DEMOGRAPHIC PROFILE OF TAIWAN

Capital The capital of Taiwan is Taipei. Location Eastern Asia, islands bordering the East China Sea, Philippine Sea, South China Sea, and Taiwan Strait, north of the Philippines, off the southeastern coast of China. Area The total area of Taiwan is 35,980 sq km, which includes land of 32,260 sq km and water of 3,720 sq km. Population The population of Taiwan as per July 2011 is 23,071,779 Population growth rate The growth rate as per year 2011 is 0.193% Languages Mandarin Chinese (official), Taiwanese, Hakka.

Age structure The age structure of Taiwan as per July 2011 is as follows 0-14 years: 15.6% (male 1,875,359/female 1,732,007) 15-64 years: 73.4% (male 8,538,881/female 8,406,716) 65 years and over: 10.9% (male 1,198,591/female 1,320,225) Education The education is compulsory up to the age of 9 years. Ethnic groups Taiwan's population was estimated in 2011 at 23.2 million, most of who are on the island of Taiwan. Amongst which includes Taiwanese (including Hakka) are 84%, mainland Chinese are 14%, and indigenous are 2%. Birth rate The birth rate as per year 2011 is 8.9 births/1,000 population. Death rate The death rate as per July 2011 is 7 deaths/1,000 population. Life expectancy at birth The life expectancy for male is 75.5 years and that of females is 81.36 years as per July 2011. Literacy The population above the age of 15 years can read and write and 96.1% of total population is literate. Calling code +886 Sex ratio The sex ratio for overall population as per July 2011 is 1.02 male(s)/female. President (Government is of semi presidential republic) Ma Ying-jeou is the current president and Vincent Siew is the vice president of Taiwan.

ECONOMIC OVERVIEW OF THE COUNTRY

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Type of economic system and economic growth of Taiwan

Taiwan has a dynamic capitalist economy with gradually decreasing government guidance of investment and foreign trade. Taiwan has transformed itself from an underdeveloped, agricultural island to an economic power that is a leading producer of high-technology goods. In the 1960s, foreign investment in Taiwan helped introduce modern, labor-intensive technology to the island, and Taiwan became a major exporter of labor-intensive products. Taiwan ranks 18th in comparison to India ranking 4th while comparing the world chart of purchasing power parity. GDP (purchasing power parity): $821.8 billion (2010) $741.5 billion (2009) $756.1 billion (2008) Exports, led by electronics and machinery, generate about 70% of Taiwan's GDP growth, and have provided the primary impetus for economic development. This heavy dependence on exports exposes the economy to upturns and downturns in world demand. In 2009, Taiwan's GDP contracted 1.9%, due primarily to a 20% year-on-year decline in exports. In 2010 GDP grew 10.5%, as exports returned to the level of previous years. Taiwan's diplomatic isolation, low birth rate, and rapidly aging population are major long-term challenges. Taiwan's Total Fertility rate of just over one child per woman is among the lowest in the world, raising the prospect of future labor shortages, falling domestic demand, and declining tax revenues.

 The island runs a large trade surplus, and its foreign reserves are the world's fourth largest, behind China, Japan, and Russia.

Key Facts GDP (official exchange rate): $430.6 billion (2010) GDP - real growth rate: 10.8% (2010) GDP-composition by sector: Agriculture: 1.4% Industry: 31.1% Services: 67.5% (2010) Labor force: 11.07 million (2010) Unemployment rate: 5.2% (2010)

Exchange rates:(Latest rate as per June 2011)

1 TWD = 0.0347 USD 1 USD = 28.78 TWD

OVERVIEW OF INDUSTRIES TRADE AND COMMERCE IN TAIWAN The following are the major industries of Taiwan:
Electronics, communications and information technology products, petroleum refining, armaments, chemicals, textiles, iron and steel, machinery, cement, food processing, vehicles, consumer products, pharmaceuticals.

Taiwan Exports
Exports: $274.4 billion (2010) $203.4 billion (2009) The Exports partners of Taiwan includes China 28.1%, Hong Kong 13.8%, US 11.5%, Japan 6.6%, Singapore 4.4% (2010) The Exports commodities includes electronics, flat panels, machinery; metals; textiles, plastics, chemicals; optical, photographic, measuring, and medical instruments.

Taiwan Imports
Imports: $251.4 billion (2010)

$174.4 billion (2009)

The Imports partners of Taiwan includes Japan 20.7%, China 14.2%, US

10%, South Korea 6.4%, Saudi Arabia 4.7% (2010)

The Imports commodities includes electronics, machinery, crude petroleum,

precision instruments, organic chemicals, metals.

Taiwan debt - external

The external Debt of Taiwan

= $92.07 billion (31 December 2010) = $78.61 billion (31 December 2009)
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DIFFERENT ECONOMIC SECTORS OF TAIWAN

The competitive advantage of Taiwan's manufacturing industry lies in information, telecommunications, and other high technology industries. Correspondingly, the government has identified and appropriated funding for the development of 10 high technology industries that will be the foundation of Taiwan's economy. The following are the ten industries: (1) Communications, (2) Information, (3) Consumer electronics, (4) Semiconductors, (5) Precision machinery and automation, (6) Aerospace, (7) Advanced materials, (8) Specialty chemicals and pharmaceuticals, (9) Medical and health care equipment, and (10) Pollution control and treatment. The service sector is thriving and shows promise of further growth as the spending power of the population increases. By the end of 1995, the growth of the service sector exceeded that of the agricultural and manufacturing sectors by more than 60 percent and has continued to do so. The different businesses that fall under the service sector in Taiwan are: finance, insurance, and real estate; commerce, including wholesale and retail business, food and beverages, and international trade; social and individual services; transport, storage, and telecommunications; commercial services, including legal, accounting, civil engineering, information, advertising, designing, and leasing; governmental services, and miscellaneous others.
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Among these businesses, finance, insurance, and real estate are the most dominant.

BUSINESS AND TRADE OF TAIWAN AT INTERNATIONAL LEVEL

The People's Republic of China replaced Taiwan at the United Nations in 1971, and Taiwan's diplomatic position has continued to erode, as many countries changed their official recognition from Taipei to Beijing. As of June 2011, Taiwan had formal diplomatic ties with 23 countries. At the same time, Taiwan has cultivated informal ties with most countries to offset its diplomatic isolation and to expand its economic relations. Many nations have set up unofficial organizations to carry out commercial and other relations with Taiwan. Including its official overseas missions and its unofficial representative and/or trade offices, Taiwan is represented in 122 countries. During the administration of President Chen, Taiwan lobbied strongly for admission into the United Nations and other international organizations, such as the World Health Organization (WHO).
The president Ma administration also hopes to expand Taiwan's "international

space," increasing its participation in international organizations, such as the

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WHO, the UN Framework Convention on Climate Change (UNFCCC), and the International Civil Aviation Administration (ICAO).

EXPORT

Taiwan exports were worth 24676 Million USD in November of 2011. Taiwan's economy is export-oriented. Main export products are Electronic Products (23%), Metals and Articles (7%), plastics & rubber (6%), and chemicals (6%), Information & Communication Products (25%), Precision Instruments, Clocks and Watches, Musical Instruments (8%),Other (25%)

Main exports partners are Mainland China & Hong Kong (42% of total), USA (12%), Japan (7%), Europe (11%) and ASEAN countries (15%).

Elec tronic Produc ts

25%

23%

Metals and A rtic les

Metals and A rtic les

7% 8% 7% 6% 24%

c hemic als

Inf ormation & Communic ation Produc ts Prec is ion Ins truments , Cloc ks and Watc hes , Mus ical Ins truments Other

IMPORT Taiwan imports were worth 21473 Million USD in November of 2011. A lack of natural resources had made Taiwan dependent on imports. Taiwan imports mostly Capital equipment (16.6%), Agricultural and industrial raw materials (75.7%), Consumer goods (7.7%) Main import partners are Japan (21% of total), Mainland China & Hong Kong (14%), USA (10%), Europe (10%) and ASEAN countries (11%). This page includes a chart with historical data for Taiwan's Imports.

8%

17%

Capital equipment

A gricultural and industrial raw materials Consumer goods

75%

PRESENT TRADE RELATIONS AND BUSINESS VOLUME OF DIFFERENT PRODUCTS WITH INDIA

Although Taiwan entered the Indian market later than the Japanese and Koreans, it has still managed to achieve an incredible high rate of growth. With its rapidly expanding economy, India is witnessing a surge in demand for home appliances and ICT products and services. Additionally, the Indian government is keen to develop the hardware market to match the nation's advances in software. This opens up many opportunities

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for strengthening the ties between the two countries as Taiwan's relative strength in hardware could be meshed with India's in software. STATISTICS OF EXPORT AND IMPORT BETWEEN TAIWAN AND INDIA (2005-10) (1 UNIT =1 MILLION USD)

Year

Exports to India

Growth compared to previous year (%)

Imports from India

Growth compared to previous year (%)

2004 2005 2006 2007 2008 2009 2010 (Jan-Apr)

1,070.2 1,567.9 1,471.1 2,342.0 3,007.5 2,531.4 1,008.7

-46.51 - 6.17 59.2 28.42 -15.83 23.3

860.5 857.2 1,245.3 2,542.4 2.338.4 1,623.9 1,054.7

-- 0.38 45.28 104.16 - 8.02 -30.56 242.2

PRODUCTS EXPORTED AND IMPORTED BETWEEN INDIA AND TAIWAN

Exports to India Mineral fuels Oils Electrical machinery Organic chemicals

Imports from India Cereals Organic chemicals Iron Steel

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Plastic articles Equipment

INDIA-TAIWAN TRADE AND TECHNOLOGY COLLABORATION

The India-Taiwan relationship will benefit a lot with direct flights between the two countries, believes Taipei Economic and Cultural Centre Representative, Wenchyi Ong. This will not only enhance trade and investments between the two countries, it will also build the people-to-people interface. TAITRA (Taiwan External Trade Development Council), a non- profit trade promotion organization under the Ministry of Economic Affairs, launched a campaign to increase growth and visibility of Taiwanese ICT brands in India and leverage Indias huge demand for ICT and consumer lifestyle products. Bilateral trade links between India and Taiwan, taking into consideration the electronics industry, has witnessed a quantum leap in spite of its late start behind Japan and Korea.

Pestle Analysis

Political Analysis
The political environment in Taiwan has shifted from being

strictly communist under the control of the Koumintang Party. However, recent developments in the parliament of Taiwan show a considerable adjustment towards a more democratic system. This is great news for companies seeking entry in the market as liberalization is slowly taking its place. Companies seeking to operate in Taiwan needs to establish a legal presence. A branch office is a duly recognized legal entity in Taiwan. It is considered permanent in nature which also means that it is subjected to the taxation laws of Taiwan and compelled to conform to its regime.

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Political Establishment

Type: Multi-party democracy. Constitution: December 25, 1946; last amended 2005. Branches (Yuan): Executive, Legislative, Judicial, Control, Examination. Major political parties: Kuomintang (KMT or Nationalist Party); Democratic Progressive Party (DPP); several small parties. Suffrage: Universal over 20 years of age. Central budget proposed (FY 2011): NT $1.789 trillion (U.S. $62.79 billion). Defense proposed (FY 2011): NT $297.2 billion (U.S. $10.43 billion), 16.6% of entire budget, or 2.73% of Taiwan's GDP.

Principal Leaders President--Ma Ying-jeou Vice President--Vincent Siew (Siew Wan-chang) Vice Premier--Sean Chen (Chen Chung) Legislative Yuan President--Wang Jin-pyng Judicial Yuan President--Rai Hau-min Defense Minister--Kao Hua-chu Foreign Minister--Timothy Yang (Yang Chin-tien) Minister of Justice--Tseng Yung-fu Government Information Office Minister--Phillip Yang (Yang Yung-ming)

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Economic Analysis
In the 1980s, focus shifted toward increasingly sophisticated, capital-intensive and technology-intensive products for export and toward developing the service sector. Taiwan has transformed itself from a recipient of U.S. aid in the 1950s and early 1960s to an aid donor and major foreign investor, especially in Asia. Taiwan is now a creditor economy, holding the world's fourth-largest stock of foreign exchange reserves ($399.5 billion as of April 2011). From 2002-2007, Taiwan's economic growth ranged from 3.5% to 6.2% per year. With the global economic downturn, Taiwan's economy slumped into recession in the second half of 2008. Its real GDP, following growth of 5.7% in 2007, rose 0.73% in 2008 and contracted 1.93% in 2009.

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 The economy saw a robust recovery in 2010, growing by 10.88%, and the highest rate in 28 years. Exports, led by electronics and machinery, generate about 70% of Taiwan's GDP growth, and have provided the primary impetus for economic development. This heavy dependence on exports exposes the economy to upturns and downturns in world demand. Taiwan's population is aging quickly, with the number of people over 65 accounting for 10.9% of the island's total population as 2011. The island runs a large trade surplus, and its foreign reserves are the world's fourth largest, behind China, Japan, and Russia. Taiwan and the mainland in June 2010 signed the landmark Economic Cooperation Framework Agreement (ECFA), an agreement that the Taiwan authorities hope will eventually lead to a free-trade arrangement that will increase cross-Strait economic ties by lowering tariffs on a number of goods and by reducing market access barriers for services. The Taiwan authorities have said that the ECFA will serve as a stepping stone toward trade pacts with other regional partners and they announced that formal negotiations towards an economic cooperation agreement with Singapore would begin in 2011.

Socio-Cultural Analysis

Culture Taiwan's culture is a blend of its distinctive Chinese, Japanese, and Western influences. Fine arts, folk traditions, and popular culture embody traditional and modern, Asian, and Western motifs. Religion The Constitution of the Republic of China protects people's freedom of religion and the practices of belief. Over 93% of Taiwanese are adherents of a combination of the polytheistic ancient and Taoism; 4.5% Chinese are religion, Buddhism, Confucianism, of Christianity, which adherents
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includes Protestants, Catholics, and other,

non-denominational, Christian

groups; and less than 2.5% are adherents of other religions, such as Islam. Confucianism is a philosophy that deals with secular moral ethics, and serves as the foundation of both Chinese and Taiwanese culture. Food Taiwanese culture has heavily influenced the west Pearl milk tea (also known as bubble tea or boba) is a popular tea drink available in many parts of the world. A notable Japanese influence exists due to the period when Taiwan was under Japanese rule. Taiwanese cuisine itself is often associated with influences from mid to southern provinces of China Clothing There are many different types of traditional clothing in Taiwan. For example there are headdresses, kimonos, tunics, and sashes, and even particular kinds of ceremonial wedding dresses. Clothing is an important part of the Taiwanese culture. Many people devote lots of time to find the right outfit for a ritual, ceremony, or traditional routine. There are also particular colors to go with every season and every social class.

Technological Analysis
In the context of market entry, Taiwan has a veritably stable technological infrastructure that could support the marketing needs of a company. There are over 14 million telephone lines in use in Taiwan. Moreover, the individuals of the said region are said to be adept in internet technologies as over 14 million internet users are said to be present in Taiwan. Apart from this well developed institutions and research and development laboratories are established so as improve the technologies to evn a greater level

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Taiwan has accumulated considerable technology innovation capabilities while consolidating its competitiveness in the global arena. COMPETITIVE ADVANTAGES OF TAIWAN'S HIGH-TECH INDUSTRIES Superior commercialized technology, especially within the information electronics category. Superior information and electronic engineering talent, technical support from overseas Chinese researchers in the US, as well as the full support of the government in developing industrial technologies. Superior manufacturing capacity and product research and development capability. COMPETITIVE INDUSTRIES Taiwan's information and semiconductor industries currently rank third and fourth in the world, respectively, in terms of production value, and their global market share is rising steadily. The local telecommunications industry has established a sound industrial base in terms of terminal user products. Taiwan could develop into one of the world's major manufacturing center for network products and mobile phones.

Environmental Analysis
Geography
Area: 36,189 sq. km. (13,973 sq. mi.). Terrain: Two thirds of the island is largely mountainous with 100 peaks over

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

Climate: Maritime subtropical

Coastline: 1,566.3 km
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Natural resources: small deposits of coal, natural gas, limestone, marble, and asbestos

Natural hazards: earthquakes; typhoons Volcanism: Kueishantao Island (elev. 401 m), east of Taiwan, is its only historically active volcano, although it has not erupted in centuries

Environment - current issues: air pollution; water pollution from industrial emissions, raw sewage; contamination of drinking water supplies; trade in endangered species; low-level radioactive waste disposal

Land boundaries: 0 km

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

major environmental laws in the region. These include the Air Pollution Control Act, the Water, Pollution Control Act, and the Waste Disposal Control Act. Infringement of such laws shall have some punitive effects on the company.

Legal Analysis
Basically, entering into business in Taiwan also entails a company to be subjected to taxation requirements. For companies with a head office that are incorporated outside Taiwan, their branch office shall be taxed based on the actual corporate income which they have derived from the local resources. The taxable range in Taiwan for foreign companies is from 20%-25% of the total local earnings. I. Tariff concessions:
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1. Agricultural and industrial products: The simple averages of nominal duty rates for industrial and agricultural products in Taiwan are 6.03% and 20.02%, respectively, and these rates will be reduced to 5.79% and 15.21%, respectively, in the first year following Taiwan's accession to the WTO. 2. The Zero for Zero Program: Taiwan committed to this Program from the Uruguay Round negotiations, which calls for the reduction of duty rates to zero in selected sectors, including distilled spirits, pharmaceuticals, medical equipment, furniture, paper, agricultural equipment, toys, construction equipment, steel, and beer.

II.Non-tariffmeasures

1. Agricultural sector: Upon accession, Taiwan is committed to removing area restrictions limiting trade to certain geographical locations, and moving to a policy of free importation for more than ten agricultural products. According to research estimates, liberalization through the reduction of tariffs and the elimination of non-tariff measures in Taiwan's agricultural sector will increase business opportunities by US$ 1.7 billion. Meanwhile, these measures will assist in significantly upgrading the competitiveness of Taiwan's food industry and services sectors.

2. Industrial Sector: Upon accession, Taiwan is committed to eliminating area restrictions on imports, local content requirements, and prohibited export subsidies on automobiles and motorcycles. Additionally, Taiwan will allow the import and domestic production of heavy-duty vehicles within six months of accession, and for diesel-gas automobiles, the same treatment within two years of accession. Despite the adjustment costs that will affect the domestic industries as a result, the WTO liberalization measures will increase the competitiveness of these domestic industries and help them to integrate more effectively into the international marketplace.
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III.Tradeinservices: Taiwan has made commitments in eleven services sectors, including business services, communication services, construction and related engineering services, distribution services, education services, environmental services, financial services, health-related and social services, tourism and travel-related services, recreational, cultural and sporting services (other than audiovisual services), and transportation services

IV.

Transparency

and

Liberalizing

Actions

in

Other

Trade

Sectors:

1. Elimination of the monopoly system for tobacco and alcohol: Taiwan has committed to eliminating the monopoly tax levied on tobacco and alcohol products. Following elimination of the monopoly, tobacco and alcohol will be subject to the general tax system. For imported products, additional tariffs will be implemented. In the future, local and foreign companies will be allowed to establish facilities for the production of alcoholic beverages in Taiwan.

2. Government Procurement: Taiwan is committed to becoming a signatory of the WTO Agreement on Government Procurement upon its accession to the WTO. Under the GPA, Taiwan will open government procurement transactions above a threshold value to bidding by the other signatories of the GPA. Taiwan companies will also be eligible to bid for government procurement opportunities available from the other GPA members. According to statistics provided by competent authorities, the average value of procurements within Taiwan above the applicable threshold is approximately US$ 6 billion per year.

3. Intellectual property rights: The IPR legal system applied by Taiwan is consistent with
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TRIPS requirements. This advantage will attract investment by foreign companies in local high-tech industries However, the government of Taiwan has also instituted incentive programs for companies that shall be adhere to green productivity initiatives of the region.

Conclusion

Taiwan plays an important role in the global supply chain. The focus of Taiwan's production has shifted away from labor-intensive products such as the canned mushrooms, umbrellas, and plastic shoes of earlier days, to today's high-tech products such as lap-top computers, semi-conductors, and telecommunications equipment and hence can act as a great market for India for both imports and exports.

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In the future, Taiwan expects to develop internet, telecommunications, and bio-tech industries, drawing on the current foundation of our high-tech industries. Taiwan's commitments under trade in services, such as the liberalization of the domestic telecommunications services market, are expected to help Taiwan in its efforts to attract new foreign investment and would help Indian investors through various trade concessions Looking into the twenty-first century, the global economy will continue to develop in the direction of liberalization. Since Taiwan's economy is highly trade-oriented and produces a variety of products developed for global markets, such trends will enhance prospects for Taiwan's future economic development

Taiwan's economic system can be expected to become increasingly stable and predictable, thereby providing foreign companies investing in Taiwan with growing commercial opportunities and a reliable policy environment in which to operate.

References

www.CIA World fact book.com

www.taiwan Wikipedia.com

www.taiwan country outlook.com www.taiwan country profile 2011.com

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 www.google.com

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