Taiwan, an island, is separated from the mainland of South China by the 100-mile-wide Taiwan Strait in the Pacific Ocean and is the seat of the Republic of China government (ROC).
The capital of Taiwan is Taipei and other major cities include Kaohsiung, Tainan, Taichong, and Chilung. The languages spoken are the Mandarin, Fujianese (Amoy), and Hakka dialects. Religions on the island include Confucianism, Taoism, Buddhism, and Christianity. The 1990s have been a time of change and achievement for Taiwan. Politically, Taiwan has undergone a dramatic transition from an authoritarian government to a true democracy and on the economic front, Taiwan has continued to prosper. For the past 20 years, Taiwan has had one of the fastest growing and most dynamic economies in the world. With over $80 billion US in foreign capital reserves, an average growth rate of 7.8 percent between 1986 and 1996, and a per capita gross domestic product (GDP) of $15,000, Taiwan has become a powerhouse in the global economy.1 Its remarkable success comes after five decades of hard work and sound economic management that have transformed Taiwan from an underdeveloped agricultural island to a leading producer of high-technology goods. Helping to spur this extraordinary growth during the last two decades were supportive U.S. policies that began with the 1979 Taiwan Relations Act (TRA).
It maintained Taiwan?s preferential trade status when formal diplomatic relations were severed in favor of the People?s Republic of China (PRC).
The Essay on TAiwan and China
The major problem between Taiwan and China is the Taiwanese economy. If the island state had never managed to industrialize under the GMD, it ... things that will keep it out of the hands of China. Taiwan's modern life began the start of the peoples republic of ... other- they are truly separate states now. China now represents China in the UN, and Taiwan is not able or willing to present ...
In 1979, Taiwan?s economy was rapidly expanding and was beginning to fully integrate into the new global economy. It exported $5.6 billion to the United States and had $7 billion in foreign exchange reserves.2 Taiwan produced a variety of products, specializing in textiles, consumer goods, and petrochemicals. U.S. corporations were beginning to invest heavily in Taiwan when the U.S. government severed the official diplomatic relations it had maintained with the Republic of China for three decades. This abrupt loss of recognition created consternation among foreign investors and Taiwan?s trading partners. International contracts, which had once been secure through treaties and formal diplomatic ties, suddenly came into question. The Taiwan Relations Act, however, calmed the fears of investors by creating a framework that allowed trade and finance to continue unhindered. The TRA sent the clear message that the U.S. intended to maintain a close relationship with Taiwan and encouraged business ties with the island. Specifically, the act mandated that all treaties and agreements remain in effect, ensuring that contracts could still be enforced. In addition, it authorized funding for Taiwan from the Overseas Private Investment Corporation (OPIC), which provides insurance, loans and guarantees to businesses investing abroad.
Thanks in large measure to OPIC?s continued programs, trade and investment tripled over the next decade between the U.S. and the ROC, helping to maintain Taiwan?s economic boom. In the 1980s, Taiwan?s economy shifted dramatically toward sophisticated, capital and technology-intensive products for export and toward developing the service sector. A generation ago, farming accounted for 30 percent of GDP and basic manufacturing represented half of the economy. Today, farming comprises only 3.3 percent of GDP while services are almost two-thirds of GDP.3 Taiwan now boasts one of the fastest growing high-tech sectors in the world and has been called ?Silicon East? by Forbes Magazine. Today, Taiwan is the fourth-largest maker of computer chips, producing 69 percent of the world?s scanners and over half of the world?s computer monitors.4 Through the 1990s, Taiwan?s economic growth rate ranked ninth in the world according to the World Bank, and for the last decade, Taiwan posted an average growth rate of 6.2 percent each year compared with the average growth rate worldwide of just 2.4 percent.5 During that period, the U.S. achieved growth of 3.1 percent per year, while Japan grew by only 1.2 percent, as it experienced its worst recession since World War II.6 Inflation, too, has largely been tamed; World Bank statistics show that Taiwan?s average annual inflation rate in the first nine years of the last decade stood at just 3.2 percent, and this figure has declined since.7 Throughout the Asian Economic Crisis, which began in late 1997, Taiwan?s economy showed great resilience. Nothing, it seemed, could derail Taiwan?s powerful economy. When the Asian economic crisis was at its worst, Taiwan posted annual GDP growth of 4.83 percent, while most of its Asian neighbors plunged into recession.8 Western press reports painted a glowing picture of the island?s economic strength. The Economist noted that ?one of Asia?s so-called Tigers . . . has fared better than the rest. While Korea and Southeast Asia are struggling, Taiwan has so far escaped with a small currency devaluation and a relatively modest decline in share prices. Economic growth remains strong.?9 In searching for an explanation for Taiwan?s success, the magazine noted a couple of factors, including a light foreign burden and better banking regulation. ?A third probable cause of Taiwan?s success is more controversial: by having a more flexible economy than some other Asian countries, Taiwan may have been better positioned to withstand the storms,?10 the article said. In addition, the article emphasized that Taiwan makes it easy for entrepreneurs to start new businesses while also making it easy for old businesses to die. “This creative destruction spurs incumbents to stay trim and helps spread new skills quickly,”11 the magazine said, boosting productivity in all sectors of the economy. “Its history of allowing troubled businesses to die and new ones to spring up should make it easier for Taiwan to adjust to turbulent times.”12 Similarly, an article in Forbes, writer Andrew Tanzer says that Taiwan’s system has helped it survive the crisis. “Knowing it stood almost alone,” he writes, “it developed habits of self-reliance, financing growth with domestic savings and welcoming foreign capital on friendly terms. It has been careful not to run deficits in its international accounts because it knows it cannot count on help from international bodies.”13 Tanzer also points out that “the island’s relatively small, private entrepreneurial firms are nimble when it comes to changing with the market.”14 He acknowledges that Taiwan is likely to feel increasing pressure from its neighbors, but concludes that “with its current account surplus and strong financial condition, Taiwan can afford to stimulate its domestic economy to take up any slack in exports.”15 Finally, Tanzer gives credit to Taiwan’s open and democratic system, declaring that “the verdict is in: Free, entrepreneurial capitalism beats the half-capitalist, half-socialist model by a country mile.”16 Taiwan has subsequently transformed itself from a recipient of U.S. aid in the 1950s and early 1960s to an aid donor and major foreign investor. The ROC’s development is now a model for other emerging markets around the world and Taiwan will undoubtedly remain one of the fastest growing economies in the world. With a 258 billion dollar economy, Taiwan is the world?s 13th largest economy and its 12th largest trading power.17 In 1998, Taiwan?s international trade totaled more than 216 billion dollars and import from all sources were worth approximately 105 billion dollars.18 Taiwan has a multi-billion dollar annual trading relationship with the United States, Japan, Germany, Korea, France, and a number of other countries. Taiwan has tried to establish its own ?international space? in a complex relationship with Mainland China. The decades long dispute over the status of Taiwan in relation to the PRC has impaired international recognition and participation in international organizations for Taiwan. Without taking provocative steps, however, Taiwan has tried to establish an increased presence in international organizations, such as the Asia Pacific Economic Council (APEC) and the World Health Organization (WHO).
The Essay on World Trade Organization WTO
World Trade Organization (WTO), international body that promotes and enforces the provisions of trade laws and regulations. The World Trade Organization has the authority to administer and police new and existing free trade agreements, to oversee world trade practices, and to settle trade disputes among member states. The WTO was established in 1994 when the members of the General Agreement on ...
The Term Paper on Consumption Expenditures Economy Percent Economic
The million (or should we say 'billion' now) dollar question is whether or not the United States' economy will stay in it's record 107 month expansion (according to the index of leading indicators) or come out of the boom and take a downturn into a recession. Nobody, including the Chairman of the Federal Reserve, Alan Greenspan has a crystal ball to provide insight as to what will happen if ...
Through most of this decade, one of Taiwan?s most important objectives in this regard has been to secure membership in the World Trade Organization (WTO).
The Essay on International Trade Wto Gatt Agreements
To export these goods you have to have an organization which deals with the rules of trade between nations. Such an international organization is the World Trade Organization (WTO). The goal is to help producers of goods and services, exporters, and importers conduct their business. Result: - is assurance- Consumers and producers know they can enjoy secure supplies and greater choice of the ...
Like most countries in the region, Taiwan trades a great deal with the world?s major trading partners?the United States, Japan, Europe and mainland China by route of Hong Kong. It is worth noting that Taiwan?s trade with the world is geographically and nationally diversified. Taiwan?s total trading reaches the one billion-dollar threshold with 15 countries, including a number, such as Canada, Switzerland, and Brazil, that lie well outside of the Asian region. See Tables 1, 2, and 3, respectively, for ?Taiwan?s Top Trading Partners,? ?Taiwan?s 10 Major Export Markets,? and ?Taiwan?s 10 Major Import Sources? for the years 1997 and 1998. Similarly, Taiwan?s imports from the world are diversified. As would be expected from an island with limited natural resources, Taiwan imports a considerable amount of agricultural products and petroleum along with a wide range of industrial products, including chemicals, steel products, electrical machinery, household appliances, wood, and paper products. Although it is also a major exporter of the same, Taiwan imports a substantial volume of textile products. See Table 4 for ?Taiwan?s Major Imports? for the years 1997 and 1998. As Taiwan liberalizes trade in connection to WTO accession, a substantial portion of the growth is likely to be in these same sectors. [It should be noted that Taiwan has succeeded in having a WTO working party formed to consider its application to the WTO and has completed bilateral negotiations with all members of the working group. Shortly, the working group could close its work and send the package for Taiwan?s membership to the larger WTO General Council for a final vote on its membership.] Taiwan is also a substantial exporter of a number of industrial products. Although Taiwan does export some agricultural products, given its small land area and limited endowment of natural resources, its comparative advantage lies in the production of manufactured products. Since most countries already grant Taiwan ?Most Favored Nation? (MFN) tariff treatment voluntarily, WTO accession is thus less likely to have immediate impact on Taiwan?s export volume or composition. Over time, however, the dynamic benefits of an increased selection of products and composition will likely spur overall growth and movement of resources within Taiwan?s economy. These changes may have a long-term impact on Taiwan?s exports. See Table 5 for ?Taiwan?s Major Exports? for the years 1997 and 1998. Like a number of its Asian neighbors, Taiwan?s economy was protected in many sectors in the 1950s and 1960s. As part of a trade liberalization effort encouraged by Taiwan?s major trading partners, notably the United States in accordance with WTO accession, many of these trade barriers have been reduced or dismantled in recent years. However, substantial barriers remain in a number of sectors. In an effort to attract more international trade, Taiwan has substantially reduced the applied level of tariffs over the years. Taiwan?s average nominal tariff rate of 8.2 percent is similar to that of other developed countries and it is scheduled to be lowered to five percent in WTO accession talks.19 For comparison, the average U.S. tariff rate is just over five percent.20 These tariff concessions will ultimately impact 3,470 industrial products and 1,021 agricultural products.21 Beyond that, however, the average tariff hides the fact that in a number of sectors, tariffs remain important barriers to trade. As is the case in many countries, tariff spikes are quite high in a number of sectors; automobiles and agriculture provide two notable examples. Many countries have employed various trade barriers to protect the automotive sector. In the case of Taiwan, most of this protection has come in the form of tariffs. Currently, tariffs on passenger vehicles range slightly over 60 percent bringing the average tariff on automobiles to almost 44 percent.22 At this level, tariffs have a strong impact on trade and a substantial restraint on imports. There are similar high tariffs on imports of auto parts; auto part tariffs reach over 20 percent and average over 17 percent.23 Most of these tariffs, however, will be reduced substantially upon WTO accession. The average tariffs on automobiles will fall to 16 percent and auto parts tariffs to just over 10 percent.24 At these levels, tariffs will still impact trade, but imports of both can be expected to rise substantially. In the agricultural sector, tariffs as well as non-tariff measures (NTMs) are also quite significant. Tariffs on many meat products exceed 50 percent and tariffs on various types of fruits and vegetables are also prohibitive.25 Taiwan?s textile and apparel market is also potentially a promising export opportunity for many developing countries around the world although Taiwan itself imports a significant volume of textiles and apparel. Most of the formal protection in this sector is provided by tariffs, which average almost 12 percent. Upon completing accession to the WTO, the average tariff on textiles will be lowered by about 20 percent?to under 10 percent.26 At this level, tariffs will still restrain imports, but substantial trade opportunities will be created and tariffs on specific products will decline even more dramatically, creating various niche opportunities. In the industrial sector, tariffs are already fairly low. For example, tariffs on semiconductors are now at less than one percent and scheduled to fall to zero.27 Tariffs on semiconductor manufacturing equipment are now just under six percent and scheduled to be cut by more than 50 percent.28 Tariffs on a number of consumer electronic products, such as cassette players, are sizeable?many in the low teens?and also scheduled for substantial reduction.29 Tariff reductions on these and other consumer products will undoubtedly create substantial opportunities for Taiwan?s trading partners and more business opportunities for Taiwanese companies. Of course, tariffs are not the only barriers to trade. A number of products are also subject to various trade licensing and import permit restrictions in Taiwan. These restrictions affect several hundred product classifications and in cases ranging from pharmaceuticals to sport fishing boats, they constitute significant barriers to imports.30 Notable restrictions are also applied to a number of agricultural products, including sugar and rice.31 Foreign companies exporting to Taiwan have also raised issues regarding various arbitrarily enforced standards on products, such as air conditioners.32 Taiwan?s import system for alcohol and tobacco products has also been criticized as ?cumbersome and costly.?33 Many of these non-tariff barriers are the subject of ongoing bilateral discussions with major trading partners and inconsistent with the WTO and would be reduced or eliminated by the WTO accession process. As is the case with a number of countries, Taiwan also enforces substantial government procurement preferences and requirements that limit the importation of foreign goods and services. Taiwan?s technology transfer requirements have also drawn some criticism, particularly in the aerospace sector. Taiwan has, however, agreed to adhere to the WTO Government Procurement Agreement upon accession to the WTO and has voluntarily undertaken some reform in this area.34 Protection of intellectual property in Taiwan has been a long-standing trade issue between the United States and Taiwan. Piracy in various forms has been a significant problem in the past. Through several bilateral agreements with the United States and a number of legislative changes, Taiwan has brought intellectual property protection to a high-level?comparable to that of most other developed countries. Concerns are sometimes raised, however, concerning some alleged connections between Taiwanese firms and piracy on the mainland. As a developed country, Taiwan would be bound to fully adhere to WTO provisions on Trade Related Intellectual Property (TRIPs) upon accession.35 In addition, as is the case in a number of countries, Taiwan maintains substantial restrictions with regard to a number of services. Financial services and telecommunications services are two sectors in which there is substantial potential for imports. Taiwan has voluntarily liberalized in both sectors and made particularly significant moves regarding telecommunications services. Taiwan has also agreed to fully participate in the General Agreement on Trade in Services (GATS) upon WTO accession.36 As noted, Taiwan has substantially reduced both tariff and non-tariff barriers and improved protection of intellectual property voluntarily over the years. In a number of sectors, however, WTO membership as a developed country would commit Taiwan to economically significant further liberalization. Taiwan and the world trading system have a complex history. Even without formal membership in the trading system, Taiwan has developed into an important trading partner for many countries. Despite the lingering impact of the Asian Economic Crisis, Taiwan?s total trade with the world has approached $250 billion in 1999; placing Taiwan in the top rank of trading powers. From the perspective of the WTO and its trading partners, Taiwan has proven itself a responsible trading power. In the last decade, Taiwan has greatly liberalized its trading system; tariffs and NTMs have come down and protection of intellectual property has improved to a level consistent with other developed countries. There are still areas in Taiwan?s trading regime which could be improved, but Taiwan?s economy is already more open than that of most of its Asian neighbors. Unlike the PRC and many current members of the WTO, Taiwan?s trading regime is already in compliance with the provisions of the WTO. Upon accession to the WTO, Taiwan has agreed to undertake a series of additional trade liberalizing measures that will open billions of dollars in new trade opportunities annually for its trading partners and for Taiwan itself. Certainly, Taiwan?s largest trading partners, such as the United States and Japan, will enjoy a substantial share of these new opportunities, however, Taiwan is a diversified trader that maintains substantial trade relationships with many countries. All of these are likely to see some additional export opportunities and some countries that do not currently trade with Taiwan may also enjoy some benefits and in the end, Taiwan?s membership in the WTO will strengthen the WTO as an institution. The trade liberalization that results will benefit Taiwan, Taiwan?s trading partners, and the world trading system. The economy of Taiwan is undoubtedly affected and will continue to be affected by the loosening of trade restraints. Because of the relative small size of the island and lack of natural resources, many Taiwanese companies have already been forced to transfer to Mainland China where their operating expenses are significantly lower due to availability of space and cheaper labor. With further liberalization of import tariffs, Taiwanese companies will be further challenged by the influx of cheaper foreign goods. Unless Taiwanese companies gear themselves to handle the changing market and competition, they will lose a significant share of their home and foreign markets and also be forced to move to mainland China or somewhere else that offers cheap labor. In addition, Taiwanese companies will have to invest in newer technologies to further compete with the ever-increasing number of foreign companies. Along with the negative effects of trade liberalization, there are also positive outcomes for the Taiwanese economy. With imports at lower tariff rates, the people of Taiwan will experience increased buying power. The standard of living will also increase since Taiwanese will have a wider range of products at cheaper prices from which to purchase. Taiwanese companies will be forced to raise the quality of their products and services in order to compete with foreign companies thus affording the Taiwanese people more product for their money and ultimately increase spending? leading to an even more robust economy. 1. ?Taiwan?s Twenty Years of Economic Expansion.? Taiwan Almanac. 29 March 1999. Viewed on: 15 April 2000 *www.taiwaninformation.org/almanac/economy/essay4-032999.html*. 2. ?Taiwan?s Twenty Years of Economic Expansion.? 3. ?Taiwan?s Twenty Years of Economic Expansion.? 4. ?Taiwan?s Twenty Years of Economic Expansion.? 5. ?Taiwan?s Economy Remains on Track,? The Washington Times, 8 October 1999, Viewed on: 15 April 2000 *www.washtimes.com/internatlads/taiwan99/6.html*. 6. ?Taiwan?s Economy Remains on Track.? 7. ?Taiwan?s Economy Remains on Track.? 8. ?Taiwan?s Economy Remains on Track.? 9. ?The Flexible Tiger,? The Economist 3 Jan. 1998: p. 73. 13. Tanzer, Andrew. ?Tight Little Island,? Forbes 12 January 1998: p. 52-53. 14. ?Tight Little Island.? 15. ?Tight Little Island.? 16. ?Tight Little Island.? 17. Taiwanese Trade Statistics. Viewed on: 15 April 2000. *www.cetra.org.tw/english/statistics/indexset.htm*. 18. Taiwanese Trade Statistics. 19. Taiwanese Trade Statistics. 20. U.S. Trade Statistics. Viewed on: 15 April 2000. *www.ita.doc.gov.*. 21. Dr. Mastel, Greg. Taiwan in the WTO: An Economic and Policy Analysis. 6 October 1999. Viewed on: 15 April 2000 *www.taipei.org/un/wto0223.htm*. 22. Taiwan in the WTO: An Economic and Policy Analysis. 23. Taiwan in the WTO: An Economic and Policy Analysis. 24. Taiwan in the WTO: An Economic and Policy Analysis. 25. Taiwan in the WTO: An Economic and Policy Analysis. 26. Taiwan in the WTO: An Economic and Policy Analysis. 27. Taiwan in the WTO: An Economic and Policy Analysis. 28. Taiwan in the WTO: An Economic and Policy Analysis. 29. Taiwan in the WTO: An Economic and Policy Analysis. 30. United States Trade Representative. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. Washington D.C.: GPO, 1998. P.318. 31. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. 32. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. P. 319. 33. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. P. 326. 34. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. P. 320-321 35. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. P. 322. 36. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. P. 323-324. TABLE 1: Taiwan?s Top Trading Partners and Total Trade in 1997 & 1998 (in US$ Millions).
The Term Paper on Foreign Policy Analysis : Compare and Contrast Nigeria’s Relationship with the U.S.A.
INTRODUCTION: A country’s foreign policy is a set of goals outlining how the country will interact with other countries economically, politically, socially and militarily, and to a lesser extent how the country will interact with non-state actors. The aforementioned interaction is evaluated and monitored in attempts to maximize benefits of multi-lateral international cooperation. Foreign policies ...
The Term Paper on Trade Liberalization and Economic Development
... to focus exports on labor-intensive products. JEL Classification: F41 Keywords: Trade Liberalization, Economic Development, Poverty I. Introduction The world ... measurements of liberalization: First through non-tariff 2 From the mid 1950s, Taiwan provides various incentives to its ... of the World Trade Origination (WTO) in 1995 provided an impetus to the process of trade liberalization. It provides ...
Germany 9,059.8 9,235.8 TABLE 2: Taiwan?s 10 Major Export Markets in 1997 & 1998 (in US$ Millions).
TABLE 3: Taiwan?s 10 Major Import Sources in 1997 & 1998 TABLE 4: Taiwan?s Major Imports in 1997 & 1998 Electronic Products 18,656.8 18,110.2 Info. & Comm. Products 3,531.8 5,296.6 Precision Instruments 6,375.5 5,192.4 TABLE 5: Taiwan?s Major Exports in 1997 & 1998 (in US$ Millions).
Electronic Products 18,024.0 16,911.6 Info. & Comm. Products 14,441.8 13,773.9 Fiber, Yarn, Linen & Fabric 11,741.5 10,246.8 Electrical Machinery 4,767.8 4,354.7
Bibliography:
REFERENCES 1. ?Taiwan?s Twenty Years of Economic Expansion.? Taiwan Almanac. 29 March 1999. Viewed on: 15 April 2000 . 2. ?Taiwan?s Twenty Years of Economic Expansion.? 3. ?Taiwan?s Twenty Years of Economic Expansion.? 4. ?Taiwan?s Twenty Years of Economic Expansion.? 5. ?Taiwan?s Economy Remains on Track,? The Washington Times, 8 October 1999, Viewed on: 15 April 2000 . 6. ?Taiwan?s Economy Remains on Track.? 7. ?Taiwan?s Economy Remains on Track.? 8. ?Taiwan?s Economy Remains on Track.? 9. ?The Flexible Tiger,? The Economist 3 Jan. 1998: p. 73. 10. ?The Flexible Tiger.? 11. ?The Flexible Tiger.? 12. ?The Flexible Tiger.? 13. Tanzer, Andrew. ?Tight Little Island,? Forbes 12 January 1998: p. 52-53. 14. ?Tight Little Island.? 15. ?Tight Little Island.? 16. ?Tight Little Island.? 17. Taiwanese Trade Statistics. Viewed on: 15 April 2000. . 18. Taiwanese Trade Statistics. 19. Taiwanese Trade Statistics. 20. U.S. Trade Statistics. Viewed on: 15 April 2000. . 21. Dr. Mastel, Greg. Taiwan in the WTO: An Economic and Policy Analysis. 6 October 1999. Viewed on: 15 April 2000 . 22. Taiwan in the WTO: An Economic and Policy Analysis. 23. Taiwan in the WTO: An Economic and Policy Analysis. 24. Taiwan in the WTO: An Economic and Policy Analysis. 25. Taiwan in the WTO: An Economic and Policy Analysis. 26. Taiwan in the WTO: An Economic and Policy Analysis. 27. Taiwan in the WTO: An Economic and Policy Analysis. 28. Taiwan in the WTO: An Economic and Policy Analysis. 29. Taiwan in the WTO: An Economic and Policy Analysis. 30. United States Trade Representative. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. Washington D.C.: GPO, 1998. P.318. 31. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. 32. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. P. 319. 33. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. P. 326. 34. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. P. 320-321 35. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. P. 322. 36. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. P. 323-324.
