Taiwan

FROM THE PUBLISHER

Over the past fifty years, hard work and sound economic management have built Taiwan into an economic powerhouse with the world's third largest foreign exchange reserves and over $230 billion in two-way trade. The economy is expanding at 6% with full employment and negligible inflation. Its 23 million people enjoy a per capita Gross Domestic Product of almost $15,000.

As Taiwan has prospered, the formerly authoritarian system has evolved into a democracy. On May 20, 2000, the inauguration of President Chen Shui-bian marked the first democratic transfer of power between political parties in Chinese history. Opposition by the People's Republic of China (PRC) to any recognition of Taiwan as a separate political entity has limited Taiwan's official diplomatic activity for years. But Taiwan has broad unofficial relationships with most of the world's major economies, including the U.S. Taiwan's $110 billion of imports in 1999 reflects its lack of resources. It imports nearly all of its energy, most raw materials and a diversity of manufactured and agricultural goods. It is the fifth largest importer of U.S. agricultural products. Its educated work force, advanced infrastructure, strategic location and generally pro-business attitudes make Taiwan an excellent -- if no longer low-cost -- place to invest.

A significant portion of Taiwan's economy is still publicly held, but the inexorable movement towards privatization and liberalization is clear. Taiwan authorities continue to reduce tariffs and non-tariff barriers as part of Taiwan's anticipated accession to the World Trade Organization in late 2000 or early 2001; restrictions on financial institutions are gradually being lifted; several public firms have been privatized; and private sector competition is being introduced in telecommunications, power generation, and oil refining and distribution.

Taiwan, America's seventh largest export market and one of the three fastest growing economies in Asia, is an excellent market for U.S. firms. Taiwanese are receptive to foreign products and have money. U.S. exports to Taiwan range from steam boilers to soybeans. U.S. investors range from giants to individuals. Competition is fierce, with Japanese firms well-entrenched and Europeans capturing market share. Nonetheless, Taiwanese generally have feelings of goodwill toward the U.S. and favorable images of U.S. products. U.S. firms with good products at competitive prices will find Taiwan a rewarding market.