively tapped into the new economy with a focus on 5G digital solutions, having secured optimal 5G bandwidth. It plans to build the most comprehensive 5G coverage in the country with a combination of low, medium and high bands, so as to successfully launch AR/VR, 4K/8K ultra-high-definition audiovisual streaming services. FET is also committed to utilizing its strong capabilities in big data, AI and IoT as the core competencies essential for corporate transformation and industrial upgrading.
FEG’s investments has achieved its own leap with steady income contribution and continued to support FEG’s foundations to serve the public interests. Yuan Ze University shoulders the responsibility of cultivating talent for the country, upgrading itself with digital innovation and aligning its teaching practices with global standards in expectation of joining the ranks of world-class universities. The Far Eastern Memorial Hospital continues to excel with innovative medical technology; its medical professionals’ remarkable contribution and performance have been recognized with the National Quality Awards and National Innovation Awards. The Far Eastern Memorial Foundation sponsors a wide range of arts and cultural events. The Far Eastern Medical Foundation provides generous grants for medical research and healthcare assistance. The Y. Z. Hsu Science and Technology Memorial Foundation hosts annually the Y. Z. Hsu Science Awards, honors outstanding performances and fosters domestic scientific research and development. It promotes and incentivizes domestic innovation in various fields, including newly additional artificial intelligence in 2019.
As with our achievements over the past seven decades, FEG will continue to rise above competitors with differentiating and innovative strategies. We will keep up our proven success in the Production Business with renewed core competencies and expand the market presence of our investments across different industries with renewed ambition and vision. In the era of the new economy, we will leverage the latest technologies and groundbreaking discoveries to quickly expand in to new markets and business territories. We will secure sustainable growth with upgraded business models and herald “A New Far Eastern Beyond 70.” (Abstract from Business Report of FENC 2020 Annual General Shareholders’ Meeting)＃