Taiwan Profile

8/2/2019 Taiwan Profile

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Age structure

The age structure of Taiwan as per July 2011 is as follows

0-14 years: 15.6% (male 1,875,359/female 1,732,007)

15-64 years: 73.4% (male 8,538,881/female 8,406,716)65 years and over: 10.9% (male 1,198,591/female 1,320,225)

Education

The education is compulsory up to the age of 9 years.

Ethnic groups

Taiwan's population was estimated in 2011 at 23.2 million, most of who are on the

island of Taiwan. Amongst which includes Taiwanese (including Hakka) are 84%,

mainland Chinese are 14%, and indigenous are 2%.

Birth rate

The birth rate as per year 2011 is 8.9 births/1,000 population.

Death rate

The death rate as per July 2011 is 7 deaths/1,000 population.

Life expectancy at birth

The life expectancy for male is 75.5 years and that of females is 81.36 years as per July2011.

Literacy

The population above the age of 15 years can read and write and 96.1% of total

population is literate.

Calling code

+886

Sex ratio

The sex ratio for overall population as per July 2011 is 1.02 male(s)/female.

President (Government is of semi presidential republic)

Ma Ying-jeou is the current president and Vincent Siew is the vice president of Taiwan.

ECONOMIC OVERVIEW OF THE COUNTRY

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Type of economic system and economic growth of Taiwan

Taiwan has a dynamic capitalist economy with gradually decreasing government

guidance of investment and foreign trade.

Taiwan has transformed itself from an underdeveloped, agricultural island to an

economic power that is a leading producer of high-technology goods. In the

1960s, foreign investment in Taiwan helped introduce modern, labor-intensive

technology to the island, and Taiwan became a major exporter of labor-intensive

products.

Taiwan ranks 18th

in comparison to India ranking 4th

while comparing the worldchart of purchasing power parity.

GDP (purchasing power parity):

$821.8 billion (2010)$741.5 billion (2009)$756.1 billion (2008)

Exports, led by electronics and machinery, generate about 70% of Taiwan's GDP

growth, and have provided the primary impetus for economic development. This

heavy dependence on exports exposes the economy to upturns and downturns

in world demand.

In 2009, Taiwan's GDP contracted 1.9%, due primarily to a 20% year-on-yeardecline in exports. In 2010 GDP grew 10.5%, as exports returned to the level of

previous years. Taiwan's diplomatic isolation, low birth rate, and rapidly aging

population are major long-term challenges.

Taiwan's Total Fertility rate of just over one child per woman is among the lowest

in the world, raising the prospect of future labor shortages, falling domestic

demand, and declining tax revenues.

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The island runs a large trade surplus, and its foreign reserves are the world's

fourth largest, behind China, Japan, and Russia.

Key Facts

GDP (official exchange rate):$430.6 billion (2010) GDP - real growth rate:10.8% (2010) GDP-composition by

sector:Agriculture:1.4%Industry: 31.1% Services:67.5% (2010) Labor force:11.07 million (2010)

Unemployment rate:5.2% (2010)

Exchange rates:(Latest rate as per June 2011)

1 TWD = 0.0347 USD

1 USD = 28.78 TWD

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DIFFERENT ECONOMIC SECTORS OF TAIWAN

The competitive advantage of Taiwan's manufacturing industry lies in information,telecommunications, and other high technology industries.

Correspondingly, the government has identified and appropriated funding for the

development of 10 high technology industries that will be the foundation of Taiwan's

economy. The following are the ten industries:

(1) Communications,

(2) Information,

(3) Consumer electronics,

(4) Semiconductors,

(5) Precision machinery and automation,

(6) Aerospace,

(7) Advanced materials,

(8) Specialty chemicals and pharmaceuticals,

(9) Medical and health care equipment, and

(10) Pollution control and treatment.

The service sector is thriving and shows promise of further growth as the spending

power of the population increases. By the end of 1995, the growth of the service sector

exceeded that of the agricultural and manufacturing sectors by more than 60 percent

and has continued to do so.

The different businesses that fall under the service sector in Taiwan are: finance,

insurance, and real estate; commerce, including wholesale and retail business, food

and beverages, and international trade; social and individual services; transport,

storage, and telecommunications; commercial services, including legal, accounting, civil

engineering, information, advertising, designing, and leasing; governmental services,

and miscellaneous others.

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WHO, the UN Framework Convention on Climate Change (UNFCCC), and the

International Civil Aviation Administration (ICAO).

EXPORT

Taiwan exports were worth 24676 Million USD in November of 2011. Taiwan's

economy is export-oriented.

Main export products are Electronic Products (23%), Metals and Articles (7%),

plastics & rubber (6%), and chemicals (6%), Information & Communication

Products (25%), Precision Instruments, Clocks and Watches, Musical

Instruments (8%),Other (25%) Main exports partners are Mainland China & Hong Kong (42% of total), USA

(12%), Japan (7%), Europe (11%) and ASEAN countries (15%).

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23%

7%

7%

6%

24%

8%

25%

Electronic Products

Metals and A rticles

Metals and A rticles

chemicals

Inf ormation &Communication Produc

Precision Instruments,

Clocks and Watches,

Musical Ins truments

Other

IMPORT

Taiwan imports were worth 21473 Million USD in November of 2011. A lack of

natural resources had made Taiwan dependent on imports.

Taiwan imports mostly Capital equipment (16.6%), Agricultural and industrial raw

materials (75.7%), Consumer goods (7.7%) Main import partners are Japan (21% of total), Mainland China & Hong Kong

(14%), USA (10%), Europe (10%) and ASEAN countries (11%). This page

includes a chart with historical data for Taiwan's Imports.

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17%

75%

8%Capital equipment

Agricultural and

industrial raw

materials

Consumer goods

PRESENT TRADE RELATIONS AND BUSINESS

VOLUME OF DIFFERENT PRODUCTS WITH INDIA

Although Taiwan entered the Indian market later than the Japanese and Koreans, it has still

managed to achieve an incredible high rate of growth.

With its rapidly expanding economy, India is witnessing a surge in demand for home appliances

and ICT products and services. Additionally, the Indian government is keen to develop the

hardware market to match the nation's advances in software. This opens up many opportunities

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for strengthening the ties between the two countries as Taiwan's relative strength in hardware

could be meshed with India's in software.

STATISTICS OF EXPORT AND IMPORT BETWEEN TAIWAN AND INDIA (2005-10) (1 UNIT

=1 MILLION USD)

Year Exports

to

India

Growth compared

to previous year (%)

Imports

from India

Growth compared

to previous year (%)

2004 1,070.2 -- 860.5 --

2005 1,567.9 46.51 857.2 - 0.38

2006 1,471.1 - 6.17 1,245.3 45.28

2007 2,342.0 59.2 2,542.4 104.16

2008 3,007.5 28.42 2.338.4 - 8.02

2009 2,531.4 -15.83 1,623.9 -30.56

2010

(Jan-Apr)1,008.7 23.3 1,054.7 242.2

PRODUCTS EXPORTED AND IMPORTED BETWEEN INDIA AND TAIWAN

Exports to India Imports from India

Mineral fuels Cereals

Oils Organic chemicals

Electrical machinery Iron

Organic chemicals Steel

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Plastic articles -

Equipment -

INDIA-TAIWAN TRADE AND TECHNOLOGY COLLABORATION

The India-Taiwan relationship will benefit a lot with direct flights between the two

countries, believes Taipei Economic and Cultural Centre Representative, Wenchyi Ong.

This will not only enhance trade and investments between the two countries, it will also

build the people-to-people interface.

TAITRA (Taiwan External Trade Development Council), a non- profit trade promotion

organization under the Ministry of Economic Affairs, launched a campaign to increasegrowth and visibility of Taiwanese ICT brands in India and leverage Indias huge demand

for ICT and consumer lifestyle products.

Bilateral trade links between India and Taiwan, taking into consideration the electronics

industry, has witnessed a quantum leap in spite of its late start behind Japan and Korea.

Pestle Analysis

Political Analysis

The political environment in Taiwan has shifted from being

strictly communist under the control of the Koumintang Party. However, recent

developments in the parliament of Taiwan show a considerable adjustment towards a

more democratic system. This is great news for companies seeking entry in the marketas liberalization is slowly taking its place. Companies seeking to operate in Taiwan

needs to establish a legal presence. A branch office is a duly recognized legal entity in

Taiwan. It is considered permanent in nature which also means that it is subjected to

the taxation laws of Taiwan and compelled to conform to its regime.

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Political Establishment

Type: Multi-party democracy.

Constitution: December 25, 1946; last amended 2005.

Branches (Yuan): Executive, Legislative, Judicial, Control, Examination.

Major political parties: Kuomintang (KMT or Nationalist Party); Democratic Progressive

Party (DPP); several small parties.

Suffrage: Universal over 20 years of age.

Central budget proposed (FY 2011): NT $1.789 trillion (U.S. $62.79 billion).

Defense proposed (FY 2011): NT $297.2 billion (U.S. $10.43 billion), 16.6% of entirebudget, or 2.73% of Taiwan's GDP.

Principal Leaders

President--Ma Ying-jeou

Vice President--Vincent Siew (Siew Wan-chang)

Vice Premier--Sean Chen (Chen Chung)

Legislative Yuan President--Wang Jin-pyng

Judicial Yuan President--Rai Hau-min

Defense Minister--Kao Hua-chu

Foreign Minister--Timothy Yang (Yang Chin-tien)

Minister of Justice--Tseng Yung-fu

Government Information Office Minister--Phillip Yang (Yang Yung-ming)

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Economic Analysis

In the 1980s, focus shifted toward increasingly sophisticated, capital-intensive

and technology-intensive products for export and toward developing the service

sector.

Taiwan has transformed itself from a recipient of U.S. aid in the 1950s and early

1960s to an aid donor and major foreign investor, especially in Asia. Taiwan is

now a creditor economy, holding the world's fourth-largest stock of foreign

exchange reserves ($399.5 billion as of April 2011).

From 2002-2007, Taiwan's economic growth ranged from 3.5% to 6.2% per year.

With the global economic downturn, Taiwan's economy slumped into

recession in the second half of 2008. Its real GDP, following growth of 5.7% in

2007, rose 0.73% in 2008 and contracted 1.93% in 2009.

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The economy saw a robust recovery in 2010, growing by 10.88%, and the

highest rate in 28 years.

Exports, led by electronics and machinery, generate about 70% of Taiwan's GDP

growth, and have provided the primary impetus for economic development. This

heavy dependence on exports exposes the economy to upturns and downturns

in world demand.

Taiwan's population is aging quickly, with the number of people over 65

accounting for 10.9% of the island's total population as 2011. The island runs a

large trade surplus, and its foreign reserves are the world's fourth largest, behind

China, Japan, and Russia.

Taiwan and the mainland in June 2010 signed the landmark Economic

Cooperation Framework Agreement (ECFA), an agreement that the Taiwan

authorities hope will eventually lead to a free-trade arrangement that will increase

cross-Strait economic ties by lowering tariffs on a number of goods and by

reducing market access barriers for services. The Taiwan authorities have said

that the ECFA will serve as a stepping stone toward trade pacts with other

regional partners and they announced that formal negotiations towards an

economic cooperation agreement with Singapore would begin in 2011.

Socio-Cultural Analysis

Culture

Taiwan's culture is a blend of its distinctive Chinese, Japanese, and Western influences.

Fine arts, folk traditions, and popular culture embody traditional and modern, Asian, and

Western motifs.

Religion

TheConstitution of the Republic of Chinaprotects people'sfreedom of religionand

the practices of belief. Over 93% of Taiwanese are adherents of a combination of

thepolytheisticancient Chinese religion,Buddhism,Confucianism,

andTaoism; 4.5% are adherents of Christianity, which

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includesProtestants,Catholics, and other, non-denominational, Christian

groups; and less than 2.5% are adherents of other religions, such asIslam.

Confucianismis a philosophy that deals with secular moral ethics, and serves as the

foundation of bothChinese andTaiwanese culture.

Food

Taiwanese culture has heavily influenced the west Pearl milk tea (also known

as bubble tea or boba) is a popular tea drink available in many parts of the

world. A notable Japanese influence exists due to the period when Taiwan

was under Japanese rule. Taiwanese cuisine itself is often associated with

influences from mid to southern provinces of China

Clothing

There are many different types of traditional clothing in Taiwan. For example

there are headdresses, kimonos, tunics, and sashes, and even particular

kinds of ceremonial wedding dresses. Clothing is an important part of the

Taiwanese culture. Many people devote lots of time to find the right outfit

for a ritual, ceremony, or traditional routine. There are also particular colors

to go with every season and every social class.

Technological Analysis

In the context of market entry, Taiwan has a veritably stable technological

infrastructure that could support the marketing needs of a company. There are over 14

million telephone lines in use in Taiwan.

Moreover, the individuals of the said region are said to be adept in internettechnologies as over 14 million internet users are said to be present in Taiwan.

Apart from this well developed institutions and research and development

laboratories are established so as improve the technologies to evn a greater level

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Taiwan has accumulated considerable technology innovation capabilities while

consolidating its competitiveness in the global arena.

COMPETITIVE ADVANTAGES OF TAIWAN'S HIGH-TECH INDUSTRIESSuperior commercialized technology, especially within the information electronics

category.

Superior information and electronic engineering talent, technical support from overseas

Chinese researchers in the US, as well as the full support of the government in

developing industrial technologies.

Superior manufacturing capacity and product research and development capability.

COMPETITIVE INDUSTRIESTaiwan's information and semiconductor industries currently rank third and fourth in the

world, respectively, in terms of production value, and their global market share is

rising steadily.

The local telecommunications industry has established a sound industrial base in terms

of terminal user products.

Taiwan could develop into one of the world's major manufacturing center for network

products and mobile phones.

Environmental Analysis

Geography

Area: 36,189 sq. km. (13,973 sq. mi.).

Terrain: Two thirds of the island is largely mountainous with 100 peaks over

3,000 meters (9,843 ft.).

Climate: Maritime subtropical

Coastline: 1,566.3 km

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Natural resources: small deposits of coal, natural gas, limestone,

marble, and asbestos

Natural hazards: earthquakes; typhoons

Volcanism: Kueishantao Island (elev. 401 m), east of Taiwan, is its only

historically active volcano, although it has not erupted in centuries

Environment - current issues: air pollution; water pollution from

industrial emissions, raw sewage; contamination of drinking water

supplies; trade in endangered species; low-level radioactive waste

disposal

Land boundaries: 0 km

The companies that seek to operate in Taiwan are subjected to the

major environmental laws in the region. These include the Air Pollution Control

Act, the Water, Pollution Control Act, and the Waste Disposal Control Act.

Infringement of such laws shall have some punitive effects on the company.

Legal Analysis

Basically, entering into business in Taiwan also entails a company to be

subjected to taxation requirements. For companies with a head office that are

incorporated outside Taiwan, their branch office shall be taxed based on the actual

corporate income which they have derived from the local resources. The taxable range

in Taiwan for foreign companies is from 20%-25% of the total local earnings.

I. Tariff concessions:

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1. Agricultural and industrial products: The simple averages of nominal duty rates for

industrial and agricultural products in Taiwan are 6.03% and 20.02%, respectively, and

these rates will be reduced to 5.79% and 15.21%, respectively, in the first year following

Taiwan's accession to the WTO.

2. The Zero for Zero Program: Taiwan committed to this Program from the Uruguay

Round negotiations, which calls for the reduction of duty rates to zero in selected

sectors, including distilled spirits, pharmaceuticals, medical equipment, furniture, paper,

agricultural equipment, toys, construction equipment, steel, and beer.

II.Non-tariffmeasures

1. Agricultural sector: Upon accession, Taiwan is committed to removing area

restrictions limiting trade to certain geographical locations, and moving to a policy of

free importation for more than ten agricultural products. According to research

estimates, liberalization through the reduction of tariffs and the elimination of non-tariff

measures in Taiwan's agricultural sector will increase business opportunities by US$ 1.7

billion. Meanwhile, these measures will assist in significantly upgrading the

competitiveness of Taiwan's food industry and services sectors.

2. Industrial Sector: Upon accession, Taiwan is committed to eliminating area

restrictions on imports, local content requirements, and prohibited export subsidies on

automobiles and motorcycles. Additionally, Taiwan will allow the import and domestic

production of heavy-duty vehicles within six months of accession, and for diesel-gas

automobiles, the same treatment within two years of accession.

Despite the adjustment costs that will affect the domestic industries as a result, the

WTO liberalization measures will increase the competitiveness of these domestic

industries and help them to integrate more effectively into the international marketplace.

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III.Tradeinservices:

Taiwan has made commitments in eleven services sectors, including business services,

communication services, construction and related engineering services, distribution

services, education services, environmental services, financial services, health-related

and social services, tourism and travel-related services, recreational, cultural and

sporting services (other than audiovisual services), and transportation services

IV. Transparency and Liberalizing Actions in Other Trade Sectors:

1. Elimination of the monopoly system for tobacco and alcohol: Taiwan has committed

to eliminating the monopoly tax levied on tobacco and alcohol products. Following

elimination of the monopoly, tobacco and alcohol will be subject to the general tax

system. For imported products, additional tariffs will be implemented. In the future, local

and foreign companies will be allowed to establish facilities for the production of

alcoholic beverages in Taiwan.

2. Government Procurement: Taiwan is committed to becoming a signatory of the WTO

Agreement on Government Procurement upon its accession to the WTO. Under the

GPA, Taiwan will open government procurement transactions above a threshold value

to bidding by the other signatories of the GPA. Taiwan companies will also be eligible to

bid for government procurement opportunities available from the other GPA members.

According to statistics provided by competent authorities, the average value ofprocurements within Taiwan above the applicable threshold is approximately US$ 6

billion per year.

3. Intellectual property rights: The IPR legal system applied by Taiwan is consistent with

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TRIPS requirements. This advantage will attract investment by foreign companies in

local high-tech industries

However, the government of Taiwan has also instituted incentive programs for

companies that shall be adhere to green productivity initiatives of the region.

Conclusion

Taiwan plays an important role in the global supply chain. The focus of Taiwan's

production has shifted away from labor-intensive products such as the cannedmushrooms, umbrellas, and plastic shoes of earlier days, to today's high-tech products

such as lap-top computers, semi-conductors, and telecommunications equipment and

hence can act as a great market for India for both imports and exports.

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In the future, Taiwan expects to develop internet, telecommunications, and bio-tech

industries, drawing on the current foundation of our high-tech industries. Taiwan's

commitments under trade in services, such as the liberalization of the domestic

telecommunications services market, are expected to help Taiwan in its efforts to attract

new foreign investment and would help Indian investors through various trade

concessions

Looking into the twenty-first century, the global economy will continue to develop in the

direction of liberalization. Since Taiwan's economy is highly trade-oriented and

produces a variety of products developed for global markets, such trends will enhance

prospects for Taiwan's future economic development

Taiwan's economic system can be expected to become increasingly stable and

predictable, thereby providing foreign companies investing in Taiwan with growing

commercial opportunities and a reliable policy environment in which to operate.

References

www.CIA World fact book.com

www.taiwan Wikipedia.com

www.taiwan country outlook.com

www.taiwan country profile 2011.com

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www.google.com

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