TAIWAN

REPUBLIC OF CHINA

INTRODUCTION

Taiwan, originally named Formosa. Taipei is the capital. ROC territory includes Penghu, Kinmen, Matsu Islands, Dongsha Islands and Nansha Islands. 19th largest economy in the world. 1 of the Four Asian Tigers, a member of WTO and APEC. The ROC is a multi-party democracy having a presidential system. Currency :- New Taiwanese dollar. President Ma Ying-jeou.

GEOGRAPHY

Location Coastline stretches 1,566.3 kms . Terrain: eastern two-thirds mostly rugged mountains; flat to gently rolling plains in west. Yu Shan is the highest point- 3,952 m

Natural resources: small deposits of coal, natural gas, limestone, marble, and asbestos.
Natural hazards: earthquakes; typhoons; volcanism.

HISTORY

In 1895, Taiwan ceded to Japan.

1945 Taiwan reverted to Chinese control after World War II. Civil war resulting in end of ROC rule in mainland. Taiwan transitioned from agricultural to commercial and industrial economy.
In 2000, Taiwan became a multi party democracy. The island prospered and became one of East Asia's economic "Tigers.

TAIWAN MIRACLE

Agricultural backwater turned into a world powerhouse.

1960s : non forex reserves, week industrial base.

1966 Kaohsiung Export Processing Zone. Bosch set up Taiwan's first optical lens factory laying seeds for Taiwan industry. Canon built its first overseas production facility there.

TAIWAN MIRACLE CONTINUE

Unique land reforms. Constant transformation. Promotion of import substitution. Liberalization of political system.

Development of high- tech sector.

Hsinchu Science Park.

CULTURE

Official language is Manderin.

Taiwanese population : 1.)Taiwanese 2.)Hakka 3.)Mandarin

Religion:- Buddhist and Taoist 93%, Christian 4.5%, other 2.5%.

Harmony living with individual freedom and respect.

The Concept of Face (Mien-tzu) 1.) Giving face, 2.) Loosing face 3.) Saving face The concept of "Guanxi Taiwan has viewed its music, film, and crafts as "soft power" tools.

BUSINESS ETIQUETES
1.

Gentle handshake. Respect the women and lower eyes during handshake. Use of Surname and Title in formal communication.

2.

3.

4.

Great respect and importance to rank.

Assemble in rank order. Card should be in native language and presented after first meeting with both hands.

5.

6.

7.

No strict meeting protocol. Ideas from all grounds are welcomed.

ADMINISTRATION

POLITICAL BACKGROUND
Conflict

with PRC

Relations with USA

FOREIGN RELATIONS

US is one of the main allies. It is an indirect reason for peace between Taiwan and Mainland China.

Resolution 2758 by the UN to replace PRC as the sole representative of China in 1971 resulted in ROCs removal from UN assembly.
Only 23 states officially recognize Republic of China. It has non-diplomatic, economic, cultural or trade relations with 57 states that officially recognize PRC.

Relations with India

India switched recognition from ROC to PRC in 1950s.No official diplomatic relations, but bilateral relations have improved.
India-Taipei Association since 1955 to promote non-governmental interactions, and facilitate business, tourism, scientific, cultural and people-to-people exchanges. Taipei Economic & Cultural Centre in New Delhi. Bilateral Investment Promotion & Protection Agreement signed in 2002.

INDIA - ROC TRADE

Efforts to expand bilateral trade and investment in the fields of IT, energy, telecomm and electronics. Major Indian exports to Taiwan include Waste Oil and Naptha, Cereals, Cotton, Organic Chemicals, Copper, aluminum and Food Residues. Major Taiwanese exports to India include integrated circuits, machinery and other electronic products Taiwanese investment in India has been affected by cultural and linguistic barriers.

TRANSNATIONAL ISSUES

Involved in complex dispute with Brunei, China, Malaysia, the Philippines, and Vietnam over the Spratly Islands. Dispute with China and the Philippines over Scarborough Reef. Paracel Islands are occupied by China, but claimed by Taiwan and Vietnam. Transshipment point for illicit drugs to Japan; major problem with domestic consumption of methamphetamine and heroin.

CROSS STRAIT RELATIONS

The biggest opponent is also the largest trade partner.

ECONOMY
GDP: 5.2% GDP - per capita: $37,900 GDP sector wise: agriculture: 1.3% industry: 32% services: 66.9% Investment (gross fixed): 22.4% of GDP Inflation rate: 1.6% Industrial production growth rate: 8.5% Exports: $325.1 billion Imports:$298.6 billion Reserves of foreign exchange and gold: $418.4 billion

ECONOMY

GDP growth rate:- 5.2% (2011). Dynamic capitalist economy with increasing privatization. Pure trade oriented economy. Major Exports:- Electronics, machinery, and petrochemicals. Taiwan runs a large trade surplus. World's fourth largest foreign reserves holder.

Future challenges:Taiwan's diplomatic isolation, low birth rate, and rapidly aging population are major long-term challenges. Taiwan's Total Fertility rate is among the lowest in the world, Raising the prospect of future labor shortages, falling domestic demand, and declining tax revenues.

ECONOMY CONTINUE..

Taiwan has been excluded from greater economic integration because of its diplomatic status. Economic Cooperation Framework Agreement (ECFA) signed with China in June 2010. (Components of ECFA: deals on trade in goods, services, and investment) China is Taiwan's second-largest source of imports after Japan; also its number one destination for FDI. 3 financial memorandums of understanding, covering banking, securities, and insurance, took effect in 2010, opening the island to greater investments from the mainland's financial firms and institutional investors, and providing new opportunities for Taiwan financial firms to operate in China.

Industries: electronics, communications and information

technology products, petroleum refining, armaments, chemicals, textiles, iron and steel, machinery, cement, food processing, vehicles, consumer products, pharmaceuticals

Agriculture - products: rice, vegetables, fruit, tea, flowers; pigs,

poultry; fish

Ports and terminals:

Chilung (Keelung), Kaohsiung, Hualian, Taichung

FOREIGN TRADE

Exports - commodities: electronics, flat panels, machinery; metals; textiles, plastics, chemicals; optical, photographic, measuring, and medical instruments Exports partners: China 28.1%, Hong Kong 13.8%, US 11.5%, Japan 6.6%, Singapore 4.4% (2010 )

Imports commodities: electronics, machinery, crude petroleum, precision instruments, organic chemicals, metals Imports partners: Japan 20.7%, China 14.2%, US 10%, South Korea 6.4%, Saudi Arabia 4.7% (2010)

AGRICULTURE

1.6% of total GDP Main crops rice, fruits and vegetables Imports large quantities of wheat, corn and soya bean mainly from U.S. Taiwan is USAs 6th largest agricultural export destination. Taiwan exports frozen fish, aquaculture and sea products, canned and frozen vegetables.

ECONOMIC OUTLOOK
labor intensive industries are getting relocated to countries with low

cost labor.

The Economy has become increasingly linked with China. Taiwan firms are increasingly acting as management centers. Growing competitive pressure from China and other developing nations. Taiwan needs to quickly move up the production value ladder.

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