McDon­ald’s move not a warn­ing about in­vest­ment cli­mate: Chen

The China Post - - LOCAL - BY ENRU LIN

McDon­ald’s re­cent de­ci­sion to sell its Tai­wan stores does not in­di­cate that Tai­wan’s en­vi­ron­ment for for­eign in­vest­ment is de­te­ri­o­rat­ing, pres­i­den­tial ad­viser Sean Chen ( ) said yesterday.

McDon­ald’s said this week that it is look­ing to sell its 413 stores in Tai­wan to a fran­chise op­er­a­tor. It has op­er­ated the stores it­self since en­ter­ing the mar­ket over 30 years ago.

The an­nounce­ment has sparked spec­u­la­tion that the com­pany is back­ing out over un­fa­vor­able le­gal fees and other for­eign in­vest­ment con­di­tions.

Chen, a pres­i­den­tial ad­viser and for­mer premier, said yesterday that the com­pany’s switch to fran­chis­ing in Tai­wan is an at­tempt to lower costs and boost profit.

It is not a sign of a de­te­ri­o­rat­ing en­vi­ron­ment for for­eign in­vestors in Tai­wan — if that were the rea­son, the in­ter­na­tional burger chain would choose to exit en­tirely from the mar­ket and shut­ter all out­lets, he said.

Chen was re­spond­ing to media in­quiries on the side­lines of a book launch at Taipei 101.

At a sep­a­rate venue, Cen­tral Bank Gover­nor Perng Fai-nan (

) was also asked if the McDon­ald’s with­drawal warns of a de­cline in Tai­wan’s in­vest­ment cli­mate.

Perng replied that McDon­ald’s is not with­draw­ing from the Tai­wan mar­ket, but only in­creas­ing the pro­por­tion of fran­chised out­lets.

30 Years of McDon­ald’s

McDon­ald’s has op­er­ated stores in Tai­wan for some 30 years, Chen said.

When the chain first en­tered the Tai­wan mar­ket, some observers pre­dicted that it would floun­der, and some said McDon­ald’s would be­come the “night­mare of Tai­wan’s food in­dus­try.” Both pre­dic­tions proved false, he said.

Open­ing up to for­eign in­vest­ment and in­te­grat­ing with the global econ­omy has been pos­i­tive for eco­nomic de­vel­op­ment, he said.

The for­mer premier cited Thomas Fried­man, who in 1999 posited that eco­nomic in­te­gra­tion low­ers the like­li­hood of con­flict be­tween coun­tries.

At a Cen­tral Bank press con­fer­ence yesterday, Perng re­marked that he some­times en­joys meals at the fast-food chain.

The in­ter­na­tional chain has been strug­gling, par­tic­u­larly in the United States, its largest mar­ket.

U.S. sales last Novem­ber were down 4.6 per­cent year-on-year, due partly to com­pe­ti­tion from a Burger King re­vi­tal­ized un­der new man­age­ment and growth in up­mar­ket “fast ca­sual” out­lets, ac­cord­ing to The Economist.

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