Does business in Taiwan have a positive outlook? There are numerous factors that go into a country’s economy and global trade market. Let’s look at the economy, global trade and how businesses are currently doing in Taiwan to get a good picture of if it’s worth exploring further.
Taiwan, or officially known as the Republic of China(ROC), is located at the very heart of Asia. Neighboring states include the People’s Republic of China (PRC) to the west, Japan to the east and northeast, and the Philippines to the south. Its capital city is Taipei. The Republic of China is a multi-party democracy that has a presidential system and universal suffrage. It experienced rapid economic growth, industrialization, and democratization on Taiwan during the latter half of the twentieth century. Despite its controversial political status, the ROC is an industrialized advanced economy. It is one of the Four Asian Tigers and a member of the WTO and APEC. The 19th-largest economy in the world, according to the CIA World Factbook, ROC’s advanced technology industry plays a key role in the global economy. The ROC is ranked highly in terms of freedom of the press, health care, public education, economic freedom, and human development, as mentioned by the UN. Let’s take a look at business in Taiwan to see if it’s a good economy to invest in.
Taiwan has a developed capitalist economy that has a high nominal GDP per capita, estimated at $21,592 by the IMF in 2011. Real growth in GDP has averaged about 8% during the past three decades. Exports have grown even faster and since World War II, have provided the primary impetus for industrialization. Inflation and unemployment are low; the trade surplus is substantial; and foreign reserves are the world’s fourth largest. Agriculture contributes 3% to GDP, down from 35% in 1952, and the service sector makes up 73% of the economy. Traditional labor-intensive industries are steadily being moved off-shore and replaced with more capital- and technology-intensive industries, as well as creative industries. Taiwan’s top five trade partners in 2010 are China, Japan, USA, the European Union, and Hong Kong, according to the Taiwanese government. The electronics sector is Taiwan’s most important industrial export sector and is the largest recipient of U.S. investment. In a 2011 report by Business Environment Risk Intelligence (BERI), Taiwan ranked third-best globally for its investment environment. Taiwan has also recovered quickly from the global financial crisis of 2007-2010, and its economy has been growing steadily. In response to the crises, the government launched a US$5.6 billion economic stimulus package, provided financial incentives for businesses, and introduced tax breaks, as reported by QFinance.
Industry in Taiwan primarily consists of many small and medium-sized enterprises, with fewer large enterprises. Taiwan’s information technology industry has played an important role in the worldwide IT market over the last 20 years. n 2010, Taiwan’s software market grew by 7.1% to reach a value of US$4 billion, accounting for 3.3% of the Asia-Pacific region market value. The digital content production industry grew by 15% in 2009, reaching US$14.03 billion, as reported by trade statistics published by the Australian government. Although only about one-quarter of Taiwan’s land area is suitable for farming, virtually all farmland is intensely cultivated, with some areas suitable for two and even three crops a year. However, increases in agricultural production have been much slower than industrial growth. Agricultural modernization has been inhibited by the small size of farms and the lack of investment in better facilities and training to develop more profitable businesses. Taiwan’s main crops are rice, sugar cane, fruits, and vegetables. In 2010, the green energy sector generated US$10.97 billion in production value. In order to promote industrial research and development, the government began establishing science parks, economic zones which provide rent and utility breaks, tax incentives and specialized lending rates to attract investment.
Overall, Taiwan is a great place to invest in. It was ranked 25th in World Bank’s Easiest Country to do Business In for 2012. In the same survey, Taiwan was ranked 79th for Protecting Investors, 23rd for Trading Across Borders, and 88th for Enforcing Contracts. Its great for exporting out of, as well as selling into. The Taiwanese market is of decent size at 23,230,506, it is also quite rich. The Taiwanese economy, was estimated at $504.612 billion by the IMF in 2011. So clearly their is a market worth competing for in China.