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The Republic of China— Partner for Peace and Prosperity
Taiwan is small, with a population of only 21.9 million. However, size has not kept the country from accomplishing much over the last half century. Economically, Taiwan has been transformed from a poor, agricultural backwater into an economic powerhouse. The ROC now has the 25th highest per capita income in the world and ranks 19th in terms of gross national product. It is the world's 15th largest trading nation and the fourth largest producer of information technology products. The ROC ranks third globally in terms of foreign exchange reserves. Even in the face of the recent financial turmoil in Asia, the ROC economy has remained robust, thanks to the government's appropriate policies and the adaptability of Taiwan's enterprises. Economic fundamentals on Taiwan are much healthier than those in neighboring nations. Not only has the ROC managed to maintain economic growth, stabilize prices, and maintain a favorable balance in trade, but overall national finances remain sound. Unlike many other Asian countries, Taiwan's economic growth is not heavily dependent on foreign capital. Financial institutions in the ROC are sound, and the government's continued efforts to liberalize the economy have helped. Restrictions on trading in the local currently were lifted long ago, and fluctuations in exchange rates are determined by market forces. The banking system also is healthy, with the rate of bad loans under 4 percent. The ROC government has been working to streamline the flow of personnel, capital, goods, and information. Efforts have included simplifying the review process for inward investment by foreign nationals and easing restrictions on outward investment. The relaxation of regulations on employment of foreign personnel is a high priority. Liberalization efforts also focus on revising obsolete and inadequate laws and loosening restrictions. The ROC industrial structure is well-balanced, and since 98 percent of domestic enterprises are small and medium-sized companies, the economy as a whole is more resilient and flexible in responding to external forces. Cooperation between these smaller enterprises and Taiwan's large firms has promoted division of labor and higher operational efficiency. Industry in Taiwan thus has been able to continuously upgrade the quality of goods, with high-tech products having emerged as the main category of production and export. These achievements notwithstanding, there always is room for further development and closer cooperation in all areas. As a modern, democratic society located at the crossroads of East Asia, Taiwan provides many excellent opportunities for foreign companies looking to expand into the region. The ROC government is promoting an ambitious plan to build Taiwan into an Asia-Pacific regional operations center. The plan calls for the development of six sectors: manufacturing, air transport, sea transport, telecommunications, finance, and the media. The success of this plan will require an expanded infrastructure, upgraded facilities, new goods and services, and improved technology. Foreign enterprises deciding to invest in Taiwan thus stand to reap a doubly bountiful harvest: first by catering to domestic demand and then again by using Taiwan as a stepping-stone to expand operations throughout Asia. Furthermore, the ROC is committed to ensuring equality for both foreign and domestic enterprises. Politically, the Republic of China has developed from a closed and authoritarian environment to a full-fledged democracy after a decade of peaceful reform that often has been called a "quiet revolution." In March 1996, the residents of Taiwan chose the first popularly-elected head of state in all of Chinese history. Now, from local government to the nation's highest office, multiparty democracy reigns supreme. Socially, Taiwan is a free, modern, and open society, whose people enjoy universal education and a high standard of living. The ROC Constitution guarantees fundamental freedoms and civil liberties, and ensures that all have a voice in local and national affairs. Concerns that many in the West have about the ROC center on the relationship between Taipei and Beijing and stability in the Taiwan Strait—issues that the TRA addresses for the United States. Although China has been divided since 1949 and the animosity between the two sides remains, ties between Taiwan and the Chinese mainland have been growing in a wide variety of fields. ROC investment figures show that at the end of 1998 there were more than 21,000 investment projects by Taiwan companies on the Chinese mainland involving a total of more than US$13.2 billion and representing 40 percent of Taiwan's total outward investment. Statistics compiled by mainland authorities put the figure even higher—around US$21.4 billion, making Taiwan the third largest investor on the mainland. Meanwhile, the value of cross-strait trade reached US$23.9 billion in 1998—12 percent of Taiwan's total trade—while exports alone to the mainland accounted for 18.4 percent of total exports. Relationships between the two sides are not limited to economic and trade ties. Cultural, educational, media, and personal contacts between people on Taiwan and the mainland have grown steadily since exchanges began in 1987. By the end of 1998, residents of Taiwan had made more than 13 million trips to the Chinese mainland. In 1998 alone, Taiwan hosted more than 6000 scholars who visited Taiwan from the mainland, and enjoyed the works of more than 1600 mainland artists and performers. One of the most significant exchanges was the visit of a high-level mainland press delegation to Taiwan in April 1998. The development of cross-strait trade and economic ties, as well as exchanges in other areas, benefit people on both sides, and Taiwan hopes to promote positive interaction with the mainland through such exchanges. In all that it does, the ROC stands today as a nation of vitality, hope, and determination to build an even brighter future.
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