Recognizing Taiwan’s Nationhood: Honduras, Kiribati and…Costco?

It’s no secret that Taiwan is short on official diplomatically linked nation friends (though not on unofficial economically linked ones)–but Quick! How many of those 20+ nations can you name?

Skimming through today’s mail, however, I was a bit surprised to see a familiar American institution apparently endorsing Taiwanese nationhood: Costco.

Costco (COST), in case you don’t know, is a membership warehouse club that aims for low prices and high volumes, usually in bulk-packages, targeting the “large family” and “small business” markets in particular, with nearly 500 locations around the world, mostly in the United States (and they opened the first “Costco Home” about a mile from my house a couple years ago).

Anyway, the cover story in this month’s edition of The Costco Connection, touted as “A lifestyle magazine for Costco members,” is a piece called “A World of Costco: Costco means value around the globe.” I checked it out, just curious to see where all Costco has made inroads around the planet. Mexico I knew, because there’s one in Puebla, near where my mother spends part of each year. Japan I also knew, because we caught sight of one on our way between Narita Airport and Tokyo earlier this year.

Also on the list is Taiwan.

No big deal either way that Costco is operating in Taiwan, I guess, but I was mildly startled to read that Costco openly describes Taiwan as a “country” and “an island nation.”

The average reader of The Costco Connection likely won’t bat an eye — “Taiwan? Is that in the Carribean, dear, where we had those delightful Coconut Margaritas last Christmas?” — but you and me, friend, we’re not average readers now, are we? ;-)

Here’s the blurb describing Costco’s operations in Taiwan:

Success made in Taiwan

The Costco concept has fit in quite well in the island nation of Taiwan, where four warehouses are in operation and a fifth is on its way under the direction of vice president country manager Richard Chang. Sure, there are things you won’t see at most other Costcos–the multistoried warehouses common in Asia, local delicacies such as sea cucumbers and parking for scooters. But, overall, it’s clear that the Taiwanese love quality and low prices.

In particular, they love Western goods. The mix of products in Costco’s four warehouses in Taiwan is a strong dose of imports, complemented by local goods–usually fresh foods, especially fish, says Beverley Ayre, general merchandising manager for Costco in Taiwan.

“Our Taiwanese members have a feeling that a product is of a higher quality if it is an import,” says Beverley, adding that name brands carry a certain prestige.

Top sellers include Kirkland Signature cranberry juice, olive oil and laundry detergent, and name-brand clothing. Aside from bilingual labels, many products are the same as those carried in the U.S. warehouses. But some, such as Kirkland Signature vitamins, must be reformulated to meet Taiwanese regulations.

Also popular among Taiwanese Costco members are instant foods, such as soup and coffee packets. “The Taiwanese tend to not eat at home or cook at home a lot,” explains Beverley. “Their houses are much smaller. They tend to live with a family, so you’ll find in one household grandparents, parents, children and grandchildren. They tend to go out and eat more as a social gathering.”

One more interesting note is about how members in Taiwan shop. Many shop as a family, and spend time at Costco going up and down every aisle, inspecting all the products and sampling all the demo-table food. If you go with them, expect to spend three to four hours at the warehouse.

     –Tim Talevich

Now, I’m not attempting to be overly “political” here, and I don’t think this article is going to foment any type of uprising among all the P.R.C. passport-carrying Microsoft developers and their spouses we rub shoulders with at our local Costco, but I have to wonder about things like this.

That is, the United States and most of the rest of the world (minus those 20+ exceptions) recognize The People’s Republic of China diplomatically and go along with its “One China” policy. But here is a major corporation in the United States, headquartered here near Seattle, that apparently refuses to play along.

Or maybe the editorial team for Costco’s publications doesn’t know better.

Or maybe they know, but don’t care.

Or maybe it’s just a reflection of Washington State’s own particular bi-polar disorder over China.

You see, on one hand, we’ve got a former governor, Gary Locke, ethnically Chinese, who still plays a key wheel-greasing role in our state’s rather significant business relationship with China, and who played no small part in arranging Chinese President Hu Jintao’s nearly triumphant visit to the Seattle area earlier this year.

But then on the other hand, there’s the state government itself.

The State of Washington publishes Washington State voter registration and voter materials in two main languages: English and Chinese. Copies in other languages can be ordered, but the main materials come by default in English and Chinese. Our voter registration cards here arrive as a cut-out on a mailer with full text in both English and Chinese. Our polling stations bear signs in two languages: English and Chinese. You get the idea.

But here’s the thing: the Washington State Voter’s materials, they’re written in Traditional Chinese characters, i.e. those still in use in Taiwan (yeah, sure, OK, OK, and in Hong Kong), and not in the Simplified character set “preferred” by the major trading partner and diplomatically recognized government of the “One China.” (One example: Washington State Voter Registration form, in Traditional Chinese.)

In the grand scheme of things, maybe this is minor stuff (although for some, the choice of either Traditional or Simplified characters is a rabidly political issue), but isn’t it often an accumulation of minor stuff that fuels major tensions?

It’s hard to make sense of, at least if you would hope for some kind of logical consistency in matters where a U.S. state openly courts deeper trade relations with a country, or where corporations go international.

And now here I’m not actually talking about Costco.

Costco’s publications recognize Taiwan’s sovereignity. They have four locations in Taiwan, but none in China.

Seems logical.

But take competitor Wal-Mart and Sam’s Club. They have over 60 locations in China, and seem to be getting along well there. And as far as I can tell, they don’t recognize Taiwan as a nation.

That much makes sense.

And yet Wal-Mart sells Lee Teng-Hui and Taiwan’s Quest for Identity and Forbidden Nation: A History of Taiwan in their online bookstore, not exactly titles that are going to top the Chinese Communist Party’s “Recommended Reading for the People” list.

You would think that someone would start to recognize and point out these interesting little inconsistencies that, you know, some superpower nation or other is going to discover and make an issue of when it becomes convenient or advantageous for them to do so.

A Personal Note Regarding Costco and China

When my Wife’s mother visited us here from China a few years back, she got “hooked” on Costco vitamins–especially their fish oil capsules. And now, the entire extended family back in Fujian Province, and some who have spilled over into Hong Kong, swear by the potency of these vitamins. We routinely ship cases of these vitamins “back home,” and as a result can offer two bits of evidence that Costco could make a successful go in China, at least in the vitamin market:

(1) Some members of the family are able to sell extra bottles of Costco vitamins for a rather tidy profit in shops in my Wife’s hometown, and online at Chinese auction site taobao.com.

(2) The last case of 12 vitamins we sent earlier this month was opened by Chinese Customs, “inspected,” and carefully re-packed with 11 of those twelve bottles missing…so…

Please be on the lookout for some Chinese customs officials looking healthier and more full of vitality than normal. I’d like to have a word with them.

September 2006