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Business entities in Taiwan

Foreigners willing to do business in Taiwan usually register a local limited liability company. There are however alternative corporate structures available in Taiwan, including the possibility for foreign companies to register a branch or a representative office. Please find below more information on the different types of corporate structures available to do business in Taiwan.

Doing business in Taiwan through a local entity

The Taiwan limited liability company (limited company)
  • The Taiwan limited liability company (LLC) can be registered with only
    1. one shareholder and
    2. one director, who can both be non-resident foreigners. While there is no minimum paid-up capital requirement, Healy Consultants recommends to allocate a minimum of US$3,300 to optimize the probability of timely company registration approval by the Ministry of Economic Affairs
  • Before registration of the company, our Client will be required to open a capital account in Taiwan and thereafter inject the paid-up capital. Unfortunately, banks require foreign directors and signatories to travel, before approving capital account opening;
  • Best uses: Setting up an LLC in Taiwan is the best option for most foreign investors due to its flexibility and low administrative requirements. Multinationals favour the LLC when establishing a subsidiary of their foreign company in Taiwan.
The Taiwan limited partnership (LP)
  • Foreigners can register limited partnerships in Taiwan, which must however include at least two partners, one of them being a general partner personally liable for any debt or tax due by the partnership and who must be a Taiwanese resident. Limited partnerships in Taiwan are not allowed to hire foreigners;
  • The partnership is a tax transparent entity, not subject to corporate income tax but still subject to the preparation and filing of financial statements and requiring all partners to submit a personal income tax return;
  • Best uses: foreigners having a local partner can consider to register a limited partnership in Taiwan. In other cases, Healy Consultants recommends to register instead a limited liability company.
The Taiwan free zone company
  • Foreigners willing to register export-oriented businesses can register a subsidiary in a special economic zone (SEZ). In addition to requirements applying to a branch, the company will be required to submit a business plan to the SEZ authority;
  • While there is no minimum investment officially required, Healy Consultants recommends our Client to allocate a minimum of US$200,000 to the paid up capital of their Taiwanese free zone company. See also this page for additional information on the tax incentives available in the Taiwan free zones;
  • Best uses: we usually recommend our Clients to seek free zone registration in Taiwan when they expect to make a significant investment and to export a significant percentage (over 75%) of their products overseas.

Doing business in Taiwan with a foreign entity

The Taiwan branch office
  • Foreign companies may establish a branch office in Taiwan to conduct business. Compared to the registration of a subsidiary, this however requires the appointment of a local agent/branch manager. There is no requirement for these appointments if an LLC is set up;
  • Best uses: We usually recommend our Client to register a branch when they plan to operate in regulated industries such as financial services, banking and finance. Otherwise, registration of a subsidiary (LLC) is more advisable.
The Taiwan representative office
  • A representative office is allowed to conduct only limited, non-commercial activities in Taiwan. Like a branch, such entity is additionally required to appoint a resident as manager;
  • Best uses: a representative office can be used by foreign companies to carry out market research, brand marketing activities and research & development, but they may not generate any revenue of their own.

In Taiwan, Moores Rowland Asian Pacific network member - Moores Rowland CPAs has 5 offices -
  • Taipei Office: 6&9F. No. 320, Sec. 4, Zhongxiao East. Rd., Taipei,10694, Taiwan (R.O.C.)
  • Taoyuan Office: 17F.,No.86-3, Yiwen 1st Street,Taoyuan Dist., Taoyuan City, Taoyuan County 33045, Taiwan (R.O.C)
  • Hsinchu Office: 3F., No. 83, Sec. 2, Dongda Rd., Hsinchu City 300, Taiwan (R.O.C.)
  • Taichung Office: 5F. -8, No. 20, Dalong Rd., Taichung City 403100, Taiwan (R.O.C.)
  • Kaohsiung Office: 4F. -2, No. 171, Sanduo 2nd Rd., Kaohsiung City 80266, Taiwan (R.O.C.)

Tax administration

The Ministry of Finance, which is part of the Executive Yuan, is the highest government entity responsible for implementing taxation policies and overseeing the leveling and collection of taxes. Taxation occurs at both the national and local government level.

National taxes

Two broad categories of taxes exist at the national level: customs duties and inland taxes. Customs duties are administered by the Directorate-General of Customs, which has local offices throughout the country. Five national tax administrations who are directly subordinate to the central government handle oversight of all inland taxes. Inland taxes is a broad term that includes:
  • Income Tax;
  • Estate and Gift Tax;
  • Value-Added and Non-Value-Added Business Tax;
  • Tobacco and Alcohol Tax;
  • Commodity Tax;
  • Securities Transaction Tax; and
  • Futures Transaction Tax
Local taxes

Individual municipalities, counties, and cities have set up Revenue Service Offices responsible for collecting a range of taxes, including:
  • Agricultural Land Tax
  • Land Value Tax
  • Land Value Increment Tax
  • House Tax
  • Vehicle License Tax
  • Deed Tax
  • Stamp Tax
  • Amusement Tax

Tax legislation

Unlike the Internal Revenue Code in the United States, there isn't one law that governs taxation in Taiwan. Rather, taxes are governed by a series of laws and regulations each related to a specific type of tax. As the chief legislative body, the Legislative Yuan plays an important role in formulating and revising tax related laws. The Income Tax Act is the primary law that governs individual income and profit-seeking enterprise income taxes.

Individual Income Tax

Both residents and non-residents are assessed individual income tax on Taiwan-sourced income unless an exception is provided in the Income Tax Act and related laws. Individuals are considered residents of Taiwan for tax purposes if they are either domiciled there, or spend for 183 days or longer in a taxable year.

Income received in exchange for services rendered while physically present in Taiwan is considered to be Taiwan-sourced income regardless of if the payer is a local or offshore person or entity. One major exception to this rule exists for non-residents who are physically present in Taiwan for less than 91 calendar days in a year and who are only paid compensation by offshore entities

Progressive tax

Taiwan has implemented a progressive tax system for individual income taxes. For the 2017 tax year, the tax rates were as follows:
Brackets (Unit NT$) Rate (%)
0 - 540,000 5%
540,001 - 1,210,000 12%
1,210,001 - 2,420,000 20%
2,420,001 - 4,530,000 30%
4,530,001 - 10,310,000 40%
10,310,001 and over 45%
Filing of individual income tax

By default, the tax year for all individuals and profit-seeking enterprises follows the calendar year. Income tax returns are due by May 31 of the following year, with no extension of time allowed. Taxpayers, including foreigners, are able to complete and file their tax return electronically through software provided by the local taxing authority.

Profit-Seeking Enterprise Income Tax

All profit-seeking businesses in Taiwan are subject to the Profit-Seeking Enterprise Income Tax. Sole proprietors and partners must file a return. However, their portion of the taxable income is reported on their individual income tax return. Income tax rate of profit-seeking enterprises

In 2010, the top tax rate was reduced from 25% to 17%, and the threshold below which no tax is owed was raised from NT$50,000 to NT$120,000. Therefore, the current profit-seeking enterprise tax rates are as follows:
Taxable Income Tax Rate
Below NT$120,000 0%
Above NT$120,000 17%
The amount of tax payable shall not exceed half of the amount of the taxable income in excess of NT$120,000.

Business tax (value-added tax)

Tax amount = (sales - purchases) * tax rate In 2017, tax rate is 5%.

Securities transaction tax

This tax is paid by sellers of Republic of China securities at a rate of 0.3% of the gross proceeds from the sale of shares issued by companies. A rate of 0.1% applies on the gross proceeds of corporate bonds, however, an exemption has been put in place through 2016.This tax is governed by the regulations set forth in the Securities Transaction Tax Act.

Real estate speculation and the luxury tax

Aimed at cooling off real estate speculation that was driving up the cost of living in Taipei City and other urban areas, the Republic of China government implemented a new luxury tax in June 2011. The law imposes a 15% sales tax on owners of second homes who sell within one year of purchase. Additionally, a 10% sales tax is charged against properties sold after being owned for between one and two years. Data provided by the Republic of China government in late 2011 showed that the luxury tax was having the desired effect, causing the average housing price in Taipei to fall nearly 12% while reducing overall volume of real estate transactions island-wide by nearly 15% in the June–October time period.

Uniform invoice lottery

First conceived in the 1950s, the Taiwan government created a uniform invoice system to encourage honest reporting of sales and prevent underpayment of taxes by businesspeople. To provide an incentive, the government launched a receipt lottery system. Each receipt is coded with an alphanumeric number, and every two months a lottery drawing is held with prizes ranging up to NT$10 million (approximately $335,000 USD as of February 2012) depending on how many numbers match. The lottery is governed by the Uniform Invoice Award Regulations.

Work Permits

In order to work in Taiwan, a foreign worker must first sign an employment contract with the company, where the company must then apply for a work permit from the Ministry of Labor before the worker may work in Taiwan. A work visa and an Alien Residence Certificate is required to legally reside in Taiwan during the duration of employment in Taiwan.

There are regulations that outline the permitted industries and occupation types. Among the permitted industries for foreign workers are oceanic fishing, housemaid, manufacturing, construction, nursing, bilingual translation and cooks.  Taiwan does allow the employment of specialized foreign workers who are able to provide specialized knowledge and skills for competitive technologies.

Your Options

Have your own Company

The employer is the sponsor for the employee and may employ foreign workers on the basis of an employment relationship or a contractual relationship to fulfil a specified obligation. Either way, the employer should be aware of the regulations and steps to fully sponsor a foreign employee for work in Taiwan.

Sponsorship Process:

  1. Offer of employment
    • The employee must receive a letter of invitation or employment contract from the employer in Taiwan, indicating an offer to work in the nation. The contract should be signed and returned to the employer, who may then proceed to the application for a work permit.
    • It should be noted that employers who have been incorporated in Taiwan for less than a year have minimum capital requirements that must be met.
  2. 2. Application for work permit
    • The employer must submit an application to the Council of Labor Affairs for a work permit. The work permit is typically issued for six months’ validity, although may be extended up to a maximum period of three years.
    • For the application of the work permit, there are two job categories, which are specialized or technical workers and managerial employees. For the employer to be eligible to hire managerial employees, there are more stringent revenue requirements. In addition, different types of employment require different documents.

    The foreign employer must meet one of the following requirements when hiring a foreign employee:

    • Operational capital of NT$5 million for Taiwanese entities incorporated for less than one year
    • Revenues in excess of $NT10 million for Taiwanese entities established for one year or more
    • Total import and export commission revenue of US$400,000 for the preceding year
    • If the company is a representative office, the necessary approval is given by the relevant authorities
    • The company has R&D centers or operational headquarters approved by the authorities
    • The employer has made significant contributions to the economic development of Taiwan

    Required documents from employer

    • Copy of most recent year’s corporate income tax return
    • Copy of the company representative’s ID card or passport
    • Copy of the company’s registration certification, business registration and other permits
    • Copy of the letter of foreign investment approval issued by Investment Commission
    • Copy of employment contract

    Required documents from employee

    • Copy of education diploma authenticated by a Taiwanese embassy. Typically a bachelor, master or Ph.D. degree
    • Copy of authenticated work experience certificate. Proof of employment should be at least five years’ experience in a related field
    • Copy of individual income tax statement
    • Medical examination report and receipt for examination fee
    • Copy of passport
    • Two passport photos

    Time: 7 – 14 days

  3. Application for visa
  4. Once the work permit has been approved by the Ministry of Labor, the foreign worker must apply for a work visa from an Overseas Office of the Republic of China (Taiwan). The visa allows the employee to reside in Taiwan for the duration of employment.

    Foreign passport holders entering Taiwan must have valid visas when they enter, although the Ministry of Foreign Affairs may grant exemptions to nationals from certain countries. A visa may be single-entry valid for three months, or multiple entries valid from three months to a year.

    The employee must submit the visa application to the Taiwanese Bureau of Consular Affairs in their resident country. The consular officer will examine the application and relevant documents, and will request an interview if necessary. If approved, the employee will be issued the visa.

    Required documents from employee

    • Passport valid for at least 6 months
    • Completed visa application form
    • Two passport-sized photos
    • Work permit provided by employer
    • Any identification documents if spouse and children are accompanying the employee

    Time: 30 working days

  5. Application for Alien Resident Certificate
  6. Once the employee receives the work permit from the employer and has visa clearance, they are allowed to travel to Taiwan. The employee must obtain an Alien Resident Certificate (ARC), which is proof that the visa may be used for day-to-day activities without the need for a passport while the employee is in Taiwan. The ARC also allows multiple re-entries, which must be shown at immigration checkpoints if the employee intends on entering and exiting Taiwan. This is done through a local National Immigration Agency (NIA) in Taiwan, and must be done within 15 days of arrival in Taiwan.

    Required documents from employee

    • Application form
    • One color photo
    • Original passport and visitor visa
    • A notarized health certificate if required
    • A certificate of criminal record of required
    • A certificate of current residence
    • A certificate of cause
  7. Employee medical examination
  8. Within 3 days of arrival in Taiwan, the foreign worker must undergo a medical examination if it is the first time traveling to Taiwan. This can be done at a local Center for Disease Control.

    Application for employee insurance

    Once the employee has obtained the work permit, visa and Alien Resident Permit, he/she is able to work under the employer. However, the employer must take further measures and registration steps within three days of receiving the ARC, or will be subject to a small fine.

    The employer should apply for coverage enrollment of labor insurance with the Bureau of Labor Insurance upon the date of the worker’s arrival.

    Required documents from employer

    • Application form
    • Copy of the employee’s current residence proof
    • Identification proof of labor
    • Copy of the employee’s full passport
    • Copy of an authenticated ARC
    • Copy of employee’s work permit

     

  9. Other post-arrival applications for employer
  10. Within three days’ of the worker’s arrival, the employer must apply for an entrance report at the local Department of City Government. This must be done or the employer’s recruitment permit and the employer’s work permit may be annulled.

    The employer must also apply for the coverage enrollment of National Health Insurance within 3 days from the date the ARC is issued. This is done through the Bureau of National Health Insurance.

    Once these steps have been taken by the employer, the employee will be properly registered in Taiwan with the relevant authorities and may commence employment in Taiwan.

Use the Shield GEO Employer of Record Solution

Once you get in touch with us, one of our consultants will take all the work off your hands, coordinate with our local partners to get all the required permits organised, provide the processing time, costs, document-checklist and keep you informed through the process.

Types of visas in Taiwan

Category Description of Visa
Visitor visa

The visitor visa is intended for foreign nationals who wish to enter Taiwan temporarily must apply for this visa. Nationals from certain countries that have visa-exempt entry status may enter for stays of 30 days or less, although any period of time longer will require a visitor visa.

Depending on the nationality, visitor visas may be issued for single entry or multiple entries. The validity of the visitor visa is valid from 3 months up to 1 year, unless stated in reciprocal visa agreements between Taiwan and certain countries.

The holder of the visitor visa allows durations of stay of less than 60 days, which may not be extended, and periods of stay for 60 days or longer, which may be extended up to 180 days. The extension of stay is administered by the National Immigration Agency of the Ministry of the Interior.

Processing Time: 4 working days

Working Holiday Visa

The working holiday arrangement allows nationals from certain countries aged between 18 and 30 years to have an extended holiday in Taiwan with some short-term work or study arrangements. Both work and study are to supplement the living arrangements during the stay or to explore Taiwan further.

The working holiday visa is valid for a period of 12 months. The visa allows the individual to stay in Taiwan for 180 days, and may be extended for another 180 days. The application for extending the working holiday visa should be submitted to the local offices of the National Immigration Agency.

Individuals may legally engage in work without applying for a work permit under a working holiday visa, although may not work for the same employer for more than 6 months. Similarly, students may study up to 4 months under this visa arrangement, without any requirements to take Mandarin language courses.

Processing Time: 4 working days

Resident visa

Foreign citizens intending to travel to Taiwan and live in the nation for more than 6 months should apply for a Resident visa, giving them the authority to reside in Taiwan. The resident visa may be obtained if the national is an immediate family member of a Taiwanese citizen with a household registered in Taiwan, or obtained an employment relationship with a sponsored employer in Taiwan. Authorization must be given from the Workforce Development Agency.

The resident visa is valid for 3 months from the date of issuance, and is normally granted for a single entry. Resident visa holders must apply for an Alien Resident Certificate (ARC) and a re-entry permit at local centers of the National Immigration Agency 15 days from entering Taiwan. The resident visa is usually valid for as long as the ARC is valid, which usually extends until the employment contract expires.

Processing Time: 4 working days

Entrepreneur visa

The Ministry of Foreign Affairs has implemented the entrepreneur visa effective as of July 31 2015, in an effort to foster greater innovation and entrepreneurship in the nation. Applicants will have their eligibility examined by the Investment Commission of the Ministry of Economic Affairs, including sufficient funding, education or patents.


TAIWAN, THE REPUBLIC OF CHINA

official name: Taiwan, Chung-hua Minkuo

1. Names: Formosa, Taiwan Province, Republic of China (ROC), Taiwan

Taiwan’s oldest name ‘Formosa’ is attributed to Portugese sailors passing the island on their way to Japan and naming it ‘ilha formosa’, beautiful island.

On January 1, 1912 Sun Yat-sen, chosen as interim president by the provisional national assembly of provincial delegates, proclaimed the establishment of the ‘Republic of China’. At that time the island Taiwan was a Japanese island and thus the name ‘Republic of China’ did not relate to Taiwan.

In 1945 Chiang Kai-shek sent troops to Taiwan to recover it from the Japanese. Until 1949 it had the status and name of ‘Taiwan province’ of the Republic of China. In that year Chiang Kai-shek lost control of the mainland to the communists, and had to flee to Taiwan and install the government of the ‘Republic of China’ there. Taiwan had still the status of a province of this republic-in-exile but represented also the ‘Republic of China’, and thus a double name: Taiwan (province) and Republic of China.

Political and economic developments in the 80s and 90s moved state power away from Chiang Kai-shek’s mainlanders to the Taiwanese , and the Kuomintang had to compete for power with the Democratic Progressive Party. Both parties have champions for Taiwan independence who wish to ‘rectify names’ and discard the name ‘Republic of China’ for the name ‘Taiwan’.

 2. Geography

The area of Taiwan includes the islands Taiwan, Kinmen, Matsu and Penghu (the Pescadores) and some smaller islands and islets.

The total area of Taiwan is 32.260 km of land and 3.720 km of water. Taiwan also claims 12 nautical miles territorial sea and 200 nautical miles exclusive economic zone. Taiwan island is approximately 394 kilometres long and at its widest point 144 kilometres wide, and has 1566 kilometres coastline The eastern and central part of the country is mountainous, its highest point is mount Yushan (3997 metres), and about two-hundred mountain peaks are over 3000 metres high; the western part is flat.

Taiwan island is situated less than 160 kilometres off the south-eastern coast of China. Since China also claims 200 nautical miles exclusive economic zone, arise boundary disputes arise, not so much with China which already claims sovereignty over all of Taiwan, but with Chinese fishing-boats . More serious boundary disputes arise from the conflicting claims on the Spratley and Paracel Islands .

3. Administrative division

Taiwan administers two provinces (sheng): Taiwan and part of Fukien, and two provincial-level municipalities (zhixiashi): Taipei and Kaohsiung. Taiwan province administers Taiwan island and Penghu and is divided into eighteen counties (xian) and five provincial cities (shengguanshi). Fukien province administers two island groups of county level, Kinmen and Matsu.

Administrative hierarchical structure: national level, provinces and provincial-level municipalities, counties and provincial cities, rural townships and urban townships, villages and neighbourhoods.

 4. Population

Total population: 22.708,280 million, density 627,51/km; birth rate: 8,29 ‰, death rate: 6,13 ‰, population growth: 2,16‰ .

Ethnic groups: Taiwanese 84%, mainland Chinese 14%, aborigines 2%. Languages: Mandarin, Taiwanese (Minnan), Hakka dialects, aboriginal dialects.

 5. Political parties:
Multi-party system since 1989

During Chiang Kai-shek’s reign the ‘Emergency Decree’ put a ban on the formation of new political parties. Political activists were sent to prison. When in 1975 Chiang Kai-Shek died , his son Chiang Ching-kuo succeeded him and became president in 1978 after Yen Chia-kan had served out the remainder of Chiang Kai-Shek’s term.

Under his administration there was a gradual loosening of political controls, culminating in the second half of the eighties with freedom of demonstration, of association and press freedom laid down in new legislation. Most important: the lifting of the ‘Emergency Decree’ on July 15, 1987 and the passing of the ‘Law on civic organizations’ January 20, 1989, thereby legalizing new political parties.

From that date the ‘Democratic Progressive Party’ (DPP), established September 28, 1986, could openly compete for power with the old Kuomingtang (KMT) of mainland Chinese and Taiwanese. There are other new parties, like the ‘People First Party’ but for now only DPP and KMT have great appeal to the electorate, and since the elections in 2000 the DPP got the upper hand .

 6. State system:
Republic, parliamentary-presidential system, free elections, democracy

The ‘Constitution of the Republic of China’, adopted January 1, 1947 is the basic document for the Taiwan government. It was drawn up to govern the whole of China. When the KMT government fled to Taiwan in 1949, it was internationally still recognized as the government of all China and it continued to assert that claim until 1991. The repulsion of the ROC from the U.N. and its subsidiaries, its seat and membership given to the People’s Republic of China (1971) and the establishment of diplomatic relations between the People’s Republic of China and the United States (1979) and other western countries and Taiwan, always on the condition of cutting diplomatic relations with the ROC, made it clear that the ROC had to give up its key point of recovering the mainland from the communists. In the end it recognized that it effectively exercised jurisdiction only over Taiwan (province), that is, the islands of Taiwan, Penghu, Kinmen and Matsu . The focus then shifted to the educational and economic development of Taiwan. Chiang Ching-kuo also made the first moves toward political reform. Political reform continued under Lee Teng-hui who steered Taiwan towards full democracy and full enjoyment of the freedoms the Constitution had promised .

The transition from a one-party system to a multiparty system, from autocracy to democracy came about by legislation and especially by amendments to the 1947 Constitution, in the form of additional articles, in 1991 , 1992 , 1994 , 1997 , 1999 , 2000 and 2005 .

The question whether Taiwan will have a parliamentary or presidential state system is still open, as the current system is a sort of combination of the two: the president has the first word and the legislative combined with the judicial council the last word .

7. State structure

According to the constitution Taiwan is a republic with a national assembly , a president and vice-president and five branches of government : the executive council (cabinet), the legislative council (parlement), the judicial council, the examination council and the control council. The additional articles/amendments to the Constitution have allowed for a transfer of most functions of the national assembly and some functions of the control council to the legislative council, and strengthened the powers of the president.

The additional articles of 1994 transferred the right to elect the president and the vice-president from the national assembly to the people of Taiwan.

The five additional articles of 2005 halved the seats of the legislative council from 225 to 113 seats; enlarged the number of constituencies from 29 to 73, with single representatives and two ballot ‘first past the post’ elections; elimination of the national assembly; ratification of future constitutional amendments, if approved by a three-quarter majority in the legislative council, by a national referendum and passed if endorsed by 50% of registered voters; and transfer of the power to impeach the president and the vice-president to the legislative council and the Grand Judges of the judicial council.

According to the amendments of 2005 the state structure is now: a president and vice-president and five branches of government. There are plans in the make to reduce the five councils to three, legislative, executive and judicial, eliminating the examination and control councils. That will be a hard nut to crack because of the new ratification procedure for future constitutional revisions introduced by the amendments.

8. International status of Taiwan:
Status quo versus independence

8.1. status quo

The international status of Taiwan is a controversial issue. The DPP and the KMT take opposite positions: the DPP favours eventual independency of China, the KMT favours reunification with China, whenever the Chinese Communist Party-PRC should hand the power over China back to the KMT-ROC. As Taiwan has its own parliament, cabinet and judiciary, and governs itself, it is de facto an independent country. But China considers Taiwan de jure as part of its own territory and insists on its reunification with the mainland. To prevent an outright war , China, Taiwan and its protector, the United States, all oppose any unilateral action that alters the actual status of the island. But they interpret this ‘status quo’ differently.

China defines the ‘status quo’ of the cross-straits relations as a synonym for the one-China policy, that both sides of the Taiwan Straits belong to one and the same China, with the eventual reunification of Taiwan with its motherland. But it will not respect the status quo indefinitely, and reserves the right to employ and execute non-peaceful means should ‘secessionist forces’ cause Taiwan’s secession from China or in case all attempts at peaceful reunification should fall flat .

Taiwan defines the ‘status quo’ as a synonym for Taiwan’s independence as a de facto independent country within specified boundaries, with a permanent population, a government exercising exclusive control over its territory, and formal and informal bilateral diplomatic relations with many countries and membership in a number of international organisations like APEC, ADB, WTO and IOC.

The United States, acknowledging but not recognizing China’s claim on Taiwan, define the ‘status quo’ as factual independence though not internationally recognized legal independence. All parties should tolerate indefinitely Taiwan’s ambiguous status of de facto independence until Taiwan and China can agree on a peaceful resolution of their dispute.

8.2. independence

‘Taiwan independence’ is a political movement for the creation of a sovereign ‘Republic of Taiwan’, seeking international recognition as a de jure independent country, separate from any concept of China. The movement started in 1895 when Japan began to rule the island, and intensified under the rule of the mainlanders because of the 1947 massacre and the discrimination of Taiwanese people. As Taiwan over the years developed into a prosperous and democratically governed country, with real constitutional freedoms for all, Taiwanese and mainlanders, the prospect of reunification with the dictatorial and relatively poor mainland was far from attractive. Symbols of the movement are using the name Taiwan instead of Republic of China, promoting the use of the Taiwanese language and rewriting history books to focus exclusively on Taiwan.

Another interpretation of ‘Taiwan independence’ is acceptance of the status quo, that Taiwan is de facto an independent country under the official name of Republic of China, separate from China. For the DPP independence and sovereignty are identical, the KMT makes a distinction and will maintain the sovereignty of the Republic of China but opposes Taiwan independence.

The PRC defines ‘Taiwan independence’ as splitting Taiwan from China. The PRC holds that in 1949 the Republic of China was replaced by the PRC as the legitimate government, so assertions that the Republic of China is still a sovereign state and therefore independent are unacceptable, as are proposals to bury the Republic of China and change the name to Taiwan. Instead the PRC adheres to the ‘status quo’, that there is only one China and both the mainland and Taiwan belong to one China. Basis for peaceful national reunification is the acceptance of the one-China principle. If no peaceful reunification is possible, China will resort to non-peaceful means to bring reunification about, that is by force of arms .

The majority of the people in Taiwan want the ‘status quo’, whatever the definition, not reunification because Taiwan’s position in the union is uncertain, nor a declaration of independence because in that case China’s angry reaction is certain . But whether China will react with words or indeed with arms is less certain. If China resorted to war, Taiwan’s ally, the United States, could find there an alibi to enter the war and crush China’s economic and political expansion and growing influence as a second world power .

9. Cross-Straits relations:
principles and facts

China’s basic principle is that there is only one China, i.e. the People’s Republic of China which in 1949 succeeded to the ‘Republic of China’ and that Taiwan is therefore a renegade province of the People’s Republic of China. In 1950 the PRC intended to ‘liberate’ Taiwan by military force, but repeated naval engagements resulted in heavy losses. The Korean War 1950 till 1953, with the Seventh Fleet of the United States deployed to Taiwan, and the mutual defence treaty between the U.S. and Taiwan, made military liberation of Taiwan not a realistic option. In 1956 Zhou En-lai proposed peace negotiations and asked the Taiwan authorities to set a date and a place. Taiwan replied with five conditions for negotiations, e.g. that land, commercial and industrial enterprises and other private property be returned to the owners, prisoners in concentration camps be released, that the political authority in Peking be annulled and transfer its loyalty to the Republic of China ! After the establishment of diplomatic relations with the United States, the PRC renewed its efforts for reunification with declaration after declaration and diplomatic manoeuvring blocking Taiwan’s membership of international organizations like the World Health Organization (WHO) and refusing to maintain diplomatic relations with any country that recognises the Republic of China.

Most countries want favourable diplomatic relations with China because of its cheap labour and potentially big market. They uphold China’s official line and cut (official) diplomatic ties with Taiwan. The exclusion from organizations of the United Nations is a consequence of the 1971 U.N. declaration that the representatives of the government of the PRC are the only lawful representatives of China to the United Nations . The refusal of the WHO to give Taiwan information during the SARS-epidemic and the enterovirus epidemic on the ground that Taiwan was not a member or observer of the WHO - no wonder since the WHO repeatedly turned down Taiwan’s bid to join -, was illogical and against the WHO constitution which declares that “the enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being without distinction of race, religion, political belief, economic or social condition”. During the 2005 session the WHO even signed a memorandum of understanding with the PRC, declaring Taiwan’s bid a “domestic Chinese (i.e. PRC – issue , thereby endorsing the ‘one China’ policy. But the ‘One-China’ is just a policy, it is not a description of present-day reality. All China’s declarations, diplomatic manoeuvres and threats mask its impotency to come to terms with facts and find a political formula that could be acceptable to both countries.

Taiwan’s basic principle is that “the ‘Republic of China is an independent, sovereign state’. This opening sentence of the six-point statement of President Chen Shuibian regarding China’s “anti-separation law”, continues “Taiwan’s sovereignty belongs to the 23 million people of Taiwan and only the 23 million people of Taiwan may decide to change the future of Taiwan”. Clearly, the ‘Republic of China’ and ‘Taiwan’ are seen as identical. The process of the formulation and passage of the anti-separation law is seen as proof of the institutional differences between  the two sides, between democratic and undemocratic, between peaceful end non-peaceful. For the president the “anti-separation law” is undemocratic and un-peaceful in that the law expressly stipulates the use of violence to infringe the basic rights and interests of other people. By this law the Chinese government would unilaterally change the status quo in the Taiwan Strait. This has a negative impact on the cross-strait relations which lately were showing signs of improvement. Taiwan’s position in the dispute “reconciliation but not flinching, standing firm yet avoid confrontation”. “We have been happy to share our developmental experiences in all areas”, but what people on the other side of the Strait need most, are three special products of Taiwan that we are most happily to share: our democratic system, complete freedom and protection of human rights”. And indeed, Taiwan has been a key factor in China’s economic transformation, moving industries and services to the mainland at astonishing speed. In the 1970s and 1980s, the light-industrial firms moved their toy, textile, electrical appliances and footwear factories to Fujian and Guangdong because they needed cheap labour to remain competitive. In the 1990s, Taiwan’s high-tech and IT firms followed for the same reason. Most Taiwanese motherboard makers, computer-chip factories, desktop computers and notebooks manufacturers moved their production lines to China (Acer, Mitac, and contractors for Dell, HP etc.). Investments have shifted from Fujian and Guangdong to Shanghai and the surrounding Yangtze River Delta. Entrepreneurs in Taiwan are concentrating on high-tech research, development and design, in cooperation with Taiwan’s universities.

Globalisation, fierce international competition, and the complementarity of the two sides have led to an informal integration of their economies. The shift to China causes great concern to Taiwanese political and business leaders. Political leaders are careful, without economic independence Taiwan’s political independence is at risk. The business leaders are concerned because of the danger of politico-economic blackmail.

The cross-straits relations remain as volatile as ever. As long as Taiwan’s political independence is not accepted, this trend is not likely to change.


This article is about the demographic features of the population in Taiwan (officially known by its constitutional name, the Republic of China), includes population density, ethnicity, education level, health of the populace, economic status, religious affiliations and other aspects of the population.

The population in Taiwan is approximately 23.4 million, spread across a total land area of about 36,000 km2; it is the seventeenth most densely populated country in the world with a population density of about 650 inhabitants per square kilometer.

The original population of the island of Taiwan and its associated islands, i.e. not including Kinmen and the Matsu Islands, consisted of Taiwanese aborigines, speaking Austronesian languages and sharing mitochondrial DNA contribution with island peoples of Southeast Asia and the Pacific. Immigration of Han Chinese to the Penghu islands started as early as the 13th century, while settlement of the main island occurred from the 16th century, stimulated by the import of workers from Fujian by the Dutch in the 17th century. According to governmental statistics, over 95% of the Republic of China's population is now made up of Han Chinese, while 2.3% are Taiwanese aborigines. Half the population are followers of one or a mixture of 25 recognized religions. Around 93% of the religious population are followers of a mixture of Buddhism, Taoism, and Confucianism, while a minority 4.5% are followers of Christianity.

During the 20th century the population of Taiwan rose more than sevenfold, from about 3 million in 1905 to more than 22 million by 2001. This high growth was caused by a combination of factors, very high fertility rates up to the 1960s, and low mortality rates, and a surge in population as the Chinese Civil War ended, and the Kuomintang (KMT) forces retreated, bringing an influx of 1.2 to 2 million soldiers and civilians to Taiwan in 1948–1949. Consequently, the natural growth rate was very rapid, especially in the late 1940s and 1950s, with an effective annual growth rate as high as 3.68% during 1951–1956. Including the Kuomintang forces, which accounted in 1950 for about 25% of all persons on Taiwan, immigration of mainland Chinese (now approximately 13% of the present population) at the end of the 1940s was a major factor in the high population growth of Taiwan.

Fertility rates decreased gradually thereafter, and in 1984 the rate reached the replacement level (2.1 children per woman, which is needed to replace the existing population). Fertility rates have continued to decline and in 2010 Taiwan was experiencing a population growth of less than 0.2% and a fertility rate of only 0.9, which is the lowest rate ever recorded in Taiwan. The population of Taiwan is projected to peak at about 23.7 million in 2024 and decrease thereafter.

The official national language is Standard Chinese, although around 70% also speak Taiwanese Hokkien 10% speak Hakka. Japanese speakers are becoming rare as the elderly generation who lived under Japanese rule are dying out. Aboriginal languages are gradually becoming extinct as the aborigines have become acculturated despite a program by the ROC government to preserve the languages.


The long shadow of China looms over its neighbor across the Taiwan Strait

 

TAIWAN AND THE WORLD

 

Nominal GDP ($)

530 billion

GDP Rank

21/195

Per Capita GNI – Nominal ($)

17,230

Per Capita GNI Rank

32/209

Population Rank

54/238

Geographical Area Rank

139/257

Global Competitiveness Rank

14/144

Economic Freedom Index Rank

11/178

Human Development Index Rank

21/188

Major Industries

Electronics, Computer
Peripherals,
Petrochemicals,
Textiles, Plastic and
Rubber Products, Basic
Metals

Increasingly dynamic and diverse, Taiwan, also known as Taipei, China, is the world’s 24th largest economy, the 16th largest exporter, and the 16th largest importer in merchandise trade. Taiwan is an archipelago of 86 islands, with the largest, Taiwan Island, comprising almost 98% of the country’s land mass of 13,900 square miles. One of Asia’s “Four Tigers,” along with South Korea, Singapore and Hong Kong, Taiwan has transformed itself through decades of hard work to a wellindustrialized and mature economy. Today, it is an important economic and trading center with one of the world’s busiest ports in Kaohsiung. From being an underdeveloped, agriculture-based island, Taiwan has grown to be a worldclass leader in technology. A recipient of U.S. aid in the 1950s and 1960s, Taiwan is now a major foreign investor, an aid donor, and holds the world’s fifth-largest stock of foreign exchange reserves. Growth has been painstaking. Taiwan was first transformed from a Dutch East India Company colony to the home for a Ming-loyalist regime. It endured centuries as a province under the Qing Empire, followed by a Japanese occupation, and eventually more than 50 years under the Kuomintang (KMT). Yet, despite being only a third the size of Virginia or a little smaller than Switzerland, Taiwan has overcome its physical limitations and challenges to emerge as one of the economic centers in Asia.

An island of refuge for the fleeing

The islands of Taiwan were first occupied by the Japanese as far back as the 12th century. Later on, in 1590, Portugal became the first European nation to set foot on the island, which they poetically named Ilha Formosa, meaning beautiful island in Portuguese. A tug of war then followed with the Dutch and the Spanish all vying for possession of Taiwan. Eventually, the Dutch held sway, claiming occupancy of the P’enghu Islands in 1622. The Dutch occupation, however, was short-lived. Once the ruling Ming dynasty in China was overthrown by the Qing dynasty, change was inevitable on the tiny island.

Taipei, the capital of Taiwan, is a bustling city, with skyscrapers jostling with ancient temples. Vibrant with modernity, the city is the economic center of Taiwan.

Eventually, Cheng Cheng-kung, known as Koxinga in the West, and one of the most famous resistance fighters against Manchu rule, immigrated to Taiwan. Large-scale immigration of Chinese began in the 17th century, especially from the coastal provinces of Fujian and Kwangtung, as they fled to escape the oppression of the Manchu. Taiwan grew during this phase as an anti-Manchu base. Cheng’s death hastened the end of Manchu resistance, and in 1683, Taiwan finally surrendered to Qing rule. Peace, however, was to be elusive for the long-suffering island as it was ceded to Japan, under the Treaty of Shimonoseki, following the end of the Sino-Japanese War.

Infrastructure was developed under the Japanese but the Taiwanese seethed under the yoke of occupation, and several revolts rocked the island, all of which were brutally put down by Japan. In 1945, with the surrender of Japan in World War II, both Taiwan and the P’enghu Islands were declared a province of China. At this time, Taiwan was governed from Nanjing by the KMT led by Chiang Kai-shek. However, enmeshed and embroiled in a bitter civil war with Mao Zedong’s Communist Party, the Kuomintang fled to Taiwan upon its defeat. Establishing the Republic of China, Chiang Kai-shek ruled as the first President of Taiwan. Despite attempts by China to invade Taiwan, the island nation gained the support of the U.S., helping it to resist Chinese incursions. The U.S. continued to support Taiwan, promising to defend the country in case of outside attack. The Nationalist Army was trained and equipped by the U.S., and along with substantial aid from its benefactor, Taiwan enjoyed spectacular economic growth, building on the infrastructure laid by the Japanese. By the 1960s, after the U.S. had injected around $4 billion in Taiwan, the country progressed to such an extent that such aid was rendered superfluous. However, Chiang Kai-shek, who was elected President for the fifth time in 1972, witnessed increasing criticism against what was termed dictatorial rule.

At this time, China was also increasing pressure on the international community to acknowledge Taiwan as its province. The result was that by 1981 very few nations maintained diplomatic relations with Taiwan including close ally U.S., which formalized diplomatic relations with China following President Reagan’s historic maiden visit to the Communist country in 1972. Disillusioned with the lack of support from the international community, Chiang Kai-shek, who died in 1975, was succeeded by his eldest son, Chiang Ching-kuo. Martial law, which had been imposed since 1949, was lifted in 1987. The first Taiwanese president, Lee Teng-hui, headed a government that in 1988 moved towards empowering more Taiwanese in the government. Since then, changes have been swift. In 1991, Taiwan proposed a long-term, three-phase reunification plan with China, along with plans to restructure the government. More political miracles occurred when Lee Teng-hui won the first popular election for president in 1996. Relations with China reached a new low when pro-independence Democratic Progressive Party (DPP) candidate Chen Shui-bian was elected president. Today, the head of state remains the president, elected by popular vote for a four-year term. Taipei is the heart of modern Taiwan – a bustling, traffic-clogged city that is the center of the national government, and the seat of its executive offices, cabinet ministries, and the supreme courts. The city is also the stronghold of the ethnic mainlander, or wai-sheng jen, who continues to exercise fair dominance in government.

Japanese, Chinese and Western fusion

Chiang Kai-shek, who fled to Taiwan after the Kuomintang suffered heavy losses in the civil war with the Communists, became the Republic of China’s first president in March 1948.

Taiwanese culture is a fusion of indigenous customs with Chinese, Japanese and Western traditions. The birthday of Ma-tsu is a celebration with great fervor all over Taiwan, and is a major event in the island’s religious and cultural calendar. Buddhism, Taoism and Chinese folk religions have all held their pride of place in Taiwanese society over the years. Other important festivals include the Hungry Ghosts Festival, the Lantern Festival, the Dragon Boat Festival and Lovers Day, all of which are popular in China too. During these festivals, hakka people make a variety of traditional ban rice patties. Since Taiwan is an archipelago of more than 88 islands, several tribes on some isolated islands managed to retain their aboriginal status. Indigenous tribes include the Amis, Atayal, Bunun, Rukai, Puyuma, Sao, Tao, and the Zou. Remnants of Taiwan’s colonial culture can be found throughout the country. There are around 12 indigenous tribes recognized by the government, which have a combined population of 464,000. Each group has carried through centuries their unique customs – for example in the Atayal tribe, face tattooing and cloth weaving are dominant.

Mandarin Chinese is the official language, while Min Nan Chinese or Taiwanese as it is more popularly known, is widely spoken on the island. The combination of popular songs (ge zih) with the performing style of che gu or cart drum opera led to the birth of the traditional Taiwanese opera. Taiwanese cuisine can be divided into Holo (Minnanese), Hakka and aboriginal dishes. “Pearl Milk Tea,” which is made with flour balls and aromatic milk was invented in Taiwan, and has spread in popularity throughout the world. Also famous is Taiwanese glove puppetry, which has its roots in Taiwan’s folk society. In fact, long before television made its appearance in Taiwan, glove puppetry was the main form of entertainment. Accompanied by music, the puppets wear highly colorful costumes that enable the audience to decipher their “social class.”

The new kid on the Asian block

Taiwan, the East Asian island that is home to about 25 million people, came under various foreign influences such as the long Chinese rule, the occupation by the Dutch and the Japanese, besides being swayed by the American culture during the course of its economic and political evolution. While the Japanese gave top priority to building infrastructure and improving public education, liberal economic aid from the United States in the 50s and 60s helped the infant nation take baby steps toward economic progress. In fact, Taiwan’s economy bears tell-tale marks of each of these cultures, though the Middle Kingdom dominates the territory’s economic landscape for reasons both political and geographical.

To put things in perspective, Asia emerged as a manufacturing juggernaut in the 60s with Japan embarking on exports of consumer goods and electronic items. Taiwan and South Korea soon followed suit. However, it was China’s triumphant entry after it opened up its economy that gave Asian manufacturing a new impetus in the 90s. Cheap Chinese labor became the game changer that entrenched Asia as the factory of the world.

Political changes helped, too. After long decades under the Kuomintang dictatorship, simmering protests for political freedom and human rights eventually led to the overthrow of martial law in 1987 and the dawn of democracy. Presidential elections followed in 1996, which completed Taiwan’s transition to democracy.

Economic progress moved in lockstep with democratic changes as jobless rate remained low and middle class incomes rose. Moreover, Taiwan has steadily followed a policy of minimal government intervention in investment and foreign trade. Taiwan’s economic prospects got a further boost when it joined the World Trade Organization. Small wonder the country clocked average GDP growth of 8% in the decades beginning in the 90s.

Taiwan’s tryst with technology

Though modern Taiwan has become almost synonymous with technology, the economy also made its mark in industries such as petroleum refining, chemicals, iron and steel, pharmaceuticals and food processing. As electronics-oriented industries gained prominence, the share of agriculture production in the country’s GDP has come down drastically over several decades. Besides, Taiwan’s beaches attract tourists in droves, primarily from mainland China. Taiwan also has a thriving financial services sector with a number of well-managed banks.

With five container terminals, the Port of Kaohsiung is one of the busiest in Asia with an annual handling capacity of 10 million twenty-feet equivalent units (TEU). The sea connectivity has helped cement Taiwan’s reputation as a leading Asian exporter.

Taiwan laid the foundation for its future technological prowess during the 70s. Notable among the initiatives was the establishment of the Industrial Technology Research Institute (ITRI) to foster the technology industry. It is widely known that Taiwan’s real strengths are its formidable R&D capabilities, well-developed industrial clusters, as well as small and medium businesses that made the country a hub of electronics manufacturing.

Starting off with manufacturing semiconductors on technology initially borrowed from the United States in 1976, Taiwan has carved a niche for itself in the global technology space ever since. Taiwan formed a network of notebook-PC manufacturers in the late 80s that made its products household names across the world.

From the onset of the 90s, brands such as HTC, Asus, Taiwan Semiconductor and Foxconn have become familiar names associated with some of the world’s most desirable electronic gadgets such as iPhones. Components manufactured by electronics firms contribute 40% of Taiwan’s export mix and bring in about 15% of its GDP.

The Chinese bear hug

Since Chiang Kai-shek’s Kuomintang Party (KMT) established a national government in Taiwan in 1949, the Middle Kingdom has held a vise-like grip on its neighbor across the Taiwan Strait, primarily with regards to politics. Economically, close bilateral cooperation was a strategy born of necessity: China sought Taiwan’s tech expertise, while Taiwan craved China’s cheap labor. The relationship flourished as Taiwanese firms began to make large investments in the mainland and a sizable number of Taiwanese started to live and work in China.

Taiwan has one of the world’s highest densities of convenience stores per person, with more than 9,000 dotting the city landscape.

The signing of the free-trade agreement, known as Economic Cooperation Framework Agreement (ECFA) in 2010, marked a high point in business ties between the two. The deal had provisions to cut tariffs on 539 categories of Taiwan’s exports to China, while Taiwan reciprocated by reducing duties on 267 categories of Chinese goods. Thanks to the trade treaty, China accounts for nearly 30% of Taiwan’s exports. Moreover, Taiwan’s services industries also benefited from the treaty as it allowed Taiwanese banks to do business in renminbi within two years of starting operations. The deal also strengthened intellectual-property rights that armed Taiwanese firms in their fight against piracy issues in the mainland, according to The Economist.

The business ties worked perfectly well as long as the relationship remained symbiotic. However, the marriage of convenience became strained as China-based companies in sectors such as petrochemicals, computers, steel and digital displays made forays into what was considered Taiwan’s home turf. Taiwanese firms with extensive operations in China have to purchase machinery and materials from suppliers in the mainland itself as they increasingly tighten their grip on the supply chain. What’s more, Chinese companies are even trying to make inroads into semiconductor manufacturing, long considered a Taiwanese stronghold as more than a fifth of the world’s semiconductors are manufactured on the island.

If cordial political ties with China initially helped Taiwan achieve economic progress, any hiccup in the relationship is bound to reflect in the Middle Kingdom’s perception about its neighbor. Notwithstanding the close business ties, China still deems Taiwan a renegade province and often asserts that there is only “one China” and counts Taiwan an integral part of it.

In fact, China’s stranglehold over its neighbor is so complete that Taiwan has official bilateral trade deals only with Singapore and New Zealand, nations with which China too has trade ties. China also refuses to engage in diplomatic relationship with any country that recognizes Taiwan as an independent state. China often uses its political clout to actively discourage countries or economic blocs from entering into free-trade deals with Taiwan. As much as Taiwan would want to break free from China’s economic orbit and expand its trade horizons in Southeast Asia, it remains a task easier said than done.

The road ahead

It is not just China that gives Taiwan a run for its money. South Korea is fast catching up with the country in sectors such as automotive manufacturing as well as in the production of communication equipment, semiconductors, steel, and chemicals. Adding to Taiwan’s woes is the fact that China is the largest trade partner and export market for both the Asian nations. South Korea’s signing of a free-trade agreement with the United States in 2011 gives the country an edge over its smaller rival although Taiwan also has thriving trade relations with the U.S., as The Economist has pointed out. Amid the chill in political ties and increasing competition from its neighborhood for a bigger share of revenues from trade, Taiwan has set its sights higher. As Taiwan reaches out to Southeast Asian nations such as Australia, as part of its ambitious “New Southbound Policy,” and continues its efforts to woo Japan, it hopes to achieve its objective of becoming an Asian Tiger once again.


Economy - overview

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


GDP (purchasing power parity)$1.175 trillion (2017 est.)
$1.152 trillion (2016 est.)
$1.136 trillion (2015 est.)
note: data are in 2017 dollars
GDP (official exchange rate)$571.5 billion (2016 est.)
GDP - real growth rate2% (2017 est.)
1.5% (2016 est.)
0.7% (2015 est.)
GDP - per capita (PPP)$49,800 (2017 est.)
$49,000 (2016 est.)
$48,300 (2015 est.)
note: data are in 2017 dollars
Gross national saving34.8% of GDP (2017 est.)
35.6% of GDP (2016 est.)
36.4% of GDP (2015 est.)
GDP - composition, by end usehousehold consumption: 52.4%
government consumption: 14.1%
investment in fixed capital: 21.4%
investment in inventories: 0%
exports of goods and services: 64.8%
imports of goods and services: -52.7% (2017 est.)
GDP - composition by sectoragriculture: 1.8%
industry: 36%
services: 62.1% (2017 est.)
Population below poverty line1.5% (2012 est.)
Labor force11.78 million (2017 est.)
Labor force - by occupationagriculture: 4.9%
industry: 35.9%
services: 59.2% (2016 est.)
Unemployment rate3.8% (2017 est.)
3.9% (2016 est.)
Household income or consumption by percentage sharelowest 10%: 6.4%
highest 10%: 40.3% (2010)
Distribution of family income - Gini index33.6 (2014)
32.6 (2000)
Budgetrevenues: $93 billion
expenditures: $91.67 billion (2017 est.)
Taxes and other revenues16.3% of GDP (2017 est.)
Budget surplus (+) or deficit (-)0.2% of GDP (2017 est.)
Public debt29.9% of GDP (2017 est.)
31.2% of GDP (2016 est.)
note: data for central government
Inflation rate (consumer prices)1% (2017 est.)
1.4% (2016 est.)
Central bank discount rate1.38% (31 December 2016)
1.63% (31 December 2015)
Commercial bank prime lending rate2.7% (31 December 2017 est.)
2.63% (31 December 2016 est.)
Stock of narrow money$535.1 billion (31 December 2017 est.)
$501.2 billion (31 December 2016 est.)
Stock of broad money$1.374 trillion (31 December 2017 est.)
$1.28 trillion (31 December 2016 est.)
Stock of domestic credit$835.8 billion (31 December 2017 est.)
$778.3 billion (31 December 2016 est.)
Market value of publicly traded shares$851.2 billion (31 December 2016)
$742.5 billion (31 December 2015)
$848.3 billion (31 December 2014)
Agriculture - productsrice, vegetables, fruit, tea, flowers; pigs, poultry; fish
Industrieselectronics, communications and information technology products, petroleum refining, chemicals, textiles, iron and steel, machinery, cement, food processing, vehicles, consumer products, pharmaceuticals
Industrial production growth rate2% (2017 est.)
Current Account Balance$79 billion (2017 est.)
$74.28 billion (2016 est.)
Exports$344.6 billion (2017 est.)
$310.4 billion (2016 est.)
Exports - commoditiessemiconductors, petrochemicals, automobile/auto parts, ships, wireless communication equipment, flat display displays, steel, electronics, plastics, computers
Imports$272.6 billion (2017 est.)
$239.7 billion (2016 est.)
Imports - commoditiesoil/petroleum, semiconductors, natural gas, coal, steel, computers, wireless communication equipment, automobiles, fine chemicals, textiles
Reserves of foreign exchange and gold$468.1 billion (31 December 2017 est.)
$439 billion (31 December 2016 est.)
Debt - external$204.7 billion (31 December 2017 est.)
$172.2 billion (31 December 2016 est.)
Stock of direct foreign investment - at home$85.58 billion (31 December 2017 est.)
$80.68 billion (31 December 2016 est.)
Stock of direct foreign investment - abroad$367.2 billion (31 December 2017 est.)
$354 billion (31 December 2016 est.)
Exchange ratesNew Taiwan dollars (TWD) per US dollar -
30.68 (2017 est.)
32.325 (2016 est.)
32.325 (2016 est.)
31.911 (2014 est.)
30.363 (2013 est.)
Fiscal yearcalendar year