Thinking of relocating to Taiwan? Here's a reality check

September 02, 2016 11:28
A pedestrian walks past the Taipei 101 building, a major tourist attraction. Soured cross-strait ties have affected tourist arrivals from mainland China this year. Photo: Bloomberg

High living costs, stalled political reforms and poor social mobility in Hong Kong are blamed for a noticeable uptick in the number of locals emigrating from the city in recent years. 

Among the places most favored by those seeking a way out, particularly the younger generation, is Taiwan.

Geographical proximity, a genuine democracy, familiar culture and language, and relatively low cost of living are some of the touted virtues of Taiwan.

Among other factors, the island is also seen offering better prospects for those looking to move up the career ladder.

Some 42 percent of Hongkongers said in a recent poll that they are disheartened by the status quo and want a way out of the city. Many of them see Taiwan as a top destination.

The survey findings are borne out by official figures.

In 2014, as many as 7,498 Hong Kong citizens moved to the island, marking a multi-year high, according to the Taipei Economic and Cultural Office, Taiwan's de facto embassy in Hong Kong.

The swelling numbers notwithstanding, prospective emigrants should bear in mind that moving to Taiwan comes with its own pitfalls and that life on the island may not look as rosy as it appears.

The difficulties faced some early immigrants also offers a sober reality check.

Safety concern

First let's not forget that Taiwan is very susceptible to earthquakes, as it sits on the edge of tectonic plates in a seismically unstable zone.

In September 1999, a 7.3 magnitude quake shook the island and wreaked substantial havoc. More recently, a 6.4 temblor rattled Taiwan's southern counties in February this year.

Next, Taiwan has also seen a spate of shocking crimes over the years. In 2014 and 2015, there were some random killings on the Taipei Metro. In other incidents, two pupils were brutally slain on streets in broad daylight in the capital city in separate cases within a span of ten months.

The incidents highlighted the failure of the Taiwan authorities in securing public safety and in emergency response.

Hong Kong, in contrast, has never seen any such tragedies.

Income gap

Another thing that Hong Kong people should be wary of is the shaky Taiwan economy.

The island's economy has been faltering in the recent past while Hong Kong has largely emerged unscathed from the global headwinds.

This has led to the income gap between Hong Kong and Taiwan widening further.

After the 2008 financial tsunami, Hong Kong's nominal gross domestic product growth has averaged at over 4 percent, higher and more stable than the rate registered in Taiwan.

Hong Kong's per capita GDP stood at US$42,389 in 2015, almost double Taiwan's level of US$22,287.

Taiwan's economic woes have had a deep impact on wage-earners there, where average monthly wage stagnated at NT$36,000 (HK$8,800) last year, according to Taiwan's Directorate General of Budget, Accounting and Statistics.

In contrast, median monthly wage in Hong Kong in May-June 2015 was HK$15,500. The figure excludes government employees whose income is normally higher than many of the city's private sector workers.

Fresh job starters in Taiwan can hardly escape the dismal "22K" destiny which refers to NT$22,000, or HK$5,380, that most tertiary graduates on the island can expect to make a month.

Employers say they can't pay their new recruits any better as the companies are barely scraping by.

Lifestyle illusion

It's true that wages are not a big worry for many Hong Kong migrants as they seek to launch their own businesses there, in fields such as catering or accommodation.

People envisage a slow-paced, semi-retired life, running businesses such as a small coffee shop or bookstore or home-stay lodge in a picturesque town on the island.

But the dreamers need to face up to the reality of the harsh business world.

If you open a little eatery or coffee shop in Taipei, the rent can be exorbitant. If you opt to venture into a rural southern county, the cost will come down but so will be the business turnover.

Taipei's average home rent was NT$1,373 per square meter in 2014, Apple Daily (Taiwan) noted, citing official data. Meanwhile Hong Kong's corresponding figure for second-hand homes stood at HK$31.6 per square foot, according to realty agent Centaline. That translates into about NT$1,390 per square meter based on back-of-the-envelope calculation at the exchange rate of 4.1.

There are other numbers for your reference.

A coffee shop owner in Xinyi (信義) area, Taipei's central business district, has pointed out that initial investment to start a business like his is no less than NT$2.5 million. And the typical monthly rent in Taipei for a midsized shop is NT$150,000.

That means that one would need a monthly turnover of no less than NT$200,000 to break even.

But the problem is that Taipei is seeing a glut of coffee shops and restaurants.

As for operating guesthouses and eateries in areas away from the island's urban centers, the prospects are uncertain given the vagaries of the tourism industry.

Taiwan's tourism department has warned recently that the island could see 400,000 fewer mainland visitors this year due to souring cross-strait relations.

Pleasure seekers from Southeast Asia, another pillar source of tourists, contracted by 3.2 percent this July year-on-year.

This should provide more food for thought for those flirting with the idea of emigrating and setting up tourism-dependent businesses in Taiwan. 

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Read more:

Hong Kong and Taiwan: The ties that bind us

Traffic moves along a road near an elevated train track in Taipei. Taiwan's economy has been sputtering due to tepid exports and weak domestic demand. Photo: Bloomberg

EJ Insight writer