MOEA

Taiwan
~Your Gateway to Asia ！

Mei-Yueh Ho, Minister

Ministry of Economic Affairs
TAIWAN
November, 2005
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Australia
 CONTENTS

 Economic Overview
 Competitive Position
 Competitive Advantages
 Development Strategy
 Investment Opportunities & Incentives
 Conclusion
 Economic Overview
Taiwan – Small Yet Big
Economic Indicators Unit:USD

Item 1952 2004

Average Economic Growth
7.61%
Rate During 1952-2004
Income Per Capita $196 $14,032

Foreign Trade $300 million $341.9 billion

FDI $1 million $3.95 billion

Foreign Exchange Reserve $34 million $241.7 billion

Unemployment Rate 4.37% 4.4%

Source: Directorate General of Budget Accounting and Statistics, Executive Yuan

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 Economic Overview
Domestic Economy Private Investment
In 2004, Taiwan’s economy In 2004, private investment
grew by 5.71%, the best grew by 28.2 ％ ,the biggest
performance in four years. increase since 1993.
30 28.2
％ Economic
18.3
20 15.1 Growth Rate
11.6
9.9(f)
10 6.37 5.32 3.94
4.33 3.33
(2.22) 5.71 3.65(f)
0 5.78
3.1
-0.8 -1.6
-10

-20
Private Investment
-29.1
-30 Growth Rate
Year 1997 1998 1999 2000 2001 2002 2003 2004 2005(f)
Source: Directorate General of Budget Accounting and Statistics, Executive Yuan, Aug. 2005
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 Economic Overview
Industrial Output
In 2004, industrial output increased by 9.85%, the biggest
increase since 1987.
Unit: ％

Year Industrial Manufacturing By Industry

Output (Total)
Metal & IT & Chemical Food,
Mechanical Electronic Textile,
etc.
2001 -7.81 -8.36 -13.70 -11.65 2.03 -8.11
2002 7.92 9.39 9.37 17.87 7.40 -4.80
2003 7.10 7.38 5.19 11.56 9.39 -3.34
2004 9.85 10.48 11.57 14.22 10.01 -0.72
2005(Jan. –Sep. ) 1.30 0.91 0.60 3.41 -0.70 -3.50
Source: Department of Statistics, MOEA

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 Economic Overview
Unemployment Rate
In 2005 ( Jan.~Sep.), unemployment rate decreased to 4.19%, the
lowest rate since 2001.
Unit: 1,000 people
Industrial Structure
Year Employment Agriculture Industry Services Unemployment
Production Rate (%)
Manufacturing

2001 9,383 706 3,377 2,587 5,299 4.57

2002 9,454 709 3,332 2,563 5,413 5.17
2003 9,573 696 3,334 2,590 5,543 4.99
2004 9,786 642 3,446 2,671 5,698 4.44
2004 9,760 649 3,429 2,658 5,682 4.52
(Jan.~Sep.
)
2005 9,917 597 3,543 2,719 5,778 4.19
Source: Directorate General of Budget Accounting and Statistics, Executive Yuan
(Jan.~Sep.
)
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 Economic Overview
Foreign Trade
In 2004, Taiwan’s two-way foreign trade totaled US$341 billion.

Year Foreign Trade Exports Imports

Amount Change Amount Change Amount Change

(US$ billion) (%) (US$ billion) (%) (US$ billion) (%)

2001 230.1 -20.19 122.9 -17.16 107.2 -23.41

2002 243.1 5.65 130.6 6.27 112.5 4.94
2003 271.4 11.64 144.2 10.41 127.2 13.07
2004 341.9 25.98 174 20.67 167.9 32.00

2005(f) 370.8 8.5 187.1 7.5 183.7 9.4

Source: Department of Statistics, Ministry of Finance

(f): Forecasted by Bureau of Foreign Trade, MOEA

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經濟部 Economic Overview
Exports by Region Central &
S. America Others
Unit: US$ million 3,390 (2%) 1,509 (1%)
Central & Others
S. America 529 (1%)
2,614 ( 3%) N. America
29,758 (17%)

N. America
25,796 (28%)
1994
Total Export Value:
US$ 93 billion
Aisa
45,933 (49%)
Europe Asia
23,435 (13%) 107,978 ( 62%)

2004 Oceania
Total Export Value:
Eurpoe 2,842 (2%)
US$ 174 billion
12,927 (14%)
Australia
Oceania Middle East
Africa
1,914 (2%)
China & 2239 Middle East
China &
1,962 (2%)
1,361 (1%) Hong Kong (1.286%) 3,611 ( 2%)
Hong Kong
21,391 (23%) Africa 63,846 (36.7%)
Australia 1,509 (1%)
1632 (1.755%)
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經濟部 Economic Overview
Imports by Region
Central & S.
Unit: US$ million America Others
3,577 (2%) 277 (0%)
Central &
S. America N. America
Others
1,885 (2%) 22,831 (14%)
406 (0%)

N. America 1994 Europe

19,293 ( 23%) Total Import Value: 21,298 (13%)
US$ 85.3 billion Asia
Asia
97,720 (59%)
40,617 (47%)
Oceania
4,044 (2%)
Europe
2004
15,949 ( 19%) Total Import Value: Australia
US$ 167.9 billion 3422 (2.038%)
Middle East
Oceania Africa 3,174 (4%) Africa China &
2618 (3%) China &
1,406 (2%) 4,125 (2%) Hong Kong
Hong Kong
18,773 (11.2%)
Australia 3,392 (4%) Middle East
2225 (2.607%) 14,022 (8%)
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 Economic Overview

Trade between Taiwan and Australia

8000
Unit: US$ million

Export from Taiwan

7000 7053
Import to Taiwan
Total
6000
5661
5090 5329
5000 4750
4804 4448 4419 4611
4682
Amount

4331 4545
4000
3857 3501 3422
3217
2957 3085
2845 2913 2832
3000 2727
2575
2225 2239 2303

1756 1837 1873 1847 1828 1884

2000 1632 1632 1587
1363

1000

0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005*
Year 10
*: Forecasted by Bureau of Foreign Trade, MOEA
 Competitive Position
Tech Taiwan
2005-06 Ranking of Competitiveness Indicators by World Economic Forum (WEF)

Country General Technology Public Macro Economic

Ranking Policy Environment
Finland 1 2 5 4
USA 2 1 18 23
Sweden 3 4 17 12
Denmark 4 5 2 3
Taiwan 5 3 26 17
Singapore 6 10 4 1
Iceland 7 9 3 11
Switzerland 8 6 9 13
Norway 9 13 6 2
Australia 10 14 10 14
New 16 19 1 20
Zealand
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MOEA
Competitive Position
2005 Evaluation on Taiwan’s Investment
Environment by Major World Agencies

BERI EIU
(Business Environment (Economist Intelligence)
Risk Intelligence) Business Environment:
Investment Risk: No. 19 in the world
No. 5 in the world No. 3 in Asia

WEF
(World Economic Forum)
Growth competitiveness:
No. 5 in the world
No. 1 in Asia

Brown University IMD

(International institute
World e-Government Evaluation
for Management Development)
No. 1 in the World
No. 11 in the world
 Competitive Advantages
Taiwan As No. 1
1971~1980 1981~1990 1991~1999 2000 -2004
•Decoration • Gourmet • Scanners • Hub
lamps powder • Mother boards • Record Optical Disk
•Ship •Umbrella • Notebook • Mother Board
dismantling • Hat computers
•Footwear • IC packaging • Foundry
• Tennis • Notebook PC
•Electric • Wafer foundry
rackets • SOHO Router
fans
• Bicycle • LCD Monitor
• ABS • WLAN
resin • Cable Modem
• Mini • DSL Modem
electronics • Optical Disk Driver
• Sewing • IC Packaging
machines • Glass Fiber
• Network Interface Card
• Yachts
• ABS Copolymer
• Monitors
• Switch
• CDT Monitor 13
經濟部
Competitive Advantages
 Comprehensive Global Supply Chain
Taiwan is the main IPO location for many transnational companies.
USA, Japan and Europe IPOs’ Purchases in Taiwan Unit: US$ billion

Top-10 USA IPOs Top-5 Japan IPOs Top-5 European IPOs Total for Top-20 IPOs

2002 31.1 7.3 1.8 40.2

2003 34.3 9.3 1.9 45.5
2004 38.6 11.2 2.0 52.7
Increase 12.54% 20.43% 5.26% 15.82%
(from 2003
to 2004)
Note: 2004 a. Top-10 US IPOs─Apple, Cisco, Dell, HP, IBM, Intel, Motorola, Solectron, Linksys, Viewsonic
b. Top-5 Japan IPOs─Fujitsu, Hitachi, NEC, Sony, Toshiba
c. Top-5 European IPOs─Actebis, Fujitsu Siemens, Nokia, Philips, Siemens
d. Total purchases in Taiwan by the top-20 IPOs in 2004 was around US$52.7 billion. The total purchase
amount of IPOs in Taiwan was around US$54.0 billion in 2004, and US$48.5 billion in 2003
, representing an 11.3% annual growth rate.
Source: IDB/MOEA 14
 Development Strategy

＊ Technology & Innovation-oriented Industrial Policy

• Developing Diversified Industries
• Promoting “Two-Trillion and Twin-Star” Program
• Encouraging Local Companies and Transnational to set up

R&D centers in Taiwan

＊ Market Diversification & Global Deployment
• Promote Taiwan as the base of Enterprise Operation
Headquarter and R&D centers.
• Encourage local companies to diversify markets in South
and Southeast Asia.

＊ Streamlined Business Recruitment Policy

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 Unit: US$ billion

16

Digital Content (14.1)

★

Information Services(9.4)
▲

Distribution & Logistic Services

Strategic Services
Cultural & Creative

Bio-tech (6.7)
★

Textile (19)
Design Services
■

R&D Services

Electronic Component (16)

▲

Electronic Material (8.1)

▲
2008

Semiconductor(59.1)
☉ ☉ ☉ ◎ ◎

Digital Hardware (20)

▲

Flat Panel Display (58.4) Plastic Products (9.7)

■

Communications (32.8) Automobile (18.8)

Development Strategy

Petrochemicals(36.9) Bicycle & Motorcycle (4.2)

■

Steel (32.8)
▲

Machinery & Equip. (26.6)

Paper Making (4.3)
■

(Processed) Foods (16.6)

■
Technology & Innovation-oriented policy

▲ High Growth Industries ( > Economic Growth Rate)

Optical Media Storage(3.1)

▲

Metallic Products (16.2) (2.2)

■

Tool Machine(4.9) (2.8)

▲

Machinery Parts & Accessories (5.4) (2.6)

■ Substantial Industries ( > US$ 3billion)

US$ 30 billion

US$ 15 billion

billion
US$ 3
~Developing Diversified Industries

★ Twin Star Industries

☉ New Trillion Industries
◎ Two Trillion Industries

Communications (12.5)
Electronic Components (12.5)
Information Hardware (11.3)
Automobile (13.0)

Exchange rate: USD1 : NTD32

Flat Panel Display(22.3) Textile (15.3)
(Processed) Foods (14.5)
Petrochemicals(28.1) Metallic Products (14.1)
Semiconductor (35.6)
2004 Steel (27.5) Digital Content (7.1)
Information Services (5.6)
Machinery & Equip. (17.8)
Bio-tech (4.3)
Electronic Material (4.1)
Plastic Products (8.6)
Bicycle & Motorcycle (3.8)
Paper Making (3.7)
 Development Strategy
Current Focused Industries
~ Two Trillions, Twin Stars
Item 2004
Target for 2006
Production
US$34.34 billion US$58.9 billion in production
Semiconductors
3 companies in world top 10
2-T US$32.34 billion US$41.4 billion in production
TFT - LCD Worldly biggest TFT-LCD
production country
US$7.18 billion 3,000 companies with
US$11.2 billion in production
Digital Content Digital content production
2-S center in Asia-Pacific and main
supplier to Chinese market
US$4.5 billion US$7.5 billion in production
Biotechnology
500 companies in 10 years

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 Current Focused Industries
~ Digital Content Industry
Vision and the Goals: Industry Development Goal
2006
Industry
US$ 10.9 billion
Revenue
Number of 3,000+ (approx.)
Companies (increase 600)
Number of 70,000+ (approx.)
Present Industry Status Employees (increase 18,000)
2004
Export Ratio 30% +
Industry
US$ 6.8 billion
Revenue
Number of
Companies
2,400 (approx.) The Goals: The Vision:
Number of
52,000 (approx.)
Employees Chinese Content Market
Innovative leadership
Export Ratio 20% Offshore production mgmt
Localize Int’l content
Taiwan
Gateway for Digital Content
Global Content Market Design, Development and
ODM/OEM opportunities
Creation in Asia-Pacific
International links
Returnees of overseas Chinese 18
 Digital Content Investment Strategy
The Government Fund and Credit Loan
— plays the role of leading investor and
capital provider to facilitate the Flagship Brings extra US$ 5.6 billion
Investment Projects in Digital Content production value in Digital
Industry Content Industry*
— brings Private Sector’s resources
(business ,technology and capital) from
international famous companies and
domestic investors to form the synergy.

(Public Sector ) (Private Sector)

Facilitating Taiwan
Government Fund D. C. Industry Foreign / Domestic
/ Low Interest Credit Loan Investment Direct Investment
(US$ 482 million) US$ 4 billion (US$ 3.5 billion)

-Equity Investment -Foreign Investments

(US$ 220million) -High-Tech Groups
-Venture Capital -Financial Holdings
(USS 90million) -Venture Capitals

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*: The generated production value is two times to the paid-in investment amount.
 Current Focused Industries
~ Biotechnology Industry
Current Status in Taiwan (2004) Unit: US$ million

New Medical
Industry Pharmaceuticals Total
Biotechnology Devices
Revenue 1,089 1,911 1,600 4,600
Number of Companies 240 414 480 1,134
Workforce (people) 7,650 12,931 14,895 35,476
Export Value 435 130 876 1,441
Import Value 476 1,368 1,175 3,019
Domestic Sales vs.
60:40 93:07 45:55 69:31
Export
Domestic Market 1,130 3,149 1,898 6,177
Source: 2004 Biotechnology Industry in Taiwan, BPIPO, 2005

The investment in Taiwan biotechnology industry has been growing

annually, above US$ 600 million. The amount is US$ 688 million in 2004.
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 Biotechnology Industrial Clusters
•About 30~40 Biotechnology companies
•Three Research Institutes (Academia Sinica, DCB,NIH)
•Two Incubation Center
•Government Supporting
-BPIPO
-The Executive Yuan’s One-Stop Service Office

Hsinchu Biomedical Nangang

Science Park Software Park

Marine Biotechnology Park

Hsinchu Science -based
Industrial Park

Yilan Biomedical
Taichung Science -Based
Science Park
Industrial Park

Changhua
National Flower Park
Taiwan Orchid Plantation
Taitung Deep Ocean Water
Technology Park

Tainan
Technology Industrial
Park

Pink: R&D Park

Ping Tung Agricultural Blue: Industrial Park
Biotechnology Park
Green: Agricultural Park
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Source: IDB, MOEA
 Taiwan’s Biotech Companies
Tend to Internationalize
Panion & BF Biotech, Taiwan

AbGenomics, Taiwan PBF 1681

Completed Phase II
Antibody 168 Multicenter Clinical Trial
Licenced to
Boehringer-Ingelheim, Germany

Antibody 168 PBF1681

Treatment: Treatment:
Rheumatoid arthritis  Renal osteodystrophy
Psoriasis / Allergies / Asthma  Soft tissue calcification
Organ transplant rejection Potential revenue:
Business arrangement: US$ 150 million during the licencing
payment and royalties > US$ 50 million period
Date of licencing: Licencing negotiations under way
June 6th,2005 Date of completion of Phase II trial:
October, 19th, 2005
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 Home
Home to
to R&D
R&D Centers
Centers
Category Achievement Target

Local 87 domestic companies Over

Over100
100R&D
R&D
Local
Companies
Companies have set up 87 R&D Centers centers
centersby
by2007
2007

28 R&D centers have

Multinationals
Multinationals Over
Over40
40R&D
R&D
been established by 25 centers
centersby
by2007
2007
multinationals

Year 2002 2003 2004 Total

Benefits from
multinationals No. of New Developed 7 39 206 252
Products

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Taiwan As Regional Operational Headquarters
Total Numbers of
Enterprise Operational Headquarters in Taiwan: 263
Machinery 44
Numbers in
Manufacturing IT 136
Sector: 233
Petrochemicals 53
Technology Service 9
Wholesale and Retail 9
Numbers in
Financial and Insurance 5
Service
Sector: 30 Transportation and Storage 6
Culture,Sport and
1
Recreation

Total Numbers of International Logistics and Distribution Centers in Taiwan ： 11

Manganese Semiconduct Computer PU raw Communications Electronic
and or equipment parts materials components components
chromium and parts
minerals
1 1 6 1 1 1

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Market
Market Diversification
Diversification and
and Regional
Regional Deployment
Deployment
Encouraging local companies to diversify markets in
South and Southeast Asia
Amount of FDI from Taiwan in ASEAN+1 ( till June of 2005)
Recipient Investment Investment Rank Among
Cases Amount Foreign Investors
(US$ billion)
China* 33,806 43.9 ─
ASEAN** 7,766 46.4 ─
　 Thailand 1,784 11.3 3
　 Malaysia 2,065 9.6 3
　 Philippines 883 1.1 7
　 Indonesia 1,084 13.6 6
　 Singapore 410 2.7 ─
　 Vietnam 1,357 7.6 1
　 Cambodia 186 0.5 2
Total 41,572 90.3
*Source: Investment Commission, MOEA 25
**Source: Local country statistics
 Investment Opportunities
~Digital Content Industry~
Digital Game
• PC Game / Online Game
• Console / TV Game
• Mobile / Wireless Game
• Arcade Game
Potential Areas
Digital Audio and Video
• Video on Demand (VOD)
• Multimedia on Demand (MOD)
• Digital TV (DTV) / HDTV
Contents
• Digital Audio Broadcasting (DAB)
•
Digital Video Broadcasting (DVB)
Computer Animation
• Animation Film /Film
• Co-production Project
• Postproduction Service
• 3D Animation OEM / ODM
Multimedia Software
• Image Processing
• Authoring Tools
• Digital Home Applications
• Streaming Technology
• Embedded Software
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 Investment opportunities
~Biotechnology industry~
Drugs: Medical devices:
Influenza & JEV vaccines Medical Imaging devices
Antibody drugs Diagnostic kits
Blood products Biochips
Cell & Gene therapy Bio informatics
Drug Delivery

Potential Areas

Chinese herb medicine: Agricultural Biotechnology:

Genetic typing of raw materials Animal vaccines
Chemistry manufacturing processes Aqua-culture
Health supplements
Medicinal plants
Transgenic plants & animals
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 Investment Incentives

Establishing single window service to facilitate license application

--Industrial Development & Investment Center (IDIC), MOEA

Provision of investment incentives & assistance measures

1. For investment, R&D personnel training, and establishment of R&D centers, etc.
2. For the deployment of labor and capital
3. Provision of assistance in post-investment market development, corporate digitization,
personnel training, and management

Provision of information and enterprise visits

1. Invest in Taiwan Website: http://investintaiwan.nat.gov.tw/zh-tw/
2. Reference Manual for Returning Taiwanese Investors

Organizing of activities to help overseas Taiwanese companies inv

est back in Taiwan
1. Cooperation with the World Taiwanese Chamber of Commerce and the Taiwanese
Chamber of Commerce in North America
2. Cooperation with venture capital associations

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 Conclusion

MOEA: http://moea.gov.tw
Invest in Taiwan: http://www.investintaiwan.org.tw

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