Research Paper on Rise to Prosperity in Taiwan Since 1982

Introduction

Taiwan's ascent to glory began in 1982 when they had their first democratic elections (IBP, 2016). The peaceful transitions of authority since then made business doable in the country, attracted investors, and encouraged the government to spend more on development projects. Today, Taiwan is a semi-presidential republic and counts as one of the most prosperous nations in Asia and has substantial investments in mainland China. There is no formal representation of Taiwan citizens in the USA, but there is an organization that takes up that role, called the Taipei Economic and Cultural Representative Office in the United States (TECRO) (IBP, 2016). This paper details the political, geographic, and business environments of Taiwan and the mechanics of doing business in the country.

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Taiwan Versus China (Video Source)

The video at https://bit.ly/2Sshoi9 by ABC News In-depth expounds on the tension between Taiwan and China in the recent years. The Taiwanese are growingly feeling as a sovereign state, but China continues to feel that Taiwan is part of it and should remain so. The rascal political stance of Taiwan and the rapidly growing economy make Taiwan a desirable asset for China. Consequently, China continues to actively campaign to convince the world to acknowledge Taiwan as part of China. The first cause of dissent is that Taiwan runs a democratic government while China runs on a one-party-state system. However, Taiwan is resilient and their 2020 elections were candid proof that they can stand on their own (ABC News In-depth, 2018).

Fair Trade in Taiwan

Fairtrade is an organization that advocates for better pricing, the right working conditions, and reasonable trade terms for employees and farmers in developing countries. Fairtrade sets terms and standards which companies in its member nations must follow. The measures include sustainable compensation, justice at work, and enabling farmers to make decisions on their market choices (Ehrlich, 2018). Taiwan became the first Chinese speaking nation to certify fair trade in its capital city, Taiwan, in 2017. Since then, the city carried out campaigns to sensitize people about fair trade. Schools and cooperation have taken up the idea and provide Fairtrade products. Ehrlich (2018) emphasizes that many shopping points also sell more and more Fairtrade products as time goes. In Taiwan, Fairtrade policies majorly affect the manufacturing and sale of rice, fruits and vegetables, oil seeds, juices, and nuts.

The Geography, People, and Culture

According to Infoplease.com, the country has a tropical climate and experiences monsoon winds, hot and humid summers, and mild and short winters. Between July to September, winds from South China push heavy rains to Taiwan. The country's average annual rainfall is approximately 2000 millimeters, which is even more at higher altitudes. In the Capital City, Taipei, the temperatures range from 120C to 180C around February, while in July it rises to between 240C to 340C during summer. The most significant cultural differences between the USA and Taiwan are that Taiwan has smaller retail stores compared to the big stores in the USA and that rice is the staple food in Taiwan compared to baked products in the USA (Infoplease).

The people of Taiwan are majorly literate, welcoming, and hardworking. They are mainly the Han Chinese, who make up 98 percent of the population. Nearly a quarter of the Han Chinese are from mainland China. The rest of the people are the Aborigines of Malayo-Polynesian origin who reside mainly in the island's central and eastern regions. Of this population, 48 percent consist of Confucians and Taoists; 43 percent are Buddhists, while 7.4 percent of them percent are Christians (Infoplease). Mandarin Chinese is their primary language, but some parts of the population speak Hakka or Hokkien. Schooling in Taiwan takes 14 years; two years of pre-school, grade one to six of primary school takes six years, junior high school lasts three years, senior high school takes 3years (Int'L B.P.U., 2015). Past this point, students are free to proceed for vocational training, bachelors, masters, or graduate degrees.

Politics and Legal Environment

The factors that influence business here is the county's rapid growth, government policy, and the delicate relationship with China. Taiwan measures 35,980 square kilometers, of which land covers 32,260 square kilometers while the ocean takes up 3,720 square kilometers. This mass encompasses Taiwan's main island plus a few nearby islands with some part of the Jian province of China. President Tsai Ing-wen and Vice President CHEN Chien-Jen have governed the country since 20 May 2016 to date (IBP, 2016). Just like Taiwan in the USA, the US has no consulate in Taiwan, and the American Institute in Taiwan (AIT) offers to help American citizens in Taiwan with diplomacy services.

Taiwan has three cites, namely Chiayi, Keelung, and Hsinchu, six special municipalities, and thirteen counties. The government mainly uses a modified Wade-Giles system to Romanize streets and names. However, cities like Taipei use Pinyin romanization to inscribe the names while some other cities use different methods (The World Factbook, 2018). Once the president and vice president get elected by democratic voting, the former appoints the prime minister, who then recommends deputy prime minister appointees. The Taiwanese legal system is almost similar to the USA system. The legislature consists of the supreme court and constitutional court as the highest courts on the land assisted by high courts and district courts. Will a population of 23million people, Taiwan has nearly 11,340,886 mobile subscriptions as of 2020 and 9.6 million internet users (Int'L B.P.U., 2015).

Physical Infrastructure and Production

The telecommunication sector is competitive, and most companies have put up stable network infrastructure with up to 4g and 5g connections with two satellite earth stations. The country also relies on the PLCN submarine fiber cables that connect the Middle East, Asia, Europe, Australia, Africa, and the USA (Infoplease). The broadcast media hosts five media houses that run over twenty TV channels and 300 satellite stations. Digital cable TV supplies nearly 99% of residents with TV and radio networks. On productivity, Taiwan produces 246.1 billion kWh of electricity per year and ranks 18th in the world in electricity production (The World Factbook, 2018). China is the biggest producer of power in the world, followed by the USA.

According to The World Factbook, in Taiwan, 79 percent of the electricity comes from fossil fuels, 11 percent from nuclear fuels, 6 percent from other renewable sources, while 4 percent comes from hydroelectric production. Their crude oil production ranks average, at 196 Barrels per Day by 2018. They do not export crude oil, and they imported 846,400 Barrels per Day in 2015, is the 13th largest crude oil importer after Thailand. The USA is the biggest importer of crude oil, followed by China. Taiwan's crude oil reserves hold approximately 2.38 million barrels. By 2015, Taiwan produced 924,000 barrels per day of refined petroleum products (The World Factbook, 2018).

Given that the country's refined crude oil products consumption is 962,400 barrels/day, they export 349,600 barrels of daily production and import 418,300 barrels per day to balance it out. For natural gas, Taiwan ranks 77th worldwide, with 237.9 million cubic meters. They consume 22.45 billion cubic meters, thus import 22.14 billion cubic meters of natural gas. The proven natural gas reserves hold nearly 6.229 billion cubic meters of the same. On both crude oil and natural gas consumption, Taiwan ranks far below the USA (Infoplease). Because of these developments, Taiwan is considered a developed country from 2018.

The country has a modern transportation system. It has eight air carriers that operate more than 220 aircraft in the more than 35 airports in Taiwan with advanced paved pathways. It has 13, 500 km of pipeline for transporting oil, 2200 km for gas, and 25 km for moving condensates (Ehrlich, 2018). The railway department is blooming too, with a total of 1,613 km, of which 345 km is standard gauge electrified while 118km is narrow gauge. Part of the railway belongs to Taiwan Cement, TaiPower, and the Forestry Bureau. On roads, they have a total of 43,206km of road network, where 42, 793 is paved as highways and expressways, and a paltry 413km that is unpaved (The World Factbook, 2018).

In the ocean business, Taiwan's public and private merchants own around 267 ships, where 18 are bulk carriers, 60 are cargo ships, 59 are container ships, 19 are oil tankers, and others a mix of many other kinds of ships. They have big ports like Kaohsiung, Taichung, Keelung, and Hualian, which handle tens of millions of cargos yearly. The world bank also boosted Taiwan's growth. The water project of 1968 and the railway, power, and education projects of the 1971s offered significant enhancements to civilization in the country (WorldBank). The mountainous ranges of Taiwan produce gold, copper, silver, and coal. The forests have natural camphor and hardwood while the coastal stretches from the prime agricultural lands (The World Factbook, 2018).

The Economy

Taiwan is a developed country and is the seventh-largest economy in Asia and the 22nd largest in the world. The country is known for its prowess in advanced computer microchip manufacturing, where they are the best in the world. Its currency is the New Taiwan Dollar (NTD), and it has a GDP of $586.104 billion, with a $1.300 trillion purchasing power parity (Yu, 2012). One NTD is equal to 0.033 United States Dollars. They have a 0.882 Human Development Index, thus rank 25th globally. Yu, 2012, also states that the county's Gross National Product (GNP) hit a high of 4710479 TWD Million in 2017 and has remained high up to date.

Taiwan is one of the beneficiaries of the US-China trade war. As companies opted for alternative manufacturing bases in China, Taiwan was the choice for many. They have low inflation and unemployment rates, a current-account surplus, and very few financial problems (Int'L B. P. U., 2015). At the moment, there is no political cause of worry for foreign investors in Taiwan.

The rising costs of production and increased competition have made Taiwan's food crop export business to dwindle. Their chief cash crops include rice (which is the chief crop), fruits, vegetables, sweet potatoes, tea, and corn. Animal production in the island mainly deals with chicken, pigs, cattle, and subtle fishing. Taiwan's primary industry used to be the milling of sugar and rice. Today, the country boasts of extensive telecommunication networks, competitive manufacturing and digital solutions business, and active service industry (Yu, 2012).

The industries manufacture electronics, chemicals, armaments, machinery, iron and steel, household products, vehicles, refined oil, and processed foods. Most of the processing plants are private, while essential products like electricity and railway are government-run. The country has set 1.5 percent as the average applied tariff rate, and exports make 115 percent of the GDP (Infoplease).

What does Doing Business in Taiwan take? (Video Source)

The main trade partners of Taiwan are China, the USA, Hong Kong, and Japan. On the video here /bit.ly/2GYyZZI by USFoodTaiwan, Valery Brown, the Agricultural Trade Office Director, American Institute in Taiwan, explains what business in Taiwan entails. Taiwan is the 9th largest US trading partner and the 6th largest US' agricultural products export market. The largest market to explore in the country is fresh produce consumption. Taiwan strictly protects property rights and patents with strong enfor...