Country Introduction

The Republic of China (Taiwan) was founded in 1912, making it the first democratic
republic in Asia. In 1949, the government moved to Taiwan and maintained jurisdiction
over an area encompassing the islands of Taiwan, Penghu, Kinmen, Matsu, Dongsha,
Zhongsha, and Nansha.
Flag:

Area: 36,000 square kilometers

Population: 23 million
Language: Mandarin / Taiwanese / Hakka / Indigenous Languages
Religion: Buddhism / Taoism / Christianity / Islam
President: Mr. Ma Ying-jeou
Location
Taiwan's total land area is about 36,000 square kilometers (14,400 square miles). It is
shaped like a leaf that is narrow at both ends. It lies off the southeastern coast of mainland
Asia, across the Taiwan Strait from China-- an island on the western edge of the Pacific
Ocean. To the north is Japan; to the south is the Philippines. Many airlines fly to Taiwan,
making it the perfect travel destination.
Taiwan lies on the western edge of the Pacific "rim of fire," and continuous tectonic
movements have created majestic peaks, rolling hills and plains, basins, coastlines, and
other natural landscapes. Taiwan's tropical, sub-tropical, and temperate climates provide
clear differentiation between the different seasons. There are about 18,400 species of
wildlife on the island, with more than 20% being rare or endangered species. Among these
are the land-locked salmon, Taiwan serow, Formosan rock monkey, Formosan black bear,
blue magpie, Mikado Pheasant, and Xueshan grass lizard.

The Taiwan government has established 8 national parks and 13 national scenic areas to
preserve Taiwan's best natural ecological environment and cultural sites. There are various
ways to discover the beauty of Taiwan. For example, trekking in the magnificence of the
cliffs at Taroko Gorge; taking a ride on the Alishan Forest Railway and experiencing the
breathtaking sunrise and sea of clouds; hiking up to the summit of Northeast Asia's highest
peak, Yu Mountain (Yushan). You can also soak up the sun in Kending (Kenting), Asia's
version of Hawaii; stand at the edge of Sun Moon Lake; wander through the East Rift Valley;
or visit the offshore islands of Kinmen and Penghu. It's fun in capital letters as well as an
awesome journey of natural discovery!
Language:
Standard Mandarin is officially recognised by the Republic of China as the national
language, and it is spoken by the vast majority of residents. About 70% of the people in
Taiwan belong to the Hoklo ethnic group and speak both Taiwanese a variant of Min
Nan, their mother tongue and Standard Mandarin.
Government: Kuomintang
Currency: New Taiwan dollar

Demographic Profile
Population
Age structure

Population
growth rate
Birth rate
Death rate
Net migration
rate
Sex Ratio
Infant
mortality rate
Life
expectancy at
birth
Total fertility
rate
Ethnic groups
Religions
Languages
Literacy

23,299,716 (July 2013 est.

0-14 years: 14.3% (male 1,722,887/female
1,609,813)
15-24 years: 13.7% (male 1,638,424/female
1,549,415)
25-54 years: 47.7% (male 5,562,031/female
5,553,318)
55-64 years: 12.7% (male 1,450,513/female
1,509,359)
65 years and over: 11.6% (male
1,262,939/female 1,441,017) (2013 est.)
0.27% (2013 est.)
8.61 births/1,000 population (2013 est.)
6.83 deaths/1,000 population (2013 est.)
0.91 migrant(s)/1,000 populations (2013 est.)
Total population: 1 male(s)/female (2013 est.)
total: 4.55 deaths/1,000 live births
male: 4.96 deaths/1,000 live births
female: 4.12 deaths/1,000 live births (2013 est.)
total population: 79.71 years
male: 76.58 years
female: 83.06 years (2013 est.)
1.11 children born/woman (2013 est.)
Taiwanese (including Hakka) 84%, mainland
Chinese 14%, indigenous 2%
mixture of Buddhist and Taoist 93%, Christian
4.5%, other 2.5%
Standard Mandarin (official), Taiwanese (Min),
Hakka dialects
total population: 98.2%
Male: 99.6%
Female: 96.8%

The Population of Taiwan is dominated by people between the age group of 25 to 54 years
which makes 47.7% of total population of Taiwan. The Life Expectancy Rate is high of
female while literacy rate is high among male

General Economic & Industries overviews

Taiwan has a dynamic capitalist economy with gradually decreasing government guidance
of investment and foreign trade. Exports, led by electronics, machinery, and petrochemicals
have provided the primary impetus for economic development. This heavy dependence on
exports exposes the economy to fluctuations in world demand. In 2009, Taiwan's GDP
contracted 1.8%, due primarily to a 13.1% year-on-year decline in exports. In 2010 GDP
grew 10.7%, as exports returned to the level of previous years, and in 2011, grew 4.0%. In
2012, however, growth fell to 1.3%, because of softening global demand. Taiwan's
diplomatic isolation, low birth rate, and rapidly aging population are major long-term
challenges. Free trade agreements have proliferated in East Asia over the past several
years, but except for the landmark Economic Cooperation Framework Agreement (ECFA)
signed with China in June 2010, so far Taiwan has been excluded from this greater
economic integration in part because of its diplomatic status. Negotiations continue on
such follow-on components of ECFA regarding trade in goods and services. The MA
administration has said that the ECFA will serve as a stepping stone toward trade pacts
with other key trade partners, which Taiwan subsequently launched with Singapore and
New Zealand. 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. Taiwan's population is aging quickly, with the number
of people over 65 accounting for 11.2% of the island's total population as of 2012. The
island runs a large trade surplus largely because of its surplus with China, and its foreign
reserves are the world's fifth largest, behind China, Japan, Saudi Arabia, and Russia.
Three financial memorandums of understanding, covering banking, securities, and
insurance, took effect in mid-January 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. In August 2012, Taiwan Central Bank signed
a memorandum of understanding on cross-Strait currency settlement with its Chinese
counterpart. The MOU allows for the direct settlement of Chinese RMB and the New Taiwan
dollar across the Strait, which could help develop Taiwan into a local RMB hub. Closer
economic links with the mainland bring greater opportunities for the Taiwan economy, but
also poses new challenges as the island becomes more economically dependent on China
while political differences remain unresolved.

Composition of GDP:
Sector

GDP

Agriculture

2%

Service

68.2

Industry

29.8

Overview of Different economic sectors:

Taiwan has a developed capitalist economy that ranks as the 19th- largest in the world
by purchasing power parity (PPP), ranks as 18th in the world by gross domestic product
(GDP) at purchasing power parity per capita (person) and 24th in nominal GDP of
investment and foreign trade by the Republic of China (ROC) government, which commonly
referred to as Taiwan.
In keeping with this trend, most large government-owned banks and industrial firms have
been privatized. With the Technocracy-centred economic planning under Martial Law until
1987, real growth in GDP has averaged about 8% during the past three decades. Exports
have grown even faster and since World War II, have provided the primary impetus for
industrialization. Inflation and unemployment are low; the trade surplus is substantial; and
foreign reserves are the world's fourth largest.
List of Industries:

Information Technology

Agriculture

Energy

Computer and Peripheral Equipment

Security Systems & Equipments

Electronics

Iron and Steel

Banking, financial and related services

Automobile

Shipping and Transportation

Textiles

Information technology
Taiwan's information technology industry has played an important role in the worldwide
IT market over the last 20 years. In 1960, the electronics industry in Taiwan was virtually
nonexistent. However, with the government's focus on development of expertise with high
technology, along with marketing and management knowledge to establish its own
industries, companies such as TSMC and UMC were established. The industry used its
industrial resources and product management experience to cooperate closely with major
international suppliers to become the research and development hub of the Asia-Pacific
6

region. The structure of the industry in Taiwan includes a handful of companies at the top
along with many small and medium-sized enterprises (SME) which account for 85% of
industrial output. These SMEs usually produce products on an original equipment
manufacturer (OEM) or original design manufacturer (ODM) basis, resulting in less
resources spent on research and development. Due to the emphasis of the OEM/ODM
model, companies are usually unable to make in-depth assessments for investment,
production, and marketing of new products, instead relying upon importation of key
components and advanced technology from the United States and Japan. Twenty of the top
information and communication technology (ICT) companies have International
Procurement Offices set up in Taiwan. As a signer of the Information Technology
Agreement, Taiwan phased out tariffs on IT products since January 1, 2002.
Agriculture
Agriculture has served as a strong foundation for Taiwan's economic miracle. After
retrocession from Japan in 1945, the government announced a long-term development
strategy of "developing industry through agriculture, and developing agriculture through
industry". Thus, agriculture became the foundation for Taiwan's economic development,
while promoting growth in industry and commerce. In 1951, agricultural production
accounted for 35.8% of its GDP. Today, agriculture only comprises about 2.6% of Taiwan's
GDP or about US$1 billion. In 2002, farming accounted for 43.33% of the industry, with
livestock (30.02%) and fishing (26.41%) making up a significant portion of the rest. Since
its accession into the World Trade Organization and the subsequent trade liberalization,
the government has implemented new policies to develop the sector into a more
competitive and modernized green industry.
Energy
Wind turbines, such as these in Qingshui, Taichung, are part of the government's efforts to
increase sources of renewable energy.
Due to the lack of natural resources on the island, Taiwan is forced to import many of its
energy needs (currently at 98%).[54] Imported energy totalled US$11.52 billion in 2002,
accounting for 4.1% of its GDP.[55] Although the industrial sector has traditionally been
Taiwan's largest energy consumer, its share has dropped in recent years from 62% in 1986
to 58% in 2002.Taiwan's energy consumption is dominated by oil (51.8%), followed by
coal (30.4%), nuclear power (8.7%), natural gas (8.6%), and hydroelectric power

(0.3%).The island is also heavily-dependent on imported oil, with 72% of its crude oil
coming from the Middle East in 2002. Although the Taiwan Power Company (Taipower),
state-owned enterprise, is in charge of providing electricity for the Taiwan area, a 1994
measure has allowed independent power producers (IPPs) to provide up to 20% of the
island's energy needs. Indonesia and Malaysia supply most of Taiwan's natural gas needs.It
currently has three operational nuclear power plants with a fourth expected to come into
operation by the end of 2012 at a cost of NT$280 billion (US$9.65 billion).
Textiles Industry
The textiles industry of Taiwan is highly export-oriented. The export value of textiles and
apparel accounts for more than 80% of total textiles and apparel production in the recent
six years. Textiles industry's production value, manufacturer number and the employees all
reveal a decline phenomenon in the past 10 years. The production value of textiles in
Taiwan was NTD482.3 billion in 2010, down 22% from NTD615.4
Billion in 1997, the manufacturers in 2010 were reduced 1,876 units from 1997, and there
was decline in employment from the number of 285,730 in 1997 to 153,163 in 2010, down
46%.
Telecom Industry
In 2009, the total sales revenue from mobile services reached NTD154.3 billion in Taiwan,
down 5.4% yr-on-yr, and the sales revenue from fixed-line telephone business was
NTD96.8 billion, up 31$ yr-on-yr. In Taiwan, mobile business income is far more than fixedline telephone business revenue, because the number of mobile phone subscribers is bigger
than that of fixed-line telephone subscribers and the charges of mobile services is higher
than that of fixed-line telephone business.
Chunghwa telecom is the largest telecom operator in Taiwan. In 2009, its consolidated
revenue reached NTD184 billion, representing a decline of 1.47% over the same period in
2008. In 2009, the mobile services accounted for 40.27% of the business of Chunghwa
telecom, fixed-line network business 47.2%, and internet and data services 12.42%. The
revenue decline of Chunghwa telecom was primarily incurred by decreasing fixed-line
telephone business income.

Steel Industry
Taiwans steel industry turned out NT$403.58 billion worth of steel products in the second
quarter for a 4.6% growth from the first quarter or an 11% rise from last year. In May
2011, China Steel Corporation (CSC)s steel production volume dropped 1.1% month-onmonth (m-o-m) and 7.0% y-o-y to 770,653 tonnes. This came on the back of a sales drop of
4.0% m-o-m and 9.8% y-o-y to 783,000 tonnes. However, a rise in steel prices ensured that
the steelmakers sales revenue fell just 0.2% m-o-m and 2.6% y-o-y to TWD20.72bn.
Semiconductor Industry
Semiconductor market of Asia, the fastest-growing area, reached US$123.5 billion in 2007,
a 6% increase from 2006. Taiwan semiconductor industry grew 5.3% in 2007, outpaced
the worldwide average of 3.2% due to the dramatic growth of 23.6% in IC Design and 8.2%
in Packaging. decreased by 3.9%, with a 3.2% increase in foundry and a 13.4% decrease in
DRAM. Taiwan IC revenue (including design, manufacturing, packaging, and testing)
totalled NT$1,466.7 billion, a 5.3% growth from 2006, with NT$399.7 billion in design, a
23.6% increase, NT$736.7 billion in manufacturing, a 3.9% down, NT$228.0 billion in
packaging, an 8.2% up, and NT$102.3 billion in testing, a 10.7% rise.
In 2007, Taiwan IC product revenue reached NT$684.2 billion (Table 1), a 5% increase
from 2006. Memory products comprised 44.2%, down from the 52.7% of 2006 due to the
DRAM price erosion. Logic IC comprised 45.1% (38.7% in 2006), Micro component IC
5.8%, and Analog IC 4.8%. Information applications, comprising 54.5% (59.7% in 2006),
remained the largest application area. Consumer applications reached 30.6% (27.8% in
2006), and communication ICs accounted for 13.8% (11.4% in 2006). 18
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.

Overview of Trade and Commerce

The Taiwan Chamber of Commerce, also known as TCOC, is a independent, non-profit
organization of leading commercial firms, business associations, and businessmen in the
Republic of China (Taiwan).
It was founded on Sept.16, 1946 mainly to represent the interests of Chinese business
community, promote commercial development in line with government policies, and
establish international economic cooperation with other countries.
The former body of TCOC was Taiwan Commerce & Industry Economic Association in the
Japanese occupation period. After the restoration of Taiwan in 1945, the "Taiwan Commerce &
Industry Economic Association" was immediately disbanded and the association was reorganized
as the Taiwan Federation of Chamber of Commerce. On Sept.16, 1946, the first provincial
member representatives convention was convened in the Sun Yat-Sen Community Centre, Taipei,
and Mr. Lin Hsiung-Cheng was the first chairman. At that time, the Taiwan Chamber of Commerce
established.
Under the excellent leadership and joint hard work of the chairmen, and directors and supervisors
of previous terms, the chamber always maintain the objective of promoting domestic and foreign
trade, stimulating economic development, coordinating relationship between peer companies and
increasing mutual benefits. Therefore the chamber has become an important force in the society
that cannot be ignored.

Services
To fit the economic policy and to channel an outlet for business laws.
To strive for managing various business activities that government authorized and
give an impetus to modernizes the commerce.
To help businessmen to express their opinions and to protect the rights of
enterprise.
To issue Certificates of Origin and other commercial documents.
To offer all kinds of commercial consultants, mediate conflicting affairs.
To offer & study domestic & foreign trade information.
To unify all business circle to support the government's economic policy.
To sponsor the government's advertising of laws, for example: good store practice
& bar code application consulting.

10

To manage overseas visiting; receive foreign business, overseas

Chinese business people and sisterhood chamber, etc..
To select model labours; mediate the relationship between labour & management.
To sponsor members' merchandise advertising & exhibitions.
To hold members' in-job training.
To build up the website of the www.abacus.org.tw and develop the unique
Chinese Culture feature-abacus.
To publish the TCOC journal.

11

Present Trade Relations of Taiwan with India

The bilateral relations between the Republic of India and Taiwan have improved since the
1990s; India has expanded economic and strategic cooperation with Taiwan.
India has sought to cultivate extensive ties with Taiwan in trade as well as working
together over weapons of mass destruction issues, environment and fighting terrorism.
Both sides have aimed to develop ties to counteract Chinese rivalry with both nations.
The India-Taipei Association (ITA) Office has been established in Taipei since 1995 to
promote non-governmental interactions between India and Taiwan, and to facilitate
business, tourism, cultural and people-to-people exchanges.
The India-Taipei Association has also been authorized to provide all consular and
passport services. In 2002, India became the 28th nation to sign the Investment
Protection Agreement with Taiwan and in 2006; both nations established the TaiwanIndia Cooperation Council. Furthermore, Taiwan promotes trade with India as a means to
reduce the extent of their economic dependence with China.
Business Products:
The Taiwan government has been trying to strengthen economic ties with India and since
2003 has designated it as one of the target countries for investment.
India is a perfect choice since it's a fast-growth country in the region with surging demand
for electronics, including such items as computers, routers, monitors and industrial
materials such as machinery tools, moulds, or other heavy-duty machines, which all
happen to be Taiwan's forte.
Taiwan's strength lies in hardware manufacturing and design especially in the field of
ICT, green technology, machinery and auto parts. India, on the other hand, is known for its
world-famous software R&D expertise. There is certainly a reason for both sides to
combine force to boost their industries.

12

Legal Aspects of Trade in Taiwan

Business Contract
General Observation
You must state precisely the obligations of the vendor and the methods of quality control.
Law Applicable to the Contract
Taiwan did not sign the Convention of Vienna because it's not recognized as an independent
country. A foreign law can be applied: to be negotiated when writing the contract. If not it is
the Code of Commerce will apply.
Advisable Incoterms
Choose FOB or CIF, or more. For more information on Incoterms consult the website of the
International Chamber of Commerce.
Language of Domestic Contract
Chinese or English.
Other Laws Which Can Be Used in Domestic Contracts
A foreign law can be applied: to be negotiated when writing the contract. If not, the Code of
Commerce will apply.
Intellectual Property
National Organizations
In order to register a patent, a trademark or a technical design, it is necessary to present it
beforehand to The Intellectual Property Office and apply to an expert in Taiwanese patents
recognized by the authorities.
Regional Organizations
Chinese Intellectual Property Protection Association.

13

National Regulation and International Agreements

Type of property and

law

Validity

Patent

20; 12 or 10 years

Patent Act
Trademark

10 years

Trademark Act
Design

12 years.

Patent Act
Copyright

The life of the author

and fifty years after the
author's death.

Copyright Act

Legal Framework of Business

Equity of Judgments
Equal Treatment of Nationals and Foreigners
Foreigners can be guaranteed an impartial trial from the country's judicial system.
The Language of Justice
The judicial language used in the country is Mandarin Chinese, having an interpreter is
possible.
Recourse to an Interpreter
Having an interpreter is possible.
Legal Similarities
Taiwanese Law today is mainly based on the civil law system.

14

The Different Legal Codes

The Constitution of Taiwan

It is the supreme law of the land and contains 175

articles in the original text.

The Civil Code

The Civil Code regulates all aspects of trade, agency,

employment, contracts, leases, loans, mandates,
partnership, surety ship and tort.

The Code of Civil Procedures

The Code of Civil Procedure governs procedurally

all civil matters including commercial.

The Criminal Code

All criminal matters are governed substantively by

the Criminal Code

The Code of Criminal Procedure

The Code of Criminal Procedure

procedurally all criminal matters.

governs

International Dispute Resolution

Arbitration
Arbitration is a solution for settling disputes. An arbitrator is called in who has to make the
final decision.
Arbitration Law
Taiwan amended its Arbitration Law in 1998 to comply with the international standard as
defined by the UNCITRAL Model Law. Many of the important provisions of the Model Law
can be found in Taiwans Arbitration Law. Moreover Taiwan has implemented investment
guaranty agreements with 31 nations.
Appointment of Arbitrators
Parties may represent themselves or be represented by any advocate of their choice, whether or
not legally qualified.

15

Arbitration Procedure
However, where the parties have not agreed on the arbitration procedure, the rules of the
Arbitration Law shall apply. Where the Arbitration Law does not provide such rules, Taiwans
Code of Civil Procedure, or other rules deemed appropriate by the arbitration
tribunal, shall apply. The rules on service of process prescribed by the Code of Civil Procedure
shall apply in arbitration. The Arbitration Law further provides that if expressly authorized by
the parties, the arbitration tribunal may apply rules of equity when rendering its decision.

16

Import- export of Taiwan

In 2013, Taiwan's exports maintained moderate growth although they were affected by
the slower-than-expected recovery of the global economy and weak demand from the US
and the EU. Among the export products, the performance of information and
communications products, optical instruments and machinery was poorer while the
exports of goods such as electronic products, electrical and machinery products and
mineral products continued to grow. In the long run, demand from overseas markets for
Taiwan's export products, particularly consumer electronics and parts and components,
will remain stable. This will help maintain the stability of exports. On the other hand, last
year's slow export growth affected some of the investment and industrial production
activities. However, some semiconductor manufacturers saw promising market prospects
from the sustained global hot sales of consumer electronics and continued to increase
their capital investment, fuelling a sustained upbeat mood in the overall investment
climate. The fall in the prices of imported machinery and equipment as a result of a
weaker yen helped boost investment in machinery and equipment. Some Taiwan
companies have started repatriating some of their investment back to Taiwan due to
rising cost on the mainland in recent years. This also spurred local production activities in
some industries.

Import - Exports
Exports (US$ billions)

2011

2012

2013

308.3 (+12.3%) 301.2 (-2.3%) 305.5 (+1.4%)

Imports (US$ billions) 281.4 (+12.0%) 270.5 (-3.9%) 270.1 (-0.1%)

17

PESTEL Analysis of Taiwan

PESTEL stands for Political, Economic, Social, Technical, Environment and Legislative. It is
a strategic planning technique that provides a useful framework for analysing the
environmental pressures on a team or an organisation.
A PESTEL Analysis can be particularly useful for groups who have become too inwardlooking. They may be in danger of forgetting the power and effect of external pressures
for change because they are focused on internal pressures.
Political view:
Taiwan is part of Republic of China (ROC) and hence it is having democratic parties to rule
the country. Taiwan is having Democratic Progressive Party or DPP [TSAI Ing-wen];
Kuomintang or KMT (Nationalist Party) [MA Ying-jeou]; Non-Partisan Solidarity Union or
NPSU [LIN Pin-kuan]; People First Party or PFP [James Soong].
Debate on Taiwan independence has become acceptable within the mainstream of
domestic politics on Taiwan; public opinion polls consistently show a substantial majority
of Taiwan people supports maintaining Taiwan's status for the foreseeable future;
advocates of Taiwan independence oppose the stand that the island will eventually unify
with mainland China; advocates of eventual unification predicate their goal on the
democratic transformation of the mainland.
Economic view:
Taiwans economic performance is greatly dependent on its ability to export goods and
services, which in recent years have amounted to over 70% of GDP. China, the U.S., and
Europe, in that order, are Taiwans three most important trading partners. Taiwans
economic outlook is rather bleak (not hopeful). China is now Taiwans only hope to end
2011 with a decent growth rate which for the last 20 years averaged 5.2% a year.
Social & cultural view:
In summary, for about 110 years starting with Koxinga's expedition to Taiwan in 1661,
Taiwan remained an agrarian, immigrant society where the indigenous culture slowly
became marginalized.

18

Taiwans social environment laid the ground for the Nationalist government's
continuation of Chinese cultural development and modernization after retrocession. It
was on this foundation that Taiwan's cultural and educational development took off.
Technology view:
The development of science and technology requires a steady influx (an arrival of
something in great numbers) of resources. The majority of Taiwans industries are smalland medium-sized enterprises, with limited resources for R&D.
Industrial research and development has progressed from improving animal, plant and
fish

species,

to

upgrading

industrial

production

technology,

and

advancing

mechanization. However, faced with limited land and other resources, these enterprises
have, with government guidance, swiftly developed from traditional industries into
capital intensive, high-tech industries.
Environmental view:
Taiwan is developing green cities for regulating pollution rate as per government
prescribed terms and conditions. Recent development states that Taiwan has successfully
managed downsizing level of pollution by opening up green gardens, cities and etc.
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. However, the government of Taiwan has also
instituted incentive programs for companies that shall be adhere to green productivity
initiatives of the region.
Legal View:
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.

19

Consumer Electronics
Consumer electronics (abbreviated CE) are electronic equipment intended for everyday
use, most often in entertainment, communications and office productivity.
Main products include radio receivers, television sets, MP3 players, video recorders, DVD
players, digital

cameras, camcorders, personal

computers, video

game

consoles,

telephones and mobile phones. Increasingly these products have become based on digital
technologies, and have largely merged with the computer industry in what is increasingly
referred to as the consumerization of information technology such as those invented
by Apple Inc. and MIT Media Lab.
Recent Trends
The analog -to- digital conversion has introduced many new standards in audio and video,
which greatly improves the quality and affordability of the multimedia digital experience.
Further, with the proliferation of broadband, accessing the media has become easy and
rewarding for consumers. With easy access and the rich quality enabled by the digital
revolution, the following consumer electronic trends are emerging:
In-Home EntertainmentWith prices of flat-panel TVs (LCD, Plasma, and DLP) falling
more than 30 percent a year, large screen HDTVs are showing up in more and more
homes. With homes equipped with HDTVs, and high-definition (HD) content available
through broadband, terrestrial, cable, and satellite, consumers now enjoy the complete
theatre experience in the convenience of their homes. HDTVs will become more
mainstream with the imminent availability of HD content and DVD players.
Staying Connectedwithin a home and while travelling, consumers want to stay
connected. Historically, they used their laptops for accessing email and the Internet.
However, with terrestrial and mobile broadcast services for handheld devices becoming
common and broadband wireless connectivity (WiFi and WiMAX) becoming ubiquitous,
mobile devices such as cell phones, PDAs, and portable media players are being used to
access audio, video, and data. Providers of these mobile devices are constantly updating
their technology features to keep up with consumer demand.
Media and Data Convergencetraditionally, there were data-centric devices such as PCs
and PDAs and media-centric devices such as TVs and portable media players. However,
the line between them is becoming blurry because consumers are demanding products
that can handle both. The new generation of consumer gadgets must handle both media

20

and data on the same platform. Such convergence is driving many traditional data-centric
companies such as Microsoft and Cisco to enter the consumer market, creating fierce
competition for traditional consumer brands.
These trends indicate that the consumer electronics market is in a rapid evolution phase
and the manufacturers are under tremendous competitive pressure to be first-to-market
with unique and differentiated products. However, a successful product in the consumer
market quickly attracts copycat products from the competition, leading to rapid price
erosion. To stay ahead of the competition, consumer manufacturers are forced to
constantly enhance their products or support emerging technologies. For these reasons,
we are seeing a dramatic reduction in the consumer product life cycle.
Traditional design methodologies of using ASSPs or ASICs alone come with significant
drawbacks. ASSPs come with a pre-defined feature set and rarely support the
latest technology features, making it impossible for manufacturers to offer differentiated
products. ASICs have long development cycles that run counter to the short product cycle
requirements of consumer markets. Hence, new design methodologies that promote
flexibility, rapid innovation, and low initial development costs are required. For system
designers, this means using programmable logic devices (PLDs) along with ASICs or
ASSPs to provide the agility and differentiation needed to be competitive in the consumer
electronics market.

21

SWOT Analysis of Consumer Electronics Industry

Strength
High Research and development leads to low cost advantage.
Continues innovation in products and technology enables the companies to attract
customer and to compete with competitors.
Good Brand Name and efficient Services leads to customer loyalty.
Effective Supply chain which makes new product available to the customer in uickest
time.
R&D enables the companies to develop unique products.
Weakness
Companies cannot produce in bulk which makes it difficult for them to achieve
economies of scale.
New products may enter in the market but the customers may not be aware about the
same.
Opportunities
Companies can increase their market by entering new markets in domestic as well as
global level.
Providing Customized products to customer.
Threats
High Competition from domestic as well as foreign player.
Rapid Changes in technology leading to high investments.
Little product differentiation.
Continues reduction in prices by companies which results in price wars and lower
margins.

22

Porters five forces for Consumer Electronics Industry

1. Potential Entrants (Entry Threat):The potential new entrant in the electronics market is Low due to following reasons.

Huge capital requirement for a firm to enter in this segment.

Rapidly evolving technology is another entry barrier as for a new entrant; it is very
difficult to build technology advanced products right from the start as they will need
time to understand the actual evolutions in this field.

Major firms have efficiently built their supply chain and hence it will be very difficult
for a new entrant to compete with them on price.

Major players have already developed their huge brand equity which will be very
tough for a new entrant to establish in this market.

Brand loyalty to existing firms. Since brand loyalty is moderate in this sector, hence
this also imposes entry threat on new entrants.

2. The Bargaining Power of Suppliers:According to present market conditions, in electronics sector also the bargaining
power of supplier is on Low end because of following reasons.

Product differentiation is very low. Since most of the companies are developing similar
kinds of products, therefore the power is very less.; hence they have less power to
bargain.

Since there is no or very negligible switching cost, hence this again makes the supplier
power to be on lower end.

Impacts on inputs on cost:- Since in this sector by changing the inputs i.e. input
technology or other raw material, the firms cannot drastically differentiate on prices in
order to be competitive, hence this also leads to reduced in supplier power.

23

3. The Bargaining power of customers (buyers):The bargaining power of buyer is High because of following reasons.

Use of internet to get all the information: - Buyer has a power to go online and compare
the prices and features of various products online. Hence buyers are more informative
and educated regarding products and this leads to increase in their power.

Mid to High price sensitivity of buyer. Since buyer are generally very price sensitive, so
this also leads to increase in buyer power.

Feedbacks and suggestions available over internet. With era of internet, there is also
increase in buyer power as buyers can now easily read the feedbacks and suggestions
regarding the products. So they are more informed and also influence buying decisions
of other powers.

Buyer switching cost is very less; hence this also leads to increase in buyer power.

4. Threat of substitute products or services

Threat of substitutes are again from Mid to High.

Due to changing technology, there is high threat of substitute products in this industry

Buyer have huge propensity to substitute if any firm provide more technologically
advanced product.

5. Intensity of competitive rivalry

The competitive rivalry is again very High in this industry due to following reasons.

There is continuous innovation in this industry making an intense competitive rivalry.

Hence innovation leads to sustainable competitive advantage.

Powerful competitive strategy: - Every firm has a different strategy and core
competencies which make their rivalry even more intensive.

24

Acer Inc

Company History:
Called "the region's most impressive technology company" in a 1996 article in The
Economist, Acer Inc. is Taiwan's leading exporter and the world's seventh-largest
personal computer brand. The company also ranks among the world's ten biggest
manufacturers of individual components like keyboards, monitors, and CD-ROM drives,
and is America's ninth-largest personal computer producer. By 1995, the company was
producing four million PCs annually, 25 percent of them OEMs (products sold under other
companies' labels). Under the guidance of Chairman and CEO Stan Shih, Acer used
ground-breaking strategies to bounce back from a US $22.7 million loss in 1991, earning
US $205 million on sales of US $3.2 billion in 1994. Shih hoped to increase Acer's global
sales to US $15 billion by 1999, by which time the company would operate as a
"federation" of local manufacturing, assembly, and marketing units.
Business Origins
Acer's founder was born Shih Chen Jung in 1945. A shy youth, Shih blossomed at National
Chiao Tung University, where his natural math aptitude helped him graduate at the top of
his class. Shih, who later westernized his given name to Stan, earned a master's degree in
1972 and went to work as a design engineer at Qualitron Industrial Corp.
It was not long, however, before the entrepreneurial bug bit Shih; in 1976, he and several
friends founded Multitech International with a $25,000 initial investment. The new
firm started by designing hand-held electronic games, then expanded into the distribution
of imported semiconductors. Shih renamed his company Acer Inc. in 1981. The name was
derived from the Latin word for acute or sharp.

25

The company enjoyed its first international success that year with the launch of
Microprocessor, a teaching tool. The company began manufacturing PC clones-computers and components that were sold to larger companies with strong brand names-in 1983. Acer diversified vertically in the late 1980s, soon becoming "one of the most
vertically integrated microcomputer manufacturers in the world," according to Los
Angeles Business Journal.
In 1995, Fortune's Louis Kraar called Stan Shih "a fascinating combination of engineering
nerd, traditional Chinese businessman, avant-garde manager, and international
entrepreneur, with an outsize ambition and vision to match." The young CEO applied all of
these talents to his young enterprise. In stark contrast to the micromanagement,
nepotism, and profit-taking typical of Taiwanese companies, Shih established a modern,
progressive corporate culture. Although Shih's wife, Carolyn Yeh, served as the company's
first bookkeeper, the founder vowed that his three children would have to look for
jobs elsewhere. Time clocks were anathema, even in production plants. In 1984 he
established Taiwan's first stock incentive program. Within four years, 3,000 of Acer's
employees were also stockholders.
In 1981, Acer hinted at a sweeping change in strategy with the establishment of Third
Wave Publishing Corp. The term "third wave" referred to the most recent phase of the
history of Taiwan's computer industry: the first was characterized by trademark and
patent piracy, the second by clonemaking, and the third by technological innovation.
Instead of simply churning out other companies' designs, Acer began to set itself apart
from most of its Taiwanese competitors by doing its own research and development. For
example, the company developed one of the world's first Chinese language computer
systems. In 1986, Acer was second only to Compaq to introduce a 32-bit PC with an Intel
386 microprocessor.
Acer went public in 1988, having chalked up average annual growth of 100 percent from
1976 to 1988. In 1988, net profits totalled more than US $25 million.
Early 1990s Setbacks
The late 1980s brought internal and external changes that had a devastating effect on
Acer. The internal problems were completely unexpected. In 1989, Shih hired Leonard Liu
away from a 20-year career with International Business Machines Corp. (IBM), making
him president of the Acer group and chairman and chief executive officer of Acer America

26

Corp. Described in an October 1995Fortune article as "a cerebral Ph.D. in computer

science from Princeton," Liu had previously been the "highest-ranking Chinese American
executive" at
IBM. Liu's managerial style reflected his experience at "Big Blue": in contrast with Shih's
traditionally progressive corporate culture, Liu tried to centralize control of Acer. His offputting approach has been blamed for a management exodus in the early 1990s.
At the same time, the computer industry quickly matured, shifting from a high profit
margin business to a low margin commodity practically overnight. Price wars pushed
component prices down so rapidly, and a strong New Taiwan dollar made the country's
goods so expensive, that it became difficult to make a profit on the finished product.
Acer's sales rose from US $530.9 million in 1988 to US $977 million by 1990, but its
profits dropped from US $26.5 million to US $3.6 million during the same period. In 1991,
Acer posted its first ever annual loss, US $22.7 million. More than US $20 million of that
shortfall came from Acer America, which had struggled since its inception. Acer's stock
dropped to 50 percent of its initial public offering price. Shih had to sell Acer's
headquarters to make a profit in 1992.
These difficulties, however, did not deter Shih from making several expensive, and oftcriticized, expenditures during the late 1980s and early 1990s. In 1989, Acer invested US
$240 million in a joint venture with Texas Instruments and China Development
Corporation, a Taiwanese development bank. The cooperative enterprise built Taiwan's
first DRAM (dynamic random access memory) factory. Half of its output was sold to Acer,
and the other half was sold on the world market. Some industry observers ballyhooed the
project, noting a glut in the global DRAM market. Acer also expanded production capacity
at its main plant, spent US $36 million on a global marketing campaign, and made
questionable acquisitions in the United States and Germany. Financial World's Jagannath
Dubashi was skeptical that the company's investments would pay off, noting in her July
1991 coverage of the company that "this new aggressiveness seems both poorly timed
and unrealistic." She even characterized the company's bold moves as "a desperate
gamble."
At the time, Shih would have been the first to agree with such an assessment. In January
1992, he offered to resign from the company he had founded. Acer's board of directors
turned down Shih's resignation, but accepted Leonard Liu's withdrawal three months
later. By mid-year, Shih had resumed day-to-day administration of Acer and its American
subsidiary.
27

Instead of being cowed by the setback, Shih was determined to cement Acer's future in
the PC industry by transforming it from just another OEM into one of the world's
leading computer brands. He would achieve this goal via several revolutionary strategies.
New Methods Pace Mid-1990s Turnaround
In a 1995 Financial World article, Shih compared Taiwanese computer manufacturing to
Chinese restaurants, saying that "Chinese food is good, and it is everywhere, but it has no
uniform global image or consistent quality." The same was true of personal computers;
although most were made in Taiwan, they were sold under several (primarily American
and Japanese) brands, with varying levels of quality. Shih wanted Acer to be more like
McDonald's, the quintessential fast food restaurant that boasted a strong brand image and
strict quality standards.
This unique paradigm shift required a complete overhaul of Acer's production and
distribution scheme. Instead of assembling computers in Taiwan, as it had done for more
than a decade, the company began to ship components to 32 locations around the world
for assembly. Shih compared computer components like casings, keyboards, and mice to
staples like ketchup and mustard that could be shipped slowly and stored indefinitely. He
likened the motherboard, which had to have the "freshest" technology possible, to the
meat in a sandwich. It was shipped by air from Taiwan to each assembly operation. And
finally, Shih compared the CPU and hard drive to "very expensive cheese: we try to source
them locally." Shih's adoption of this unique strategy earned him the nickname "the Ray
Kroc of the PC business."
This production scheme saved on shipping costs and enabled Acer to include the most upto-date (Shih liked to call it the "freshest") technology available. In Acer-speak, "fresh"
meant innovative. Not content to rely on low-end knockoffs of other companies'
technology, Acer stayed abreast of the industry's latest developments. In 1992, it
launched a multi-user UNIX system as well as 386- and 4865x-based PCs. That year also
saw the introduction of an international service and support network, a vital element of
any successful PC business in the 1990s. In 1993, Acer unveiled a new PC that came
equipped with a RISC (reduced instruction-set computing) chip and Microsoft Corp.'s
most recent version of the Windows operating system.

28

Shih hoped to bring the "fast food" concept all the way to the retail level, so that
customers could custom-order computers with peripherals and memory capacity
specifically suited to their needs. Acer tested this concept at a company-owned retail
store in Taipei. It seemed to be as close as Acer could come to McDonald's-style service:
only two hours passed from the time a system was ordered to the time it was booted.
Shih's "global brand, local touch" strategy was closely related to the "fast food"
distribution concept. Instead of creating a series of centrally controlled foreign
subsidiaries, Acer established a network of virtually autonomous affiliates, much like a
fast food franchise system. Each of these affiliates was managed by a group of locals who
determined product configurations, pricing strategies, and promotional programs based
on national or regional preferences. The affiliate would usually have just one Taiwanese
person on staff to facilitate inter organizational communications. Sales & Marketing
Management characterized the system as a "revolutionary departure from the traditional
hierarchical model of worldwide branches and subsidiaries reporting to a head office."
Instead, it was "a commonwealth of independent companies, united only in their
commitment to a common brand name and logo."
This strategy gave each Acer affiliate the semblance of a local company, an image that
carried with it several benefits. Perhaps most important, it helped to downplay Acer's
Taiwanese roots. Despite the country's large strides in the area of quality, "made in
Taiwan" continued to carry negative connotations in the minds of many consumers. While
Shih was proud of his company's heritage, individual affiliates often found it efficacious to
de-emphasize that aspect of the business.
Globalization at Acer employed a third strategy adapted from an Asian chess-like game
called "Go." Instead of jumping directly into the world's largest and most important
computer markets, Acer conquered the surrounding markets before entering the United
States. For example, Acer established itself as the leader in less hotly contested markets in
Latin America, Southeast Asia, and the Middle East. By 1995, it was the top-selling
computer brand in Mexico, Bolivia, Chile, Panama, Uruguay, Thailand, and the Philippines,
not to mention Taiwan.

29

This combination of tactics worked quickly and well, vindicating many of Acer's
previously criticized moves. In 1993, Acer posted record profits of US $75 million; 43
percent of that year's net was generated by the DRAM joint venture, considered "the most
efficient in the DRAM industry" by some observers. From 1994 to 1995, Acer advanced
from fourteenth to ninth among the world's largest computer manufacturers, surpassing
Hewlett-Packard, Dell, and Toshiba. Total sales grew to US $3.2 billion in 1994, and net
income increased to US $205 million, as Acer America turned its first annual profit in the
1990s.
Strategies for the Mid-1990s and Beyond
In the mid-1990s, Acer began to globalize production as well as assembly, building a
keyboard and monitor plant in Malaysia in 1994. The company planned a motherboard
and CD-ROM factory for the Philippines and hoped to set up production in Argentina,
Chile, Thailand, Dubai, South Africa, Brazil, India, the People's Republic of China, and the
former Soviet Union.
In 1994, Shih unveiled a plan to "deconstruct" Acer into 21 publicly traded business units
by the end of the 20th century. Acer Inc. would continue to own anywhere from 19
percent to 40 percent of the firms' stock, but Shih hoped that their independent status
would enable the individual units to compete more effectively by facilitating
entrepreneurship, inspiring research and development, and allowing for corporate
fundraising

through

stock

and

bond

offerings.

Michael

Zimmerman

of PC

Week speculated on another possible motivation behind the plan, known internally as
"21-in-21." His June 1994 piece on Acer noted that "Separating the divisions will also
clear a path for Shih to retire and, as one observer said, 'to leave his legacy intact' by not
risking the future of his brainchild to a successor." In fact, Shih told PC Week that he
"expects to withdraw from Acer and the workforce" by 1999.
Acer Computer International, the company's Asia-Pacific distributor, had its initial public
offering in September 1994. The approximately US $55 million floatation was
oversubscribed by about 20 times. Spin-offs of Acer Peripherals, the corporation's
manufacturer of keyboards and monitors, and Acer Sertek, the Taiwanese distribution
operation, were planned for 1996. Stock in Acer America and certain Latin American
operations was slated to go on the auction block by 1997.

30

The Economist reported that Acer's revenues had increased by 75 percent from US $3.2
billion in 1994 to US $5.7 billion and that Shih hoped to increase that figure to US $15
billion by 1999 via expansion into consumer electronics like televisions and fax machines.
The article also emphasized that "Given the computer industry's history of wild swings,
Mr. Shih's success may not last forever; but his company is one of the few large ones in
developing Asia that may be able to teach western businesses more than it can learn from
them."
Products of Acer Inc
Business desktops
Acer Veriton series
Business notebooks

Acer TravelMate series

Acer Extensa series

Chrome books
Acer AC700
Acer C710
Acer C720 (2GB)
Acer C720 (4GB)
Acer C720P
Computer displays

G Series
P Series
H Series
X Series
B Series
V Series
S Series
T Series
D Series
MO Monitor TV series

31

Consumer desktops

Desktop Acer Aspire Predator

Acer Aspire Desktop series
Acer Aspire Predator series
Consumer notebooks

Acer Aspire Notebook series

Acer Aspire Timeline series
Acer Ferrari products series
Acer Iconia
Home network solutions

Acer Clear.fi
Mobile phones

Acer CloudMobile
Acer Allegro (WP8)
Acer Tempo series
Acer Liquid series
Acer beTouch
Acer neoTouch
Acer Stream
Acer E110
Acer DX
Acer F
Acer Iconia
Acer T
Acer X960

32

Netbooks

Netbook Acer Aspire One Ultra-Thin 522

Acer Aspire One series
Ferrari One
Nettops

Acer Aspire Revo

Projectors

Professional series
Home series
Travel series
Value series
Servers and storage

Acer server F1 series

Tower series: T110 F1, T115 F1, T150 F1, T310 F1, T350 F1;
Rack series: R160 F1, R180 F1, R320 F1, R360 F1, R380 F1, R385 F1, R585 F1;
Blade series: B2x285 F1, B2x280 F1, B460 F1;
Gemini series: B1170 F1, B2170 F1, B2170t, B2175 F1
Home Server Series: H340, H341, H342, Altos Easystore M2
Acer storage series
N500 F1, N1600 F1, HNAS3080, GS2040, AMS2100, AMS2300

33

Tablets

Acer Iconia Tab W5

Acer Iconia Tab series

Television]
AT Series
Other (discontinued devices)

Digital cameras
Personal digital assistants
Automotive navigation systems
Acer PICA

34

SWOT Analysis of Acer Inc

Strength

1. Acer group employs 8000 employees across the globe

2. Operational Efficiency, tight control on Overhead Costs
3. It has huge network, in around 38 countries so it works
on Economies of Scale
4. Acers aggressive price strategy, particularly suitable to a
time of economic recession

Weakness

1. Less presence in B2B market when compared to Dell or

Lenovo
2. It has limited product portfolio for midsize business
3. Market share growth is slow due to competition

Opportunity

1. Economic downturn, which favours low-price products

2. Growth of Mobile PCs in Homes in emerging markets, where
brand preferences are weaker
3. Growth into the Chinese market
4. Growth into midsize-business markets
5. Reaching large numbers of customers by targeting various
segments through multiple brands and by joint ventures in
various countries

Threats

1. Continued Price Decline in Mobile PCs, due in part to mininotebooks, tablets, Smartphones which erodes margins and
profitability
2. Dell's expansion into indirect sales
3. Samsungs entering into Computer mobile PCs
4. Increased competition due to the movement toward
disintegrated computer components

35

Structure of Consumer Electronics in Taiwan

Taiwanese government officials consider Taiwan's primary strengths to be in electronics
manufacturing. While Japan has been Asia's benchmark in electronics' R&D, design,
manufacturing, marketing, and sales, Taiwan has been strongest in all areas of computers
and in component technologies. According to a 1993 study (BCG 1994), Taiwan is
relatively weak in consumer and telecommunication products.
Taiwan developed its electronics manufacturing capabilities over the past four decades.
In the 1960s, Taiwan assembled such products as transistor radios, tape recorders, and
some transistor packaging. In the 1970s, Taiwanese firms entered the component
manufacturing business with CRTs, IC pilot production of ICs (via ERSO), electronic watch
production, and VCR magnetic drum developments. In the 1980s, Taiwan entered into
computer

manufacturing

with

United

Microelectronics

Corporation's

(UMC's)

semiconductors, the IBM-compatible PC, 256K DRAM development, color monitor

production, and establishment of Taiwan Semiconductor Manufacturing Company
(TSMC). Electronics became the number one export and Taiwan became the fifth-largest
supplier of PCs. In the 1990s, Taiwan moved into microelectronics manufacturing and
became the number one supplier of motherboards, monitors, scanners, and mice. In 1995,
Taiwan became the number three supplier of computers, with a value of $19.7 billion. In
1995, Taiwan produced $3.3 billion in semiconductors, began mass production of 16 Mbit
DRAMs, and opened four of 20 planned 8-inch wafer fab operations. Today, Taiwan is
targeting the markets for semiconductors, optoelectronics, displays, and packaging.
Taiwan's government decided to get out of electronic games and toys, considered
intellectually unhealthy for children. The shift into computers and related components
has been extremely successful. While communications electronics has remained a small
proportion of output, it is targeted as an emerging growth industry for the
future. Consumer electronics fell from 30.9% to 7.3% of Taiwan's electronics output
between 1986 and 1995; information products grew from 22.8% to 33.8% during the
same period. Related electronic components also increased from 38% to 53.4%.

36

Taiwan's Evolution in Electronics Manufacturing

Growth in Electronics Industry

37

Taiwan's Leading PC Vendors

38

Structure of Acer Inc

Organizational chart of Acer Inc

Client-server organizational structure

In order to carry out its vision of a decentralized confederation of business units, Acer
reorganized itself into a client-server organizational structure In the client server
structure, all of Acers business units and affiliated companies were expected to act as
clients or play dual client/server roles in support of other member companies. The clients
and servers were separated according to either product lines or regions. Strategic
Business Units (SBUs) were responsible for the design, development and production of
components and systems and were also responsible for OEM sales and marketing.
Regional Business Units (RBUs) were primarily Acer-brand marketing companies,
responsible for specific regional territories. They developed new distribution channels,
assembled finished products, provided support for dealer and distributor networks, and
created new joint ventures in key local markets.

39

Acer established four special functional teams (IT, logistics, customer service, and brand
management) directly from headquarters to oversee these four key functions throughout
the various business groups. The IT Steering Committee, responsible for coordinating IT
across the entire Acer Group, consists of chief information officers (CIOs) from each of
Acers business units. In addition headquarters may also assign cross-group task teams to
implement short-term projects that cut across business units.
Functions & business units of Acer computers
Acer International Services Group (AISG):

Acer Computer International (Marketing, sales and assembly of Acer brand

products in Asia, Africa, the Middle East, Australia, New Zealand and CIS countries.

AASOFT (software content development)

SERVEX (software content development)

Acer Sales and Service Group (ASSG)

Acer Sertek (marketing, sales and assembly of Acer brand products in Taiwan and

mainland China,

Acer Marketing Services (marketing, sales and assembly of Acer brand products in

mainland China)

Weblink International Inc.(channel management for computer peripherals and

software)

Vision Tech Information Technology Inc (distributor for Computer Associates

software)

HI TRUST (e-commerce security)

Acer Semiconductor Group (ASG)

Acer Semiconductor Manufacturing Inc. (design and manufacture of IC logic

chips and DRAMs)

Acer Laboratories Inc. (design and manufacture of core logic chips, multimedia

chips and I/O controllers)

Acer Testing Inc. (IC testing services)

40

Acer Technology Inc (design and manufacture of memory modules)

Taiwan Semiconductor Technology Corp (IC packaging services)

Acer Information Products Group (AIPG)

Acer Inc (design and manufacture of computer systems, components and consumer

electronics products, OEM sales)

Acer Netxus Inc. (high-speed network systems, Internet/Intranet onnection

systems)

Acer Neweb (wireless communications equipment)

Acer America Corp.(marketing, sales and assembly of Acer brand products in

North America)

Acer Europe B.V. (marketing, sales and assembly of Acer brand products in

Europe)

Acer Softech (software design)

Acer Peripheral Group (APG)

Acer Peripherals Inc. (API) (color monitors, multimedia TV, CD-ROM drives,

keyboards, scanners and mobile phones)

Acer Display Technology (ADT) (design and manufacture of plasma display panels

and LCD modules)

AMT (design and manufacture of rewriteable media for optical storage and

printers)

41

Relationship of Taiwan with Indian Trade and Commerce

General Background:
In 1942 late President Chiang Kai Shek of the Republic of China (ROC) visited India and
met with Mahatma Gandhiji, during the visit late President Chiang made a statement to
support the Indian Independence Movement. After Indias independence in 1947, ROC
assigned Mr. Luo Jialun as the first ambassador to India.
After the ROC government shifted to Taiwan in 1949, India switched diplomatic ties from
the Republic of China to the Peoples Republic of China on December 30 of the same year.
The ROC embassy in Delhi and consulates in Calcutta and Bombay were all closed
immediately. There had been only minimum trade exchanges between India and Taiwan
for over 40 years ever since the closure of our embassy.
When the Indian government initiated Look East Policy in early 1991, Taiwan and India
started to approach each other and lifted Visa restrictions. In 1995 the two countries
established representative offices in each others capitals, namely Taipei Economic and
Cultural Center (TECC) for ROC in New Delhi and India-Taipei Association (ITA) for India
in Taipei.
In June 2007, President Ma Ying Jeou of ROC visited India as presidential candidate. After
his inauguration in May 2008, Taiwan-India relationship has seen significant progress. In
2002 the two countries signed the Bilateral Investment Promotion & Protection
Agreement, in 2011 signed the Custom Mutual Assistance Agreement and Double
Taxation Avoidance agreement which have further enhanced the economic and trade
relationships in particular for both sides.
Because of mutual willingness of further cooperation, the two countries have build up
cordial and friendly relationship in areas such as economic cooperation, culture and
educational exchange, as well as exchange of high ranking officials visits in recent years.

42

Trade, commerce and investment relationships:

By the end of 2013, there are more than 70 Taiwanese enterprises have invested or set up
factories in India; the accumulated amount of investment was more than USD 1.4 billion.
The Bilateral Economic Consultation Meetings are held regularly and industrial and
commercial groups exchange visits frequently. In 2013, the bilateral trade amount was
USD 6.171 billion between India and Taiwan.

Science & technology cooperation:

The MoU on Scientific and Technological Cooperation was signed between TECC and ITA
in 2007. The continued MoU of cooperation was signed between Taiwans Academia
Sinica and Indian National Science Academy in 2012. Bilateral joint meetings and
academic seminars are held annually. 29 Indo-Taiwan joint proposals are to be carried
out in 2014.
Education communication:
The educational and academic communications between Taiwan and India had been
developed smoothly in the last several years. MoU on acknowledgement of each other's
university degrees was signed between Foundation for International Cooperation in
Higher Education of Taiwan (FICHET) and Association of Indian Universities (AIU) in
2010, which has resulted in close and frequent academic exchange and cooperation
between the two sides. As of now four Taiwan Education Centers had been set up in India
by National Tsing Hua University. They are becoming the platforms for academic
cooperation and Mandarian teaching.
Now Indian students have opportunities to study in Taiwan through Taiwan Scholarships
and Huayu Enrichment Scholarships provided by the Government of Taiwan. To
encourage enrolment of Indian students, Taiwanese universities and colleges also provide
scholarships to attract outstanding Indian students. In an average there are around 600
Indian students studying in Taiwan every year. Taiwan and Indias academic cooperation
is developing in fast paces.

43

Taiwan Economic and Cultural Center in India

General Background:
The Taipei Economic and Cultural Center (TECC) in India is the Republic of China's
(Taiwan) government representative office in India. It is responsible for promoting
Taiwan and Indias bilateral relations in the areas of the economy, trade, investment, the
media, tourism, culture, education, and science and technology. TECC in India is currently
headed by Representative Chung- Kwang Tien and has four divisions. They are
the Consular, Economic, Education, and Science and Technology. Each division is
responsible for managing related aspects of the bilateral relationship and advancing
mutual interests between Taiwan and India.

The Consular Division issues passports to ROC citizens and visas to foreigners who wish
to travel to Taiwan. The Economic Division promotes the economic and trade relations
between Taiwan and India through contacts with the government and the private sectors
in India. The Education Division promotes educational communication with India. Taiwan
has always patronized higher education and introduced The Taiwan Fellowship
program for Indian Scholars through which there is swift flow of knowledge between
both countries. The Science and Technology Division aims to boost the bilateral and
multilateral scientific exchanges and activities. This Division is also actively prompting
and bridging the cooperation amongst scientists, institutes and universities of Taiwan and
India.

44

Policies and Norms of Taiwan for Trade

IMPORT POLICIES
Tariffs
When Taiwan became a WTO Member in January 2002, the authorities implemented
tariff-rate quotas (TRQs) on small passenger cars, three categories of fish and fish
products, and a number of agricultural products. On January 1, 2007, in accordance with
its WTO commitments, Taiwan made additional tariff cuts and increased TRQ amounts on
these products. For example, the commodity tax on small passenger cars dropped from 35
percent to 30 percent (which is waived for electrical cars until 2014 in an effort to
promote energy conservation). Beginning January 2011, Taiwan fully eliminated TRQs on
small passenger cars. Taiwan maintains Special Safeguards (SSGs) for a number of
agricultural products covered by TRQs. SSGs, which are generally permitted under Article
5 of the WTO Agreement on Agriculture, allow Taiwan to impose additional duties when
import quantities exceed SSG trigger volumes or import prices fall below SSG trigger
prices. Because Taiwan previously did not import many of these products, SSG trigger
volumes are relatively low. Over the last few years, Taiwan has imposed SSG provisions
on poultry imports and other products, including types of offal.
U.S. industry continues to request that Taiwan lower tariffs on many goods, including
large motorcycles, wine, canned soups, cookies (sweet biscuits), snack foods, vegetable
juices, potato and potato products, and various fruits and vegetables.
Import Controls
Taiwan has eliminated more than 99 percent of its import controls, but 107 product
categories still face import restrictions, up from 71 product categories in 2008. Of these
107 categories, 21 require import permits from the Board of Foreign Trade, and 86
categories are prohibited. Most of the requirements reportedly are based on public health
and national defence concerns.
The Economic Cooperation Framework Agreement includes early harvest lists of 267
goods permitted to enter Taiwan from the PRC with tariff reductions and exemptions. The
early harvest lists will be phased in over three years starting on January 1, 2011, with the
goal of eliminating tariffs on all of the 267 items at the end of the three-year period.
Taiwan still retains import bans on more than 2,000 products from the PRC.

45

Agriculture and Fish Products

Prior to joining the WTO, Taiwan banned or restricted imports of 42 agricultural and fish
items. In January 2002, Taiwan eliminated restrictions on the importation of 18 of these
categories and implemented tariff rate quotas (TRQs) on the remaining 24 items. In
October 2002, market access for rice was changed from a minimum market access regime
to a TRQ. On January 1, 2005, Taiwan eliminated TRQs on four products of interest to the
United States, including chicken meat, poultry offal, and pork bellies and offal. In February
2005, Taiwan unilaterally eliminated sugar from its TRQ. At the end of 2007, Taiwan
phased out TRQs for persimmon, mackerel, carangid, and sardines. Currently, 16
agricultural products are subject to TRQs.
Rice
Upon accession to the WTO in 2002, Taiwan committed to lift the ban on rice importation
and opened up an import quota of 144,720 metric tons on a brown rice basis under a
special treatment regime. Starting in 2003, Taiwan shifted its rice importation from a
special treatment regime to a complex TRQ system that includes a ceiling price
mechanism. After the United States and other WTO members raised objections to
Taiwans method of quota allocation, Taiwan subsequently agreed that its public sector
import quota would be allocated based on a country-specific quota (CSQ) regime, with the
U.S. quota accounting for the largest share at 64,634 metric tons -- valued at
approximately $50 million (based on trade flow estimates) at current world prices
Wood Products
The issue of counterfeit U.S. industry-associated wood certification stamps noted in the
2010 National Trade Estimate has largely been resolved through an education campaign
conducted by importers of U.S. wood products to familiarize local builders and architects
with legitimate certification stamps. The U.S. wood industry also plans to establish an
association office in Taiwan in 2011, which will allow for even closer monitoring of this
issue. Revisions to Taiwans building and fire codes in 2008 resolved outstanding issues
for general construction lumber, improving market access for U.S. exports. With regard to
heavy timber, however, the United States continues to engage with Taiwan authorities to
encourage adoption of fire codes consistent with those in the United States.

46

Automobiles and Motorcycles

Although the Ministry of Transportation and Communications (MOTC) opened most
expressways to large motorcycles with engine displacement of 550cc or more in 2007, the
MOTC subsequently asked the Directorate General of Highways (DGH) in 2009 to study
further the feasibility of opening highways to those motorcycles. Following completion of
the study, the MOTC concluded that opening highways to large motorcycles would not be
appropriate. MOTC continues to restrict motorcycles with engine displacement of over
550 cc from Taiwan's highways.
EXPORT SUBSIDIES
Taiwan provides incentives to industrial firms in export processing zones and to firms in
designated Emerging industries. Taiwan has notified the WTO of these programs.
INTELLECTUAL PROPERTY RIGHTS (IPR) PROTECTION
Taiwan generally provides strong IPR protection and enforcement. However, rights
holders continue to express concern regarding: infringement of copyrighted material on
the Internet; illegal textbook copying on and around university campuses; inadequate
protection for the packaging, configuration, and outward appearance of products (trade
dress); and the continued availability of counterfeit pharmaceuticals in Taiwan. The
importation and transhipment of counterfeit products from China is also a problem, as
well as the collusion of some Taiwan companies in supplying components to mainland
factories producing Shanzhai counterfeits (e.g. mobile phones, netbooks, and other
electronic devices). Taiwan also needs to provide an effective system to address patent
issues expeditiously in connection with applications to market pharmaceutical products.
Piracy on the Internet remains a serious IP enforcement concern in Taiwan. In April 2009,
the Legislative Yuan amended the Taiwan Copyright Law to require Internet service
providers (ISP) to undertake specific and effective notice-and-takedown actions against
online infringers to avoid liability for the infringing activities of users on their networks.
Rights holders expect to reach agreement on a "code of conduct" with ISP operators for
implementation of the new ISP law regulation.

47

In January 2010, the Legislative Yuan passed an amendment to the Copyright Collective
Management Organization Act and an amendment to article 37 of the Copyright Law.
Copyright collection groups complained that both amendments, which require a single
portal and a joint tariff rate for fee collection, and exempt secondary public broadcasting.
Users from criminal liability, weaken copyright owners' ability to collect remuneration for
the use of their works.
Medical Devices
The medical device industry has expressed concern regarding pricing policies that
currently specify a Single purchase price for all medical devices that treat the same
indication. This policy does not take into account difference in quality and effectively
subsidizes lower-cost devices while underpaying for high-tech, higher quality devices,
discouraging the introduction of these devices into the Taiwan market.
SERVICES BARRIERS
Banking Services
Foreign banks may set up representative offices, branches, and subsidiaries in Taiwan.
Foreign-invested banks in Taiwan are accorded national treatment. Foreign entities may
acquire up to 100 percent equity in Taiwan banks, subject to certain requirements.
Securities Services
Foreign securities firms may set up representative offices, branches, and subsidiaries, and
Taiwan securities firms are not subject to any foreign ownership limit. In general, asset
management business requires a securities investment trust enterprise (SITE) license
and/or securities investment consultant enterprise (SICE) license. Both SITEs and SICEs
are allowed to raise and sell offshore funds, or a fund established outside of Taiwan.
Neither SITEs nor SICEs are subject to any foreign ownership limit.
Insurance Services
Taiwan allows foreign insurance firms to set up representative offices, branches, and
subsidiaries. Taiwan also allows foreign insurance firms to merge with or acquire local
companies. Foreign insurance firms in Taiwan may engage in life, non-life, and reinsurance businesses.

48

Telecommunications Services
The National Communications Commission (NCC) is an independent agency modeled
after the U.S. Federal Communications Commission which regulates Taiwan's
telecommunications and broadcasting sectors, and supports the development of these
industries. In 2008, the NCC began accepting and reviewing license applications when
submitted, rather than on a quarterly basis. In addition to completing NT$35 billion ($1.1
billion) of new broadband network construction ongoing since 2003, the NCC in July 2007
issued six regional licenses to Worldwide Interoperability for Microwave Access (WiMax)
operators. Three WiMax operators began services in 2009 . A total of six are in operation
as of 2010, a situation that will help break the dominance of the telecommunications
network by Chunghwa Telecom (CHT),the legacy carrier still partially owned by the
Ministry

of

Transportation

and

Communications

and

Taiwan's

largest

telecommunications firm with approximately half of the market.

Despite these advances, the agency has been criticized for demanding that service
suppliers reduce fees, causing a decrease in infrastructure investment by firms. NCC has
been ineffective in integrating Telecommunications and broadcasting regulations, causing
Taiwan's telecommunications industry to fall behind in an era of digital convergence. For
example, current regulations prevent Taiwan's principal fixed-line phone company, CHT,
from running multimedia-on-demand (MOD) programs, and restrict another primary
mobile phone operator, Taiwan Mobile Co., from acquiring a cable television multisystem
operator. In addition, existing fixed-line operators report that they still face difficulties in
negotiating reasonable interconnection arrangements at technically feasible points in the
network of the dominant carrier, CHT.

49

Import Export Policy of India

Import Restrictions

Control over the import of goods into India is exercised by the Import Trade Control
Organization, which functions under the ministry of Commerce. This organization is
supervised by the Director General of Foreign Trade stationed at New Delhi, who is
assisted by Additional and Joint Directors General and by other licensing authorities at
various centers. Current import policy, valid from April 1992 to March 1997, is embodied
in the Export and Import Policy book out by the Director General of Foreign Trade. Some
salient features of the import restrictions are as follows:
1. Goods may be imported freely without any restriction unless regulated on grounds of
public policy or listed in the negative list of imports. The negative lists comprise
prohibited, restrictive list of imports. The negative lists comprise prohibited, restricted
and canalized items:
a. The importing of prohibited items is banned;
b. The importing of restricted items is permitted under specific license, or in accordance
with a public notice conveying a general schedule;
c. Canalized items can be imported only through designated public sector agencies, such
as the Indian Oil Corporation and the State Trading Corporation. However, the central
government may grant licenses to others to import any canalized goods.
The negative list of import is under constant review; it is important to check the current
list at the time of import.
2. The import of consumer goods and durables continues to be restricted (with exceptions
for Specific items).
3. The import of capital goods machinery has been liberalized and is generally allowed
without license. Second hand capital goods are also allowed, subject to certain conditions.
4. Special licensing schemes permit the import of capital goods required for export
production either duty-free import of inputs required for export production.

50

5. The import of gold and specified items of consumer goods is also permissible under
special import licenses issued to certain categories of exporters on the basis of either the
net foreign exchange earnings or the FOB value of physical exports.

Customs duties

Customs duties are levied at specific percentage ad valorem, specific amount per unit of
quantity or both, depending on the classification of the imported goods in the Customs
Tariff Act.
Duty is waived or a concessional duty rate is permitted for export into India of capital
goods under the Export promotion Capital Goods (EPCG) Scheme.
Antidumping duty provisions have been invoked in some cases. Indications are that they
may be applied more actively where availability of imports in India at lower price that
that prevailing in the exporting country is likely to cause significant harm to the domestic
industry.

Documentation Procedure of Import

The rules and procedures for imports are contained in the Handbook of Procedures Imports and Export Promotion, which is issued from time to time by the Director General
of Foreign Trade. Import licenses are issued in duplicate and market for customs and
exchange control purposes, respectively. It is important that the correct quantity,
description and value of the goods be properly recorded on the license and exporter's
invoices, because failure to do so could lead to protracted delays in the clearance of goods
and litigation. Every invoice must be signed. Invoices should normally be prepared on
FOB terms, and a freight note should be attached, since in the absence of documentary
evidence of the amount payable for freight and insurance, Indian customs adds 10 percent
to the invoice price in arriving at the value for imposing import duty. Where an import
license is required, no letter of credit may be opened or remittance made to a foreign
country for imports unless the importer is in possession of a valid import license marked
for exchange control purposes.

51

Settlements of Bills

The Government certain mention conditions for exchange settlement of bills & control
related to exports below the authority of the FER Act 1973 (Foreign Exchange
Regulation). For normal Commercial Exports to all Countries except Bhutan & Nepal, the
exporters are required to complete the GR Form in the duplicate. The GR form covers
exports not made by post.
With few exceptions, all exports must be declared on the appropriate form and the
exporter's code number as assigned by the Reserve Bank of India must be shown on the
form.
The Payment Provision is Sight Draft, Shipment on Consignment, Letter of Credit & Time
Draft. For export proceeds settlement time limit that is the amount representing the full
export value of the goods is 6 months. A highest of 15 Months is allowed for exports to
Indian owned warehouses abroad.
Documents: Documents which are required for exports:

GR Form

Export License

Export Declaration

Customs Invoice

Customs Entry Form

Certificate of Origin

Commercial Invoice

Air Waybill or Bill of lading

There are some special documents may be needed depending on the Destination or type
of product. The some export products may needed a quality control inspection certificate
from the export inspection agency. Some food & Pharmaceutical may require a Sanitary or
Health certificate for the purpose of export.

52

Export License

An Export License is a one types of document which is issued by Appropriate Licensing

agency after the when an exporter is allowed for the transport of his product in the
foreign market. After a careful review of the facts nearby the given export transaction
license is issued.
Main Export License is depends on destination port as well as on nature of goods to be
transported.
Thus, being an exporter it is required to decide whether the goods or product to be export
license or not. While making the resolve one must consider the following necessary
points:

Where are you Exporting?

What are you exporting?

Who will receive your Items?

What will your Items will be used?

Highlights of Indian Foreign trade Policy (2009- 2014)

26 new markets have been added under Focus Market Scheme. These include 16 new
markets in Latin America and 10 in Asia-Oceania.
The incentive available under Focus Product Scheme has been raised from 1.25% to
2%.
A large number of products from various sectors have been included for benefits under
FPS. These include Engineering products such as agricultural machinery, sewing
machines, clocks and watches, railway locomotives etc, Plastic, Jute and Sisal products,
Technical Textiles, Green Technology products and certain Electronic items.
A common simplified application form has been introduced.
To aid technological up gradation of export sector, EPCG
Scheme at Zero Duty has been introduced. This Scheme is available for engineering &
electronic products, basic chemicals & pharmaceuticals, apparels & textiles, plastics,
handicrafts, chemicals & allied products & leather products.
Income Tax exemption to 100% EOUs and to Software Technology parks.
To neutralize duty incidence on gold Jewellery exports, it has now been decided to
allow Duty Drawback on such exports.
53

 A new facility to allow import on consignment basis of cut & polished diamonds for the
purpose of grading/ certification purposes has been introduced.
To reduce transaction and handling costs, a single window system to facilitate export of
perishable agricultural produce has been introduced.
Export of tea has been covered under Vishesh Krishi and Gram Udyog Yojana Scheme
benefits.
Time limit of 60 days for re-import of exported gems and jewellery items, for
participation in exhibitions has been extended to 90 days.
Leather sector shall be allowed re-export of unsold imported raw hides and skins and
semi finished leather from public bonded ware houses, subject to payment of 50% of
the applicable export duty.
EOUs will now be allowed to procure finished goods for consolidation along with their
manufactured goods, subject to certain safeguards.
EOUs have been allowed to sell products manufactured by them in Domestic Tariff
Area upto a limit of 90% instead of existing 75%.
Payment of customs duty for EO shortfall under Advance Authorisation / DFIA / EPCG
Authorisation has been allowed by way of debit of Duty Credit scrips. Earlier the
payment was allowed in cash only.
Transit loss claims received from private approved insurance companies in India will
now be allowed for the purpose of EO fulfillment under Export Promotion schemes. At
present, the facility has been limited to public sector general insurance companies
only.
To facilitate duty free import of samples by exporters, number of samples has been
increased from the existing 15 to 50.
Greater flexibility has been permitted to allow conversion of Shipping Bills from one
Export Promotion scheme to other scheme. Customs shall now permit this conversion
within three months, instead of the present limited period of only one month.
To reduce transaction costs, dispatch of imported goods directly from the Port to the
site has been allowed under Advance Authorisation scheme for deemed supplies. At
present, the duty free imported goods could be taken only to the manufacturing unit of
the authorization holder or its supporting manufacturer.
Disposal of manufacturing wastes / scrap will now be allowed after payment of
applicable excise duty, even before fulfilment of export obligation under Advance
Authorisation and EPCG Scheme.

54

 Regional Authorities have now been authorized to issue licenses for import of sports
weapons by renowned shooters, on the basis of NOC from the Ministry of Sports &
Youth Affairs.

55

Trade barriers for Taiwan

Tariff barriers
Two-column tariff based on the Harmonised System. Most duties are ad valorem (per
cent), based on the GATT Valuation Code - approximately CIF value (Incoterms 1990).
Preference is granted to countries having trade agreements or diplomatic relations with
Taiwan.
The Ministry of Finance administers customs regulations and procedures in Taiwan.
Goods imported into Taiwan are liable to ad valorem (per cent) duty determined and
calculated on the transaction value. Tariff rates vary depending on the product. Specific
customs regulations also apply to travellers coming into and out of Taiwan.
Non-tariff barriers
Imports may be affected either under the Automatic Approval system or the Covering
Licence system. Some applications for Automatic Approval items must be made to
authorised banks; other items may be permitted entry without a licence. Applications for
Covering Licence items must be made to the Board of Foreign Trade. Licences are valid for
six months.
Permitted imports are classified into two categories:
Controlled - includes government monopoly controlled items, ie. petroleum; strategic
and military supplies; and imported items, which compete with the produce of emerging
domestic industries
Permissible - all other items
All importers, except those authorised to import on a deferred payment basis, must make
a deposit with a foreign exchange bank within 14 days after approval of their import
licence. The current rate of deposit is 10 per cent of the CIF value (Incoterms 1990).

56

PRODUCT CERTIFICATION, LABELLING AND PACKAGING

Labelling
Outer containers should bear consignee's mark and port mark and should also be
numbered (to accord with packing list) unless their contents can be otherwise readily
identified.
Labelling regulations are applied to all kinds of packaged foods and pharmaceuticals. If a
foreign language is used in the label prepared by the manufacturer in the country of
origin, major ingredients, valid date, manufactured date, product name, weight/size,
name and address of the importer is required.
Cigarettes must indicate the date of manufacture and display a generic health warning.
Most textile goods are now subject to mandatory labelling requirements; importers
should be contacted for specifics.
Square recycle logos are required to be on recyclable containers, including those which
are made from glass, plastic, iron, aluminium, paper, and aluminium foil, imported to
Taiwan. For plastic containers, triangle recycle logos should also be shown.
Packaging
Goods should be securely packed, having due regard to the nature of the goods, means of
transport and likely climatic conditions during transit and delivery.
Special certificates
Live animals, animal products, plants and plant products require health certificates issued
by an approved authority in the country of origin (see 'Public health requirements') - two
copies required.
Old newspapers require a sanitary certificate - two copies.
Old jute, feather waste, cotton rags, etc. require a fumigation certificate - two copies

57

DOCUMENTARY REQUIREMENTS
Commercial invoice
No prescribed form and a minimum of four copies required. The invoice must include:
import licence number
names of seller and buyer
marks and number on each package
number of packages
full description of contents (including gross and net weights)
quantity
dimensions
unit price
total price (whether FOB, C&F, or CIF (Incoterms 1990))
commissions
Goods in different licensing categories must be shown separately. Method of shipment,
packing, date and port of shipment should also be included.
Pro-forma invoice
Two copies are required to obtain import licence. See 'Methods of quoting and payment'
regarding quotations. The invoice must include:
a full description of the goods
including brand name (if any)
method of packing
quantity
unit price
freight
insurance and other charges
method of shipment
date and port of shipment
terms of payment
methods of inspection and/or survey
name and address of letter of credit beneficiary and any other details as requested by
the importer

58

Certificates of origin
Two copies, when requested. It is a requirement to register pharmaceuticals, cosmetics,
medical instruments, food additives and agricultural chemicals (see 'Public health
requirements').
Public health requirements
Food additives, medical instruments, drugs and pharmaceutical products require prior
registration with, and approval from, the Department of Health, Executive Yuan.
A certificate of origin is required to register cosmetics, pharmaceuticals, food additives,
agricultural chemicals and some medical instruments.
Live animals, animal products, plants and plant products require health certificates issued
by an approved authority in the country of origin. In Australia this is usually the
Australian Quarantine and Inspection Service (AQIS) or the Department of Agriculture.
The use of DDT on agricultural crops or as a household pesticide has been banned.

59

Potential for Import Export in India

Among the "BRICs" (Brazil, Russia, India and China), India is the closest country to Taiwan
besides China. In addition to its geographical proximity, India offers vast labor, a stable
economy and an advanced ICT investment environment. It is the 13th largest export
market for Taiwan. India ranks higher, or has surpassed the UK, Australia, Italy, Canada,
France, Brazil and Russia, and offers much better trade growth than these other trade
partners.
According to a report by the Economist Intelligence Unit (EIU), India will surpass China to
become the world's fastest growing economy by 2018. In addition, the World Economic
Outlook report by the International Monetary Fund (IMF) estimates India's economic
growth rate to be 7 per cent, way above than the 2.1 per cent of the developed countries.
The report ranked India as the world's second largest market. India and China, as per the
report, are the two major engines for global economic growth.
India has become an important market for Taiwan. Although Taiwan entered the Indian
market later than the Japanese and Koreans, it has still managed to achieve an incredible
high rate of growth (59 per cent and 28 per cent in 2007 and 2008, respectively).
Trade between Taiwan and India (in INR)
\Year 2009-2010
EXPORT

2010-2011

2011-2012

2012-2013

2013-2014

881,271.49 1,047,916.94 1,598,615.65 1,655,512.26 1,205,668.27

18.91

%Growth

52.55

3.56

-27.17

India's Total Exp 84,553,364.3 114,292,192. 146,595,939. 163,431,883. 189,973,019.

ort
8
18
96
77
25
%Growth
%Share
IMPORT

1.04

11.48

16.24

0.92

1.09

1.01

0.63

45.80

27.58

-6.24

13.06

136,373,554. 168,346,695. 234,546,324. 266,916,195. 271,735,961.

76
57
45
69
02

%Growth
%Share

28.26

1,237,084.18 1,803,677.66 2,301,149.07 2,157,624.16 2,439,370.80

%Growth
India's Total
Import

35.17

0.91

23.45

39.32

13.80

1.81

1.07

0.98

0.81

0.90

60

Import from Taiwan

The worlds seventeenth-largest exporter, Taiwan shipped US$305.1 billion worth
of products around the globe in 2013. That figure represents 1.7% of worldwide exports
estimated at $18.1 trillion.
Taiwans Top Import Partners
Below is a list of Taiwans top 15 trade partners that imported the most Taiwanese
shipments by dollar value during 2013. Also shown is each import countrys percentage
share of total exports from Taiwan.
China: $81,705,889,000 (26.8% of total Taiwanese exports)
Hong Kong: $39,396,683,000 (12.9%)
United States: $32,587,304,000 (10.7%)
Singapore: $19,495,384,000 (6.4%)
Japan: $19,201,766,000 (6.3%)
South Korea: $12,067,057,000 (4%)
Philippines: $9,766,294,000 (3.2%)
Viet Nam: $8,918,703,000 (2.9%)
Malaysia: $8,176,269,000 (2.7%)
Thailand: $6,325,876,000 (2.1%)
Germany: $5,619,829,000 (1.8%)
Indonesia: $5,142,959,000 (1.7%)
Netherlands: $4,443,362,000 (1.5%)
United Kingdom: $4,318,424,000 (1.4%)
Australia: $3,763,506,000 (1.2%)
Highest Value Taiwanese Export Products
Below are the 20 highest value export products shipped from Taiwan in 2013. Shown
within brackets is the 6-digit harmonized tariff system code for each item.
Electronic integrated circuits: US$54,156,924,000 (HTS code 854239)
Other petroleum oils: $18,494,174,000 (271019)
Other optical devices, appliances and instruments: $8,224,151,000 (901380)
Optical appliance and instrument parts: $7,588,514,000 (901390)
Electronic integrated circuits as memories: $7,288,942,000 (854232)

61

 Photosensitive semiconductor devices and solar cells: $5,856,807,000(854140)

Printed circuits: $5,789,977,000 (853400)
Cell phones and Smartphones: $5,747,430,000 (851712)
Computer parts and accessories: $4,996,172,000 (847330)
Solid-state data storage devices: $4,638,948,000 (852351)
Liquid crystal device indicator panels: $3,829,258,000 (853120)
Light petroleum oils: $3,772,550,000 (271011)
Mobile phone parts: $3,057,507,000 (851770)
P-xylene: $2,415,051,000 (290243)
Acrylonitrile butadiene styrene chemicals: $2,264,459,000 (390330)
Iron or steel bolts and screws: $2,018,615,000 (731815)
TV cameras, digital cameras, video recorders: $1,929,978,000 (852580)
Other motor vehicle parts: $1,868,227,000 (870899)
Bicycles and other cycles: $1,749,182,000 (871200)
Articles of plastics: $1,703,616,000 (392690)
World exports to Taiwan in 2013 totalled $305.8 billion and imports in 2013 totalled
$268.8 billion. Taiwans major export partners are China, Hong Kong, the United
States, Japan and Singapore.

62

Potential for import export in India

Information technology today has become an integral part of home improvement. It

can make a huge difference to the way your interiors and outdoors look and express.
The Indian Information technology industry, despite an overall slowdown of the
economy, continues to grow at a healthy 15% per annum.
The Indian Information technology industry is divided into organized and unorganized
sector.
The organized sector comprises of approximately 16 players. The current size of the
organized sector is about Rs.2625 Crores.
The unorganized sector accounts for 70% of the total industry bearing testimony of the
attractive returns from this sector. The size of the unorganized sector is approximately
Rs.6125 Crores.
Revenue earning industry - excise mops up over Rs. 350 crores annually from the
organized sector itself.
With proper planning and better quality control our exports (presently insignificant)
contribution can significantly increase.
Information technology as a product segment has grown to a sizeable chunk today at
340 Millions Square meters production per annum. However, the potential seems to be
great, particularly as the housing sector, retail, IT & BPO sectors have been witnessing
an unprecedented boom in recent times.

63

Future Opportunities of Business

While the Electronics sector in India is currently small, there are several advantages that
India offers that can be effectively leveraged to achieve higher growth. These can be
categorised under three heads:
o Manpower
o Market Demand
o Policy and Regulatory Support
Man Power
India produces over 500 PhDs, 2,00,000 engineers, 3,00,000 non-engineering
postgraduates and 21,00,000 other graduates each year. The Indian Institute of
Technology and The Indian institute of Management produce graduates and post
graduates with best-in class skills and capabilities in technical and management fields.
Indias capabilities in IT and engineering make it an attractive location for sourcing
engineering service.
Main challenges for Taiwanese organizations:
The main challenges Taiwanese firms face when tapping into the Indian market are the
cultural and linguistic gap and the differences in business practices and solutions.
Some suggestions for Taiwanese exporters who are willing to sell in India:
1. Find a proper agent or consignee
2. Set pricing policy according to Indian consumers buying habits
3. Develop niche products for the Indian market.
Free trade agreement
India and Taiwan have begun efforts on a feasibility study for the opening of formal talks
on a free trade agreement (FTA). Taiwans Chung-Hua Institution for Economic Research
and the Indian Council for Research on International Economic Relations are in
cooperation assessing the possibility of a Taiwan-India FTA.
The two sides will wait for the result of the study before deciding when to begin FTA
conciliation. India and Taiwan have already signed an investment promotion and
protection agreement and are likely to seal three more deals on double taxation
avoidance, temporary duty-free admission of goods, and customs cooperation.

64

Trade forecast
India and Taiwan are estimated to double bilateral trade to US$10 billion by 2015
through food processing, information and communication technology and electrical
engineering tie-ups.
Taiwan expects bilateral trade to double to US$10 billion in the next five years from over
US$4 billion in 2009. In 2010 (calendar year), Taiwan expected bilateral trade between
the two nations to touch US$6 billion (data has not been verified). Presently, the
mainstream of Taiwanese investments in India is in the information and communication
technology sector.
Currently, major Taiwan-based ICT companies like Acer, BenQ, DLink and Transcend have
a support of operations in India. In the last 10 years, Taiwanese companies have invested
about US$1 billion in India.
Taiwanese also invited Inviting Indian airlines to operate direct flights between Delhi to
Taipei, so that it would not only help in enhancing trade and investment, but would also
help in building a people-to-people interface. Presently, none of the Indian airlines have
direct flights between the two countries.

65

Findings

Total area of Taiwan is 36,000 square kilometers.

Total population of Taiwan is 23 million

Population Growth Rate of Taiwan was 0.27% in 2013, Birth Rate was 8.61
births/1,000 population (2013 est.) while Death Rate was 6.83 deaths/1,000
population (2013 est.)

GDP growth rate was 2.19% in 2013. Service sector contributed 68.2% while
Industrial Sector contributed 29.2% and Agriculture contributed 2%.

Import of Taiwan were 270.1 (US$ billions) which decreased 0.1% compared to
2012 while the exports were305.5 (US$ billions) which increased 1.4% compared
to 2012.

Acer Inc provides employment to 8000 people across the globe and functions in 38
countries across the world.

Compaq is the leading PC vendor in the world while Acer is at 10th Number.

Acer Inc has different Companies in its Group which are engaged in production of
IT Products or Facilitating the Sales and Marketing of the same.

Taiwan had tough import controls but it eliminated more than 99 percent of its
import controls, but 107 product categories still face import restrictions. Of these
107 categories, 21 require import permits from the Board of Foreign Trade, and 86
categories are prohibited.

All goods imported in Taiwan are liable to custom duty charge, such charges are
calculated on the price of the product and this charge differs from product to
product.

Import and export of Taiwan to India has shown continues increase across the last
few years.

Taiwans Export to world in 2013 totaled $305.5 billion and imports in

2013 totaled $270.1 billion. Taiwans major export partners are China, Hong Kong,
the United States, Japan and Singapore.

Rapid Growth in IT sector of India and around the world will encourage exports of
Taiwans IT industry.

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Strategic suggestions for trade and commerce by Taiwan in India

Reduction in Tariff and Non- Tariff Barriers which are more as compared to other
countries of the world.
As India is having strong man power in IT sector it can merge its resources with the
well developed IT Industry of Taiwan.
Taiwan Electronics, Textile and Semiconductor industry have shown good potentials
in last few years, so India can think upon escalating its investment in such sectors.
Taiwan should focus on creating more bilateral free trade agreements.
Taiwans Electronics Companies should focus more on B2B Business.

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Conclusion
The study was undertaken with an objective to understand the Policies, Norms and
structure of a Country and also of a particular industry in the same country and also to
determine the relation of the particular country and company with the other countries in
the world.
To conduct this study Taiwan was selected along with the consumer electronics industry.
Acer Inc a Giant Consumer Electronics Company of Taiwan was selected to study its
Functioning in Taiwan as well as across the world.
Taiwan has a strong consumer electronics industry which plays a major role not only in
the economy of Taiwan but also in the entire consumer electronics industry of the world.
Acer Inc is one of the key player in Taiwan consumer electronics industry and also makes
major contribution in the exports of Taiwan.
Taiwan before becoming the member of WTO had a very stringent Import Export policy
but after becoming the member of WTO in 2002 Taiwan liberalized its import Export
policy by reducing Tariff and Non Tariff Barriers.
As the IT industry of world is growing rapidly and as Taiwan is having a strong base in
Electronics industry it can attract other countries in the world to invest in its IT industry.

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Bibliography
Websites:
Taiwan Country Information Retrieved 19 June, 2014
Website: - http://eng.taiwan.net.tw/m1.aspx?sNO=0000202
Demographic Profile Retrieved 20 June, 2014
Website: - http://www.indexmundi.com/taiwan/
SWOT Analysis of Consumer Electronics Industry Retrieved 30 June, 2014
Website: - http://www.wikiswot.com/SWOT/4_/electronics_industry.html
SWOT Analysis of Acer Inc Retrieved 2 July, 2014
Website: - http://www.mbaskool.com/brandguide/it-technology/4334-acer.html
Structure of Consumer Electronics Industry Retrieved 6 July, 2014
Website: - http://www.wtec.org/loyola/em/05_03.htm
Economic Policy of Taiwan Retrieved 9 July, 2014
Website: - http://www.austrade.gov.au/Export/ExportMarkets/Countries/Taiwan/Doing-business/Tariffs-and-regulations#.U8j9SpSSw7R
Taiwan and India Relationship Retrieved 12 July, 2014
Website:
http://www.roctaiwan.org/IN/ct.asp?xItem=481335&CtNode=5056&mp=277&xp1

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