Another Taiwan Firm to Drop "China" from Name

UNCLAS TAIPEI 000545 SIPDIS SIPDIS STATE PASS USTR STATE FOR EAP/ TC, EAP/EP COMMERCE FOR 3132/USFCS/OIO/EAP/WZARIT TREASURY FOR OASIA/LMOGHTADER USTR FOR STRATFORD, ALTBACH E.O. 12958: N/A TAGS: ECON PREL CH TW SUBJECT: Another Taiwan Firm to Drop "China" from Name Ref: Taipei 335 Taipei 325 Taipei 308 ¶1. Summary: Another Taiwan firm has moved to drop references to China from its name. China Steel follows China Petroleum, China Shipbuilding and Chunghwa Post, which all changed names last month. China Steel's situation is more complicated because it has been privatized, and the Taiwan authorities hold only 22.6 percent of its stock. The decision to change the name of a privatized enterprise increases the likelihood Chunghwa Telecom and China Airlines could be future targets. End summary. ¶2. Following China Petroleum Corp., China Shipbuilding Corp. and Chunghwa Post Co. (now know as CPC, Taiwan; CSBC, Taiwan; and Taiwan Post Co., respectively),China Steel Corp has become the next target for "name rectification" to remove references to China. In a visit to China Steel's headquarters on March 1, 2007, President Chen Shui-bian pointed out to China Steel Chairman Chiang Yao-chung that it took 8 days to change the name of Chiang Kai-Shek International Airport to Taoyuan International Airport, and several other enterprises had changed their names quickly and efficiently. Chen reportedly hinted that if Chiang did not change China Steel's name soon, he might be replaced. ¶3. China Steel took a first step toward a formal name change in early March by changing the sign at the front gate of its headquarters. It had previously read China Steel in Chinese ("Zhongguo Gangtie" in standard pinyin). Now it reads "Zhong Gang," an ambiguous abbreviation that could also mean "Central Steel." In addition, letterhead and signs within the firm's factories have also been changed to use the more ambiguous abbreviation. China Steel reportedly wishes to maintain CSC in the English name and change the Chinese name to either "Taiwan Zhong Gang" or Central Steel ("Zhongyang Gangtie"). ¶4. China Steel's situation is more complicated than CPC, Taiwan; CSBC, Taiwan; or Taiwan Post beci@}QQ"]zlders. Foreign investors own 33 percent of the firm's stock. ¶5. The firm is supervised by the Ministry of Economic Affairs (MOEA). MOEA Minister Steve Chen formally asked China Steel to begin the process of changing its name as soon as possible. China Steel estimated the cost of changing its name at NT$1 billion (US$30 million). A board meeting has been scheduled for March 28 to discuss the issue. However, the final decision cannot be formally approved until the next shareholders meeting in May. ¶6. Comment: The decision to change the name of China Steel, a partially privatized enterprise, increases the likelihood Chunghwa Telecom and China Airlines could also be future targets. YOUNG