Submitted by

Shariq Ejaz – 142199

Junaid Qaisar – 142039

Country Analysis
Republic of China (Taiwan)

Analysis & Strategies for Emerging Markets

Submitted to
Sir Nabeel Younas
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 Introduction:

Republic of China (Taiwan)

GDP $529.6 B (as of December 2016)
At a Glance
 GDP Growth: 1.5%
 GDP per Capita: $48100
 Population: 23.5M
 Public Debt/GDP: 31.2 %
 Unemployment: 3.9 %
 Inflation: 1.4%
 President: LAI Ching-te (2014)
 Capital and largest city : Taipei
 Monetary unit: NEW TAIWAN DOLLAR
 Literacy rate: 98.5%
 National name: TAIWAN
 National Holiday: Independence Day, October 10th, 1911

 Language: Mandarin Chinese (official)

 Religions: Buddhist 35.3%, Taoist 33.2%, Christian 3.9%, Taoist or Confucian folk religionist
approximately 10%, unaffiliated 18.2% (2016 est.)

 Ethnicity/race: More than 95% Han Chinese (including Hoklo, who compose approximately
70% of Taiwan's population, Hakka, and other groups originating in mainland China), 2.3%
indigenous Malayo-Polynesian peoples.

 Economic summary: GDP/PPP (2016 est.): $1.133 trillion; per capita $48,100. Real growth
rate: 1.5%. Inflation: 1.4%. Unemployment: 3.9%.

 Agriculture: Rice, vegetables, fruit, tea, flowers, pigs, poultry, fish.

 Labor force: 11.73 million; agriculture 4.9%, industry 35.9%, services 59.2% (2016 EST).

 Industries: Electronics, communications and information technology products, petroleum

refining, chemicals, textiles, iron and steel, machinery, cement, food processing, vehicles,
consumer products, pharmaceutical.

 Natural resources: Oil/petroleum, semiconductors, natural gas, coal, steel, computers, wireless
communication equipment, automobiles, fine chemicals, textiles

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 Exports: $310.4 billion (2016 est.): semiconductors, petrochemicals, automobile/auto parts,
ships, wireless communication equipment, flat display displays, steel, electronics, plastics and
computers.

 Imports: $239.7 billion (2016 est.): oil/petroleum, semiconductors, natural gas, coal, steel,
computers, wireless communication equipment, automobiles, fine chemicals and textiles.

Taiwan has a dynamic capitalist economy that is driven largely by industrial manufacturing and
especially exports of electronics, machinery and petrochemicals. This heavy dependence on
exports exposes the economy to fluctuations in global demand. Taiwan's diplomatic isolation,
low birth rate, rapidly aging population, and increasing competition from China and other Asia
Pacific markets are other major long-term challenges.

Following the landmark Economic Cooperation Framework Agreement (ECFA) signed with
China in June 2010, Taiwan in July 2013 signed a free trade deal with New Zealand - Taipei’s
first-ever with a country with which it does not maintain diplomatic relations - and in November
of that year, inked a trade pact with Singapore. However, follow-on components of the ECFA,
including a signed agreement on trade in services and negotiations on trade in goods and dispute
resolution, have stalled. In early 2014, the government bowed to public demand and proposed a
new law governing the oversight of cross-Strait agreements, before any additional deals with
China are implemented; the legislature has yet to vote on such legislation, leaving the future of
ECFA uncertain. President TSAI since taking office in May 2016 has promoted greater
economic integration with South and Southeast Asia through the New Southbound Policy
initiative and has also expressed interest in Taiwan joining the Trans-Pacific Partnership as well
as bilateral trade deals with partners such as the US.

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 expected to
account for nearly 20% of the island's total population by 2025.

The island runs a trade surplus with many economies, including China and the US, and its
foreign reserves are the world's fifth largest, behind those of China, Japan, Saudi Arabia, and
Switzerland. In 2006, China overtook the US to become Taiwan's second-largest source of
imports after Japan. China is also the island's number one destination for foreign direct
investment. Taiwan since 2009 has gradually loosened rules governing Chinese investment and
has also secured greater market access for its investors on the mainland. In August 2012, the
Taiwan Central Bank signed a memorandum of understanding (MOU) on cross-Strait currency
settlement with its Chinese counterpart. The MOU allows for the direct settlement of Chinese
renminbi (RMB) and the New Taiwan dollar across the Strait, which has helped Taiwan develop
into a local RMB hub.

Closer economic links with the mainland bring opportunities for Taiwan’s economy but also
pose challenges as political differences remain unresolved and China’s economic growth is
slowing. Domestic economic issues loomed large in public debate ahead of the January 2016

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presidential and legislative elections, including concerns about stagnant wages, high housing
prices, youth unemployment, job security, and financial security in retirement.

Main Sectors:
During 2016, the Main sectors contributing to GDP were Agriculture 1.9%, Industry 36.1%, and
Services Sector 62%. Total Labor force employed by each sector was 4.9%, 35.9%, 59.2%
respectively. (est. 2016)

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 strategy of "developing industry
through agriculture, and developing agriculture through industry". As such, agriculture became
the foundation for Taiwan's economic development during early years and served as an anchor
for growth in industry and commerce. Where as in 1951 agricultural production accounted for
35.8% of Taiwan's GDP, by 2013 it had been vastly surpassed and its NT$475.90 billion
accounted for only 1.69% of the GDP. As of 2013, Taiwan's agriculture was a mixture of crops
(47.88%), livestock (31.16%), fishery (20.87%) and forestry (0.09%). 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.

Although only about one-quarter of Taiwan's land area is suitable for farming, virtually all
farmland is intensely cultivated, with some areas suitable for two and even three crops a year.
However, increases in agricultural production have been much slower than industrial growth.
Agricultural modernization has been inhibited by the small size of farms and the lack of
investment in better facilities and training to develop more profitable businesses. Taiwan's
agricultural population has steadily decreased from 1974 to 2002, prompting the Council of
Agriculture to introduce modern farm management, provide technical training, and offer
counseling for better production and distribution systems. Promotion of farm mechanization has
helped to alleviate labor shortages while increasing productivity; both rice and sugar cane
production are completely mechanized. Taiwan's main crops are rice, sugar cane, fruits (many of
them tropical), and vegetables. Although self-sufficient in rice production, Taiwan imports large
amounts of wheat, mostly from the United States. Meat production and consumption has risen
sharply, reflecting a high standard of living. Taiwan has exported large amounts of frozen pork,
although this was affected by an outbreak of hoof and mouth disease in 1997. Other agricultural
exports include fish, aquaculture and sea products, canned and frozen vegetables, and grain
products. Imports of agriculture products are expected to increase due to the WTO accession,
which is opening previously protected agricultural markets.

Industry:
Industrial output has gradually decreased from accounting for over half of Taiwan's GDP in 1986
to just 31% in 2002. Industries have gradually moved to capital and technology-intensive
industries from more labor-intensive industries, with electronics and information technology

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accounting for 35% of the industrial structure. Industry in Taiwan primarily consists of many
small and medium-sized enterprises (SME) with fewer large enterprises.

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 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 1 January 2002.

The "e-Taiwan" project launched by the government seeks to use US$1.83 billion to improve the
information and communications infrastructure in Taiwan in five major areas: government, life,
business, transport, and broadband. The program seeks to raise industry competitiveness,
improve government efficiency, and improve the quality of life, and aims to increase the number
of broadband users on the island to 6 million. In 2010, Taiwan's software market grew by 7.1%
to reach a value of US$4 billion, accounting for 3.3% of the Asia-Pacific region market value.
The digital content production industry grew by 15% in 2009, reaching US$14.03 billion. The
optoelectronics industry (including flat panel displays and photovoltaics) totaled NT$2.2 trillion
in 2010, a 40% jump from 2009, representing a fifth of the global market share.

The semiconductor industry, including IC manufacturing, design and packing, forms a major part
of Taiwan's IT industry. Due to its strong capabilities in OEM wafer manufacturing and a
complete industry supply chain, Taiwan has been able to distinguish itself from its competitors.
The sector output reached US$39 billion in 2009, ranking first in global market share in IC
manufacturing, packaging, and testing and second in IC design. Taiwan Semiconductor
Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC) are the two
largest contract chipmakers in the world, while MediaTek is the fourth-largest fabless supplier
globally. In 1987, TSMC pioneered the fabless foundry model, reshaping the global
semiconductor industry. From ITRI's first 3-inch wafer fabrication plant built in 1977 and the
founding of UMC in 1980, the industry has developed into a world leader with 40 fabs in
operation by 2002. In 2007, the semiconductor industry overtook that of the United States,
second only to Japan. Although the global financial crisis from 2007 to 2010 affected sales and
exports, the industry has rebounded with companies posting record profits for 2010. Taiwan has
the largest share of 300 nm, 90 nm, and 60 nm manufacturing capacities worldwide, and was
expected to pass Japan in total IC fab capacity by mid-2011.

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Foreign Trade:
Foreign trade has been the engine of Taiwan's rapid growth during the past 40 years. Taiwan's
economy remains export-oriented, thus it depends on an open world trade regime and remains
vulnerable to downturns in the world economy. The total value of trade increased over fivefold
in the 1960s, nearly tenfold in the 1970s, and doubled again in the 1980s. The 1990s saw a more
modest, slightly less than twofold, growth. Export composition changed from predominantly
agricultural commodities to industrial goods (now 98%). The electronics sector is Taiwan's most
important industrial export sector and is the largest recipient of United States investment.

Taiwan, as an independent economy, became a member of the World Trade Organization (WTO)
as Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (often shortened to
"Chinese Taipei"-both names resulting from PRC interference on the WTO) in January 2002. In
a 2011 report by Business Environment Risk Intelligence (BERI), Taiwan ranked third-best
globally for its investment environment.

Taiwan is the world's largest supplier of contract computer chip manufacturing (foundry
services) and is a leading LCD panel manufacturer, DRAM computer memory, networking
equipment, and consumer electronics designer and manufacturer. Major hardware companies
include Acer, Asus, HTC, Foxconn, TSMC and Pegatron. Textiles are another major industrial
export sector, though of declining importance due to labor shortages, increasing overhead costs,
land prices, and environmental protection.

Imports are dominated by raw materials and capital goods, which account for more than 90% of
the total. Taiwan imports most of its energy needs. The United States is Taiwan's third largest
trading partner, taking 11.4% of Taiwanese exports and supplying 10.0% of its imports.
Mainland China has recently become Taiwan's largest import and export partner. In 2010, the
mainland accounted for 28.0% of Taiwan's exports and 13.2% of imports. This figure is growing
rapidly as both economies become ever more interdependent. Imports from mainland China
consist mostly of agricultural and industrial raw materials. Exports to the United States are
mainly electronics and consumer goods. As Taiwanese per capita income level has risen, demand
for imported, high-quality consumer goods has increased. Taiwan's 2002 trade surplus with the
United States was $8.70 billion.

The lack of formal diplomatic relations between the Republic of China (Taiwan) with Taiwan's
trading partners appears not to have seriously hindered Taiwan's rapidly expanding commerce.
The Republic of China maintains cultural and trade offices in more than 60 countries with which
it does not have official relations to represent Taiwanese interest. In addition to the WTO,
Taiwan is a member of the Asian Development Bank as "Taipei, China" (a name resulting from
PRC influence on the bank) and the Asia-Pacific Economic Cooperation (APEC) forum as
"Chinese Taipei" (for the same reason as above). These developments reflect Taiwan's economic
importance and its desire to become further integrated into the global economy.

The Economic Cooperation Framework Agreement (ECFA) with the People's Republic of China
was signed on 29 June 2010, in Chongqing. It could potentially widen the market for Taiwan's
exports. However, the true benefits and impacts brought by ECFA to Taiwan's overall economy
are still in dispute.

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The newly signed agreement will allow for more than 500 products made in Taiwan to enter
mainland China at low or no tariffs. The government is also looking to establish trade
agreements with Singapore and the United States.

Energy:
Due to the lack of natural resources on the island, Taiwan is forced to import many of its energy
needs (currently at 98%). Imported energy totaled US$11.52 billion in 2002, accounting for
4.1% of its GDP. 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 crude oil & petroleum products (48.52%),
followed by coal (29.2%), natural gas (12.23%), nuclear power (8.33%), and hydroelectric power
(0.28%). 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. A fourth plant under construction was mothballed in 2014.

Although Taiwan's per capita energy use is on par with neighboring Asian countries, in July
2005 the Ministry of Economic Affairs announced plans to cut 170 million-tons of carbon
dioxide emissions by 2025. In 2010, carbon dioxide emissions have been reduced by 5.14
million metric tons. In order to further reduce emissions, the government also plans to increase
energy efficiency by 2% each year through 2020. In addition, by 2015 emissions are planned to
be reduced by 7% compared to 2005 levels.

Taiwan is the world's 4th largest producer of solar-powered batteries and largest LED
manufacturer by volume. In 2010, Taiwan had over 1.66 million square meters of solar heat
collectors installed, with an installation density that ranks it as third in the world. The
government has already built 155 sets of wind turbines capable of producing 281.6 MW of
energy, and additional projects are planned or under construction. Renewable energy accounts
for 6.8% of Taiwan's energy usage as of 2010. In 2010, the green energy sector generated
US$10.97 billion in production value. The government also announced plans to invest US$838
million for renewable energy promotion and an additional US$635 million for research and
development.

Science & Industrial Parks:

In order to promote industrial research and development, the government began establishing
science parks, economic zones which provide rent and utility breaks, tax incentives and
specialized lending rates to attract investment. The first of these, the Hsinchu Science Park was
established in 1980 by the National Science Council with a focus on research and development
in information technology and biotechnology. It has been called Taiwan's "Silicon Valley" and
has expanded to six campuses covering an area of 1,140 hectares (11.4 km2).

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Over 430 companies (including many listed on TAIEX) employing over 130,000 people are
located within the park, and paid in capital totaled US$36.10 billion in 2008. Both Taiwan
Semiconductor Manufacturing Company and United Microelectronics Corporation, the world’s
largest and second largest contract chipmakers, are headquartered within the park. Since 1980,
the government has invested over US$1 billion in the park's infrastructure, and further expansion
for more specialized parks have been pursued. The Industrial Technology Research Institute
(ITRI), headquartered within the park, is the largest nonprofit research organization in Taiwan
and has worked to develop applied technological research for industry, including for many of
Taiwan's traditional industries (such as textiles).

Following the success of the first park, the Southern Taiwan Science Park (STSP), consisting of
the Tainan Science Park and the Kaohsiung Science Park, was established in 1996. In addition to
companies, several research institutes (including Academia Sinica) and universities have set up
branches within the park with a focus on integrated circuits (ICs), optoelectronics, and
biotechnology. The Central Taiwan Science Park (CTSP) was established more recently in 2003.
While the CTSP is still under development, many firms (including AU Optronics) have already
moved into the park and begun manufacturing operations. Like the other parks, CTSP also
focuses on ICs, optoelectronics, and biotechnology, with the optoelectronics industry accounting
for 78% of its revenue in 2008. These three science parks alone have attracted over NT$4 trillion
(US$137 billion) worth of capital inflow, and in 2010 total revenue within the parks reached
NT$2.16 trillion (US$72.8 billion).

The Linhai Industrial Park, established in Kaohsiung in 1960, is a well-developed industrial zone
with over 490 companies focusing on other industries including base metals, machinery and
repairs, nonmetallic mineral products, chemical products, and food and beverage manufacturing.
The Changhua Coastal Industrial Park, located in Changhua County, is a newer industrial cluster
with many different industries such as food production, glass, textiles, and plastics.

The complete lists of industrial and science parks in Taiwan are:

 Central Taiwan Science Park

 Hsinchu Science Park
 Kaohsiung Science Park
 Nankang Software Park
 Neihu Science Park
 Tainan Science Park

Political Information:
Taiwan Government is a semi-presidential republic. The President of Taiwan is both the 'head of
state' and 'head of government'.

Executive Branch:
Chief of state: President TSAI Ing-wen (since 20th May 2016); Vice President CHEN Chien-jen
(since 20th May 2016)

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Head of government: Premier LAI Ching-te (President of the Executive Yuan) (since 8th
September 2017); Vice Premier LIN Hsi-yao, Vice President of the Executive Yuan (since 20th
May 2016)
Cabinet: Executive Yuan - ministers appointed by president on recommendation of premier.

Legislative branch:
Unicameral Legislative Yuan (113 seats; 73 members directly elected in single-seat
constituencies by simple majority vote, 34 directly elected in a single island-wide constituency
by proportional representation vote, and 6 directly elected in multi-seat aboriginal constituencies
by proportional representation vote; members serve 4-year terms)

International Relations:
Currently, Taiwan maintains 20 embassies abroad as well as 2 consulates and 88 other
representations. The Taiwanese capital Taipei hosts 19 embassies, and in addition there are 1
consulates and 51 other representations in Taiwan.

Participation in International Organizations:

ADB (Taipei, China), APEC (Chinese Taipei), BCIE, ICC (national committees), IOC, ITUC
(NGOs), SICA (observer), WTO (Taipei, China)

Current political issues:

The dominant political issue in Taiwan is its relationship with the People Republic of China. For
almost 60 years, there were no direct transportation links, including direct flights, between
Taiwan and mainland China. This was a problem for many Taiwanese businesses that had
opened factories or branches in mainland China. The former DPP administration feared that such
links would lead to tighter economic and political integration with mainland China, and in the
2006 Lunar New Year Speech, President Chen Shui-bian called for managed opening of links.
Direct weekend charter flights between Taiwan and mainland China began in July 2008 under
the current KMT government, and the first direct daily charter flights took off in December
2008.

Other major political issues include the passage of an arms procurement bill that the United
States authorized in 2001. In 2008, however, the United States was reluctant to send over more
arms to Taiwan out of fear that it would hinder the recent improvement of ties between the PRC
and the ROC.

The politicians and their parties have themselves become major political issues. Corruption
among some DPP administration officials has been exposed. In early 2006, President Chen Shui-
bian was linked to possible corruption. The political effect on President Chen Shui-bian was
great, causing a divide in the DPP leadership and supporters alike. It eventually led to the
creation of a political camp led by ex-DPP leader Shih Ming-teh which believes the president
should resign.

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The KMT assets continue to be another major issue, as it was once the richest political party in
the world. Nearing the end of 2006, KMT's Chairman Ma Ying-jeou was also hit by corruption
controversies, although he has since then been cleared of any wrongdoings by the courts. After
completing his second term as President, Chen Shui-bian was charged with corruption and
money laundering. Following his conviction, he is serving a 17-year sentence in Taipei Prison.

Investment:

Taiwan has invested 20.9% of total GDP in fixed capital. Fixed capital consists of total business
spending on fixed assets, such as factories, machinery, equipment, dwellings, and inventories of
raw materials, which provide the basis for future production. It is measured gross of the
depreciation of the assets, i.e., it includes investment that merely replaces worn-out or scrapped
capital. Taiwan invested major part of its GDP in fixed capital which is seemed as a long run
benefit for country.

Taiwan’s investment in inventories -0.1%. Investment in inventories consists of net changes to

the stock of outputs that are still held by the units that produce them, awaiting further sale to an
end user, such as automobiles sitting on a dealer’s lot or groceries on the store shelves. This
figure may be positive or negative. If the stock of unsold output increases during the relevant
time period, investment in inventories is positive, but, if the stock of unsold goods declines, it
will be negative. Investment in inventories normally is an early indicator of the state of the
economy.

If the stock of unsold items increases unexpectedly – because people stop buying - the economy
may be entering a recession; but if the stock of unsold items falls - and goods "go flying off the
shelves" - businesses normally try to replace those stocks, and the economy is likely to
accelerate. In case of Taiwan this is investment is in negative which shows that the country needs
to increase its output growth at least by 0.1% to fulfill the needs of the nationals.

FOREIGN INVESTMENT:

As of December, 2016 Taiwan has received $80.68 billion in foreign direct investment from
abroad and was declared by CIA World Fact Book as 48th largest country in this regard.

As of December, 2016 Taiwan has invested $354 billion (31st December 2016 est.) abroad and
was declared by CIA World Fact Book as 20th largest country in terms of stock of direct foreign
investment in abroad.

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Natural Resources:
Small deposits of coal, natural gas, limestone, marble, asbestos, arable land

MAJOR COMPANIES:
Top 5 companies of Taiwan from Fortune 500:

2016
Employee
Rank Image Name Revenues Notes
s
(USD $M)

World's largest
contract electronics
manufacturer and the
fourth-largest
information technology
Hon Hai Precision company (by revenue).
27 $135,129 726,772
Industry (Foxconn) The firm operates as a
contract manufacturer
and subsidiaries
include the Sharp
Corporation and Smart
Technologies.

Electronics
manufacturing
company developing
296 Pegatron $35,891 196,251 computing,
communications and
consumer electronics.
Spun off from Asus.

World's largest
Taiwan dedicated independent
Semiconductor semiconductor
369 $29,388 46,968
Manufacturing foundry. Subsidiaries
(TSMC) include SSMC in
Singapore.

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 2016
Employee
Rank Image Name Revenues Notes
s
(USD $M)

Largest manufacturer
390 Quanta Computer $27,715 92,698 of notebook computers
in the world.

Taipei-based
multinational life
411 Cathay Life Insurance $26,292 36,578 insurance company.
Part of Cathay
Financial Holding.

Top Business Investment Opportunities in Taiwan

Automotive and Car Parts Business
Without an iota of doubt, Taiwan has a robust economy that is very much capable of high
technology industrial production. One business therefore you may want to invest in this country
is that Auto parts business. However, this all depends on the scale you would like to start from.
You may decide to set up your own manufacturing company, as well as become a distributor to
other countries. This is one industry that requires huge capital and you must be able to pool the
appropriate resources to start out.
Medical Supplies and Equipment
The need to solve the problems in the health sector all over the world is such that requires good
supply of equipment. Therefore this is the reason why Taiwan producers have taken it upon
themselves to produce the very best of medical supplies. You too can plug into this business
opportunity. Some of the things that may be considered dealing in are; dental equipment and
appliances, diagnostic instruments, hospital equipment, medical disposable items, prosthetic and
orthopedic products, amongst others.
Hardware
Taiwan is one country where the production of hardware is in abundance, if you are an IT savvy
person, then you may want to consider dealing in Hardware. This might be a capital intensive
business to start with; however, you can be sure that the returns on your investment wouldn’t be
regret.

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Machinery
It is no longer news that heavy duty machineries can be found in Taiwan. Hence, it might also no
longer be news to you that you could make great profit from dealing in machinery in Taiwan.
This is because the market all over the world is a very vast one. You may decide to set up your
business in Taiwan for the sole aim of exporting to countries from there. Types of machinery
include; truck machines, generating set as well as others.
Communication Products
Another business which you might yet want to invest in Taiwan is the communication products.
Taiwan is like the one stop center to get these products and you must be ready to take advantage
of this opportunity. Some of the communication products include; fax, modems, wireless
communication products, LAN card and adapter, amongst many other products.
Consumer Electronics and Electrical Parts Business
There is a ready way to get these products supplied to your stores when you operate such a
business in Taiwan. The market for consumer electronics and electrical parts is a very big one in
Africa, Europe, the Caribbean, you name it. Some of the products you may want to deal in
include the following; air condition equipment, audio electronic products, battery, cell chargers,
modules, just to mention a few.
Food and Agricultural Products
Much more than the electronics and the equipment industries in Taiwan, there is also the food
and agricultural sector. And the truth is that there is as much profit in the food and agricultural
business as there is in other sectors. Some of the products you may consider dealing in are;
confectioneries, biscuits, snacks, farm products- fresh or chilled, food additives, frozen foods and
what have you.
Fashion Accessories and Household Textiles
The love for fashion is such that cuts across continents and borders. Therefore, you may also
invest in the fashion business in faraway Taiwan. There are lots of industries who work tirelessly
to churn out quality products for fashion lovers. Some of the products that could fetch you good
money in the venture include; belts, gloves, hair ornaments, hats, hosiery, towel, handkerchiefs
amongst others.

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OPPORTUNITIES FOR COMPANIES:
Hub in Asia-Pacific: Taiwan is located in the heart of the Asia-Pacific region, at the center of the
route between China, Japan, Korea and the Southeast Asian countries, and on the doorstep to over
2 billion consumers. In June 2010, Taiwan and China signed a landmark Economic Cooperation
Framework Agreement (ECFA), significantly increasing Taiwanese market access to Mainland
China and lowering the cost of goods and services trade for U.S. business in Taiwan.
Global Logistics Capabilities: High-quality human resources and government incentives have
prompted many local and foreign enterprises to set up their regional logistics centers, R&D, and
operations headquarters in Taiwan. As of the end of 2010, nearly 50,000 Taiwanese companies
had invested directly in Mainland China and ASEAN, forming a complete supply chain system
for your company to develop its Asian market and reach out to the world.
Industrial Cluster: Home to more than half of the top 100 IT companies in Asia, Taiwan has
become the global supply base for high-tech products, with the highest industrial cluster density
in the world. Taiwan’s government plans to integrate domestic suppliers and establish stronger
links to international industrial clusters.
Intellectual Advantage: Taiwan's 23 million citizens have a literacy rate of over 98% among
those 15 years old and up, 36.75% of which hold college degrees, higher than the UK's 30% and
France's 25%. From the 10-million strong labor force, the many MNCs in Taiwan have cultivated
an R&D and managerial talent pool with a knowledge of how to do business in Asia in a diverse
set of industries.
Innovation Capability: Taiwan’s focus on developing "knowledge-intensive industries" makes it
the world’s third most entrepreneurial society according to IMD. Taiwan is ranked 6th on the
EIU’s Global Innovation Index 2009-2013, and 11th for Gross Expenditure on R&D among the
major OECD countries.
Sophisticated Infrastructure: Two international airports, 7 international harbors, high-speed
railway networks, quality telecommunication services, and 70% household access to broadband
internet service — ensures that you get your product to market.
Sound Legal Framework: Taiwan has a stable and transparent regulatory system based on rule
of law, providing a high level of protection for foreign investment.

Comprehensive IP Protection: Taiwan has taken active measures to protect inventions and
encourage innovation, including passing amendments that strengthen existing IP laws on
copyrights, patents, and trademarks; assigning an IP Protection Police Squad; and dedicating a
functioning IP court since July 2008.
Abundant Capital Funds: Mature financial markets and abundant capital resources support a
personal savings rate of 28.1%, a stable exchange rate, and fair interest rates. Plans to increase
financial transparency through International Financial Reporting Standards and competitive tax
incentives provide the ideal, investor-friendly environment. Recently, Taiwan lowered its
corporate income tax from 25% to 17%, among the lowest in the region.

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 WHY TAIWAN IS AN EMERGING MARKET?
Taiwan is an emerging economy because it is in transitional phase. Its economy is rapidly
growing, Service and Manufacturing sector is performing very well and contributing a lot to the
country’s GDP. It has newly industrialized base and has many features of developed market but
lacks some standards of such market like it has High per capita income and falls in the category
of upper class income country. Its foreign trade sector is performing very well and injecting a
huge sum of money in the economy so far whereas its political system is not stable and the
country itself is not a member of many global organization for example United Nation and is not
illustrated in world bank directory as a country , which makes it weaker in many areas
furthermore it is not recognized by many countries as an Independent state, its territorial dispute
with People Republic of China (CHINA) (a potential superpower of the upcoming future) creates
difficulty for the foreign investors to invest and also for the domestic investors and leads to lack
of confidence of investors in the internal market.

The economy of the Republic of China (Taiwan), is the 7th largest economy in Asia, and is
included in the advanced economies group by the International Monetary Fund and gauged in the
high-income economies group by the World Bank, and ranked 15th in the world by the Global
Competitiveness Report of World Economic Forum, has a developed capitalist economy that
ranks as the 22nd-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,
commonly referred to as Taiwan. It is improving its industrial base, Health and education sector.
It is considered as one of the world’s largest exporter of modern digital gadgets.

According to Forbes following are some other factors which shows Taiwan is still not be
considered as developed market economy in spite of having most of the features of such
economies:

1. Building construction

It’s hard to find an apartment building more than 30 years old without unapproved, jerrybuilt
“granny flats” on the roof. Illegal units total about 7,000 in Taipei. Mayors talk about getting rid
of them but seldom make more than a small crack in the issue. (Imagine the population of voters
without roofs.) Older buildings also allow apartment owners to build outward through their
windows or onto shared balconies. For buildings without centralized management, homeowners
seldom pool money to maintain the whole property, leaving gray or yellow water stains on
exterior walls among other signs of decay. Some units pose structural hazards. A lot more just
stun tourists who visit Taiwan expecting a different kind of culture and scenery.

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2. Green space

Urban trees help ease air pollution, cool hot cities and even calm aggressive drivers. But they’re
a post-modern luxury. Most of urban Taiwan is too dense for serious street trees. Buildings come
right up to the curbs -- on streets that have even those. Legislators fault government for improper
planting along streets that are wide enough, allowing otherwise hardy trees to fall easily during
typhoons. But trees cost money, the top concern for an emerging country. For every 1% increase
in per capita income, demand for forest cover goes up 1.76%, according to research compiled by
science writer Tim De Chant on the persquaremile.com website.
“There's nothing Taiwan can do about typhoons, but perhaps the authorities could try to educate
people about the value of trees for shade, reducing energy consumption, air quality, biodiversity
and flood mitigation,” says Steven Crook, a writer on Taiwan environmental issues.

3. Law enforcement

Enforcement of most laws only follows complaints. Traffic cops who see someone double park
or deny someone else the right-of-way do nothing. Code enforcement officers don’t walk about
the neighborhoods looking for rampant illegal gambling or dogs barking above the legal decibel
levels. They wait for complaints before investigating and follow up based on a sense of who’s
morally right or wrong rather than the word of law. Taiwan’s white-collar crime suspects such as
people in the companies linked last year to tainted cooking oil may get light sentences because
their companies contribute heavily to the economy – and to decision makers in government.

4. Quality of life

Noise in Taiwan can be severe enough to disrupt sleep. Factory smoke, underground gas lines
and other industrial spill over into people’s neighborhoods, some of which have complained over
the past five years against some of Taiwan’s top manufacturers. Gas lines exploded one night in
2014 in a dense residential tract of the southern industrial city Kaohsiung and killed 32 people.
Formal complaints are less common against more local quality-of-life threats such as standing
water that breeds mosquitoes or remodeling noise late in the evening. Having food on the table is
enough of a blessing for those old enough to remember Taiwan’s widespread poverty.

THE END

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