Providing Source : Board of Foreign Trade, Ministry of Economic
File Last Revised : NOVEMBER 1993
Contact Phone : 886-2-3941964
Taiwan's spectacular ecomomic achievements have often been labeled a "miracle" - with good reason. Over the last few decades, the Republic of China has been transformed from an underdeveloped island into a nation joining the ranks of the world's 20 richest countries.
With a land area smaller than that of the Netherlands, the ROC is home to over 20 million people. This population is squeezed into less than 25% of the land mass, the rest being covered with inhospitable mountains. Taiwan has no natural resources to speak of, except for the industriousness of its people and the beauty of its geography.
In the 1950s, as Taiwan was recovering from the setbacks of warfare, there was little hint that the struggling island economy was soon destined to reach heights of prosperity and modernization unprecedented in Chinese history. Through hard work and commitment to the values of free trade and democracy, Taiwan has struggled to earn its status as a newly industrialized country, increasing trade volume over 500-fold in 40 years to become the 14th largest trading nation in the world.
Maintaining its momentum, the ROC is building the foundations of its future, aiming for even higher pinnacles of achievement as one of the world's main hubs of finance, trade and quality product design. Through its growing success, Taiwan will continue to serve as a unique model of harmony between traditional Chinese culture and modern economic success.
Trade has played a central role in the development of Taiwan's economy for decades, approaching US$150 billion annually in recent years. In 1992, foreign trade accounted for 73% of Taiwan's GNP, ranking the ROC as the 12th largest exporter and 14th largest importer in the world. Taiwan's focus on trade has resulted in spectacular economic growth rates sustained beween 6% and 9% for almost half a century. The island also boasts one of the fastest growing per capita incomes in the world, recently topping US$10,000 and expected to reach US$20,000 by the end of the decade.
The combination of affluence, lower tariffs and market liberalization has fueled booming consumption in recent years, Cash-rich consumers are causing retail sales to grow 10% annually.
Consumers' hunger for variety is exemplified by an annual growth rate in imports almost twice that of exports, and this appetite is satisfied by broad access to products from all over the world. Most goods can enter Taiwan without restric-tions, and as a result, the ROC imports more goods per capita than almost any other country in Asia.
Taiwan's trade policy is continuing to evolve as the nation adapts to changing circumstances, The 1950s saw a policy of import substitution to cope with high unemployment and a shortage of foreigh reserves. In the 1960s and 70s, the government adopted a number of export-oriented measures designed to ensure the success of ROC goods in international markets. These policies greatly strengthened Taiwan's capacity for foreign trade. But they also created trade surpluses with some of the ROC's largest trading partners and a serious trade deficit with Japan, from which many essential components ar purchased. To lessen the ROC's dependence on Japanese imports, Taiwan is financing research for the local develop-ment of key components currently sourced there. To bring overall trade into balance, Taiwan is encouraging equal growth of exports and imports and greater market diversification to capture opportunities all over the world. The ROC government has also eased tariffs on almost all goods and has opened the service sector to foreign participation. Through these sensible and realistic policies, Taiwan aims to maintain the health of its economy, whil also adhering to adhering to the GATT principles of free trade.
Strategically located between Japan, South Korea, mainland China and Southeast Asia, Taiwan is one of the premier centers of Asia-Pacific trade. To maintain this pivotal role in the region and support the needs of its maturing economy, Taiwan is pouring hundreds of millions of dollars into world-class infrastructure development, outlined in the ROC's Six-Year National Development Plan.
Taiwan's metamorphosis can be seen everywhere. Ports and harbors are being expanded to handle extra trade. Air cargo facilities are being enhanced. Taipei is building a comprehensive mass transit system, with all major cities soon to follow. And an extensive higway network will increase access to remote parts of the island.
Thar's not all. Although Taiwan's telephone network is already considered excellent, it is being upgraded to meet the ISDN standard. The new multi-billion-dollar telecommunications network will transform the way the nation does business with voice, pictures and data seamlessly interconnected. This new way to handle information will help turn the ROC into a world financial center.
The ROC is not only a regional economic powerhouse, it has also become a major player on the international scene. Taiwan is one of the world's largest exporters of capital and the second largest investor in Asia. Tai-wanese factories employ thousands of workers in Asia and the rest of the world. And decades of involvement in international business have fostered on the island an unrivaled pool of management talent, making Taiwan the place where deals are struck and profits are made.
All these advantages combine to make Taiwan an ideal location for international companies expanding into the Asia-Pacific region. Taiwan consistently ranks among the top countries in the world in major surveys measuring economic performance and potential, such as the BERI and U.S. Conference Board reports, and its status is rising annually. For this reason, the ROC government actively encourages foreign companies to establish regional operations in Taiwan. International firms can benefit from Taiwan's location, resources, and expertise in establishing regional operations centers to service growing Asian markets. Multinationals will also find the ROC to be a prime investment site with low investment risk, a strengthened infrastructure, and improved investment laws. Many of the world's top international firms have already discovered the advantages of Taiwan's business environment -- the time is right for more companies to unlock this treasure chest of opportunity awaiting them on the island.
Competitive manufacturing and high-value added products are the driving force behind Taiwan's success in foreign trade. Taiwan is one of the world's largest exporters of information technology products. Advanced computers, scanners, keyboards, and monitors are just a few of the products that have contributed to this remarkable growth. Taiwan is also a leading exporter of industrial machinery. And the island's textiles are prized by fashion designers around the world. Taiwan's focus on quality has earned ROC products a proud new label -- Very Well Made in Taiwan.
There are many reasons explaining the roots of Taiwan's excellent trade performance. Chief among them is the quality of the work force. highly committed and educated, Taiwan's superior labor force powers the island's success. Taiwan's educational system requiring nine years of mandatory schooling provides equality of opportunity to all students, and provides them with the skills industry requires. Vocational and technical schools accommodate the need for manpower capable of operating modern automated factories using state-of-the-art machinery. ROC universities provide the nation with a large and competent engineering work force, In fact, Taiwna has more electrical engineers per capita than many of its trading partners, including the United States.
With so many competent technicians, Taiwan has now graduated from the production of orders based onforeign specifications to the original design and develop-ment of its own products. World-class firms leading this quality revolution include Giant Bicycle, one of the top companies in the U.S>market, Kunnan Enterprised, parent company of Pro Kennes tennis racquets, and Acer inc. whose computers have won awards for excellence in the U.S.,Europe, and Japan.
To maintain Taiwan's competitive edge in the worldwide market place of the future, the ROC invests 2% of GNP yearly in R&D to promote industries and key technologies, a rate comparable to those of the most economically powerful nations.why such ambition? Because Yaiwan has what it takes to join economies of this stature. Taiwan's labor-intensive industries have moved overseas and are being replaces with upscale manufacturing facilities with cutting-edge technology. The nation's goal: to seize this opportunity to nurture high-value added industries and continue to enhance the quality of Taiwan products.
Ren-ching-wei -- Chinese for "the flavor of human feelings" -- is a key ingredient to successful business in Taiwan. It characterizes the way the Chinese relate to one another. A synthesis of friendship and frankness, courtesy and respect, candor and culture, ren-ching-wei is the cement that binds together all successful relationships. In international business, ren-ching-wei is the spirit of cooperation and trust with partners and friends abroad.
In recent years, as leading nations of the world have been pushing for better international protection of intellectual property rights(IPR), Taiwan has cooperated by taking a central role in the global war on IPR infringements. With the increasing number of patents issued locally, Taiwan fully recognized the central importance of controlling the damage caused by international IPR infringement. FGor Taiwan realized that R&D and innovation are key elements in sustaining the ROC's own competitiveness in the global marketplace. As a result, along with the United States and other major countries, Taiwan has adopted tough measures to deal with piracy of intellectual property.
For example, as a result of strict, new rules put in place in the spring of 1992, Taiwan now has internationally unprecedented procedures to control the export of information industry products. These measures are so strict that no high-risk information technology shipment can leave the country without first being examined by experts from the Institute for Information Industry, a non-profit organization studying and promoting the domestic computer industry. Taiwan is moving quickly in other areas of protection of intellectual property as well, by adopting a new copyright law and designing new trademark and patent laws, a cable TV law, a video reproduction law, an integrated circuit design law, and an industrial design law. Such determination is truning the island into a model for other countries struggling with the serious problem of IPR piract.
Taiwan's flexibility in the face of changing international investors. Over the years, they have invested billions of dollars in the island, knowing Taiwan's business environment can adapt to changing times. A list of the mai international investors in Taiwan reads like the Fortune 500. For Taiwan is a proven wellspring for cooperative success and profitability in international business.
After more than four decades of fast-paced development, Taiwan has much to be proud of. The thirst for progress has not led to social upheaval. The ROC is a full parliamentary democracy where power rests firmly in the hands of the voters. A sizable middle class and low unemployment have ensured that the majority of Taiwan's people have enjoyed the fruits of the island's economic success. Centuries-old Chinese traditions coexist in hamony with a modern understanding of innovation in business.
The Republic of China's strength comes from its people. Patient. Hardworking. Entrepreneurial. The people of Taiwan have succeeded in the face of adversity, building one of the largest trading nations in the world today. A nation known for the quality of its products. The excellence of its manufacturing. And the charm of its people.
The Republic of China on Taiwan is perched at the cross-roads of Asia. A democratic nation with its gates flung wide open, companies from the world over enjoy booming success in Taiwan.
The Republic of China on Taiwan is a nation with its sights set on the future. A future where Taiwan takes its place among the 29 richest countries in the world. A future where Taiwan is the center forn international business in Asia.
The Republic of China on Taiwan ... Building on Success.
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