TAIWAN

Republic of China

Chung Hwa Min Kuo

CAPITAL: T'aipei

FLAG: The flag is red with a 12-pointed white sun on the blue upper left quadrant. The 12 points of the sun represent the 12 two-hour periods of the day in Chinese tradition, and symbolize progress. The colors red, white, and blue represent the Three Principles of the people (San Min Chu I) of Sun Yat-sen, father of the Republic of China, and symbolize the spirit of liberty, fraternity, and equality.

ANTHEM: Chung Hwa Min Kuo Kuo Ke (Chinese National Anthem).

MONETARY UNIT: The new Taiwan dollar (nt$) is a paper currency of 100 cents. There are coins of 50 cents and 1, 5, and 10 dollars, and notes of 50, 100, 500, and 1,000 new Taiwan dollars. nt$1 = us$0.03154 (or us$1 = nt$31.71) as of 2005.

WEIGHTS AND MEASURES: The metric system is employed in government and industrial statistics. Commonly used standards of weights and measures are the catty (1.1 lb or 0.4989 kilograms), the li (0.5 kilometers or 0.31 miles), the ch'ih (0.33 meters or 1.09 feet), and the chia (0.97 hectare or 2.39 acres).

HOLIDAYS: New Year's Day and the Founding of the Republic of China (1912), 1 January; Youth Day (formerly known as Martyrs' Day), 29 March; Tomb-Sweeping Day and Anniversary of the Death of Chiang Kaishek, 5 April; Birthday of Confucius and Teachers' Day, 28 September; National Day (Double Tenth Day), 10 October; Taiwan Retrocession Day, 25 October; Chiang Kai-shek's Birthday, 31 October; Sun Yat-sen's Birthday, 12 November; Constitution Day, 25 December.

TIME: 8 pm = noon GMT.

LOCATION, SIZE, AND EXTENT

Taiwan, the seat of the Republic of China, lies in the western Pacific Ocean astride the Tropic of Cancer, less than 161 km (100 mi) from the southeast coast of mainland China, from which it is separated by the Taiwan (Formosa) Strait. To the ne, less than 129 km (80 mi) away, is the w end of the Japanese Ryukyu Islands; to the e is the Pacific Ocean; the Philippine island of Luzon lies 370 km (230 mi) to the s.

Besides the island proper, Taiwan comprises 21 small islands in the Taiwan group and 64 islands in the Penghu (Pescadores) group; the total area is 35,980 sq km (13,892 sq mi). Comparatively, the area occupied by Taiwan is slightly larger than the states of Maryland and Delaware combined. Leaf-shaped Taiwan island extends 394 km (245 mi) nne–ssw and 144 km (89 mi) ese–wnw; it has a coastline of 1,566 km (973 mi). The Penghu group, lying 40 km (25 mi) west of Taiwan island, has a total area of 127 sq km (49 sq mi).

Also under the control of the Taiwan government are Quemoy (Chinmen) and Matsu, two island groups located strategically close to the mainland Chinese province of Fujian (Fukien). Quemoy is the biggest of a group of six islands, two of which are occupied by the People's Republic of China; it is situated in Xiamen (Amoy) Bay at 118°23e and 24°27n and has a total area of 176 sq km (68 sq mi). The Matsu group, consisting of Nankan (the largest), Peikan, Tungyin, and about 10 small islets, is located at 119°56 e and 26°9 n, 30.6 km (19 mi) off the mainland port city of Fuzhou; it has a total area of 28.8 sq km (11.1 sq mi).

The capital city of T'aipei is located on northern Taiwan.

TOPOGRAPHY

Taiwan perches on the margin of the continental shelf. Along the west coast the sea is rather shallow, averaging 90 m (300 ft) and not exceeding 210 m (690 ft) at the deepest point; however, it deepens abruptly along the east coast, dropping to a depth of 4,000 m (13,000 ft) only 50 km (31 mi) offshore. The terrain is precipitous on the east coast, with practically no natural harbor except Suao Bay in the north. The west coast is marked by wide tidal flats. Kaohsiung, the southern port, is situated in a long lagoon called Haochiung Bay. The north coast with its many inlets provides Taiwan with its best harbor, Chilung (Keelung).

The eastern two-thirds of the island are composed of rugged foothill ranges and massive mountain chains. A low, flat coastal plain, extending from north to south, occupies the western third. Yü Shan, with an elevation of 3,997 m (13,113 ft), is the highest peak on the island.

Located on the Eurasian tectonic Plate near the border of the Philippine Plate, Taiwan is part of the "Ring of Fire," a seismically active band surrounding the Pacific Ocean. Mild to moderate earthquake tremors are common, with over 200 minor shocks recorded each year.

All the rivers originate in the mountains in the central part of the island. They have short courses and rapid streams. The longest river, Choshui, draining westward, is only 190 km (118 mi) long. Only the Tanshui, which flows past T'aipei in the north, is navigable.

CLIMATE

Taiwan enjoys an oceanic, subtropical monsoon climate. The warm and humid summer lasts from May until September, the mild winter from December until February. The average lowland temperature in January is 16°c (61°f) in the north and 20°c (68°f) in the south; the average July temperature is 28°c (82°f) in both the north and south. The growing season lasts throughout the year, except at elevations above 1,200 m (4,000 ft), where frost and snow occasionally occur.

The average rainfall is 257 cm (101 in), ranging from 127 cm (50 in) at the middle of the western coast to 635 cm (250 in) and more on exposed mountain slopes. Southwest monsoon winds blow from May through September and northeast monsoon winds from October to March. Only the extreme southwest has a distinct dry season. As a result of the tropical cyclonic storms that sweep out of the western Pacific, typhoons occur between June and October.

FLORA AND FAUNA

The flora is closely related to that of southern China and the Philippines. Taiwan has almost 190 plant families, about 1,180 genera, and more than 3,800 species, of which indigenous members constitute about one-third of the total flora. Mangrove forest is found in tidal flats and coastal bays. From sea level to a height of 2,000 m (6,600 ft) is the zone of broad-leaved evergreen tropical and subtropical forest, where ficua, pandanus, palms, teak, bamboos, and camphors are commonly found. The mixed forest of broad-leaved deciduous trees and conifers occupies the next zone, extending from a height of 2,000 to 3,000 m (6,600–9,800 ft). Pines, cypresses, firs, and rhododendrons are grown in this region. Above this level is the zone of coniferous forests, composed mainly of firs, spruce, juniper, and hemlock.

The mammals so far discovered number more than 60 species, 45 of which appear to be indigenous to the island. The largest beast of prey is the Formosan black bear. Foxes, flying foxes, deer, wild boar, bats, squirrels, macaques, and pangolins are some of the mammals seen on the island. There are more than 330 species and subspecies of birds, of which 33 are common to the island, China, and the Philippines, and about 87 are peculiar forms. More than 65 species of reptiles and amphibians inhabit the island. There is an abundance of snakes, of which 13 species are poisonous. The insect life is rich and varied.

ENVIRONMENT

The Environmental Protection Agency (EPA) has the main responsibility for environmental policy. Water pollution from raw sewage and industrial effluents is a significant problem in Taiwan. Outside the larger hotels and urban centers, the water is likely to be impure. Health problems like hepatitis result from waterborne contaminants. Water quality is regulated under provisions of the sanitary drinking water legislation of 1972 and the 1974 Water Pollution Control Act.

Air pollution is another significant problem, complicated by a high pollen count. Solid waste disposal regulations and air quality standards were adopted in 1975. All factories are required to comply with established standards, the cost of installing antipollution devices being written off as a depreciable item over two years. Taiwan in 1978 adopted the safety procedures for nuclear facilities issued by the IAEA. In the mid-1980s, the government began tightening emission standards for automobiles and ordered many factories and power plants to install filters and dust collectors. The EPA announced plans in 1987 to install an island-wide pollution-monitoring system.

Wildlife management is the responsibility of the National Wildlife Protection Association of the Republic of China. The nation's marine life is threatened by the use of driftnets. According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included 11 types of mammals, 29 species of birds, 8 types of reptiles, 8 species of amphibians, 23 species of fish, and 78 species of plants. Threatened species include the Formosan sika, hawksbill turtle, Oriental white stork, and Lan Yü scops owl. Trade in endangered species has been reported.

POPULATION

The population of Taiwan in 2005 was estimated by the United Nations (UN) at 22,731,000, which placed it at number 48 in population among the 193 nations of the world. In 2005, approximately 9% of the population was over 65 years of age, with another 19% of the population under 15 years of age. According to the UN, the annual population rate of change for 2005–10 was expected to be 0.4%, a rate the government viewed as too low. The projected population for the year 2025 was 23,625,000. The population density was 628 per sq km (1,627 per sq mi), one of the highest in the world. Approximately 90% of the inhabitants live west of the Central Range.

The UN estimated that 78% of the population lived in urban areas in 2005, and that urban areas were growing at an annual rate of %. The capital city, T'aipei, had a population of approximately 2,700,000 in that year. Other large cities (with their estimated populations) include Kaohsiung (1,600,000), T'aichung (1,114,080), T'ainan (755,800), and Panch'iao (589,700).

MIGRATION

In 1963, the Nationalist government stated that since the completion of the Communist conquest of the mainland in 1949–50, a total of 146,772 Chinese refugees had come to Taiwan for resettlement. The number of refugees has varied from year to year.

In 1986, the Taiwan government reported that there were 28,714,000 overseas Chinese (25,799,000 in Asia, 2,044,000 in the Americas, 584,000 in Europe, 214,000 in Oceania, and 73,000 in Africa), including those with dual nationality.

There may be as many as 100,000 illegal immigrants. Taiwan is pressured by the Chinese perception that Taiwan is a "land of fortune." In 2003, the Taiwanese government cracked down on illegal Chinese immigrants, especially the smuggling of Chinese women which had increased tenfold from 1999. Detained Chinese immigrants number about 2,000 a year. Their numbers outpace the ability to repatriate them. As reported in the Asia Times Online, the phenomenon of "foreign brides" is another unique aspect of Taiwanese immigration. In 2003, 25% of marriages involved Taiwanese men marrying foreign women. The Ministry of the Interior noted that there were about 280,000 foreign women in Taiwan married to Taiwanese nationals. More than half of these women were from China and the remainder from Southeast Asian countries, predominantly Vietnam and Indonesia. A serious social problem that the government attacked in 2005 was the criminal activities of illegal Chinese immigrants in Taiwan.

In 2005, there were 320,000 foreign workers from Thailand, the Philippines, Indonesia, and Vietnam. The net migration rate in 2005 was an estimated zero migrants per 1,000 population.

ETHNIC GROUPS

The term "Taiwanese" is often used when referring to those Chinese who are natives of the island as distinct from the two million "mainlanders" who migrated from China after the end of World War II. Most of the more than 20 million inhabitants of Taiwan are descendants of earlier immigrants from Fujian and Guangdong (Kwangtung) provinces in South China. They form several distinct groups. The Hakka are descendants of refugees and exiles from Guangdong who came to Taiwan before the 19th century; they are farmers and woodsmen who occupy the frontiers of settlement. The more numerous Fujians are descendants of peasants from Fujian who migrated to Taiwan in the 18th and 19th centuries; they form the bulk of the agricultural population.

The aboriginal population is primarily of Indonesian origin. They live mainly in central and eastern Taiwan. They are mainly divided into nine major tribes, with the Ami, Atayal, Paiwan, and Bunun accounting for about 88%; the balance is mainly distributed among the Puyuma, Rukai, Saisiyat, Tsou, and Yami. The language and customs of the aborigines suggest a close resemblance to the Malays. About 84% of the total population is Taiwanese and 14% are mainland Chinese. About 2% of the total population are aborigine.

LANGUAGES

Most people on Taiwan now speak Mandarin Chinese (Peking dialect). It is the official language and is used in administration, jurisprudence, education, and, to a large extent, in commerce; it has come into increasingly common use during the last three decades. The Wade-Giles system of romanization, which has been replaced on the mainland by the pinyin system, is still used in Taiwan.

Native Taiwanese speak a variety of southern Chinese dialects, but mainly Southern Fukienese. This is the native tongue of about 70% of the population. It has also influenced the vocabulary of Mandarin spoken on Taiwan. There is also a sizable population of Hakka speakers. This dialect is mainly spoken in Kwantung Province on the mainland. As a result of 50 years of Japanese rule, most Taiwanese and aborigines over the age of 60 speak or understand Japanese. Tribal peoples speak dialects of the Malay-Polynesian family which have no written script.

RELIGIONS

The Chinese are traditionally eclectic in their religious beliefs. The Taiwan folk religion is a fluid mixture of shamanism, ancestor worship, magic, ghosts and spirits, and aspects of animism. commonly overlap with an individual's belief in Buddhism, Confucianism, Taoism, or other traditional Chinese religions. Natural phenomena have been deified, and ancestors, sages, virtuous women, and historical personalities have been given the status of gods. In 2003, registered organizations estimated that about 33% of the population were Taoists, 23.9% were Buddhists, 2.6% were I Kuan Taoist, and 1.2% were Protestant.

The first Westerners to bring Christianity to Taiwan were the Dutch (1624). However, a great persecution of Christians took place when the island was lost to Cheng Ch'eng-kung in 1662. Christianity made another beginning in 1860, when a missionary from Scotland came to the island. The English Presbyterian Mission started its work in the southern part of Taiwan about 100 years ago. Since the end of World War II, more than 80 Protestant denominations have been established on the island, and the activities of Christian missions, many coming over from the mainland, have become widespread. Christians constitute about 4.5% of the total population. Denominations represented include Roman Catholic, Presbyterians, Mormons, Baptists, Lutherans, Seventh-Day Adventists, Episcopalians, and Jehovah's Witnesses.

Other faiths include Tien Ti Chiao (Heaven Emperor Religion), Tien Te Chiao (Heaven Virtue Religion), Li-Ism, Hsuan Yuan Chiao (Yellow Emperor Religion), Maitraya Great Tao, Chinese Holy Religion, Hai Tzu Tao (Innocent Child Religion), Tien Li Chiao (Heaven Reason Religion), the Baha'i Faith, Mahikari, and Judaism. About 14% of the population are atheists.

TRANSPORTATION

As of 2004, Taiwan had 2,497 km (1,553 mi) of railroad track, all of it narrow gauge. Of that total, 1,400 km (871 mi) belonged to the Taiwan Sugar Corporation and the Taiwan Forestry Bureau. The main trunk line, now electrified, links the main cities of the populous west coast between Chilung and Kaohsiung. A second trunk line, the North Link between T'aipei and Hualien on the east coast, was completed in 1979. It connects with an eastern line between Hualien and T'aitung, which was modernized in the early 1980s. Construction of the 98-km (61-mi) South Link (between T'aitung and P'ingtung) has been completed. Forming the last link in the round-the-island rail system, the South Link opened on 6 December 1991, taking over 11 years and $770 million to complete. A total of 685 km (426 mi) of main line were electrified.

As of 2002, Taiwan had an estimated 37,299 km (23,200 mi) of highways, of which 35,621 km (22,156 mi) were paved, including 608 km (378 mi) of expressways. By 2003 there were 6,133,794 registered motor vehicles, 5,169,733 of which were passenger cars and 964,061 were commercial vehicles.

Taiwan has five international seaports, all of them extensively modernized in the 1970s. Kaohsiung in the southwest is by far the largest, handling about two-thirds of all imports and exports. Other major ports are Chilung, on the north coast; Hualien and Suao, both on the east coast; and T'aichung, on the west coast. As of 2005, Taiwan's merchant marine consisted of 126 vessels of 1,000 GRT or more, totaling 3,417,768 GRT.

Also in 2004, there were an estimated 40 airports. As of 2005 a total of 38 had paved runways, and there were also three heliports. There are two international airports. The main one, opened in 1979, is Chiang Kai-shek International Airport, at T'aoyüan, southwest of T'aipei; the other serves Kaohsiung. T'aipei Airport handles only domestic flights. Regular domestic flights also reach Hualien, T'aitung, Chiai, T'ainan, and several other cities. Principal air service is provided by China Air Lines, Taiwan's international airline, and other international carriers, and by Taiwan's leading domestic airline, Far Eastern Air Transport.

HISTORY

Although Taiwan can be seen on a clear day from the China mainland, ancient Chinese accounts contain few references to the island. The earliest inhabitants were Malayo-Polynesian aborigines. Historians have surmised from the brief information available in the early dynastic histories that Chinese emigration to Taiwan began as early as the T'ang dynasty (618–907). During the reign of Kublai Khan (1263–94), the first civil administration was established in the neighboring Pescadores. Taiwan itself, however, remained outside the jurisdiction of the Mongol Empire. During the Ming dynasty (1368–1644), Japanese pirates and Chinese outlaws and refugees wrested the coastal areas from the native aborigines. The Chinese settled in the southwest region, while the Japanese occupied the northern tip of the island. Significant Chinese settlement, by immigrants from Fujian and Guangdong, began in the 17th century.

In 1517, the Portuguese sighted the island and named it Ilha Formosa (Beautiful Island). The Dutch, who were disputing the monopoly of Far Eastern trade held by the Portuguese, captured the Pescadores in 1622 and used them as a base for harassing commerce between China, Japan, and the Philippines. Two years later, the Chinese offered the Dutch a treaty that gave them certain commercial privileges if they withdrew from the Pescadores and occupied instead a trading post on Taiwan. The Dutch complied by building Fort Zeelandia and Fort Providentia in the southwestern part of the island. The Spaniards, wishing to compete, seized the northern part of Chilung in 1626 and later extended their domain to nearby Tanshui. The Japanese, constrained by the policy of national seclusion adopted by the Tokugawa Shogunate, withdrew voluntarily in 1628. The Dutch captured the Spanish settlement in 1642 and, after putting down a Chinese uprising in 1656 with the aid of the aborigines, gained complete control of the island.

While the Dutch were consolidating their hold on Taiwan, the Ming dynasty on the China mainland was overthrown by the Manchus, who established the Qing (Ch'ing) dynasty (1644–1912). Remnants of the Ming forces, led by Zheng Chenggong (Cheng Ch'eng-kung Koxinga, 1624–62), son of a Chinese pirate and a Japanese mother, decided to establish an overseas base in Taiwan. They landed on the island in 1661 and ousted the Dutch in the following year. It was not until 1683 that the Manchus succeeded in wresting Taiwan from Zheng Chenggong's successors.

From 1683 to 1885, Taiwan was administered as a part of Fujian Province. During this period, Chinese colonization proceeded steadily, as the aborigines were either assimilated into the Chinese population or pushed back into the mountains. The imperial government, however, paid scant attention to the island administration. As a result, official corruption and inefficiency often provoked armed rebellions. In the latter part of the 19th century, the strategic importance of Taiwan for the defense of the South China coast was recognized by the authorities, particularly after the French bombardment and blockade of the island in 1884 during the Sino-French War over Annam. The local administration was reorganized, and the island was made into a separate province in 1885.

Upon the conclusion of the First Sino-Japanese War in 1895, Taiwan was ceded to Japan. Refusing to submit to Japanese rule, the islanders declared their independence and established a republic, although organized resistance against the Japanese lasted only a few months. Ineffective armed resistance, chiefly by aborigines, continued. Under the Japanese, the island's agricultural resources were developed rapidly to supply the needs of the home islands and the transportation infrastructure experienced modernization. A policy of Japanization of the Taiwan population was adopted and, by 1944, 71% of children attended primary school. During World War II, Japanese administrators began to orchestrate the island's industrialization in support of Japanese expansionism in south Asia.

In accordance with the Cairo Declaration of 1943 and the Potsdam Proclamation of 1945, Taiwan was restored to China in September 1945. The carpetbagging malpractices of the mainland Chinese officials, however, aroused the resentment of the local population. In February 1947, a police incident touched off a popular revolt, which was suppressed with bloodshed. In May, more troops were brought from the mainland and the Taiwanese leadership was systematically killed. Estimates of the dead range from 5,000 to 50,000. On 8 December 1949, as the Chinese Communists were sweeping the Nationalist armies off the mainland, the government of the Republic of China (ROC), led by General Chiang Kai-shek (Jiang Jieshi), was officially transferred to Taiwan.

The Republic of China

With the removal of the ROC government to Taiwan, two million mainland Chinese came to the island where they instituted an authoritarian rule under martial law. Initially Chiang Kai-shek remained myopically focused on retaking the mainland, but as the stalemate continued, the government gradually shifted its attention to industrializing Taiwan. Strong government policies contributed to steady economic progress, first in agriculture and then in industry. In the 1950s, with US aid and advice, the ROC undertook a successful program of land redistribution. Japan built an infrastructure; the Nationalists brought skills and capital; and the United States poured in excess of $2 billion in aid by 1968. Furthermore, Japanese investment and procurement boom during the Vietnam War in the 1960s further stimulated economic growth.

In 1951, Japan signed the San Francisco Peace Treaty, thereby formally renouncing its claim to the island of Taiwan. In 1954, the ROC and the United States concluded a Mutual Defense Treaty and the United States and Western nations supported Taiwan possession of a UN Security Council seat, while the Eastern bloc nations supported the People's Republic of China (PRC). Support for Taiwan's representation gradually eroded over the years, and on 25 November 1971 the General Assembly voted 75–36 (with 17 abstentions) to remove recognition from the ROC and recognize the PRC. In a significant policy reversal, the United States voted with the majority to seat the mainland government. Although maintaining full diplomatic ties with Taiwan, the United States took the occasion of President Nixon's visit to China to acknowledge, in what became known as the Shanghai communiqué of February 1972, that "all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is part of China. The United States government does not challenge that position."

By 1975, most nations shifted recognition from the ROC to the PRC. On 1 January 1979, the United States formally recognized the PRC as the sole legal government of China and severed diplomatic ties with Taiwan. It also announced the unilateral termination of the 1954 US-ROC Mutual Defense Treaty, effective 1 January 1980, and withdrew its remaining military personnel. Nonetheless, the United States continued to sell arms to Taiwan, and commercial and cultural contacts were unofficially maintained through the American Institute in Taiwan and the Coordination Council for North American Affairs. Taiwan successfully warded off worldwide political and economic isolation by maintaining a host of similar contacts with other countries.

When President Chiang Kai-shek died at age 87 on 5 April 1975, he was succeeded in office by former Vice President Yen Chia-kan (Yan Jiagan). Leadership of the Nationalist Party (Kuomintang, Guomindang) and, hence, of the government, passed to Chiang's elder son, Chiang Ching-kuo (Jiang Jingguo). The younger Chiang was elected to a six-year term as president in March 1978 and reelected in 1984. While control of the central government had remained in the hands of mainlanders in the first decades of the Nationalists' rule on Taiwan, Taiwanese Chinese increasingly won elections at local levels, and Chiang Ching-kuo instituted a policy of bringing more Taiwanese into the Nationalist Party. By the 1980s, economic development had produced a new middle class, and the passage of time, together with intermarriage between mainlanders and Taiwanese, had brought a new generation for which the distinction between mainlander and Taiwanese held diminished importance. These factors contributed to popular pressure for a more democratic government. In November 1986, 5,000–10,000 demonstrated in support of an exiled dissident, Hsu Hsin-liang (Xu Xinliang), when he was not allowed to return to Taiwan. Thousands protested the 38th anniversary of martial law in May 1987. And, in March 1990, more than 10,000 demonstrators demanded greater democracy and direct presidential elections. This was followed in the same month by a demonstration involving some 6,000 students.

In 1987 martial law was revoked and with that press restrictions were eased, citizens were allowed to visit relatives on the mainland, and opposition political parties formed. Then in January 1988, Chiang Ching-kuo died and was succeeded as president by the vice president, Lee Teng-hui (Li Denghui, b. 1923). Lee, a protégé of Chiang Ching-kuo, was a native Taiwanese. In March 1990, the National Assembly reelected Lee as president for a six-year term. In July, he was also named Chairman of the Nationalist Party by the Party Congress.

In the early 1990s, as Taiwan increasingly opened its political system to greater democracy, the KMT's corrupt practices were revealed. However, after the 1992 legislative elections, the KMT emerged victorious as it still controlled most national media and opposition parties failed to mobilize voters. Vote-buying and other forms of fraud were also widespread. By the 1995 elections, however, the political environment changed because the KMT lost control of the media. Furthermore, the Control Yuan, the branch of government responsible for oversight, began to assert its independence by investigating KMT corruption. In local elections of 1994, for instance, state prosecutors convicted more than one third of 858 city and county representatives for vote-buying. Just prior to the 1995 national elections, it was revealed that the Minister of Justice had evidence of another extensive ring of vote-buying. The KMT took 54% of the vote (83 seats), its lowest majority ever and its major rival, the Democratic People's Party (DPP) obtained 54 seats and the Chinese New Party (CNP) captured 21 with 6 going to various independents. The constitution was also rewritten in 1995, calling for direct election of the president with the first election slated to be held in 1996.

Amid these democratic reforms, Taiwan faced a major international crisis in 1995 when President Lee was given a US visa to visit Cornell University, his alma mater. China objected vociferously and threatened military action against Taiwan. In a show of support for Taiwan and in opposition to PR China's launching of missiles into Taiwan's territorial waters, the United States dispatched a naval force to the region, only to further irritate PR China.

Prior to the presidential elections of March 1996, the formerly united KMT began to splinter. Dissidents within the party and those who had previously left the KMT announced their intentions to run against Lee, who had been chosen by a party plenum in August 1995 as the official KMT candidate. Primary among these were Lin Yang-gang, a former Judicial Yuan president and current vice-chairman of the KMT, and Chien Li-an, president of the Control Yuan and former Minister of National Defense. Campaigning was intense, with scandals being revealed on all sides, but Lee received a resounding 54% compared to 21% for his nearest competitor.

President Lee was criticized by political opponents in 1997 as an increased wave of crime swept the island. In May 1997, more than 50,000 protestors gathered in the capital protesting the government's lack of action on issues of crime. Multiple members of the Executive Yuan resigned and Lee reshuffled his cabinet. However, late in 1997, the KMT suffered severe losses in local and magistrate elections. The main opposition, the DPP, won 12 of the 23 constituency positions contested and led to the reorganization of the KMT following the resignation of the party's Secretary General. In 1998, the KMT recovered in the next set of elections but only to suffer a setback in summer elections that year. As the economy weakened from the Asian financial crisis, the government sought to deregulate the economy and decrease taxes. Relations with PR China again worsened as Taiwan prepared for presidential elections in 2000. On 18 March 2000, Chen Shui-bian, the DPP candidate and a former dissident leader imprisoned for his opposition to the KMT was elected president in a hotly contested race. He obtained 39.3% of the vote and Lien Chan (KMT) captured 23.1% while ex-KMT businessman James Soong ran as an independent and garnered 36.8%. Leading up to and following the election, the PRC warned the Taiwanese that the election of a pro-independence DPP candidate would lead to possible military action. In his inaugural address in May, Chen stated that he would not declare independence as long as China did not attack the island. He said he would not call for a referendum on independence, nor abolish Taiwan's plan for an eventual reunion with the PRC. China responded by saying that Chen had evaded the question as to whether he considered Taiwan to be part of China.

In April 2001, the Dalai Lama met with President Chen during a visit which drew strong opposition from China. That month, the United States announced it would sell submarines, warships, and antisubmarine aircraft to Taiwan, but not the Aegis naval combat radar system, as Taiwan had requested. China protested the sale, and US president George W. Bush pledged to come to Taiwan's aid in the event of a Chinese invasion. That November, Taiwan lifted a 50-year ban on direct trade and investment with China.

In parliamentary elections held 1 December 2001, the DPP won 87 out of 225 seats, compared with the KMT's 68. It was the first time the KMT lost its parliamentary majority since 1949. In January 2002, Prime Minister Chang Chun-hsiung led the cabinet to resign en masse, stating he had "accomplished his mission" during a time of political instability in the transfer of power from the KMT to the DPP, and during an economic downturn that was worse than the Asian financial crisis of 1997–98. President Chen nominated his chief-of-staff, Yu Shyi-ku, as prime minister.

As of April 2002, academics from Taiwan and China were discussing the possibility of building an underwater tunnel to join Taiwan and the mainland. The shortest possible route would be 78 miles. There is no direct passenger access between the mainland and Taiwan by air or sea, although there were "friendship flights" between Taiwan and Beijing in 2005 during the Lunar New Year celebration. All travel between the ROC and the PRC is required by both sides to go through another regional location, usually Hong Kong or Macao. The ROC and the PRC declared that technical considerations for the tunnel posed no problems; the question to be resolved is the political one.

In August 2002, President Chen referred to Taiwan and China as two countries, and stated he supported legislation for a referendum to be held on independence, contrasting with his inaugural pledge not to hold a referendum. In 2003 Taiwan passed a referendum law which allows Taiwanese to hold referendums for the first time. This so called "defensive referendum" allowed the president, on his own authority and without legislative oversight, to initiate a referendum on national-security issues if faced with an external threat to national sovereignty. China was harshly critical because it believed Chen would hold a referendum on independence from mainland China, which as of 2005 had not happened.

President Chen accomplished lowering the amount of corruption, bribery and organized crime which pervaded Taiwanese politics prior to his term. However, allegations of vote buying and electoral inconsistencies remained. The 2004 presidential elections resulted in a surprising electoral result with Chen emerging victorious over the opposition by 0.2%. Hours before the vote, Chen and his vice president, Annette Lu, were shot, although not fatally. The opposition blamed the loss of the presidential election on sympathy votes gained by the shooting and claimed the shooting was staged. A commission was set up in late 2004 to investigate the shooting.

Taiwan participates in a free-market capitalist economy and due to its economic success is part of the four "Asian Tigers." Although many countries were devastated by the Asian financial crisis in 1998, Taiwan was able to escape serious recession due to conservative fiscal spending and its entrepreneurial base. Due to growing ties with China, the Taiwanese economy continued to strengthen as 2004 growth figures were above 6%. China replaced the United States as Taiwan's largest export partner.

GOVERNMENT

The government of the Republic of China in T'aipei claims to be the central government of all of China. Its constitution was drafted by a constitutional convention at Nanjing (Nanking) on 15 November 1946; it was adopted on 25 December 1946 and promulgated by the national government on 1 January 1947. All governmental powers originally emanated from the National Assembly; however, the powers of the National Assembly have been curtailed. The first National Assembly, which was elected in November 1947, had 2,961 delegates, selected on the basis of regional and occupational representation. The original delegates held their seats "indefinitely," until control of the mainland could be reestablished. Since 1969, the number of seats gradually increased with the addition of new seats for Taiwan. In April 1990, President Lee Tenghui revoked the emergency decree of 1948 which had allowed the 1,947 deputies to remain in office and the "indefinite" deputies had to retire by December 1991. With the promulgation of constitutional amendments on 25 April 2000, the National Assembly's functions are limited to amending the constitution and altering the national territory after a public announcement by the Legislative Yuan. In addition, the Assembly may impeach the president or vice president within three months of a petition initiated by the Legislative Yuan. The National Assembly's 300 delegates are selected by proportional representation of the political parties in the Legislative Yuan.

The president is the head of state and of the Executive Yuan, which functions as a cabinet. Previously, the National Assembly chose the president. After amendments to the constitution in 1992, however, citizens now elect the president by direct popular vote. The president may serve a maximum of two consecutive four-year terms. Under the president, there are five government branches known as yuans (councils or departments): legislative, executive, control, examination, and judicial. The legislative yuan, elected by popular vote, is the highest lawmaking body. As in the National Assembly, many members of the 1948 legislative yuan held their seats until 1991.

The executive yuan, comparable to the cabinet in other countries, is the highest administrative organ in the government. There are eight ministries, two commissions, and a number of subordinate organs under the executive yuan. The premier—the president of the executive yuan—is appointed by the president of the republic, with the consent of the legislative yuan. The president is empowered to compel the premier to resign by refusing to sign decrees or orders presented by the latter for promulgation.

The legislative yuan is the highest legislative organ of the state. It has a binding vote of no confidence which would lead to the dissolution of the executive yuan. Of its 225 members, 168 are chosen by universal suffrage and the remaining members are appointed through a system of proportional representation; members serve three-year terms. The number of seats in the legislature were reduced from 225 to 113 beginning with the election in 2008.

The control yuan, the highest supervisory organ, exercises censorial and audit powers over the government and may impeach officials. It also supervises the execution of the government budget. It has 29 members, all of whom serve six-year terms and are appointed by the president with the consent of the legislative yuan.

The examination yuan is the equivalent of a civil service commission. It consists of two ministries. The Ministry of Examination appoints government personnel through competitive examination. The Ministry of Civil Service registers, classifies, promotes, transfers, retires, and pensions. Its president, vice president, and 19 commissioners are appointed by the president of the republic with the consent of the control yuan.

POLITICAL PARTIES

The Chinese Nationalist Party, better known as the Kuomintang—KMT, was, until 2000, the dominant political party in Taiwan. The teachings of Sun Yat-sen (Sun Zhongshan), which stress nationalism, democracy, and people's livelihood, form the ideology of the party. After the fall of the mainland to the Communists in 1949, a reform committee was organized to chart a new program for the party.

The KMT's organization is similar to that of the Chinese Communist Party. The basic unit is the cell, which represents neighborhoods. The next levels include the district, county, and provincial congresses and committees. The highest levels include the National Congress and the Central Committee. The National Congress delegates serve four-year terms and are charged with the tasks of amending the party charter, determining the party platform and other important policies. It also elects the party chairman and the Central Committee members, and approves candidates nominated by the chairman to serve as vice chairmen and members of the Central Advisory Council. When the National Congress is in recess, the supreme party organ is the Central Committee, which holds a plenary session every year.

The Central Standing Committee, which represents the Central Committee when that body is not in session, is the most influential organ in the KMT. The day-to-day affairs of the party are managed by the secretariat. All organization within the KMT are funded by profits from party-owned and operated business enterprises, ranging from newspapers and TV stations to electrical appliance companies and computer firms.

At the party's 14th National Congress held in August 1993, significant changes to the conduct of party affairs were made. It decided that the party chairman was to be elected by the National Congress through secret ballot. President Lee Teng-hui won 83% of the votes cast and was reelected chairman of the party. In addition, four vice-chairmen were added to the Central Committee after being nominated by the chairman and approved by the National Congress. It also decided that the chairman would appoint only 10 to 15 of the 31 members of the Central Standing Committee, with the remaining members elected by the Central Committee. Finally, it decided to hold the National Congress every two years instead of four years.

Under martial law, from 1949 through 1986, the formation of new political parties was illegal, although there were two nominal, previously formed parties. Non-KMT candidates ran as independents or "Nonpartisans," with increasing success by the end of the 1970s. In September 1986, a group of "nonpartisans" formed a new opposition party, the Democratic Progressive Party (DPP), which had an orientation toward the Taiwanese population and advocated "self-determination." Although technically illegal, the DPP's candidates took 22% of the vote in the December 1986 elections, winning 12 out of 73 contested seats in the Legislative Yuan; the KMT won 59. The lifting of martial law in 1987 made the formation of new parties legal, although a new security law continued to restrict political activity. In the first fully competitive, democratic national elections, in December 1992, the KMT won 53% and the DPP 31% of the votes for the Legislative Yuan. Before the 1995 legislative elections, the KMT began to splinter and in 1994 the Chinese New Party (CNP) was formed by KMT defectors who favored strengthened ties with the mainland. In the 1995 balloting, however, the KMT was able to maintain its majority, winning 83 of the 164 seats in the Legislative Yuan. The DPP took 54, the CNP took 21 and six seats were won by independents. In the National Assembly (334 seats) the KMT took 183, the DPP 99, the CNP 46, and six were won by others.

The Democratic Progressive Party was formed on 28 September 1986. The party's organizational structure closely resembles that of the Kuomintang. The DPP's National Congress elects members to the Central Executive Committee and to the Central Advisory Committee. The Central Executive Committee in turn elects the members of the Central Standing Committee. Its leader is President Chen Shui-bian. At the party's sixth National Congress, held in April and May of 1994, a two-tier primary system was initiated under which ordinary members of the DPP voted for candidates in one primary election and party cadres vote in a second primary. The results of the two would then be combined, with equal weight given to both. At the second plenary meeting of the sixth National Congress held in March 1995, the nomination process for the presidential and gubernatorial candidates was modified to add open primaries for DPP members and nonmembers. It was further decided at the meeting that the party chairman would be elected directly by all members of the party starting in 1998. What most distinguishes the DPP from the two other major parties is its support of Taiwan independence, or the permanent political separation of Taiwan from the Chinese mainland. Although the DPP has incorporated Taiwan independence into its official platform, the urgency accorded to its realization is a source of factional contention within the party.

The Chinese New Party (NP) was formed in August 1993, shortly before the Kuomintang's 14th National Congress by a group of KMT reformers who broke away from the party in protest of the undemocratic practices of the KMT. The NP adopted an anticorruption platform and championed social justice. The goal of the NP was to attract voters who were dissatisfied with the performance of the ruling KMT and opposed to the DPP's advocacy of Taiwan independence.

As of early 2003, there were four significant political parties operating in Taiwan. The DPP, which won the presidential and legislative elections of 2000 and 2001, respectively, was the largest party. It took 87 seats in the Legislative Yuan in December 2001 election. The KMT took 68 seats, and was the second-largest party in the Legislative Yuan. The People First Party (PFP), founded by James Soong following his second-place finish in the 2000 presidential election, was the third-largest party with 46 seats. The fourth major political party, based on its membership in the Legislative Yuan, was the Taiwan Solidarity Union (TSU), winning 13 seats. As of June 2002, a total of 99 political parties had registered with the Ministry of the Interior.

The 2004 elections of the Legislative Yuan resulted in the DPP retaining the largest number of seats with 89; the KMT gained 11 seats to secure 79 overall; the PFP continued to place in third with 34 seats; and the TSU lost one to emerge with 12 seats; other parties and independents retain 11 seats. The next election for the Legislative Yuan was scheduled to be held in 2007.

LOCAL GOVERNMENT

The Taiwan provincial government holds jurisdiction over the main island of Taiwan, 21 smaller islands in adjacent waters, and the 64 islands of the Penghu (Pescadores) group. The provincial capital is located at T'aichung. The province is divided into 16 county (hsien) administrative areas and 5 municipalities under the direct jurisdiction of the provincial government. In addition, T'aipei (since 1967) and Kaohsiung (since 1979) are self-governing "special" municipalities. Subdivisions of the county are the township (chen ), the rural district or group of villages (hsiang ), and the precinct. Quemoy and Matsu are administered by the military. At the local level and under the Taiwan Provincial Government, there are five cities—Chilung, Hsinchu, T'aichung, Chiai, and T'ainan—and 16 counties, and under each county there are county municipalities.

The province is headed by a governor who is nominated by the president of the executive yuan and appointed by the president of the republic. Department heads and members of the provincial council are recommended by the governor for appointment by the executive yuan. The governor is the ex officio chairman of the appointed provincial council, the policy making body, and holds veto power over its resolutions. The provincial government can issue ordinances and regulations for the administration of the province as long as they do not conflict with laws of the central government. The mayors and city councils of T'aipei and Kaohsiung are elected.

The provincial assembly, an elected body, meets for two yearly sessions of two months each. Nominally it possesses broad legislative powers; however, its prerogatives are circumscribed by a provision in its organic law that in the event of a disagreement between the provincial executive and the Assembly, the former may request reconsideration. Should the assembly uphold its original resolution, the provincial executive may submit the dispute to the executive yuan for final judgment. The executive yuan may dissolve the provincial assembly and order a new election if it holds that the assembly is acting contrary to national policy.

At the end of 1996, the National Development Conference was convened to streamline local government operations. The county government is headed by an elected magistrate (hsien-chang ) and the municipal government by a mayor (shih-chang ). Each county or municipality has a representative body called the hsien, or municipal assembly. Further down are the councils and assemblies of townships and rural districts, each headed by a chief officer. All of these officials are elected by universal suffrage of citizens over age 20.

JUDICIAL SYSTEM

The Judicial Yuan is Taiwan's highest judicial organ. It interprets the constitution and other laws and decrees, adjudicates administrative suits, and disciplines public functionaries. The president and vice president of the Judicial Yuan are nominated and appointed by the president of the republic, with the consent of the legislative yuan. They, together with 15 grand justices, form the Council of Grand Justices, which is charged with the power and responsibility of interpreting the constitution, laws, and ordinances. The judicial system is based on the principle of three trials in three grades of courts: district court, high court, and Supreme Court. The Supreme Court, the highest tribunal of the land, consists of a number of civil and criminal divisions, each of which is formed by a presiding judge and four associate judges. The judges are appointed for life.

In 1993 a separate Constitution Court was established. Staffed by the then-16 grand justices of the Judicial Yuan, but with the judicial yuan excluded from the court, the new court was charged with resolving constitutional disputes, regulating the activities of political parties and accelerating the democratization process.

There is no right to trial by jury, but the right to a fair public trial is protected by law and respected in practice. Defendants are afforded a right to counsel and to a right to appeal to the High Court and the Supreme Court in cases in which the sentence exceeds three years. Those sentenced to three years or less may appeal only to the High Court. The Supreme Court automatically reviews all sentences to life imprisonment or death. There is also an administrative court.

In late 2004 the Legislative Yuan approved constitutional changes, effective 2008, which included halving the number of seats in the Legislative Yuan and extending all legislators' terms from three to four years. Taiwan employs a quota system which allows for minorities and aboriginal persons to gain access into government positions. Although banned by law, minorities and aboriginal persons claim to face discrimination in the socio-economic realm.

The judicial system is based on civil law and Taiwan accepts compulsory jurisdiction of the International Court of Justice. Military service is mandatory for Taiwanese males.

Taiwan is a free and fair society. Citizens are able to organize, protest and gain access to any type of material without fear of reprisal. Trade unions are independent and collective bargaining is legal. The law does restrict the right to strike by ordering mediation sessions and banning work stoppages while mediation is in progress.

Taiwan is involved in several land disputes, most notably involved in a complex dispute with China, Malaysia, Philippines, Vietnam, and possibly Brunei over the Spratly Islands. The Paracel Islands are occupied by China, but claimed by Taiwan and Vietnam. In 2003, China and Taiwan became more vocal in rejecting both Japan's claims to the uninhabited islands of the Senkaku-shoto (Diaoyu Tai). Taiwan also disputes Japan's unilaterally declared claim to the exclusive economic zone in the East China Sea.

ARMED FORCES

In 2005, Taiwan's armed forces had 290,000 active personnel, with reserves numbering 1,653,500. The Army had an estimated 200,000 members including military police. Equipment included more than 926 main battle tanks, 905 light tanks, 225 armored infantry fighting vehicles, 950 armored personnel carriers, over 1,815 artillery pieces and 101 attack helicopters. The Navy numbered 45,000, including 15,000 Marines. Major naval units included four tactical submarines, 11 destroyers, 21 frigates, 59 patrol/coastal vessels and 12 mine warfare ships. The Navy's aviation arm also operated 32 maritime reconnaissance and 20 antisubmarine warfare helicopters. The Air Force had 45,000 active personnel, and operated 479 combat capable aircraft that included 293 fighters and 128 fighter ground attack aircraft. Paramilitary forces included security groups with 25,000 members, a 22,000 member civilian Coast Guard and an estimated 1,000 member Maritime Police. Taiwan's defense budget in 2005 totaled $8.32 billion.

INTERNATIONAL COOPERATION

The ROC, a charter member of the UN, became the first government to lose its recognition from that body following a General Assembly vote on 25 November 1971 to recognize the PRC as the sole legitimate representative of China. The ROC subsequently lost its membership in most UN bodies, as well as in several other international organizations—usually with its place taken by the PRC. Taiwan is a member of APEC, the Asian Development Bank, the International Chamber of Commerce, the International Confederation of Free Trade Unions, the World Confederation of Labor, and the World Trade Organization.

As of 2005, Taiwan had formal diplomatic ties with only 25 countries. The government claims to have "substantive" trade relations with more than 140 countries and territories, however. In November 2001, Taiwan lifted a 50-year ban on direct trade and investment with China.

ECONOMY

Under the Japanese, the island was developed as a major source of foodstuffs for Japan. Production of rice and sugar increased rapidly, but little effort was directed toward industrialization until after 1937. Immediately after World War II, a number of factors—including repatriation of Japanese technicians, dismantling of industrial plants, and lack of fertilizer for agriculture—caused a rapid deterioration of the economy, which was aggravated by the influx of refugees from the mainland. The situation improved after 1949 with the removal of the ROC government to Taiwan. The arrival of technical and experienced personnel and capital equipment from the mainland facilitated the island's economic rehabilitation. Currency and tax reforms stabilized the monetary situation. The supply of fertilizer from the United States and a land reform program aided the revival of agricultural production.

Energetic government measures in the form of successive fouryear plans, at first supplemented by US aid, resulted in substantial economic progress. In the first decade (1951–60), the stress was on agricultural development and the establishment of textile and other labor-intensive industries. From 1961 to 1970, the promotion of industrial products for export was emphasized. In 1963, Taiwan registered its first favorable trade balance. By 1965, the economy appeared stable enough to warrant the cessation of US economic aid programs. Medium and light industry led the expansion, with striking gains registered in electronics, household goods, and chemicals. The decade 1971–80 saw the development of such capital-intensive industries as steel, machinery, machine tools, and motor vehicle assembly. Such industries, based on imports of raw materials, were encouraged through massive government support for major infrastructural improvements in roads, railroads, ports, and electricity. During the 1980s, emphasis was placed on the development of high-technology industries. As a result, between 1981 and 1991, the share of high-technology industries in total manufactures increased from 20% to 29%, making Taiwan the seventh-largest producer of computer hardware on the global market. The 1990s brought an influx of capital-rich investment, especially after 1996 when the first democratic elections were held. High-technology industries accounted for over 73% of total manufacturing, and 67% of exports in 1999. Growth accelerated in the late 1990s, measuring 4.6% in 1998, 5.4% in 1999 and 6% in 2000, spurred by the boom in the PC and IT industries. Exports played an increasing role, accounting for 47.8% of GDP in 1998, 48.3% in 1999 and 54% in 2000. Growth in high-tech exports peaked at 54% in the third quarter of 2000.

Taiwan's GNP advanced at an average annual rate of 9% in real terms between 1952 and 1980. In contrast to Taiwan's industryled economic growth of previous decades, since the late 1980s the country has undergone a shift towards a services-dominated economy. As of 2000, services made up about 66% of the GDP, compared to less than 50% in the mid-1980s and 44% in the early 1960s. Taiwan has the world's third-largest foreign exchange reserves and over $230 billion in two-way trade. Though still expanding in absolute terms, industry's share of the GDP declined from 52% in 1986 to 32% in 2000. Agriculture has continued to claim only a small share of the economy, making up 2% of the GDP in 2000. A lack of domestic resources hampers the development of agriculture and primary industries. An earthquake in September of 1999 caused major damages to Taiwanese lives and property, but reconstruction was complete by 2000. What affected the economy was the burst of the dot.com bubble beginning in late 2000, and the global slowdown in 2001, aggravated by the aftermath of the 11 September 2001 terrorist attacks on the United States. Taiwan experienced its first recorded decline in real GDP, -2.2%. Recovery began in the last quarter of 2001, and in 2002 real growth of 3.2% was recorded. Inflation has been generally falling in the late 1990s, from 3.1% in 1996 to 0% in 2001 and a slightly negative -0.2% in 2002. Unemployment, by contrast, has increased steadily, from 2.6% in 1996 to 5.2% in 2002.

The economy grew by 5.7% in 2004, up from 3.3% in 2003; in 2005, the GDP growth rate was expected to be 3.7%. Inflation remains at negligible levels, and unemployment seems to have been brought under control, decreasing from a rate of 5.2% in 2002 to 4.4% in 2004, and an expected 4.2% in 2005. Increasing trade with China has contributed significantly to the country's economic recovery.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 Taiwan's gross domestic product (GDP) was estimated at $610.8 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $26,700. The annual growth rate of GDP was estimated at 3.6%. The average inflation rate in 2005 was 2.3%. It was estimated that agriculture accounted for 1.6% of GDP, industry 29.3%, and services 69%.

According to the World Bank, in 2003 remittances from citizens working abroad totaled $45 million.

It was estimated that in 0.9 about 2005% of the population had incomes below the poverty line.

LABOR

The civilian labor force in Taiwan was estimated at 10.31 million in 2005. The share of persons employed in farming, forestry, and fishing has been declining steadily, while the share of the workforce employed in mining, manufacturing, construction, and utilities has increased. As of 2005, about 6% of the labor force was engaged in agriculture, 58.2% in services, and 35.8% in industry. In that same year the unemployment rate was estimated to be 4.2%.

Trade unions are weak and cannot be called unions in the real sense of the term, for the law does not provide for effective collective bargaining and also prohibits strikes, shutdowns, and walk-outs in vital industries. The trade unions, organized under government supervision, tend to be used for carrying out government policies, but they carry on a considerable amount of welfare work. In 2002, there were 3,854 registered unions in Taiwan, with membership totaling 29% of all employed persons.

The minimum age for employment is 15. Current occupational health and safety regulations provide only minimal protection and have a mixed record of enforcement. The law provides for an eight-hour day (which may be extended to 11 hours for men and 10 for women) and a six-day workweek; overtime is paid at 40–100% above the regular wage. Most large firms give allowances for transportation, meals, housing, and other benefits, which can increase base pay by 60–80%. A minimum of one week's vacation is provided after a year's employment, and there are 14 or 15 other paid holidays. In 2002, the monthly minimum wage was us$452. This amount provides a decent standard of living in rural areas, but is not sufficient for urban life.

AGRICULTURE

About 24% of the land is under cultivation. Although still important as both an export earner and a domestic food source, agriculture has fallen far from the preeminent position it long held in the Taiwan economy. From 1973 to 1987, the crop production growth rate increased on average only 0.1% per year. In 2004, agriculture accounted for 1.6% of GDP. About 6% of the labor force was employed in agriculture. High production costs and low return have driven much of the agricultural work force away to industry. In 2003, there were 200,246 farm households. Part-time farming households have accounted for over 80% of all farming households since 1980. In 2003, Taiwan imported nearly $8 billion in food and agricultural products, with 33% coming from the United States, 7% from Australia, and 7% from Japan.

Rice, the principal food crop, is grown along the western plain and in the south. In 2004, paddy rice production was 1,433,611 tons; brown rice, 1,164,580 tons. Taiwan's annual rice production exceeds demand; the island's per capita rice consumption has declined by over 50% since the mid-1970s due to changing diet preferences. Other food crops include sweet potatoes, bananas, peanuts, soybeans, and wheat. Sugar, pineapples, citrus fruits, crude tea, and asparagus are plantation-grown and are the principal cash and export crops. Small amounts of Taiwan's world-famous oolong tea, cotton, tobacco, jute, and sisal are also produced. A fast-rising industry, mushroom canning, led to the development of mushroom cultivation, a specialty crop well suited to Taiwan since it is labor-intensive and requires little space and small investment. Betel nuts have become Taiwan's second most valuable cash crop after rice. In 2004, betel nut production totaled 143,368 tons. In 2004, Taiwan's major crop production was valued at nt$259 billion, with crops accounting for 63%; vegetables, 14%; mushrooms, 1%; and fruits, 22%. Between 2001 and 2004, fruit and horticultural production increased by 6% and 8%, respectively, while rice production fell by 16.7%.

Generally, Taiwanese agriculture is characterized by high yields, irrigation, terracing, multiple cropping, intertillage, and extensive use of fertilizers. Farms are small, averaging 1.1 hectares (2.7 acres) of cultivable land per farm family. Mechanization, once confined largely to sugarcane and rice production, is increasing rapidly as a result of government subsidies and other incentives. Since there is an oversupply of rice, the government has encouraged farmers to grow soybeans, wheat, and corn, which are more profitable. The growing scarcity of land on Taiwan is causing serious disagreements over land resources between agricultural, industrial, and housing interests.

ANIMAL HUSBANDRY

Pastures in Taiwan occupy only 0.1% of the total land area. In 2004, livestock sector production was valued at nt$125 billion. That year, Taiwan produced 891,776 tons of pork and 631,640 tons of poultry from chickens. Hog production is Taiwan's most valuable farm product. In 2004, Taiwan's pork production was valued at nt$64.4 billion. In 1997, a major outbreak of hoof and mouth disease affected 6,147 hog farms. As a result, one-third of the hog population had to be destroyed. The government helped compensate pig farmers with $1.1 billion in low interest loans. Livestock production declined by 13% from 1996 to 2001, and fell another 3.9% from 2001 to 2004. Chickens and ducks are raised by most households.

FISHING

Production of fish products totaled 1498,866 tons in 2003 (19th in the world). Exports of seafood products totaled $1,299 million in 2003. In 2003, Taiwan accounted for 14.9% of the world's fresh, chilled and frozen fish exports, valued at $1,175 million, and 0.6% of the canned fish exports, valued at $38.1 million. Squid, skipjack and yellowfin tuna, chub mackerel, shark, and milkfish are the main species of the marine catch. Deep-sea fishing, which was practically wiped out by World War II (1939–45), has shown strong gains following heavy investments in vessels and harbors. Milkfish, tilapias, clams, oysters, and eels are the main species farmed. In 2004, the aquacultural area covered 42,047 hectares (103,898 acres), with production of 299,066 tons, valued at nt$28.2 billion.

FORESTRY

Native stands of cypress, fir, camphor, and oak were cut to help fund Japan's development when Taiwan was under Japanese imperial rule (1895–1945). Logging provided hard currency exports for the Nationalist Chinese regime after its retreat from mainland China to the island in 1949. Nearly 60% of Taiwan is covered with forests, with the total forest area estimated at 2.1 million hectares (5.2 million acres) in 2004. The roundwood harvest was estimated at 40,041 cu m (1.41 million cu ft) in 2004 (90% softwood, valued at nt523.8 million). Although forestry production increased by 21.3% between 2000 and 2004, domestic timber production only meets 1% of total demand; the value of wood imports totaled $1.23 billion in 2004. Taiwan's timber production has declined since the 1980s due to local labor shortages, intensifying environmental concerns, and logging restrictions. In 1992, Taiwan banned all logging from nonplantation forests. Principal timbers are oak, cedar, and hemlock. Taiwan is a major furniture exporter that relies heavily on imported wood products to support the industry.

MINING

Mining in 2004, accounted for only 0.1% by value of Taiwan's total industrial output. Iron and steel was the leading metal production sector on the island. Value-added products made from aluminum and copper were dependent upon scrap or imported metals. Dolomite, limestone, and marble were the most important nonfuel mineral commodities. The western third of the island had adequate amounts of sand, gravel, and limestone for building purposes, although there has been a recent slowdown in the construction sector. The demand for mineral products has increased over the years, while local supplies were dwindling. Mineral production in 2004 included (in metric tons): dolomite, 115,000, up from 54,000 in 2003; limestone, 213,000, down from 1,434,000 in 2003; marble, 22,970,000, up from 21,041,000 in 2003; and serpentine, 229,000, up from 194,000 in 2003. Taiwan also produced hydraulic cement, fire clay, feldspar, precipitated gypsum, lime, mica, marine salt, caustic soda, soda ash, sulfur, and talc. No kaolin clay was produced in 2004.

ENERGY AND POWER

Taiwan's domestic energy resources are modest and the country is nearly totally dependent upon imports.

Oil is the biggest part of Taiwan's energy mix, accounting for 48% of energy demand, followed by coal at 34%, nuclear power at 9%, natural gas at 8% and hydroelectric power at under 2%. Taiwan's proven reserves of oil are miniscule. As of 1 January 2004, these reserves were estimated at four million barrels. In 2003, production of oil was estimated at an average of 3,806 barrels per day, of which an average of 800 barrels per day consisted of crude oil. Demand for oil, however, in 2003, was estimated at an average of 896,000 barrels per day, making the country a net importer of oil at an estimated average of 892,200 barrels per day. As of 1 January 2004, Taiwan's refining capacity was estimated at an average of 920,000 barrels per day.

As of 1 January 2004, Taiwan's proven reserves of natural gas were estimated at 2.7 trillion cu ft. In 2002, natural gas output came to an estimated 30 billion cu ft, while demand totaled an estimated 287 billion cu ft, and imports totaled an estimated 257 billion cu ft.

Taiwan's domestic consumption of coal in 2002 was estimated at 55.8 million short tons, while imports for that year were estimated at 54.7 million short tons. Although Taiwan has proven coal reserves of 1.1 million short tons, the active production of coal ended in 2000.

In 2002, Taiwan's installed electric power generating capacity totaled 30.134 million kW, of which conventional thermal fuel sources accounted for 20.568 million kW of capacity and nuclear power for 5.144 million kW. Hydroelectric power accounted for 4.422 million kW of capacity in that same year. Total electric power output in 2002 reached 158.537 billion kWh. Of this total, 72% was from fossil fuels, 3.9% from hydropower, and 23.9% from nuclear power. Consumption of electricity in 2002 was 147.439 billion kWh. Reported as of July 2004, Taiwan had three nuclear power plants (the Maanshan station in the south, and the Kuosheng and Chinshan stations in the north), with a combined installed capacity of 4,884 MW. Construction of the 2,700 MW Kungliao nuclear power station had become a controversial issue by 2000, when the Democratic People's Party government had it halted. However, through legislative and judicial efforts, work on the project was resumed in 2001. The Kungliao station is slated to start operations in 2006.

INDUSTRY

Under the Japanese, about 90% of the industrial enterprises were owned by the government or by Japanese corporations with govvernment assistance. After the restoration of Taiwan to China in 1945, the ROC government took over these enterprises. Some were sold to private owners, and the rest were grouped under the management of 18 public corporations, operated either by the national government or by the provincial government, or by both. Added to the confiscated enemy properties were public enterprises evacuated from the mainland. As a result, government-operated enterprises came to dominate Taiwanese industry. Although the proportion accounted for by these enterprises in the production value of manufacturing industries has been falling in recent years in contrast to the private sector, it still accounts for a significant amount of value added. Beginning in 1992, Taiwan authorities have made efforts to reduce the size of the public sector. These efforts have gained momentum after democratization in 1996. By 2002, the government had sold equity shares and reduced public ownership to below 50% in 23 state-owned enterprises (SOEs), mostly banks and insurance companies, but including a steel mill and one fertilizer company. In 1998 and 1999 privatization announcements included the Chinese Petroleum Corp., Chunghwa Telecom Corp., and Taiwan Power Corp. Plans for privatization have been announced for SOEs involved in power, oil, tobacco, wine, railway transport, mining and telecommunications. Since 1998, also, a number of construction projects—the north-south high speed railway, the mass rapid transit (MRT) systems in Kaohsiung (KMRT) and the between T'aipei and the CKS Airport—were given to private firms, including many foreign companies, on a build-operate-transfer (BOT) basis.

The average annual growth rate in manufacturing was 13% during 1953–62, 20% during 1963–72, 9.6% during 1973–85 and 5.9% for 1986–92. The private sector outpaced the public sector during each of these periods. The number of workers in manufacturing rose from 362,000 in 1952 to 736,000 in 1967 and to almost 2.8 million in 1987. By 1992, however, this number declined to about 2.6 million as the rapidly expanding service sector absorbed more of the workforce. Manufacturing for export has been encouraged by the establishment of free-trade export-processing zones (EPZs) in the Kaohsiung harbor area, at Nantze (near Kaohsiung), and at T'aichung. Since the late 1980s rising production costs and a 40% appreciation of the New Taiwan dollar have prompted many export-oriented companies to relocate their manufacturing plants to mainland China and Southeast Asia. In particular; labor-intensive industries, such as toys, footwear, umbrellas, and garments, have relocated. In 1986, industrial production accounted for nearly half of GDP. By 1997 this figure had dropped to about 35% and in 2000, it was an estimated 31/.9%, including manufacturing at 26.4% of GDP; construction at 3.4% and electricity, gas and water at 2.1% of GDP. For to June 2001, industrial production accounted for 29.4% of GDP., with manufacturing accounting for 24%.

Production rose spectacularly after the end of World War II, especially between 1952 and the early 1980s. Slower economic growth since the mid-1980s and greater investment emphasis on heavy and high-technology industries as well as services has resulted in declining production figures for traditional manufactures such as cotton yarn and fertilizer. Labor intensive industries have gradually been replaced by capital and technology intensive industries. In 2000 electronics and information technology (IT) products accounted for 27% of industrial output. The two largest made-to-order computer chip manufacturers are Taiwan Semiconductor Manufacturing Company (TSMC), Taiwan second-largest company, and United Microelectronics Company (UMC). In 2000, Taiwan global share in scanner production was 90%; in motherboards, 65%; monitors, 57%; in notebook PCs, 57%; in digital cameras, 45%, and in D/DVD drives, 39%. Strong growth in IT products continued in many IT products despite the overall 10.4% contraction in industrial production in 2001. Sales of LCD monitors, for instance, reached $3.13 billion, a 66% increase over 2000, while sales of digital cameras reached $7.132 billion, a 95.5% yearly increase. In 2000, Taiwan was the world's fourth-largest computer hardware supplier. Taiwan has become the world's leading supplier of computer peripherals, including motherboards, monitors, mice, interfaces, network cards, and graphic cards; and holds the largest market share of notebook computers and semiconductors. The structure of Taiwan's IT industry is a pyramid with a handful of large companies that make the major investments in research and development, and over 1000 small and medium-sized operations that account for about 85%s of the output. The sector employs about 130,000.

Taiwan's petrochemical industry consists of mainly of 45 upper and middle-stream manufacturers, many concentrated in the Kaohsiung special chemical zone. In 1999, Taiwan's petrochemical production capacity was only 51% of domestic demand. As of 2000, this was raised to 79% with the completion of a naphtha cracking plant in the Mailiao industrial zone. The Mailiao zone also includes its newest oil refinery, a 450,000 barrels per day facility built by Formosa Petrochemical Company (FPC), which, with Taiwan's three other refineries—a 270,00 barrels-per-day refinery at Kaohsiung, a 270,000 barrels-per-day refinery at Ta-Lin, and a 200,000 barrels-per-day refinery at Taoyuan—establishes refinery capacity in excess of domestic demand. In December 2002, an export contract was concluded with the mainland China state petroleum company

In heavy industry, Taiwan has 10 manufacturing companies, most of them contractual joint ventures with Japan. The production value of the automotive industry reached $10 billion in 2000, about 4% of its aggregate manufacturing. Taiwan's small size and the availability of efficient MRT lines limits the demand for automobiles. Domestic demand for vehicles fell from 542,000 in 1995 to 420,000 in 2000.

Textiles were the leading export until the 1980s when labor costs, land prices and environmental protection concerns led to a relocation of much of the industry to Southeast Asia and China. The domestic industry is based on man-made fibers. In 2000, Taiwan was third in the world in the production of man-made fibers, and second in the production of polyester, which constitutes 80% of its output.

Overall industrial production fell 2.6% in 1998 from an increase of 7.4% in 1997, due largely to the effects of the Asian financial crisis. Industrial production recovered quickly to growth rates of 7.5% and 7.4% in 1999 and 2000, but then slid 10.4% in 2001 in the wake of the dot.com bust. In 2002, the economy recovered, registering a 3.3% growth rate, and in the first quarter of 2003, industrial production had risen 6.4%.

In 2004, the industrial production growth rate was 12.2%, well above the overall growth of the economy. Industry made up 30.9% of the economy, and employed 35% of the working population. Agriculture is an insignificant part of the economy, but services seem to be the main driving force, with 67.4% participation in the GDP and 57% representation in the labor force.

SCIENCE AND TECHNOLOGY

In the 1970s, Taiwan instituted its Science and Technology Development Program. Coordinated by the National Science Council, the program seeks to encourage the development of "knowledge-intensive" industries through grants for the training of scientific personnel, subsidies for recruitment of distinguished scientists from abroad, and grants to universities to promote scientific research. Specific goals of the program are to integrate and promote research in geothermal energy, battery-powered vehicles, electronics, cancer treatment, pharmaceuticals, nuclear safety, and the development of high-precision instrumentation and computers.

The Industrial Technology Research Institute is charged with the transfer of pertinent technologies developed to manufacturing and other industries. College students are encouraged to build careers in engineering and science. In 1979, the Science-Based Industrial Park was established at Hsinchu, near the National Tsinghua University, with the objective of encouraging computer manufacturing and other high-technology industries by offering loans, tax incentives, and low-cost housing and factory buildings. By 1990, over 60 companies had established research and development (R&D) and joint production facilities there. These include computer, semiconductor, precision electronics and instrumentation, telecommunications, and biotechnology firms.

The highest institution for scientific research on Taiwan is the Academia Sinica (Chinese Academy of Sciences), founded in 1928 and now located in T'aipei. Its 18 associated institutes carry on research in mathematics, statistics, history and philology, economics, modern history, physics, botany, zoology, ethnology, chemistry, molecular biology, biological chemistry, biomedical sciences, atomic and molecular sciences, earth sciences, information science, nuclear energy, social sciences and philosophy, and American culture. An Atomic Energy Council, founded in 1955, promotes atomic research.

In T'aipei, the National Taiwan Science Education Center has a planetarium and various exhibits; the Taiwan Museum has exhibits on natural history, geology, and ethnography, and a spectroscopic dating laboratory for fossils. Taiwan has 23 universities and colleges that offer courses in basic and applied sciences.

DOMESTIC TRADE

The marketing system is partly free and partly controlled. Salt, tobacco, alcoholic beverages, and certain commodities are produced and distributed by the government. Prices of basic living commodities are controlled. Retail sales in cities are handled by small department stores, specialty shops, general stores, convenience stores, roadside stands, and peddlers. In 2000, Taiwan had over 1,000 supermarkets and 3,200 convenience stores. Since roadside stands and peddlers have little overhead and are satisfied with a small profit, their prices are generally lower than those of the large stores and shops, if the customer bargains. In recent years, wholesale discounters, hypermarkets and franchises have become significant distribution channels for consumer goods, increasing the efficiency of the marketing system overall. The nation's first shopping malls opened in 1999 and 2001, with development plans to build 20 to 30 more within the next few years.

Chilung and T'aipei are the distribution centers for the northern end of the island, while Kaohsiung and T'ainan are the principal distribution centers for the southern area. Most registered import and export trading firms are located in T'aipei. Accounts are usually settled during festival periods, according to Chinese custom.

Local markets open about 7 am and close at 6 pm or later. Business firms and stores are usually open from 9 am to 5:30 pm, and in the morning on Saturdays, and some stores close as late as 10 pm. Most stores are open seven days a week. Banks are open six days a week: Monday–Friday, 9 am to 3:30 pm, and Saturday, 9 am to noon. As of January 1998, government employees (excepting the police, health bureau, and customs) and most private companies take the second and fourth Saturday of the month off.

FOREIGN TRADE

Foreign trade is of ultimate importance to the island economy. To fulfill both production and consumer needs, Taiwan must import large quantities of energy, industrial raw materials, food, and manufactured goods. With rising consumer wealth within Taiwan as well as tariff reductions and other liberalization measures by the government, imports have risen rapidly from $24 billion in 1986 to an estimated $122 billion in 2000.

The export pattern has changed significantly since the end of World War II. In 1952, industrial products represented only 10% of Taiwan's total exports and agricultural exports made up the rest; but by 1992, industrial exports (excluding processed agricultural products) had jumped to an overwhelming 95.7% share of the total. Exports increased from $8.2 billion in 1976 to an estimated $112 billion in 2000. However, the export growth rate has declined steeply in recent years, from 23% in 1986 to 13% in 1991 and 0.4% in 1992, due to recession in Taiwan's major markets and the movement of export-oriented manufacturing plants to China and Southeast Asia. Exports leveled off in 1997, and dropped by 9.4% in 1998, in part due to the financial crisis in all of Asia. The growth in services has overtaken that of industrial production.

Most of Taiwan's export commodities are electronic equipment and other small manufactured goods.

The United States remains Taiwan's single most important trade partner, although Japan has made major gains, becoming Taiwan's major supplier in the 1970s and 1980s. Over 18% of imports come from the United States, while Taiwan exports more than 27% of goods to the United States. Trade with mainland China via Hong Kong expanded rapidly during the late 1980s and early 1990s, resulting in a sharp increase in Taiwan's trade surplus with the latter country. Following cross-strait tension from 1995 onwards, Taiwan investors have limited their relations with mainland China, resulting in a 50% drop in investment during 1998. Exports to China fell by 13% in 1998.

In 2004, exports reached $171 billion (FOB—Free on Board), while imports grew to $165 billion (FOB). The bulk of exports went to China, including Hong Kong (37%), the United States (16%), and Japan (7.7%). Imports included machinery and electrical equipment, minerals, and precision instruments, and mainly came from Japan (26%), the United States (13%), China, including Hong Kong (11%), and South Korea (6.9%).

BALANCE OF PAYMENTS

There was a consistent trade surplus after the mid-1970s, which exceeded $10 billion after the mid-1980s through the mid-1990s. The current account surplus was $19 billion in 2001 and was forecast to remain substantial in 2003. Taiwan's total foreign exchange reserves are the world's third-largest after Japan and China; they stood at a record $175.2 billion in May 2003. Total foreign debt was only $24 million in 2001.

The US Central Intelligence Agency (CIA) reported that in 2001 the purchasing power parity of Taiwan's exports was $122 billion while imports totaled $109 billion resulting in a trade surplus of $13 billion.

Exports of goods and services reached $173 billion in 2004, up from $143 billion in 2003. Imports grew from $119 billion in 2003, to $157 billion in 2004. The resource balance was consequently positive in both years, reaching $24 billion in 2003, and $16 billion in 2004. The current account balance was also positive, deteriorating though from $29 billion in 2003, to $19 billion in 2004. Foreign exchange reserves (including gold) grew to $242 million in 2004, covering more than one and a half years of imports.

BANKING AND SECURITIES

Many banking institutions are either owned or controlled by the government. There were 11 public banks in 1998, with total assets of $261 billion, or 44%. The Bank of Taiwan (with 75 branches) used to issue currency notes, handle foreign exchange, act as the government's bank, and perform central banking functions in addition to its commercial banking activities; before reactivating the Central Bank of China (CBC) in T'aipei in 1961. The functions of the Central Bank include regulation of the money market, management of foreign exchange, issuance of currency, and service as fiscal agent for the government. The Bank of China is a foreign exchange bank with branch offices in major world capitals. The Bank of Communications is an industrial bank specializing in industrial, mining, and transportation financing. The Export-Import Bank of China, inaugurated 1 February 1979, assists in the financing of Taiwan's export trade. The Central Trust of China acts as a government trading agency and handles most of the procurements of government organizations. The Postal Savings System accepts savings deposits and makes domestic transfers at post offices.

At the end of 2002 there were 48 domestic commercial banks, five medium business banks, and 39 foreign banks. There were also 48 credit cooperatives, 287 farmers' credit unions, and 27 fishermen's credit unions. The government holds majority status in several of the most important banks, including the Bank of Taiwan, the Cooperative Bank of Taiwan, and the First Commercial Bank. The two largest private banks are the International Commercial Bank of China and the Overseas Chinese Commercial Banking Corp. By 1998, three large government-owned provincial banks were privatized, and others were set to follow.

In 1990 the government announced the goal of establishing the island as a regional financial center. Its original target of 1996 was far too optimistic, and liberalization will have to be far more thoroughgoing than that to which the authorities are at present committed, but various steps are being taken towards this end. Restrictions on bringing in capital from abroad, limits on capital transfers both in and out of Taiwan by domestic firms and individuals, and the operations of foreign banks have been liberalized. On 18 February 1997, the Finance Ministry set up a 37-member financial reform task force, headed by the finance minister. This group spent 10 months devising proposals in the following four areas: improving the overall efficiency of the banking system; development of capital and derivatives markets, and relaxation of the rules governing the kinds of business banks may conduct; improving market-regulating procedures such as credit evaluation systems, asset management, investor insurance, and insider trading rules; and strengthening banks' internal financial controls.

Taiwan's first private corporate bond issue was floated in 1958. The first stock exchange in Taiwan opened on 4 February 1962. Volume was low until liberalization measures opened the market to foreigners, and the Taiwan stock market surged in the early months of 1997, with the index smashing through the 8,000-point barrier for the first time since 5 March 1990. This milestone immediately prompted rumblings from the CBC that the market was overheated. Yet by May 1997, the market was flirting with the next resistance level, at 8,500 points. Authorities raised the limits to foreign ownership in companies listed on the TAIEX from 30% to 50% in 1999. Most limits on foreign ownership were ended in 2000, and the index was up by the 10,000 mark in that year. However, it has since dropped off considerably, especially in the wake of the Asian financial crisis of 1998. The TAIEX was at 5,551.2 at the end of 2001, and trading value, at $545 billion, was only slightly more than half of the previous year's level. As of 2004, the TAIEX stood at 6,139.7, up 5% from the previous year. Trading value that year totaled $718.619 billion. In 2004, a total of 697 companies were listed on the Taiwan Stock Exchange, which had a market capitalization of $441.436 billion.

INSURANCE

Insurance in Taiwan is supervised by the Ministry of Finance and may be written only by a limited liability company or a cooperative association. Aside from group insurance operated by the government, life and annuity insurance are comparatively undeveloped in Taiwan. The Chinese tradition that the family should take care of its members in sickness and old age lowered demand in the past, but social change and rapid economic growth have modified this situation, especially in industrial areas. In 1986, the Taiwanese government agreed to allow US companies to compete equally for insurance business. In 1999, nine foreign nonlife insurers were authorized to run full branches in Taiwan. Foreign insurers must receive approval from the government, however, and secure a business license. In Taiwan, third-party automobile liability, health insurance, pension, unemployment insurance, and workers' compensation are all compulsory. In 2003, the value of all direct insurance premiums written totaled $32.402 billion, of which life insurance premiums accounted for $23.739 billion. For that same year, Taiwan's top nonlife insurer was Fubon, which had gross written nonlife premiums totaling $847 million, while Cathay Life was the country's leading life insurer, with gross written life insurance premiums of $7,972.7 million.

PUBLIC FINANCE

Central government revenues come mostly from taxation, customs and duties, and income from government monopolies on tobacco and wines; other revenues are derived from profits realized by government enterprises. Government accounts showed surpluses through the early 1980s. Public authorities anticipated a growing fiscal deficit throughout the 1990s as Taiwan's six-year development plan required over $300 billion of investment in public infrastructural construction projects and in upgrading industries. In 1996, the government's deficit was equal to 4% of GDP. Growing demands for social welfare spending and increased defense spending (up 20% in 1996/97, the largest rise in over a decade) continued to put pressure on the budget. Outstanding debt reached 16% of GDP in 1998, up from 6% in 1991, and debt service payments consumed 15% of the central budget in 1999. The government was committed to balancing the budget by 2001. Austerity measures included controlling public sector consumption expenditures, limiting expansion of government expenditures, freezing government employment, limiting public employee pay raises, and encouraging private participation in major public projects. The government was also committed to reducing the public sector's role in the economy. National defense expenditures as a portion of the central budget dropped from over 40% in 1960 to 20% in 1999, and were set to fall to 15% in 2000.

The US Central Intelligence Agency (CIA) estimated that in 2005 Taiwan's central government took in revenues of approximately $70.9 billion and had expenditures of $80.1 billion. Revenues minus expenditures totaled approximately -$9.2 billion. Public debt in 2005 amounted to 33.3% of GDP. Total external debt was $81.64 billion.

TAXATION

All taxes are collected by the local government and transferred to the relevant provincial or central government agency. Tax revenues reserved for the central government include the income tax, estate (inheritance) tax, gift taxes (4–50%); customs duty, stamp tax, commodity tax, securities transaction tax, and mine tax.

As of 2005, individual income taxes were progressive with a top rate of 40%. Dividends paid to resident individuals is not subject to a withholding tax. Non resident individuals were subject to a 30% withholding rate. Interest and royalty income paid to resident individuals were subject to withholding taxes of 10% and 15%, respectively, but increases for each to 20% for nonresidents.

Corporate income taxes range from 0 to 25%. Capital gains are subject to the same corporate tax rates, although gains incurred by a nonresident company are taxed at a flat rate of 25%. Dividends paid to nonresident firms are also taxed at the flat 25% rate. Banking, insurance and investment services are subject to a 2% turnover tax. Higher rates apply to entertainment.

Taiwan also has a value-added tax (VAT) of 5% on sales and services. Items zero-rated from the VAT include international transport, exports, services performed in Taiwan but for use abroad, and services performed overseas. Basic foodstuffs, land, water, certain agricultural inputs, some financial and insurance products, and education and health are exempt from the VAT. However, certain businesses not subject to the VAT pay a tax on their gross business receipts that ranges from 0–25%. Sales taxes are 1% for reinsurance activities, 5% for bank activities, insurance and brokerage services; and 15–25% for bars and restaurants. There is a 60% ad valorem merchandise tax on petrol. Other taxes include building, commodity, deed, estate, gift and land value taxes. There are no social security or local income taxes in Taiwan.

CUSTOMS AND DUTIES

Customs duties are important revenue earners and consist principally of import duties and tonnage dues. The former are levied on dutiable commodities, the latter on ships that call at Taiwan ports. Duties range from 2–60%and are assessed on seven commodity categories that include rubber tires, cement, beverages, oil and gas, electrical appliances, flat glass, and automobiles. Articles imported for military use, for relief, or for educational or research purposes are exempted from import duty. Duties on imported raw materials for business can be rebated. Some agricultural products are prohibited from importation, such as rice, sugar, chicken, some pork cuts, peanuts, and certain dairy products. Imports from Japan and mainland China are restricted due to balance of payments problems. There is also a 5% VAT that is applied to the CIF (cost, insurance, freight) value, plus the duty and a 0.3% harbor fee that is not applied to items arriving by parcel post or air freight duty.

FOREIGN INVESTMENT

From 1952 to 2000 cumulative foreign direct investment approvals came to $44.8 billion of which 24% was in the electronics and electrical industries. Other industries attracting relatively heavy foreign investment include banking and insurance services, chemicals, trade and basic metals. The government reported Taiwan received $3.27 billion in foreign investments in 2002, and had received an average of $2.7 billion a year 1991 to 1999. The rate of foreign investment has been rapidly accelerating as in preparation for its accession to the World Trade Organization (WTO) Taiwan has liberalized its economy and improve its investment environment. Foreign firms are generally accorded national treatment and trade-related capital flows are unrestricted. In January 2001 the 50% foreign ownership limit was lifted with exceptions in a few designated industries. Most limits on the amount of portfolio investment in companies listed on the Taiwan Stock Exchange (TSE) were also lifted. About 1% of manufacturing industries and 5% of services industries continue to have limits on foreign ownership. Investment incentives are offered for investments in emerging or strategic industries, pollution control systems, production automation, and energy conservation. Since the goal was first announced in 1995, increasing effort has been put in making Taiwan an Asia-Pacific Regional Operations Center (APROC). A goal is to have about 1,000 corporations establish headquarters in Taiwan by 2011.

The United States has been the largest source of foreign investments in Taiwan with investment approvals totaling $10.7 billion in the period 1952 to 2000, 24% of the total. Another $9.2 billion is approvals during this time from the British Virgin Islands, the Cayman Islands, and other offshore havens in Central America, should also be largely attributed to US multinationals. Japan has ranked second with approved investments totaling $9.2 billion or 21% of the total. Twenty-seven percent has been in electronic and electrical products and 20% in services and trade. Investment approvals totaled 1,410 equal to potential investment of $7.6 billion, an increase of 80% over 1999. Most of these investment applications came from British territories in Central America (mainly the British Virgin Islands, the Cayman Islands, and other conduits of mostly US investments), the United States, Singapore, Japan and the United Kingdom.

Taiwan outward investment has been such that by 2000 over 50% of Taiwan manufacturing was being conducted outside of the country, and by 2001, 53% was being out-sourced. The top five sectors for outward investment were banking and finance, services, electronics and electrical appliances, marketing, and transportation. In 1992, investment in mainland China was legalized and despite a fall off due to tensions in 1996, by 2001 Taiwan had become China's fourth-largest source of foreign investment. In 2002, the government changes its official investment stance towards China from "patience over haste" to "active opening and effective management."

Taiwan uses the cheap labor force from the mainland to assemble and process domestic produced high tech goods, and then exports them to the developed markets (like the United States, Japan, and Europe). Taiwan's direct investments in China grew from $1.3 billion in 1999 to $5.4 billion in the first 10 months of 2004. China (including Hong Kong) have thus become Taiwan's largest export market. Capital inflows have also been high, with FDI levels amounting to 20.8% of the GDP in 2003. Investors complain however that the business environment is not as streamlined and transparent as it could be.

ECONOMIC DEVELOPMENT

Since 1950, the government has adopted a series of economic plans to help guide and promote economic growth and industrialization. The first four-year economic development plan (1953–56) emphasized reconstruction and increased production of rice, fertilizers, and hydroelectric power; it resulted in an increase of 37% in GNP and 17% in income per capita. In the second four-year plan (1957–60), import substitution industries were encouraged. Industry and agriculture both registered significant gains; GNP increased by 31%, and national income per capita by 13%. The third four-year plan (1961–64) emphasized labor-intensive export industries, basic services, energy development, industries contributing to agricultural growth, and exploration and development of the island's limited natural resources. The results were a 42% increase in GNP and a 31% increase in per capita income. US loans and grants, totaling $2.2 billion, and foreign (mostly overseas Chinese) investment financed these early stages of development.

Following the curtailment of AID assistance in 1965, the fourth four-year plan (1965–68) was introduced, followed by the fifth four-year plan (1969–72); increases in GNP for these periods were 46% and 55%, respectively. By 1971, exports of manufactured goods had registered spectacular increases, and Taiwan's foreign trade pattern changed from one of chronic deficit to consistent trade surpluses. At this point, the government began to redirect its priorities from labor-intensive industries to the development of such capital-intensive sectors as shipbuilding, chemicals, and petrochemicals. The sixth four-year plan (1973–76), adversely affected by the worldwide recession, was terminated in 1975 after producing only a 19% increase in GNP. It was replaced by a six-year plan (1976–81) that focused on expansion of basic industries and completion of 10 major infrastructural projects, including rail electrification, construction of the North Link railroad, development of nuclear energy, and construction of the steel mill at Kaohsiung and of the new port of T'aichung.

In 1978, the six-year plan was revised, and 12 new infrastructural projects were added, including completion of the round-the-island railroad, construction of three cross-island highways, expansion of T'aichung Port's harbor, and expansion of steel and nuclear energy facilities. A subsequent four-year plan (1986–89), designed to supplement a longer-range 10-year plan (1980–89), had as a target average annual GNP increase of 6.5%. Among its goals were price stability, annual growth of 7.5% in the service sector, trade liberalization, encouragement of balanced regional development, and redirection of new industrial growth into such high-technology industries as computers, robotics, and bio-engineering. In response to flagging export growth and a slowdown in private investment following a stock market collapse in 1990, the government devised a six-year plan for 1991–97 aimed at economic revitalization. This plan targeted investment mainly in transportation, telecommunications, power generation, and pollution control. A "Statute for Upgrading Industries" enacted in early 1991 continued the government's efforts to provide incentives for private investment in research and development and high-technology sectors of the economy. Economic development in the late 1990s focused on a continuing privatization of government enterprises, the opening of the Taiwan market to foreigners, and high investment in the technological sector.

Taiwan's six-year national development plan for 2002–08 is titled "Challenge 2008." It is estimated to cost $75 billion and has seven specified goals: 1) expanding the number of products and technologies that meet the world's highest standards; 2) doubling the number of foreign visitors; 3) increasing expenditures on research and development to 3% GDP; 4) reducing unemployment to less than 4%; 5) increasing the average growth rate to over 5%; 6) increasing number of broadband internet users to over six million; and 7) creating about 700,000 jobs. There are 10 major areas of emphasis, including cultivating talent for the E-generation (with a special emphasis on mastering English); developing the cultural arts industry; developing a digital Taiwan, using information technologies to make government more efficient and industries more competitive; developing Taiwan as a regional headquarters for multinational corporations; and constructing culturally rich hometown communities as a means of retaining talent, in addition to more standard goals of increasing value-added, improving the transportation infrastructure, conserving water resources and doubling the number of tourists.

Taiwan's economy is estimated to grow by 3.7% in 2005, a clear set-back from the 5.7% growth rate registered in the previous year. Reason for this is the weaker growth in the demand for the country's key manufactured exports. However economic expansion is expected to pick-up again in 2006 as a result of increased world trade.

SOCIAL DEVELOPMENT

A social insurance system provides medical, disability, old age, survivor, and other benefits, with employers paying 3.85% of payroll and workers contributing 1.1% of earnings. Benefits are paid in lump sums depending on years of contribution. The retirement age is set at age 60 for men and 55 for women. The National Health Insurance Bureau provides medical care for all workers and dependents. Firms with five or more employers are required to fund a workers' compensation program. Unemployment benefits are funded by employers, employees, and the government.

All enterprises and labor organizations must also furnish welfare funds for workers and "welfare units," such as cafeterias, nurseries, clinics, and low-rent housing. Fishermen, farmers, and salt workers have their own welfare funds. Government programs include relief for mainland refugees, calamity-relief assistance, and direct assistance to children in needy families.

The law provides equal rights to women, and protects against sex discrimination. Sections of the legal code that discriminated against women have been eliminated. Now the law permits married women to retain their maiden names, gives them an equal voice in child custody disputes, and clarifies their property rights. In the workplace, women tend to receive lower salaries and less frequent promotion, and are often denied federally mandated maternity leave. Violence against women, especially domestic abuse, is extremely widespread. Child abuse is also a serious problem. The Child Welfare Act mandates that any citizen aware of child abuse or neglect must report it to the authorities. As of 2004, Taiwan remained a significant transit point for trafficked persons.

Human rights are generally well respected, but some cases of police abuse continue to be reported.

HEALTH

As a result of improved living conditions and mass vaccinations, significant progress has been made in controlling malaria, tuberculosis, venereal disease, leprosy, trachoma, typhoid, diphtheria, and encephalitis. As of 2002, the crude birth rate and overall mortality rate were estimated at, respectively, 14.2 and 6.1 per 1,000 people. In 2005 the infant mortality rate was 6.4 per 1,000 live births and life expectancy was 77.26 years. Taiwan's public health facilities include 55 general hospitals and approximately 900 health stations. In 1990, there were 22,300 doctors.

HOUSING

The evacuation of more than two million persons from the mainland to an already densely populated island in 1949 made the provision of low-cost housing an early priority. By 1979, more than 150,000 units of public housing had been built. Since the 1970s, government housing programs have focused on the cities, with slum clearance and the construction of high-rise apartment dwellings for low-income groups the major priorities. Two new towns were constructed in the early 1980s and a third was planned. The government set a target of 600,000 new housing units for the 1979–89 decade, but only 236,106 units were completed as of 1986. In 2000, the total housing stock was at about 6,977,770 units with about 3.4 people per dwelling. Some 29% of all housing was built in the period 1971–80; about 32% was built in the period 1991–2000. About 83% of all dwellings were owner occupied.

EDUCATION

All children receive nine years of free and compulsory education provided at government expense, including six years in public primary school and three years in junior high. After completing nine years of compulsory schooling, approximately 90% of students continue their studies at a senior high (general studies) or vocational school. Agriculture, engineering, commerce, maritime navigation, home economics, and nursing are some of the skills taught in vocational schools, which offer three-year programs. In order to attend high school, students must pass an examination after junior high. Salaries of the teaching staff are paid by local governments.

In 2003/04, there were 1,912,791 students enrolled in primary schools and 1,676,970 students enrolled in secondary schools. The same year, there were 103,793 primary school teachers and 97.738 secondary school teachers.

As of 1997, Taiwan had over 100 institutions of higher education. More than 100,000 students take the joint college entrance exam each year. Approximately 61.9% of the candidates are admitted to a college or university. The government relaxed many restrictions which prevented students from studying abroad in the 1980s. Although Taiwan has a highly developed college curriculum, many students do travel abroad to study. Taiwanese college and graduate students are particularly interested in engineering, computer science, natural science, and business management. In the latter half of the 1990s, about 13,000 students annually pursued graduate study in the United States. In 2003/04, there were 981,169 students enrolled in universities and colleges with 45,702 teachers.

LIBRARIES AND MUSEUMS

The National Central Library in T'aipei holds more than 1,615,000 items, including a collection of rare Chinese books (180,000 volumes). The National Taiwan University in T'aipei has more than 1,500,000 volumes in collected holdings. The T'aipei Public Library of Taiwan consists of a main library, 30 branch libraries, and 12 neighborhood reading rooms within the metropolitan area with a combined collection of about 4,386,601 volumes, plus periodicals and multimedia materials.

The major museums, all in T'aipei, are the National Palace Museum, National Museum of History, and the Taiwan Museum. The National Palace Museum houses one of the world's largest collections of Chinese art—the collection consists primarily of treasures brought from the mainland. The T'aipei Contemporary Arts Museum was completely renovated in 2001. The National Museum of History, founded in 1955, has more than 30,000 items in its collections of oracle bones and ritual vessels of the Shang and Chou dynasties, earthenware of the Sui and T'ang dynasties, stone engravings of the Han dynasty, and jade articles of the Chou dynasty. The Taiwan Museum has the most complete collection of natural history specimens in the country. The National Taiwan Science Education Center in T'aipei houses a planetarium and scientific exhibits.

MEDIA

Telecommunications services are owned by the government. Nearly all telephone service is automatic. In 2003, there were 13.3 million mainline phones and 25 million mobile phones in use nationwide. The postal service is managed by the Directorate General of Posts under the Ministry of Communications.

Radio broadcasting stations in Taiwan are under the supervision of the Ministry of Communications. As of 1999 there were 218 AM and 333 FM radio stations and 29 television stations. In 2004, there were about 100 cable television stations. The largest network is the Broadcasting Corp. of China, which operates three systems: an overseas service, known as the Voice of Free China; the mainland service, known as the Central Broadcasting Station, aimed at the Chinese mainland; and the domestic service. These stations broadcast in 14 languages and dialects. Television was introduced in 1962. In 1997 there were 386 radios and 48 television sets per 1,000 population. In 2005, there were 13.8 million Internet subscribers.

The leading newspapers with their estimated 2002 daily circulation rates are: United Daily News, 1,200,000; China Times, 1,200,000; Central Daily News, 600,000; Min Sheng Daily, 556,640; Liberty Times, 500,000; Taiwan Hsin Sheng Pao, 460,000; China Times Express, 400,000; and China Daily News, 670,000. The Central News Agency was established on the mainland by the KMT in 1924.

Though authorities generally respect constitutionally provided rights to free speech and free press, these rights are formally circumscribed by a law excluding the advocacy of communism or division of national territory. Controls over radio and television are said to be under a process of liberalization and privatization.

ORGANIZATIONS

The most influential private organizations are the occupational or trade associations. These include associations of farmers, fishermen, trade unions, business leaders, and professional persons. Organizations devoted to social welfare and relief work are sponsored by the government, by religious groups, and by civic clubs. The Taiwan Federation of Chambers of Commerce has branches in all the principal cities.

Cooperatives are an important adjunct to economic life, especially in the urban centers. In rural areas, agricultural cooperatives help the farmers transport and market special farm products such as fruits, tea, citronella oil, and handicrafts. Cooperative farms, organized with the help of the government, operate either on a community basis, with the products distributed among the members, or on an individual basis, with the cooperative functioning as a purchasing, processing, and marketing agency.

Agricultural services and 4-H clubs in various parts of Taiwan provide training and social activities for boys and girls. Both the YMCA and YWCA are active in Taiwan, as is Little League baseball. There is an active Junior Chamber in Taiwan and there are several other sports associations based in T'aipei.

Cultural and educational organizations include the Historical Research Commission of Taiwan, the National Science Council, Academia Sinica, and Modern Fine Arts Association of Southern Taiwan. The Taiwan Medical Association is one of many professional organizations that also promotes research and education in medical and scientific fields.

Social action groups include the Taiwan Grassroots Women Worker's Center and the Taiwan Association of Human Rights. Volunteer service organizations, such as the Lions Clubs and Kiwanis International, are also present. There are national chapters of Amnesty International and the Society of St. Vincent de Paul.

TOURISM, TRAVEL, AND RECREATION

T'aipei is the chief tourist attraction, with such popular sites as the seat of government in Presidential Square, Lungshan Temple, and the nearby National Palace Museum and famous Yangmingshan National Park. Attractions outside the capital include the Shihmen Dam recreation area, Lake Tzuhu, and the mausoleum of Chiang Kai-shek. The many temples and Dutch relics of T'ainan, Taiwan's oldest city, and Sun Moon Lake near T'aichung also attract numerous visitors. The national sports are baseball, football (soccer), and basketball.

In 2003, tourist arrivals totaled 2,248,117, of whom 60% were from East Asia and the Pacific. Tourism receipts totaled us$3.5 billion. Hotel construction has boomed as a result of government investment. That year hotel rooms numbered 21,896 with an occupancy rate of 56%. All visitors need a valid passport and visa.

In 2005, the US Department of State estimated that the daily expense for a stay in T'aipei was us$298.

FAMOUS TAIWANESE

Among the many Chinese scholars who have lived in Taiwan since 1949 are Hu Shih (1891–1962), philosopher and president of the Academia Sinica; Chiang Monlin (1886–1964), educator and chairman of the Joint Commission on Rural Reconstruction; Li Chi (1896–1979) and Tung Tso-pin (1895–1963), archaeologists, whose discoveries at the Anyang site laid the foundation for modern Chinese archaeology; and Tsiang Ting-fu (Ting-fu Fuller Tsiang, 1895–1965), historian and long-time delegate to the UN. Chang Ta-chien (1899–1983) is known for his painting of landscapes and figures and his copies of the famous Buddhist mural paintings of Tunhwang caves in Gansu Province. Lin Yutang (1895–1976), poet, philosopher, lexicographer, and historian, was one of China's foremost interpreters for Western cultures.

The outstanding political and military figure of Nationalist China and postwar Taiwan was Chiang Kai-shek (Chiang Chung-cheng, 1887–1975), who was responsible for sustaining the spirit of anticommunism in Taiwan. His son, Chiang Ching-kuo (1910–88), assumed leadership of the Taiwan government from Chiang Kai-shek's death to his own. Chen Shui-bian (b.1950) became president in 2000; his controversial views regarding Taiwanese independence have caused consternation with mainland China.

DEPENDENCIES

Taiwan has no territories or colonies.

BIBLIOGRAPHY

Aspalter, Christian. Conservative Welfare State Systems in East Asia. Westport, Conn.: Praeger, 2001.

Chang, Sung-sheng. Literary Culture in Taiwan: Martial Law to Market Law. New York: Columbia University Press, 2004.

Copper, John F. Historical Dictionary of Taiwan (Republic of China). 2nd ed. Lanham, Md.: Scarecrow Press, 2000.

Hoare, Jim and Susan Pares. A Political and Economic Dictionary of East Asia. Philadelphia: Routledge/Taylor and Francis, 2005.

Hood, Steven J. The Kuomintang and the Democratization of Taiwan. Boulder, Colo.: Westview, 1997.

Hsiung, Ping-Chun. Living Rooms as Factories: Class, Gender, and the Satellite Factory System in Taiwan. Philadelphia, Pa.: Temple University Press, 1996.

Kemenade, Willem van. (Diane Webb, trans.) China, Hong Kong, Taiwan, Inc.: The Dynamics to a New Empire. New York: Vintage Books, 1998.

Manthorpe, Jonathan. Forbidden Nation: A History of Taiwan. New York: Palgrave Macmillan, 2005.

Marsh, Robert. The Great Transformation: Social Change in T'aipei, Taiwan Since the 1960s. Armonk, N.Y.: M.E. Sharpe, 1996.

Wang, Huei-Huang. Technology, Economic Security, State, and the Political Economy of Economic Networks: a Historical and Comparative Research on the Evolution of Economic Networks in Taiwan and Japan. Lanham, Md.: University Press of America, 1998.

Yu, Bin. Dynamics and Dilemma: Mainland, Taiwan and Hong Kong in a Changing World. New York: Nova Science Publishers, 1996.

TAIWAN

Republic of China

Chung Hwa Min Kuo

COUNTRY OVERVIEW

LOCATION AND SIZE.

The island of Taiwan, in Eastern Asia, is about 161 kilometers (100 miles) away from the southeast part of mainland China, and about 483 kilometers (300 miles) north of the Philippine island of Luzon. The East China Sea forms the northern border of Taiwan, the Taiwan Straits are to the west, the Philippine Sea to the south, and the Pacific Ocean on the east coast. The territory is slightly smaller than the combined area of Maryland and Delaware in the United States. Taiwan occupies a total area of 35,980 square kilometers (13,892 square miles). Its capital city, Taipei, is in the northeast, and is the most densely populated area in the territory.

POPULATION.

As of November 2000, the population of Taiwan was estimated at 22,257,000. People aged 14 years and under comprise 22 percent of the total population, while 70 percent belong in the 15 to 64 age bracket. The earliest government census records, dated 1905, set the island's population at 3.12 million, which doubled to 6.02 million by 1945. Subsequently, the Taiwanese population increased at an average of 3.84 percent, prompting the government to implement strict population control measures such as family planning. By 1997, the population growth rate had dropped to 1 percent.

Besides government family planning programs, the decline in population growth can be linked to the change of attitude in the younger generation who, due to better education and career opportunities, now tend to marry later. There has been a decrease in potential mothers between the ages of 20 and 34. Of the 326,002 births registered in Taiwan in 1997, the ratio was 109.04 boys for every 100 girls. The greater male-to-female ratio on the island is in keeping with Chinese culture, which traditionally values sons above daughters.

The population distribution curve measured by age groups indicates an aging population. In 1990 people aged 65 and over comprised about 6.1 percent of Taiwan's population. This figure increased to 8 percent in 2000 and, with average life expectancy at 76.35 years, the government estimates that the percentage of its elderly population will increase to 19.1 percent by 2030. In an attempt to encourage a moderate increase in population, the government modified its former population reduction slogan from, "One [child] is not too few; two are just right," to "Two are just right."

Because of the increasing industrialization of Taiwan, people are flocking to the urban-metropolitan areas of the island, which absorb 67.8 percent of the total population. In 1997 the population density of Taiwan was the second highest in the world next to Bangladesh, with 601 people per square kilometer (1,557 per square mile). The capital city, Taipei, which covers 272 square kilometers (105 square miles), is the most densely populated area with 9,560 persons per square kilometer (24,760 per square mile). Second to Taipei is Kaohsiung City with an area of 154 square kilometers (59 square miles), which is home to 9,350 persons per square kilometer (24,216 per square mile), while Taichung City, with an area of 163 square kilometers (63 square miles), has 5,519 inhabitants per square kilometer (14,294 per square mile).

OVERVIEW OF ECONOMY

The economic development of Taiwan can be broken down into 5 stages. In the 1950s, the main goal of the government was to stabilize the economy and ensure an adequate and regular food supply for the population. Hand in hand with agricultural production, the government encouraged the development of labor-intensive industries to provide much-needed employment to a growing labor force , and to ease the need for imported products by manufacturing substitute products locally.

In the 1960s, the government continued to promote the same labor-intensive industries, but this time the focus was on manufacturing products for export. By the end of the decade, the export industry was thriving and had stimulated local demand for the machinery needed to produce export goods. This export-led strategy had several positive results. Employment opportunities increased and a greater variety of manufactured products were developed. Expansion advanced local knowledge of management skills and the development of industrial technology. Moreover, receipts of foreign currency greatly enhanced the financial standing and stability of the government.

Supported by these developments, in the 1970s the government shifted its strategy to the encouragement of basic and heavy industries. These industries were designed to produce and promote domestic substitutes for imported products, and to develop those industries that would require heavy capital expenditures. By thus reducing Taiwan's reliance on foreign suppliers for components, government expenditure decreased.

By the 1980s, Taiwan's foreign trade was posting huge surpluses. The government directed these funds to building infrastructure such as roads, bridges, airports, and seaports, and to improve the quality of life on the island. The surplus was also able to finance the further development of capital-intensive and high-technology industries such as electronics, information, and machinery. At the turn of the decade, the government focused on building a world-class infrastructure and 1994 saw the approval of a plan known as the Twelve Major Construction Projects. The scope of the plan included transportation, culture, and education, improvement of living standards, development of water resources, and environmental protection.

In just 50 years, Taiwan had achieved rapid economic growth, characterized by stable prices and equitable distribution of income. Its rapid industrial advancement between 1980 and 2000 has earned the island recognition as one of the "tiger" economies of Asia.

One of the most important events that set the stage for Taiwan's economic development was its implementation of genuine land reform. Under this program, rents were reduced, public lands were distributed to the landless, and farmers were given the opportunity to own the land they had been tilling for many years. In 1953, 60 percent of the rural population became owner-farmers, and owner-cultivated land increased to more than 75 percent of the total land tilled. In the meantime, those land owners who were compelled to sell their property under the land reform program were compensated in government bonds. Dissatisfied with the government's action and highly suspicious of the value of the bonds, many of the landowners immediately sold them. At the same time, land prices went down in anticipation of the effects of land reform. Taken together, these events contributed to eradicating the land-owning class and the landlord-tenant relationship, a transformation that saved Taiwan from the fate of other societies where huge income disparity between landowners and their workers set the stage for social and economic injustice.

Land reform also led to the reorganization of rural Chinese society. It brought the end of patriarchy, whereby authority was vested only in men, and saw the loosening of family ties. As agricultural processes were modernized, production became more efficient, allowing younger people to leave the farms and pursue other careers in the urban areas. This migration triggered urbanization which, in turn, fostered job specialization, lowered class barriers, promoted social equality, and increased cultural and social interaction.

As social interaction increased, people no longer confined close relationships to the family circle but made outside friends, thus further contributing to social stability and harmony. Under government guidance, the Taiwanese found themselves sharing a common vision and working toward a common goal. Besides economic policies, the government implemented policies that extended compulsory education to 9 years and established schools for vocational and technical training. By encouraging young people to acquire new ideas and skills, Taiwan created a well-trained and industrious labor force, which has served as the backbone of the nation's economic development.

The major economic sectors in Taiwan are composed of services, manufacturing, and agriculture. Since 1985, the service sector has contributed greatly to economic development by generating more than half the gross domestic product (GDP), increasing to 64 percent in 1999, while industry and agriculture accounted for 33 percent and 3 percent of GDP, respectively.

Small and medium enterprises (SMEs) in Taiwan are engaged in the manufacturing of products from toys and textiles to personal computers. SMEs can also be found in the construction industry, and in the service sector, particularly in financial, social, and personal services. According to the Ministry of Finance, 97.76 percent of the businesses in Taiwan can be classified as SMEs. In 1998, SMEs provided employment for 4 out of 5 workers in Taiwan, or 7.27 million out of 9.55 million workers.

The government of Taiwan is optimistic about the island's continued economic growth. Its optimism is based on past economic performance. Even at the height of the 1997 Asian financial crisis, which had a negative impact on the leading economies of Asia, Taiwan's gross domestic product still amounted to US$283.4 billion.

Taiwan's government is continually drawing up plans to create more businesses on the island to provide more employment and to strengthen its position against the re-occurrence of a regional or global economic crisis. For the 21st century, the government is working hard to secure the next step of that process. In his inaugural speech of May 2000, President Chen declared that Taiwan must respond to international developments by moving toward a knowledge-based economy in which high-tech industries constantly innovate, while traditional industries progressively transform and upgrade.

POLITICS, GOVERNMENT, AND TAXATION

In the early stages of its development, in the 1950s, Taiwan's economy was closely managed and controlled by the government. After the economy showed signs of rapid growth and continued development, government gradually exerted less control to give the economy free rein.

Government control during the early stages of Taiwan's economy was crucial to the provision of much-needed direction, guidance, and motivation of the population. The government's role included the maintenance of a stable and law-abiding society, strict implementation of their policies, and the formulation of programs to spur national development.

From the 1950s to the 1960s, the government assumed the role of an economic caretaker, exercising control and influence. The government gave support to emerging industries and acted to protect them against external competition. In the 1950s, foreign aid from the United States assisted the development of the textile and milling industries, while export industries tapped the country's limited foreign reserves. During this period, the government also encouraged the growth of Taiwan's domestic automobile industry by shielding it from foreign competition. Citizens wanting to buy foreign-made cars were penalized by a tax equivalent to the price of the imported car itself.

At this stage of Taiwan's economic development, the government demonstrated creativity in its plans to advance economic development. First, it maximized the contribution of state-run enterprises to the national coffers by taking a part of the profits in indirect tax . Second, the government provided incentives for private enterprise to thrive, lowering the price of electricity for industrial use, while increasing the price for commercial use. As intended, this ploy encouraged business into the manufacturing rather than the retail sector.

In the 1970s, the government took the initiative in building necessary infrastructure such as roads, bridges, airports, new cities, highways, and railways. It launched large-scale public investment projects, since dubbed the Ten, Twelve, and Fourteen Major Construction Projects; the Six-Year National Development Plan; and the Twelve Economic Construction Projects.

Because of the government's protection and economic intervention, Taiwan's economy grew by leaps and bounds in just 4 decades. By the 1990s, private enterprise had grown strong and steady and needed little state assistance, although the expectation remains that government will continue to foster a healthy investment environment and move with the times in implementing new regulations. The role of the government, in short, has shifted from that of caretaker to that of teacher. As teacher, it has provided private enterprise with information on economic growth and technology, as well as assistance in training personnel.

Over the years, the government and people of Taiwan have attempted to uphold democratic principles and strengthen the island's political institutions. Political activities, especially elections which appear tainted by corrupt practices (buying votes, peddling influence, or provoking violence) are greeted with outrage. Beginning in the mid-1990s, certain reform-minded politicians campaigned for electoral reform. They tried to strengthen the role of political parties, improve their image, and highlight the importance of issues in elections. They aimed, too, to attract political candidates of a higher caliber, reduce the influence of personal connections and, finally, to combat factionalism (the breaking into smaller, differing factions or groups within a political party).

Taiwan's government is a multi-party democracy based on a constitution created in 1947 and amended in 1992, 1994, 1997, and 1999. The president and vice president are elected on the same ticket by popular vote and serve a 4-year term. The legislative branch consists of a unicameral (single-house) Legislative Yuan with a total of 225 members serving 3-year terms, 168 of whom are elected by popular vote, 41 of whom are elected by proportional vote by party, 8 elected from overseas constituencies based on proportional vote, and 8 elected by popular vote from among the country's aboriginal population, which constitutes 2 percent of the population. There is also a unicameral National Assembly of 300 members, all of whom are elected by proportional representation based on election of the Legislative Yuan and serve 4-year terms.

The year 2000 marked a significant political event in Taiwan when the candidates of the Kuomintang (KMT), Taiwan's ruling party for over 50 years, were defeated by the candidates of the leading opposition party, the 14-year-old Democratic Progressive Party (DPP). Taiwan's highest political office, the presidency, went to the DPP's Chen Shui-bian, the country's tenth president. His running mate, Hsiu-lien Annette Lu, became vice president, marking a victory not only for the DPP but also for the women's movement. Vice President Lu is known to have championed gender equality and women's rights since the beginning of her political career.

In the 2000 national elections, there were 3 major issues aside from the economy on which candidates had to make their attitudes clear to win votes. These were mainland policy, national defense, and foreign relations. Mainland policy dictates whether Taiwan should pursue its independence from mainland China or maintain the status quo. Currently, Taiwan upholds the principle of "one China, two political entities." Under the constitution, Taiwan is referred to as the Republic of China and regards itself as the national government of China, while the People's Republic of China is a political entity that controls mainland China. The issue is a cause of political tension not only for the 2 territories but also for other countries. Mainland China continues to use the threat of political and economic sanctions against those countries willing to recognize Taiwan as a separate country. Due to the scale of China's economic resources, its huge population, and its military capability, the threats are not taken lightly.

The KMT, or Nationalist Party, has the longest running political record in Taiwan. Founded by Dr. Sun Yatsen in 1894, the KMT celebrated its one hundredth anniversary on 24 November 1994. The party is of major significance in Taiwan's history, and was involved in the war against Japanese invaders, struggles against communist rebellion, implementation of the constitution, and the economic development of the island. The KMT enjoys wide support, with a membership of approximately 2.1 million. At the lowest level, members are organized into cells. Moving upwards, there are district, county, and provincial congresses and committees. The highest level includes the National Congress and the Central Committee. With its historic defeat in 2000, KMT's leadership began an evaluation of the party platform, direction, and standing, compared with the other political parties.

The Democratic Progressive Party (DPP) was long the leading opposition party to the KMT. It was established on 28 September 1986 and has approxima tely 200,000 members. Its main policy is in direct opposition to the KMT because it calls for Taiwan's complete independence from mainland China. In recent elections, the more senior officers of DPP have tended to attach less importance to the party's stance on independence in an attempt to attract more voter support. The lack of consensus on this issue has caused some dissent within the party and has resulted in the breaking away of members who are passionate advocates of Taiwanese independence. Several of these dissatisfied DPP members have left the party and, with new recruits, have formed the Taiwan Independence Party and the New Nation Association.

In the 2000 elections, the economic platform espoused by the DPP included the introduction of a progressive tax system, elimination of unemployment, the promotion of balanced development in every sector of the economy, the opening of state-run enterprise to private investment, and protection of the environment against further destruction.

Another opposition party that has emerged is the New Party (NP), formed in August 1993 by a KMT breakaway group composed of 6 Legislative Yuan (a branch of government) members and 1 former lawmaker. Their official statement of resignation from the KMT, as documented in Taiwan's 1999 Yearbook, gave as their reason the "un-democratic practices of the KMT" as well as ideological differences. The New Party has been led by such prominent political personalities as the former finance minister, Wang Chien-shien, and former head of the Environmental Protection Administration, Jaw Shau-kong. The party champions 2 major issues: anti-corruption and social justice. The goal of the NP is to attract those voters who were dissatisfied with the performance of the ruling KMT, but who are opposed to the DPP's support for independence. The NP now claims a registered membership of nearly 68,500.

One of the newest parties to emerge because of Taiwan's ongoing democratization is the People First Party (PFP), established on 31 March 2000 by former Taiwan governor James Soong. The PFP is distinct from the other parties in allowing eligibility for membership at age 16, 2 years younger than the minimum age required by the other parties. James Soong, who was elected as the party's first chairman, ran as an independent in the 2000 presidential elections, but was defeated. The PFP is still in the process of establishing its structure and political base.

GOVERNMENT EXPENDITURES AND TAXATION.

Data generated by the Directorate General of Budget, Accounting and Statistics (DGBAS) shows that the government spent NT$1.164 trillion in 1999. A big percentage of the budget went to national defense (22.6 percent); followed by education, science, and culture (17.4 percent); economic programs (14.8 percent); social welfare (13.5 percent); general administration (11.6 percent); and pension and survivor's benefits (11.1 percent). In the same year, the government posted a budget surplus amounting to NT$64.6 billion, while external debt amounted to US$35 billion.

Taiwan's government collects 18 different categories of taxation, which provide the revenue for national expenditures. Nine of these categories are classified as direct taxes : corporate income tax , individual income tax, rural land tax, land value tax, land value increment tax, estate and gift tax, mining-lot tax, house tax, and deed tax. The other 9 taxes are indirect and include customs duty , business tax, commodity tax, stamp duty, vehicle license tax, securities transaction tax, amusement tax, slaughter tax, and harbor dues.

Taxes are collected by the National Tax Administration, which administers different tax collection offices in the different provinces and municipalities. In 1999 tax revenue alone accounted for 62.7 percent of the govern-ment's total revenues. In the same period, the government was able to collect a little over NT$770 billion in taxes according to DGBAS statistics.

INFRASTRUCTURE, POWER, AND COMMUNICATIONS

One of the key factors in Taiwan's rapid economic development is its well-planned and efficient transport network. As an export-oriented economy, its many businesses are heavily dependent on shipping, by air and sea, for the transport of their goods to overseas markets.

On 5 January 1995, Taiwan approved the Asia-Pacific Regional Operations Center (APROC) Plan, an

ambitious project that will transform the island into a center of business and investment in the Asia-Pacific region. With APROC, Taiwan plans to attract the establishment of new local, as well as foreign, companies on the island. Taiwan's world-class and well-organized facilities would see such companies conveniently placed to take advantage of opportunities in the flourishing Southeast Asian markets, and the much coveted market of mainland China.

There are a total of 34,901 kilometers (21,687 miles) of roads in Taiwan, 90 percent of which are paved. Taiwan has a modern railway system that provides frequent and convenient passenger service between major cities on the island. As of 1999, Taiwan's railway network totaled 2,481 kilometers (1,542 miles). Railways in Taiwan are operated by the Taiwan Railway Administration (TRA), the Taiwan Sugar Corporation, and the Taiwan Forestry Bureau. The TRA provides passenger and freight services to the general public, while the Taiwan Sugar Corporation and the Taiwan Forestry Bureau haul their own products and offer only limited passenger service.

The government has already begun the development of a high-speed railway (HSR) that is expected to begin operating in June 2003. The planned HSR route, 340 kilometers (212 miles) long, will pass through the west corridor of the island. Ten stations will be located from Taipei to Kaohsiung to serve about 22 million residents in the region. The estimated construction cost of the project is US$13.05 billion, and the HSR will cut the present travel time from north to south by train or highway vehicles from 4 hours to 90 minutes.

As of December 1997, Taiwan's shipping industry had a fleet of 255 vessels weighing over 100 gross tons. Taiwan claims to have one of the largest fleets of cargo container ships in the world. Taiwan has 6 international harbors: Chilung, Suao, Taichung, Hualien, Anping, and Kaohsiung. Waterborne imports and exports handled by these ports amounted to 166.1 million tons in 1997.

As of 1997 51 airlines have been providing flight services to destinations in Taiwan. There are 34 foreign carriers, and 5 domestic-based airlines: EVA Airways, Mandarin Airlines, China Airlines, Transasia Airways, and Far Eastern Air Transport Corporation. Three Taiwan-based carriers offer international charter services: UNI Airways Corporation, Great China Airlines, and U-Land Airlines.

Taiwan has 2 international airports: Chiang Kai-shek International Airport at Taoyuan in northern Taiwan and Kaohsiung International Airport in the south. In addition, there are several domestic airports.

COMMUNICATIONS.

The government is laying the foundation for a national information infrastructure through 30 different projects designed to make the country into a competitive and knowledge-based society. The different projects are focused on enhancing broadband access, improving the quality of Internet service, improving and diversifying the content of local web sites, and promoting electronic commerce and other Internet-based applications. As of 1 July 1999, Taiwan had 15 Internet service providers and 4.13 million Internet users. Based on official estimates, there are at least 52,000 locally authored web sites in Taiwan, 89.6 percent of which are dot-coms (Internet-based companies offering different types of conventional and innovative goods and services). Most of these web sites are written in Chinese, although many provide English versions.

As of April 2000, the Directorate General of Telecommunications estimated the mobile phone subscribers at 13.78 million, a number that was higher than the estimated 12.49 million telephone main lines. In July 2000, Taiwan reduced its international direct dialing (IDD) fees by an average of 15 percent. Earlier, charges on local and mobile phones, leased lines and Internet service had seen reductions of between 2 percent and 5 percent. Further reductions are expected once a separate accounting system has been established and an evaluation of the state-run telecom company carried out.

ECONOMIC SECTORS

According to a study by the Nomura Research Center of Japan, the competitive advantage of Taiwan's manufacturing industry lies in information, telecommunications, and other high technology industries. Correspondingly, the government has identified and appropriated funding for the development of 10 high technology industries that will be the foundation of Taiwan's economic success in the first few decades of the 21st century.

The 10 industries are: (1) communications, (2) information, (3) consumer electronics, (4) semiconductors,(5) precision machinery and automation, (6) aerospace,(7) advanced materials, (8) specialty chemicals and pharmaceuticals, (9) medical and health care equipment, and (10) pollution control and treatment.

Labor-intensive industries such as processed foods, leather products, and wood and bamboo products have gradually been replaced by capital-and technology-intensive industries. Examples of these industries are chemicals, petrochemicals, information technology, electrical equipment, and electronics. Electronics and information technology are the biggest players in the manufacturing sector, which employs 26 percent of the national workforce.

The service sector is thriving and shows promise of further growth as the spending power of the population increases. By the end of 1995, the growth of the service sector exceeded that of the agricultural and manufacturing sectors by more than 60 percent and has continued to do so. The different businesses that fall under the service sector in Taiwan are: finance, insurance, and real estate; commerce, including wholesale and retail business, food and beverages, and international trade; social and individual services; transport, storage, and telecommunications; commercial services, including legal, accounting, civil engineering, information, advertising, designing, and leasing; governmental services, and miscellaneous others. Among these businesses, finance, insurance, and real estate are the most dominant. The service sector creates the largest competitive employment opportunities and employs the bulk of Taiwan's labor force.

Meanwhile, the contribution of the agricultural sector to GDP has been steadily declining since the 1980s when Taiwan's government shifted the focus of its economic strategy to industrialization. Few of the younger generation are willing to work in the agricultural sector, preferring to pursue better opportunities in the other sectors. Farmers make up only 8 percent of the labor force and produce less than 3 percent of the island's total GDP according to 1999 statistics. Consequently, the sector diminished in importance while the manufacturing sector has risen to the forefront. The agricultural sector will face even more problems when the country is finally accepted as a member of the World Trade Organization (WTO). To comply with the WTO's requirements, the government has been systematically reducing the trade barriers on its traditionally well-protected agricultural goods, leaving local produce to face increased competition from the foreign agricultural products that will flood the domestic market when Taiwan becomes a full-fledged member in the WTO.

Manufacturing has long been overtaken by the service sector in terms of contribution to GDP. In 1999, the service sector contributed the biggest slice of GDP at 64 percent, with industry accounting for 33 percent, and agriculture 3 percent.

AGRICULTURE

In the 1950s, 90 percent of Taiwan's residents lived in farming communities growing rice, sugar, tea, camphor, and other crops. Two decades later, the government aggressively pursued industrialization, causing agricultural exports to fall behind agricultural imports. By 1999, agriculture constituted only 3 percent of Taiwan's GDP compared with 32.2 percent in 1952. Although the total area under cultivation decreased by one-third between the 1960s and the 1990s, the value of agricultural output to the national economy has increased by half because of improvements in overall productivity. Taiwan's biggest export markets are Japan, Hong Kong, and the United States.

In 1998, rice was Taiwan's most valuable crop, followed by betel nuts, corn, sugar cane, mangos, water-melons, tea, pineapples, pears, and grapes. In the 2 crop seasons of 1998, Taiwan harvested 1.49 million tons of brown rice. According to the Taiwan Provincial Department of Food (TPDF), this was more than was needed to meet local demand. The oversupply of rice is expected to peak as Taiwan braces itself for intensive competition from foreign rice imports as the country moves toward membership in the WTO.

Next to hogs, rice, and chickens, betel nuts rank as Taiwan's fourth most valuable farm product according to TPDF. Demand steadily increased in the 1990s, resulting in the expansion of areas cultivated for betel nuts. In 1997, 56,300 hectares of land were planted with betel nuts and produced almost 156,000 metric tons. Farmers were keen to plant betel nuts because, in a good year, the income can be 10 times higher than that from growing rice.

In 1998, 178,000 hectares of land were devoted to vegetable cultivation, which yielded 2,872,571 metric tons of produce. More than 100 kinds of vegetables are grown in Taiwan. The primary vegetables grown in planted areas are bamboo shoots, watermelon, leafy vegetables, vegetable soybeans, cabbage, cantaloupe, garlic, scallions, celery cabbage, Chinese cabbage, and radishes.

Taiwan produces 30 varieties of fruit, including apples, pears, peaches, citrus fruits, bananas, pineapples, lychees, longans, mangos, papayas, persimmons, loquats, and guavas. The main crops are citrus, mangos, lychees, bananas, pineapples, wax apples, and Asian pears. Pineapples and lychees are canned to satisfy domestic and international demand, while other fruits are processed into juice for local consumption.

FLORICULTURE.

From 1986 to 1998, Taiwan's floriculture (flower-growing industry) underwent huge and profitable expansion, and its export value increased from US$3.7 million to US$41.5 million. As demand and sales increased, Taiwan's floral nurseries were expanded from 3,500 hectares to 10,000 hectares. The major export markets for flowers are Japan, Hong Kong, and the United States. Most flower farms allocate half of their planting area to producing cut flowers, that is, flowers sold as single stems for vases and floral arrangements, while the other half is used for nursery production. Annual production of cut flowers is 1.4 billion stems and 25 million potted plants.

FISHING.

In 1998, the Taiwanese fishing industry harvested fish worth US$2.9 billion, of which 62 percent came from deep-sea fishing, 20 percent from aquaculture, 15 percent from offshore fishing, and 3 percent from coastal fishing. Skipjack and eel are Taiwan's biggest water-based export items. The export value of eel, most of which goes to Japan, exceeded US$400 million in 1998.

To protect natural resources and further develop the island's fishing industry, Taiwan's government invested in the construction of fishing harbors, wholesale markets, modern equipment, and other infrastructure during the 1980s. During the 1990s, the government complemented this initiative with renewed efforts to raise public awareness of environmental and conservation issues. Several environmental laws were passed, such as the Water Pollution Control Act in 1991 and the Environmental Impact Assessment Act in 1994.

Taiwan's mountainous terrain serves as a natural hazard to its thriving fishing industry, especially in the rainy season when mud and silt are deposited in the island's wide and shallow river beds. The government, therefore, set aside and developed areas especially suited to aquaculture (the production of scientifically farmed fish), and Taiwan has become a world leader in aqua-cultural development. The industry flourished in the 1980s, but received a setback when the grass shrimp industry was hit by an epidemic in 1987. During the 1990s, government further boosted production by promoting automation, encouraging the use of biotechnology, and improving its marketing strategy.

LIVESTOCK.

In the 1950s, the farming of livestock in Taiwan was a backyard enterprise. In just 4 decades since, livestock grew into a multi-billion dollar industry and has become a major export product. In 1998, livestock production was valued at more than US$3.6 billion, accounting for 41.56 percent of the total value of agricultural production. Hog farming still ranks first in the livestock industry, followed by broiler chickens, eggs, and milk. However, an outbreak of foot and mouth disease in March 1997 caused a temporary decline in export sales. The official estimate of hog farms stricken by the disease is 6,147 across 20 cities. To control the spread of the disease, the government ordered the extermination of all affected animals and the immediate vaccination of those unaffected. Roughly 21 million doses of vaccines were used to bring the disease under control. Since then, the hog industry has recovered and export sales have returned to the normal level.

Taiwan attributes the growth of its agricultural industry to the dedication of its farmers, the development of a farmers' organization, continual improvements in techniques and infrastructure, and the implementation of a beneficial land reform program. The government continues to support its farmers with price guarantees, low-interest loans, economic incentives, and other helpful measures.

Through technological improvements such as new cultivars, growth regulators, and mechanization, crop yields per hectare of land jumped from 8,600 kilos in 1945 to 16,384 kilos in 1998. Taiwanese fruit growers have applied advanced horticultural technology to modernize their operations. Through the effective control of plant diseases, adjustments to fruit maturation periods, the cultivation of improved fruit strains, and the implementation of multiple annual harvests, the fruit sector has witnessed profitable growth.

Taiwan has used information technology to create the National Agricultural Information Service, an integrated agricultural information database that includes planning, production, and marketing information related to domestic farming, forestry, fishing, and animal husbandry. This database provides rapid access to information and communication, and allows players in the agricultural sector to exchange ideas at an international level.

Taiwan's agricultural sector faces several challenges. Efficient farming is hindered by the rapidly aging agrarian workforce and a severe shortage of new young workers, who have abandoned the rural life for more profitable careers in the cities. Farmers are having to confront falling incomes, rising costs, and increased foreign competition, and as Taiwan's entry into the WTO approaches, the farmers' predicament will worsen before it gets better.

Another factor that serves to hinder agricultural growth is the island's mountainous topography, which restricts farming to the arable western slopes and alluvial plains. To make matters worse, plots are small with most farmers having less than 1 hectare of cultivable land. This restricts the application of advanced agricultural methods such as mechanization, since these depend on economies of scale (large output) to be cost-effective. Promotion of efficiency in the farming industry has not kept pace with other sectors. About 10 percent of Taiwan's total farmland has been neglected because farming has ceased to be profitable.

The development of aquaculture is seriously threatened by environmental degradation. Freshwater aquaculture uses huge amounts of ground water, sometimes causing land to shift or cave in. Two of Taiwan's government agencies, the Ministry of Economic Affairs and the Council of Agriculture, have jointly promoted recycling systems that use fresh water more efficiently, and have encouraged aquaculturists to switch to marine ranching.

Taiwan's fishing and aquaculture industries are endangered by the pollution of its rivers and coastal waters caused primarily by the expansion of urban communities. There are 21 primary, 29 secondary, and 79 ordinary rivers in Taiwan. According to the Environmental Protection Administration (EPA), 33.8 percent of primary and secondary rivers are polluted to different degrees. Most industrial, agricultural, and residential wastewater drains directly into rivers, seriously polluting the water downstream. By April 1998 only 240,000 households (33.25 percent) were connected to the sewage system.

INDUSTRY

INFORMATION TECHNOLOGY.

According to the Institute for Information Industry, Taiwan's software market will have reached up to NT$150 billion in production value by 2001 due to rising global demand for software. Continued investment and a steady supply of competent human resources are 2 major factors behind the sharp growth of Taiwan's software industry in recent years. The industry will have the opportunity to upgrade its production value further in the future, especially as e-commerce becomes increasingly popular among domestic enterprises in Taiwan.

In 1998 Taiwan's hardware information technology industry registered a total production value of US$33.8 billion, up by 11.9 percent from US$30 billion of the previous year, making it Taiwan's most important foreign exchange earner. Since 1995, Taiwan has been the world's third-largest computer hardware supplier after the United States and Japan. Taiwan has about 900 computer hardware manufacturers employing close to 100,000 workers. These companies manufacture laptop computers, monitors, desktop PCs, and motherboards which, in 1998, accounted for about 80 percent of the production value of the information technology industry. To secure a lion's share of the world market, Taiwan's manufacturers strive to maintain high quality and competitive prices. According to statistics released by the Institute for Information Industry, Taiwan has already replaced Singapore as Japan's second largest supplier of information products after the United States. In March 2000, Taiwan earned the distinction of becoming the world's leading manufacturer of CD-ROM drives, a feat made possible by Japan's withdrawal from the CD-ROM market in 1998. In 1999 Taiwan also claimed to be the world's largest supplier of notebook PCs, with an estimated world market share of 49 percent.

AUTOMOBILES.

Thirteen automobile manufacturers have plants in Taiwan. Most of these are working in partnership with foreign carmakers, mostly Japanese. These companies produce and import automobiles. In 1998, roughly 402,000 automobiles were produced in Taiwan, and the value of the automotive industry reached US$9.93 billion.

However, limited parking space and the efficient mass transit systems in urban districts have resulted in the decline of the domestic car market. From a high of 542,000 units sold in 1995, only 476,000 were purchased in 1998, with 80 percent of the demand being for sedans. In recent years, competition between locally made and imported vehicles has gradually decreased. In 1998 the domestic automobile industry, although threatened by imports from Japan and the United States, still managed to capture about 84 percent of the market, with over 70 percent of the 292,000 domestically made sedans supplied by 3 companies: Ford Lio Ho Motor Co., Ltd. (20.3 percent), Yulon Motor Co., Ltd. (28.6 percent), and Kuozui Motors, Ltd. (22.4 percent). In the commercial vehicle market, China Motor Corporation maintained its traditional top position, producing over half of the 115,700 commercial vehicles sold.

To strengthen the industry, automobile manufacturers need to invest in research and design (R&D), and to improve their own technology in engines, computerized gearing systems, and several other components, to enhance their design capability. One of the industry's weaknesses is its dependence on foreign engines and its inability to produce other key parts such as airbags, which has curtailed its plans to export vehicles. Since 1999, the Ministry of Economic Affairs has allocated funding to encourage R&D and thus alleviate the automobile industry's dependence on imports from Japan and elsewhere.

TEXTILES.

The Taiwanese textile industry produces synthetic fibers, yarns, fabrics, clothing, and clothes accessories. In the last few years, local manufacturers have attempted to develop man-made fibers and fabrics to compensate for Taiwan's inability to produce cotton or wool, and its limited production of silk and linen. In 1998, Taiwan produced 3.25 million metric tons of man-made fiber, the third highest volume in the world. The country's output of polyester fiber, at 2.68 million tons, occupied second place globally. Nylon production was the world's highest at 301,000 tons. Taiwan has also started mass-producing carbon, spandex, and viscose fibers. The chief export markets for Taiwan's textile exports are the United States, Hong Kong, and other Southeast Asian countries.

SERVICES

FINANCIAL SERVICES. As in the past, Taiwan's banking system is dominated by state-run institutions. Despite pressure from foreign investors, the financial sector has not been liberalized and remains under government control. Consequently, the financial services sector is underdeveloped. In 1995, the combined factors of the Mexican peso crisis, the flight of foreign capital from Taiwan, and the collapse of several savings institutions brought even more restrictive government controls, the severity of which caused an increase in black market activities. In 1991, the Bureau of Investigation launched a campaign against unlicensed investment houses and underground futures brokers that resulted in prosecutions of certain companies charged with stock manipulation. Despite such moves, the sector continued to draw criticism for its perceived dubious and risky practices.

RETAIL.

One of the biggest retailers in Taiwan is the 7-11 chain of convenience stores. In terms of store-to-population density, Taiwan has the highest ratio in the world with one 7-11 outlet for every 10,000 people. Owned by the President Chain Store Group, the company's revenues amounted to US$1.29 billion in 1998. The President Group is a household name in Taiwan, where almost everybody has used its products or services at one time or another. Moreover, it is the largest Taiwanese investor in mainland China. In October 1999, the Ministry of Economic Affairs approved a US$328 million mainland-bound investment project proposed by the President Group. The company is diversifying its operations by reinvesting in the Starbucks coffee shop chain and the Conforama home furniture and appliance chain.

Aside from food and beverages, an emerging retail market in Taiwan is the home improvement and furniture market. With the population's increased spending power, ever-increasing numbers of people are renovating their homes and surroundings. In 1992, internationally renowned companies like Ethan Allen, ID-design, Ikea, and B&Q entered the Taiwanese market. In an interview with the Free China Journal in 1999, an Ikea official estimated the annual value of the furniture sector in Taiwan at US$203 million. This estimate did not include the home improvement sector.

In 1998, Ikea's international chain of stores posted earnings worth US$7.02 billion. According to the Taiwan Furniture Manufacturers' Association, the huge potential of the sector evidenced by the earnings of the foreign companies has attracted Taiwan-based furniture exporters to offer their products to the domestic market as well.

INTERNATIONAL TRADE

The phenomenal growth of Taiwan's economy can be credited to its brisk foreign trade. From 1970 until 1990, the country amassed huge surpluses from its earnings in international trade, which peaked in 1987 when the trade surplus reached US$18.7 billion. However, several other countries became alarmed at Taiwan's huge surpluses and the corresponding economic power it might exert on other economies. The United States demanded that Taiwan remove trade restrictions and allow more foreign products into the country. Since then, Taiwan has reduced or removed a significant number of trade barriers, thus allowing foreign products to compete with local products in the domestic market. From 1992 to 1996, Taiwan's trade surplus declined by nearly 30 percent. However, from 1998, trade figures have once more shown a steady rise and, according to the Central Bank of China, Taiwan's foreign exchange reserves in 1999 amounted to US$106.2 billion, one of the highest in the world. In 2000, Taiwanese exports reached US$148.38 billion against imports of US$140.01 billion, producing a trade surplus of US$8.37 billion.

Taiwan is a major exporter of industrial products ranging from mechanical appliances and accessories, electronics, electrical appliances, personal computers and peripherals, metal products and transport equipment, to furniture and clothing. The United States has been Taiwan's most important trading partner over decades. However, as Taiwan pursued the expansion of its economy, it began seeking out other trading partners, which resulted in a decrease in trade with the United States. In the 1980s, 40 percent of Taiwan's total exports were U.S.-bound; by 2000 only 23.5 percent of the island's total exports were destined for the American market.

Until 1999, Japan was Taiwan's biggest export destination after the United States. However, since 1999, Hong Kong has replaced Japan as the second leading export partner, since Taiwan uses it as an indirect link to send goods to mainland China. Major items exported to Hong Kong include electrical and electronic equipment and peripherals, machinery, accessories, raw plastic materials, and textiles. In 2000, exports to Hong Kong amounted to 21.1 percent of Taiwan's total exports, while those to Japan, due also to the slowdown of the Japanese economy, only accounted for 11.2 percent.

Southeast Asia has become an attractive trading partner for Taiwan. Many Taiwanese businesses have set up in Southeast Asian countries such as Thailand and the Philippines to take advantage of abundant skilled labor, availability of raw materials, and lower land prices. In 1986, only 5 percent of Taiwan's exports were bound for countries in the Association of South-East Asian Nations (ASEAN), but by 2000 the figure had climbed to 12.2 percent.

Taiwan has also set its sights on the large and economically strong European market. In 2000, Taiwan recorded exports to Europe at 16 percent of its total. The country's top 4 European trading partners are Germany, France, the United Kingdom, and the Netherlands, which, together, account for more than 60 percent of exports to the continent.

With huge exports fueling the economy, the spending capacity of the government and the population has multiplied. In the past, the government aggressively discouraged the entrance of imported products to the island by trade barriers and restrictive laws. However, with the new economy, the government has liberalized the situation and, in 2000, Taiwan's total imports amounted to roughly US$110 billion. More than a quarter, or 27.5 percent, of these imports came from Japan. Taiwan's industries, especially the information and automobile industries, rely heavily on the supply of parts and the transfer of technology from Japan. Most of the items imported from Japan are machinery, auto parts, electrical appliances, electronics, chemicals, and metal products. Other imports come from the United States (17.9 percent) and Europe (13.6 percent).

Despite the absence of direct transport links to mainland China, Taiwan's economic ties with the country are strengthening through the substantial Taiwanese investment being poured into China. Taiwanese businesses are eager to invest in mainland China, one of the most sought-after markets in the world. With a population approximately a billion strong, China is not only a huge market for any country's products, but also has one of the biggest manpower resources in the whole world. Trade relations between the 2 economies are so intertwined that breaking them off would bring major repercussions. Mainland China is a big contributor to Taiwan's overall trade surplus. In 1987, Taiwan had a trade surplus of just over US$1 billion with mainland China, and by 1998, this had grown to US$15.7 billion.

Based on data from Taiwan's Mainland Affairs Council, the value of 2-way trade between Taiwan and mainland China amounted to US$23.95 billion in 1998. More than 82 percent of the indirect trade consisted of exports from Taiwan, which totaled US$19.84 billion. Some major items exported to mainland China are industrial machinery and equipment, electronic parts, plastics, man-made fibers, and industrial textiles. Meanwhile, imports from China climbed to 4.1 percent in 1999 from 3.9 percent in 1998. Agricultural and industrial raw materials accounted for a huge percentage of these imported goods. However, in view of the uneasy political relations that prevail between the 2 territories, Taiwan does not concentrate too great a part of its investments in China. Taiwan is mindful that political upheaval in its dealings with China would jeopardize its own economic development.

Taiwan is gearing itself for membership in the WTO and is setting the proper economic policies in motion to ensure its acceptance. One of the long-standing trade issues for which Taiwan is criticized is its violation of agreements on the protection of intellectual property. Piracy in different forms—such as copying and reselling the contents of entertainment and software CDs—remains a serious matter. To its credit, Taiwan's government is addressing the problem through a combination of rules and regulations to control piracy, and efforts to raise awareness of the issues involved with it.

MONEY

The financial industry in Taiwan operates within 3 important legal frameworks: the Banking Law, the Securities and Exchange Law, and the Insurance Law. Three government agencies oversee financial operations: the Ministry of Finance (MOF), the Central Bank of China

(CBC), and the Departments of Finance of each municipal or provincial government.

The MOF is in charge of supervising the financial markets and allied financial institutions in Taiwan through its subordinate agencies: the Bureau of Monetary Affairs, the Securities and Exchange Commission, and the Department of Insurance. In addition, it formulates policies that contribute to the development and efficiency of Taiwan's financial service sector. The CBC controls the strict implementation of the monetary policies of Taiwan as outlined in the provisions of the Banking Law and the Law Governing the CBC.

Each of the provincial or municipal governments has its own Department of Finance. Collectively, these departments direct and control community financial institutions such as credit cooperatives and the credit of farming and fishing associations.

The several agencies and institutions that comprise the structure of Taiwan's financial sector offer a wide variety of financial services, designed to cater to clients from big business to individual account holders.

Banks fall into several categories such as commercial banks, specialized banks, local branches of foreign banks, and others, established under Taiwan's banking laws, which undertake savings and trust business and deal in securities. In the past, the sector was dominated by government-owned banks, but, as a result of increasing competition and government privatization policies, 15 new private commercial banks were established in 1991. These new arrivals now dominate the market.

Credit cooperatives provide banking services in regional communities where the customer base is small and it is not economically viable to establish commercial banks. Grassroots organizations such as farming and fishing associations usually have credit departments to take charge of promoting economic development in their particular areas. Investment and trust companies act as fund managers of trust funds and trust properties.

The Postal Savings System of Taiwan has more than 1,600 post offices throughout the island where people can remit or deposit money. Money may be withdrawn and re-deposited into banks, or reinvested in different financial instruments.

The insurance industry offers life and other insurance. Life insurance includes simple life insurance, health insurance, and accident insurance. Other policies offer fire insurance, marine insurance, land and air transportation insurance, liability insurance, and other non-life insurance.

In 1960 the Securities and Exchange Commission was founded in Taiwan, based on American and Japanese models. In 1961, the Taiwan Stock Exchange (TSE) was established and began operating in 1967, and the Securities and Exchange Law was passed in 1968.

The first securities traded in Taiwan were issued by the Taiwanese government in 1949, and were called "Patriot bonds." Trading in stocks began on an informal basis in 1953 when the government launched its "Land to the Tillers" program. The objective of the program was for government to buy land from large landowners and distribute it equitably among farmers with no land of their own. Rather than money, landlords were issued government shares in previously nationalized enterprises. Since the landowners were not interested in holding these stocks, an informal market developed to trade these shares.

POVERTY AND WEALTH

Poverty in Taiwan has almost been eradicated, with less than 1 percent of the population (129,968 people or 56,720 households) considered as poor or belonging to the low-income bracket. This means that more than 99 percent of the population enjoys the benefits of Taiwan's economic prosperity and greatly improved quality of life.

Families are classified as belonging to the low-income bracket if their average monthly income does not reach the estimated monthly minimum set by each city or province. To meet the family's basic needs (food, shelter, clothing, and education) in Taipei City, one would need to earn at least US$337 monthly. This amount changes depending on the city's standard of living; for example, one would only need to earn US$171 monthly to live in Kinmen County.

In 1999, the government spent US$5.08 billion on social welfare programs, and offers many kinds of assistance to individuals and families from low-income groups. In addition to cash, job-placement assistance is provided to the wage earners in families, along with educational aid for school-age children and health programs for mothers and children. There are also civic organizations, academic institutions, and private foundations that

coordinate with government agencies in assisting displaced or disadvantaged citizens.

Aside from low-income families, the government gives support to people, such as the elderly and the handicapped, who are unable to work. In July 1993, the government began providing a monthly subsidy to the low-income elderly. Citizens over the age of 65 whose average family income is less than, or equal to, 1.5 times the minimum monthly expenses are qualified to receive a monthly subsidy of US$174. Elderly people whose average family income is between 1.5 and 2.5 times the minimum expense are eligible for a monthly relief subsidy of US$87. In addition, the government pays the health insurance premium in full for low-income households and emergency aid where needed.

WORKING CONDITIONS

A well-trained labor force is the backbone of a developing economy, and Taiwan's economic growth over the past 50 years has been bolstered by a diversified and skilled workforce of about 9.7 million people. Approximately 6.6 million of these are employees, while the rest are either self-employed or have some other working status. The unemployment rate in 2000 was at a very low 3 percent.

Taiwan protects the rights of workers by law, while other important labor issues such as workers' welfare, gender equality, labor-management relations, safety and health, and appropriate quotas for foreign workers, are also clarified by legislation.

The Labor Insurance Act, which was passed into law in 1958, mandates the provision of insurance coverage to employees in the private sector , including industrial workers, journalists, fishermen, persons receiving vocational training in institutes registered with the government, union members, and those working in non-profit organizations. Teachers and employees working in government agencies who are not eligible for teachers' or civil servants' insurance are also covered under this law.

One of the most important labor laws in Taiwan is the 1984 Labor Standards Law. It supplies the basic legal definitions of worker, employer, wages, and contract, and outlines the rights and obligations of workers and employers. The law prescribes the minimum requirements for labor contracts, and makes provisions for working hours, work leave, and the employment of women and children. Furthermore, the law offers protections against unreasonable work hours and forced labor, and grants workers the right to receive compensation for occupational injuries and layoffs, as well as a retirement pension.

On the initiative of the Employment and Vocational Training Administration of the Council of Labor Affairs (EVTA), the Employment Promotion Measures law was formulated in 1985. This law aims to assist target groups such as women, people aged 45 and above, the disabled, aborigines (people from local indigenous groups), low-income households, and dispossessed workers to find decent employment. Under this program, the government assists women by promoting job equality between the sexes, providing women with vocational training, and surveying the demand for part-time and freelance opportunities to enlarge the employment market for women. The government also provides daycare centers for pre-school children, after-school classes for elementary students, and day care for the elderly to relieve the pressure on women to stay at home.

In 1991 the Labor Safety and Health Law was amended to include many new requirements for the installation of safety and health equipment in work places such as dockyards and fireworks factories. The law covers almost all major industries in the industrial, agricultural, commercial, and service sectors, and specifically prohibits women and employees under the age of 16 from working in dangerous or harmful environments.

Passed into law on 8 May 1992, the Employment Services Act is a comprehensive law that seeks to ensure equal job opportunities and access to employment services for all. Specifically, the act calls for a balance of manpower supply and demand, efficient use of human resources, and the establishment of an employment information network. Further, the act requires the central government to encourage management, labor unions, and workers to negotiate reductions in working hours, wage adjustments, and in-service training to avoid layoffs, and for government to protect workers' rights during times of economic slowdown. The Employment Services Act also regulates public and private employment service agencies.

The Labor Inspection Law replaces the old Factory Law. It empowers the Council of Labor Affairs and local governments to inspect conditions in the workplace to ensure the safety and health of workers. The scope of inspections carried out under the law covers health and safety, labor insurance, employee welfare funds, and the hiring of foreign workers. Employment at potentially dangerous sites requires approval from labor inspectors before employees can begin work on the project. Labor laws ensure the rights of workers to organize unions for the protection of their collective interests.

Under the revised Collective Agreement Law, labor unions are designated as the sole labor representative in the signing of collective agreements. Such agreements promote labor-management cooperation and cover working conditions such as wages, work hours, layoffs, pensions, compensation for occupational injuries, and the handling of labor complaints and disputes.

In Taiwan, women have been traditionally considered inferior to men and are expected to stay at home and submit to the decisions of fathers or husbands. However, new attitudes have slowly developed with the lobbying of women's groups for equal opportunities, and as Taiwan's society has become exposed to modern ideas. Over the last decade, society's expectations of women have changed as more women complete higher education, compete with men in the workplace, become financially independent, and postpone marriage to pursue a career. On average, first-time brides were 28.1 years old in 1998 compared to 25.8 in 1990. Almost half of Taiwan's women are regular wage earners and help support their families financially.

In 1998, the Ministry of Education reported that 56 percent of junior college graduates, 51 percent of university and college graduates, and 26 percent of graduate school graduates were women. This was a significantly large change from the figures of 20 years earlier, and marked the first time that female graduates outnumbered male graduates.

As in any country with a bustling economy, Taiwan cannot depend on its domestic labor force because the demand for workers exceeds available supply. In the high-tech industries, Taiwan produces 20,000 new workers annually, but 30,000 workers are needed. A sample survey of 302 Taiwan-based high-tech industries conducted by the Taipei Computer Association revealed that 80 percent of companies experience difficulty in finding suitable employees, particularly software specialists. Situations such as these call for the hiring of foreign workers to meet the labor shortage and, in August 2000, there were 316,078 foreigners working in Taiwan. Most of these workers come from Thailand, followed by the Philippines and Indonesia.

Aside from the large demand for labor, foreign workers are attracted to Taiwan by the range of job opportunities. The Taiwanese are now reluctant to take low-paying jobs or work in fields that demand heavy physical labor, and the agricultural sector is suffering shortages. An aging population and a low birth rate add to the problem. More workers are retiring than are entering the workforce, and the influx of foreigners is growing. The presence of a foreign workforce has created a degree of tension in Taiwan. Locals have expressed apprehension that their indigenous culture might be destroyed by foreign influences and, in practical terms, there is a possibility that wages will decrease because foreign workers are willing to accept less pay than the Taiwanese.

In July 2000, the unemployment rate of Taiwanese workers increased to 3.06 percent (300,000 workers) from 2.9 percent for the years 1999 and 1998. The main cause of unemployment is the layoffs in traditional manufacturing businesses, which are re-structuring or downsizing (cutting down the number of employees). The availability of sophisticated technology that can do the work of 2 or more people is one reason for downsizing, especially since the government is encouraging industries to shift from labor-intensive operations to high-tech manufacturing and services.

COUNTRY HISTORY AND ECONOMIC DEVELOPMENT

1206. The Island of Taiwan is declared a protectorate of the Chinese Empire.

1622. The Dutch establish a trading post and control much of the Republic of China (ROC) until 1662 when the Chinese expel them.

1887. Taiwan is granted provincial status by the Chinese mainland government.

1895-1945. Taiwan is declared a Japanese colony after the Sino-Japanese war in 1895, and remains a Japanese colony until the end of World War II in 1945.

1947. The Constitution of Taiwan is adopted.

1949. Chinese nationalist forces under Chiang Kai-Shek retreat from the Communist armies on the mainland to Taiwan and take power in Taiwan.

1949-91. Taiwan is officially in a state of war with the Peoples' Republic of China (PRC).

1951-64. The United States injects US$100 million annually into Taiwan's economy, supplying needed capital to Taiwan's industries, which grow rapidly during this period.

1953. The Taiwanese government begins a series of 4-year plans, setting goals and guidelines for economic development.

1961. The Securities and Exchange Commission (SEC) is established.

1969. For the first time, a popular national election is held and a handful of national politicians are elected with tenure for life.

1973-74. Taiwan's economic growth suffers a temporary setback due to the world oil crisis.

1975. President Chiang Kai-shek dies. For the next 3 years, the vast powers of the presidency rest in the hands of Premier Chiang Ching-kuo, chairman of the Kuomintang (KMT), the country's sole political party.

1978. Chiang Ching-kuo is elected president. The United States announces its decision to end recognition of the government of Taiwan and to transfer recognition and the United States embassy to the Peoples' Republic of China.

1983. The government opens the stock market to foreign investment.

1987. A vocal opposition, the Democratic Progressive Party (DPP), is established, thereby challenging the long-running dominance of the Kuomintang (KMT).

1988. The government lifts restrictions on the publication of new daily newspapers.

1989-93. Elections are described by foreign observers as progressively freer, leaving the KMT in power but facing a strong parliamentary opposition.

1993. The Ministry of Finance and the Central Bank of China allow the establishment of foreign exchange brokerage businesses and foreign insurance companies.

1994. The government assigns top priority to the implementation of the Twelve Major Construction Projects. A Comprehensive Physical Development Plan is initiated with a view to rationalizing land use, improving the investment climate, and upgrading the quality of life.

1994. President Lee and Premier Lien initiate the White Paper on China, which redefines Taiwan's one-China principle. The leaders of China bitterly oppose Taiwan's new one-China principle and accuse it of trying to establish an independent Taiwan.

1996. Conduct of the first presidential election results in victory for the KMT, with President Lee Teng Hui garnering 54 percent of the vote.

1996. Foreign mutual fund companies are allowed to invest in the stock market.

1997. The Plan for National Development into the Next Century is introduced. Aimed at accelerating Taiwan's transformation into a modern industrialized society, this plan is centered on the achievement of 3 goals: strengthening national competitiveness, improving the quality of life, and promoting sustainable development.

1999. President Lee provokes Beijing's fury in July when he declares that, in the future, Taiwan and China should conduct relations on a "special state-to-state basis," a move away from the official formula that they constituted one temporarily divided country.

2000. The opposition party, DPP, captures the top national positions as Chen Shui-bian and running mate Annette Lu are elected as president and vice-president respectively, breaking 55 years of uninterrupted rule by the KMT.

FUTURE TRENDS

Despite the current instability caused by the political realignment in the new administration of President Chen Shui-bian, Taiwan's future remains optimistic. Economic forecasts made by the Taipei-based World Economics Society point to continued growth, estimating that GDP growth over the next 10 years will not fall below 5.5 percent annually. The figure approximates the fluctuations of Taiwan's GDP annual growth performance in recent years: 8.2 percent in 1989, 6.68 percent in 1997, 4.57 percent in 1998, and 5.7 percent in 1999. This means that Taiwan's economy will continue to display stability and expansion, propelled by exemplary performance in the service and manufacturing sectors. Both sectors are expected to perform even better because of technological innovations and improved productivity. Moreover, employment levels and living costs are expected to remain manageable. Taiwan is also likely to benefit from its strategic position in the information technology industry. It aims to be known as the "Silicon Island of East Asia." This goal is not far-fetched since, in 2000, Taiwan ranked third in the world in the production of computer hardware and software, next to the United States and Japan. With its aggressive implementation of its growth plans, Taiwan is likely to attract more foreign businesses to the island and thus become a major international procurement and logistics base. The International Monetary Fund has recognized Taiwan's consistent economic performance by affiliating it with the rest of the world's advanced economies.

Politically, Taiwan's relationship with mainland China is still of major concern. To protect its economic achievement, Taiwan must tread slowly and wisely in setting the direction of its relations with mainland China. It must make sure that the relationship between the 2 territories is based on mutual respect and benefit. With regard to domestic politics, the government must continue to strengthen its democratic institutions.

The government is also taking steps to check the social and environmental impact of its economic programs and policies. Environmental programs focusing on protection and conservation are being implemented across the island in line with President Chen Shui-bian's electoral promises, and research into green technologies is also promised.

Meanwhile, the newfound affluence of Taiwanese society has, inevitably, produced certain social problems that need to be nipped in the bud. The government has realized that the younger generation must be encouraged to retain the work ethic of their elders. This is crucial to the health of the country's economic future. The "nouveau riche" mentality that characterizes the poor who suddenly acquire wealth can result in people opening themselves to financial profligacy, profiteering, corrupt practices, and other social ills that accompany irresponsible wealth. Other emerging social concerns involve the rise in crime and criminal gangs, the breakdown of the family, and the neglect of children as parents become too involved with their careers.

DEPENDENCIES

Taiwan has no territories or colonies.

BIBLIOGRAPHY

"A Brief Introduction to the Republic of China." Republic of China on Taiwan Government Information Office. <http://www.gio.gov.tw/taiwan-website/5-gp/brief>. Accessed October 2001.

Copper, John F. Taiwan: Nation-State or Province. London: Westview Press, 1990.

Council for Economic Planning and Development. Economic Development, Taiwan, Republic of China 2000. Taipei: Council for Economic Planning and Development, 2000.

Directorate General of Budget, Accounting and Statistics, Executive Yuan. <http://www.dgbasey.gov.tw>. Accessed December 2000.

Economist Intelligence Unit. Country Profile: Taiwan. London: Economist Intelligence Unit, 2001.

Feldman, Harvey, and Ilpyong J. Kim, eds. Taiwan in a Time of Transition. New York: Paradigm House, 1988.

Ministry of Economic Affairs R.O.C. <http://www.moea.gov.tw>.Accessed October 2001.

"The Republic of China Yearbook 2000." Republic of China on Taiwan Government Information Office. <http://www.gio.gov.tw/info/book2000>. Accessed October 2001.

Taipei Economic and Cultural Office in the United States. Taiwan Online. <http://www.roc-taiwan.org/usoffice/dc.htm>. Accessed October 2001.

"Taiwan Factbook." China Economic News Service. <http://www .cens.com.tw./info/factbook.html>. Accessed December 2000.

Taiwan Headlines. <http://www.taiwanheadlines.gov.tw>.Accessed October 2001.

U.S. Central Intelligence Agency. World Factbook 2001. <http://www.odci.gov/cia/publications/factbook/index.html>. Accessed September 2001.

U.S. Department of State. FY 2001 Country Commercial Guide: Taiwan. <http://www.state.gov/www/about_state/business/com_guides/2001/eap/index.html>. Accessed October 2001.

—Maria Cecilia T. Ubarra

CAPITAL:

Taipei.

MONETARY UNIT:

New Taiwan dollar (NT$). One dollar equals 100 cents. There are notes of 50, 100, 500, and 1,000 dollars. There are coins of 50 cents, and 1, 5, and 10 dollars.

CHIEF EXPORTS:

Machinery and electrical equipment (51 percent), metals, textiles, plastics, chemicals.

CHIEF IMPORTS:

Machinery and electrical equipment (51 percent), minerals, precision equipment.

GROSS DOMESTIC PRODUCT:

US$386 billion (purchasing power parity, 2000 est.).

BALANCE OF TRADE:

Exports: US$148.38 billion (f.o.b., 2000). Imports: US$140.01 billion (c.i.f., 2000).

Taiwan

Compiled from the October 2006 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:
Taiwan

PROFILE

PEOPLE

HISTORY

ADMINISTRATION

POLITICAL CONDITIONS

ECONOMY

DEFENSE

FOREIGN RELATIONS

U.S.-TAIWAN RELATIONS

TRAVEL

PROFILE

Geography

Area: 35,967 sq. km. (13,887 sq. mi.).

Cities: (2006) Capital—Taipei (pop. 2.6 million). Other cities—(Kaohsiung 1.5 million), Taichung (1.0 million).

Terrain: Two thirds of the island is largely mountainous with 100 peaks over 3,000 meters (9,843 ft.).

Climate: Maritime subtropical.

People

Population: (July, 2006 est.) 23.0 million.

Annual growth rate: (2006 est.) 0.61%.

Languages: Mandarin Chinese (official), Taiwanese, Hakka.

Education: Years compulsory—9. Attendance (2005)—99.4%. Literacy (2005)—97.3%.

Health: Infant mortality rate (2006 est.)—0.63%. Life expectancy (2006 est.) male 74.67 yrs.; female 80.47 yrs.

Work force: (2006 est.)10.6 million.

Political Establishment

Type: Multi-party democracy. There are four major parties forming two alliances known as Pan-Blue and Pan-Green. The Pan-Blue includes the Kuomintang (KMT) and the People First Party (PFP). The Pan-Green includes the Democratic Progressive Party (DPP) and the Taiwan Solidarity Union (TSU). The Pan-Blue coalition holds a slight majority of seats in the Legislative Yuan (LY).

Constitution: December 25, 1946; last amended 2005.

Branches: (Yuan) Executive, Legislative, Judicial, Control, Examination.

Political parties: Democratic Progressive Party (DPP); Kuomintang (KMT or Nationalist Party); People First Party (PFP); Taiwan Solidarity Union (TSU).

Suffrage: Universal over 20 years of age.

Central budget: proposed (FY 2007) $50.8 billion.

Defense: proposed (2007) 18.7% of entire budget.

Economy

GNP: (2006 est.) $364 billion.

Real annual growth rate: (2006 est.) 4.3%.

Per capita GNP: (2006) $16,024.

Unemployment: (Jan-Aug. 2006) 3.9%.

Natural resources: Small deposits of coal, natural gas, limestone, marble and asbestos.

Agriculture: (1.7% of GDP) Major products—pork, rice, fruit and vegetables, sugarcane, poultry, shrimp, eel.

Services: (73.3% of GDP).

Industry: (25.0% of GDP) Types—electronics and computer products, chemicals and petrochemicals, basic metals, machinery, textiles, transport equipment, plastics, machinery.

Trade: (2005) Exports—$198 billion: electronics, optical & precision instruments, information and communications products, textile products, basic metals, plastic and rubber products. Major markets—U.S. $29 billion, PRC and Hong Kong $78 billion, Japan $15 billion. Imports—$183 billion: electronics, optical & precision instruments, information & communications products, machinery & electrical products, chemicals, basic metals, transport equipment, crude oil. Major suppliers—Japan $46 billion, PRC $20 billion, U.S. $21 billion. (Note: 2005 trade figures are revised because Taiwan began early this year to include re-exports in its exports and re-imports in its imports. End Note.)

PEOPLE

Taiwan has a population of 22.8 million. More than 18 million, the “native” Taiwanese, are descendants of Chinese who migrated from Fujian and Guangdong Provinces on the mainland, primarily in the 18th and 19th centuries. The “mainlanders,” who arrived in Taiwan after 1945, came from all parts of mainland China. About 370,000 aborigines inhabit the mountainous central and eastern parts of the island and are believed to be of Malayo-Polynesian origin. Of Taiwan’s total population, approximately one million, or 4.4%, currently reside in Mainland China.

Education

A 9-year public educational system has been in effect since 1979. Six years of elementary school and 3 years of junior high are compulsory for all children. About 93.5% of junior high graduates continue their studies in either a senior high or vocational school. Taiwan has an extensive higher education system with more than 150 institutions of higher learning. Each year, over 100,000 students attempt to enter higher education institutes; about 75% of the candidates are admitted to a college or university. Opportunities for graduate education are expanding in Taiwan, but many students travel abroad for advanced education. In FY 2006, over 16,000 U.S. student visas were issued to Taiwan passport holders.

Languages

A large majority of people in Taiwan speak Mandarin Chinese, which has been the medium of instruction in the schools for more than five decades. Native Taiwanese and many others also speak one of the Southern Fujianese dialects, Min-nan, also known as Taiwanese. Recently there has been a growing use of Taiwanese in the broadcast media. The Hakka, who are concentrated in several counties throughout Taiwan, have their own distinct dialect. As a result of the half-century of Japanese rule, many older people also can speak Japanese. The method of Chinese romanization most commonly used in Taiwan is the Wade-Giles system. In 2002, Taiwan authorities announced adoption of the pinyin system also used on the Mainland to replace the Wade-Giles system, but its use is not consistent throughout society, often resulting in two or more romanizations for the same place or person.

Religions

According to Taiwan’s Interior Ministry figures, there are about 11.2 million religious believers in Taiwan, with more than 75% identifying themselves as Buddhists or Taoists. At the same time, there is a strong belief in Chinese folk religion throughout the island. These are not mutually exclusive, and many people practice a combination of the three. Confucianism also is an honored school of thought and ethical code. Christian churches have been active on Taiwan for many years, and today, the island has more than 600,000 Christians, a majority of whom are Protestant.

Culture

Taiwan’s culture is a blend of its distinctive Chinese heritage and Western influences. Fine arts, folk traditions, and popular culture embody traditional and modern, Asian, and Western motifs. One of Taiwan’s greatest attractions is the Palace Museum, which houses over 650,000 pieces of Chinese bronze, jade, calligraphy, painting, and porcelain. This collection was moved from the mainland in 1949 when Chiang Kai-shek’s Nationalist Party (KMT) fled to Taiwan. The collection is so extensive that only 1% is on display at any one time.

HISTORY

Taiwan’s aboriginal peoples, who originated in Austronesia and southern China, have lived on Taiwan for 12,000 to 15,000 years. Significant migration to Taiwan from the Chinese mainland began as early as A.D. 500. Dutch traders first claimed the island in 1624 as a base for Dutch commerce with Japan and the China coast. Two years later, the Spanish established a settlement on the northwest coast of Taiwan, which they occupied until 1642 when they were driven out by the Dutch. Dutch colonists administered the island and its predominantly aboriginal population until 1661. The first major influx of migrants from the Chinese mainland came during the Dutch period, sparked by the political and economic chaos on the China coast during the Manchu invasion and the end of the Ming Dynasty.

In 1664, a Chinese fleet led by the Ming loyalist Cheng Ch’eng-kung (Zheng Chenggong, known in the West as Koxinga) retreated from the mainland and occupied Taiwan. Cheng expelled the Dutch and established Taiwan as a base in his attempt to restore the Ming Dynasty. He died shortly thereafter, and in 1683, his successors submitted to Manchu (Qing Dynasty) control. From 1680, the Qing Dynasty ruled Taiwan as a prefecture and, in 1875, divided the island into two prefectures, north and south. In 1887 the island was made into a separate Chinese province.

During the 18th and 19th centuries, migration from Fujian and Guangdong provinces steadily increased, and Chinese supplanted aborigines as the dominant population group. In 1895, a weakened Imperial China ceded Taiwan to Japan in the Treaty of Shimonoseki following the first Sino-Japanese war. During its 50 years (1895-1945) of colonial rule, Japan expended considerable effort in developing Taiwan’s economy. At the same time, Japanese rule led to the “Japanization” of the island, including compulsory Japanese education and forcing residents of Taiwan to adopt Japanese names.

At the end of World War II in 1945, Taiwan reverted to Chinese rule. During the immediate postwar period, the Nationalist Chinese (KMT) administration on Taiwan was repressive and corrupt, leading to local discontent. Anti-mainlander violence flared on February 28, 1947, prompted by an incident in which a cigarette seller was injured and a passerby was shot to death by Nationalist authorities. The island-wide rioting was brutally put down by Nationalist Chinese troops, who killed thousands of people. As a result of the February 28 Incident, the native Taiwanese felt a deep-seated bitterness toward the mainlanders. For 50 years the KMT authorities suppressed accounts of this episode in Taiwan history. In 1995 a monument was dedicated to the victims of the “2-28 Incident,” and for the first time, Taiwan’s leader, President Lee Teng-hui, publicly apologized for the Nationalists’ brutality. Starting before World War II and continuing afterwards, a civil war was fought on the mainland between Chiang Kaishek’s KMT government and the Chinese Communist Party led by Mao Zedong. When the civil war ended in 1949, 2 million refugees, predominately from the Nationalist government, military, and business community, fled to Taiwan. In October 1949 the People’s Republic of China (PRC) was founded on the mainland by the victorious communists. Chiang Kai-shek established a “provisional” KMT capital in Taipei in December 1949. During the 1950s, the KMT authorities implemented a far-reaching and highly successful land reform program on Taiwan. They redistributed land among small farmers and compensated large landowners with commodities certificates and stock in state-owned industries. Although this left some large landowners impoverished, others turned their compensation into capital and started commercial and industrial enterprises. These entrepreneurs were to become Taiwan’s first industrial capitalists. Together with refugee businessmen from the mainland, they managed Taiwan’s transition from an agricultural to a commercial, industrial economy.

Taiwan has developed steadily into a major international trading power with nearly $381 billion in two-way trade (2005) and the world’s 17th largest economy. Taiwan’s accession to the World Trade Organization in 2002 has expanded its trade opportunities and further strengthened its standing in the global economy. Tremendous prosperity on the island has been accompanied by economic and social stability. Chiang Kai-shek’s successor, his son Chiang Ching-kuo, began to liberalize Taiwan’s political system, a process that continued when President Lee Teng-hui took office in 1988. The direct election of Lee Teng-hui as president in 1996 was followed by opposition Democratic Progressive Party candidate

Chen Shui-bian’s election victory in March 2000. Chen was re-elected in March 2004 in a tightly contested election.

ADMINISTRATION

The authorities in Taipei exercise control over Taiwan, Kinmen, Matsu, the Penghus (Pescadores) and several other smaller islands. Taiwan is divided into counties, provincial municipalities, and two special municipalities, Taipei and Kaohsiung. At the end of 1998, the Constitution was amended to make all counties and cities directly administered by the Executive Yuan. From 1949 until 1991, the authorities on Taiwan claimed to be the sole legitimate government of all of China, including the mainland. In keeping with that claim, when the Nationalists moved to Taiwan in 1949, they reestablished the full array of central political bodies, which had existed on the mainland. While much of this structure remains in place, the authorities on Taiwan in 1991 abandoned their claim of governing mainland China, stating that they do not “dispute the fact that the PRC controls mainland China.”

The first National Assembly, elected on the mainland in 1947 to carry out the duties of choosing the President and amending the constitution, was re-established on Taiwan when the KMT moved. Because it was impossible to hold subsequent elections to represent constituencies on the mainland, representatives elected in 1947-48 held these seats “indefinitely.” In June l990, however, the Council of Grand Justices mandated the retirement, effective December 1991, of all remaining “indefinitely” elected members of the National Assembly and other bodies.

The second National Assembly, elected in 1991, was composed of 325 members. The majority were elected directly; 100 were chosen from party slates in proportion to the popular vote. This National Assembly amended the Constitution in 1994, paving the way for the direct election of the President and Vice President the first of which was held in March 1996. In April 2000, the members of the National Assembly voted to permit their terms of office to expire without holding new elections. The National Assembly elected in May 2005 voted to abolish itself the following month, leaving Taiwan with a unicameral legislature. The President is both leader of Taiwan and Commander-in-Chief of its armed forces. The President has authority over four of the five administrative branches (Yuan) Executive, Control, Judicial, and Examination. The President appoints the President of the Executive Yuan, who also serves as the Premier. The Premier and the cabinet members are responsible for government policy and administration.

The main lawmaking body, the Legislative Yuan (LY), was originally elected in the late 1940s in parallel with the National Assembly. The first LY had 773 seats and was viewed as a “rubber stamp” institution. The second LY was not elected until 1992. The third LY, elected in 1995, had 157 members serving 3-year terms, while the fourth LY, elected in 1998, was enlarged to 225 members. The LY has greatly enhanced its standing in relation to the Executive Yuan and has established itself as a major player on the central level. With increasing strength, size, and complexity, the LY now mirrors Taiwan’s recently liberalized political system. In the 1992 and 1995 elections, the main opposition party—the Democratic Progressive Party (DPP)—challenged the half-century of KMT dominance of the Legislature. In both elections, the DPP won a significant share of the LY seats, leaving only half of the LY seats in the hands of the KMT. In 2001, the DPP won a plurality of LY seats–88 to KMT’s 66, PFP’s 45 seats, TSU’s 13, and other parties’ 13. In the December 2004 LY election, the Pan-Blue coalition won a slender majority of 114 of the 225 seats (later increased to 115) compared to the Pan-Green coalition’s 101 (later reduced to 111 and 97 seats, respectively, of the 220 occupied seats).

In 1994, when the National Assembly voted to allow direct popular election of the President, the LY passed legislation allowing for the direct election of the Governor of Taiwan Province and the mayors of Taipei and Kaohsiung Special Municipalities. These elections were held in December 1994, with the KMT winning the Governor and Kaohsiung Mayor posts, and the DPP’s Chen Shui-Bian winning the Taipei Mayor’s position. In 1998, the KMT’s Ma Ying-jeou wrestled back control of the mayorship of Taipei from Chen Shui-bian, and DPP leader Frank Hsieh defeated the KMT incumbent to become Mayor of Kaohsiung. Additionally, in a move to streamline the administration, the position of elected Governor and many other elements of the Taiwan Provincial Government were eliminated.

The Control Yuan (CY) monitors the efficiency of public service and investigates instances of corruption. The 29 Control Yuan members are appointed by the President and approved by the National Assembly; they serve 6-year terms. In recent years, the Control Yuan has become more activist, and it has conducted several major investigations and impeachments. Since December 2004, however, the pan-Blue dominated LY has refused to approve the new slate of CY members proposed by President Chen, leaving the CY inactive. The Judicial Yuan (JY) administers Taiwan’s court system. It includes a 16-member Council of Grand Justices (COGJ) that interprets the constitution. Grand Justices are appointed by the President, with the consent of the National Assembly, to 9-year terms.

The Examination Yuan (EY) functions as a civil service commission and includes two ministries: the Ministry of Examination, which recruits officials through competitive examination, and the Ministry of Personnel, which manages the civil service. The President appoints the President of the Examination Yuan.

Principal Government Officials

Last Updated: 11/7/2006

President: CHEN Shui-bian

Vice President: Annette LU

Pres., Executive Yuan (Premier): SU Tseng-chang

Vice Pres., Executive Yuan (Vice Premier): TSAI Ing-wen

Sec. Gen., Executive Yuan: Arthur IAP

Pres., Control Yuan: Fredrick CHIEN

Pres., Examination Yuan: YAO Chia-wen

Pres., Judicial Yuan: WENG Yueh-sheng

Pres., Legislative Yuan: WANG Jin-pyng

Min. of Economic Affairs: Morgan HWANG Ing-san

Min. of Education: TU Cheng-sheng

Min. of Finance: LIN Chuan

Min. of Foreign Affairs: Mark CHEN

Min. of Health: CHEN Chien-jen

Min. of Interior: SU Jia-chyuan

Min. of Justice: SHIH Mao-lin

Min. of National Defense: LI Chieh

Min. of Transportation & Communications: LIN Ling-san

Min. Without Portfolio: CHEN Chi-mai

Min. Without Portfolio: FU Li-yeh

Min. Without Portfolio: HU Sheng-cheng

Min. Without Portfolio: KUO Yao-chi

Min. Without Portfolio: LIN Ferng-ching

Min. Without Portfolio: LIN Sheng-Fong

Min. Without Portfolio: LIN Yi-fu

Chmn., Agricultural Council: LEE Ching-lung

Chmn., Atomic Energy Council: OUYANG Min-sheng

Chmn., Central Election Commission: CHANG Masa

Chmn., Consumer Protection: YEH Chulan

Chmn., Cultural Affairs: CHEN Chi-nan

Chmn., Economic Planning & Development Council: HU Sheng-cheng

Chmn., Fair Trade Commission: HWANG Tzong-leh

Chmn., Labor Affairs Council: CHEN Chu

Chmn., Mainland Affairs Council: Joseph WU

Chmn., Mongolian & Tibetan Affairs Commission: HSU Chih-hsiung

Chmn., National Council on Physical Fitness & Sports: CHEN Chuan-show

Chmn., National Palace Museum: SHIH Shou-chien

Chmn., National Science Council: WU Mau-kuen

Chmn., National Youth Commission: CHENG Li-chiun

Chmn., Overseas Chinese Affairs Commission: CHANG Fu-mei

Chmn., Public Construction Commission: KUO Yao-chi

Chmn., Research Development & Evaluation Commission: YEH Jiunnrong

Chmn., Veterans Affairs Commission: KAO Hua-chu

Governor, Central Bank of China: PERNG Fai-nan

Representative to the US: David LEE

POLITICAL CONDITIONS

Until 1986, Taiwan’s political system was effectively controlled by one party, the Kuomintang (KMT), the chairman of which was also Taiwan’s President. As the ruling party, the KMT was able to fill appointed positions with its members and maintain political control of the island. After 1986, the KMT’s hold on power was challenged by the emergence of competing political parties. Before 1986, candidates opposing the KMT ran in elections as independents or “nonpartisans.” Before the 1986 island-wide elections, many “nonpartisans” grouped together to create Taiwan’s first new political party, the Democratic Progressive Party (DPP). Despite the official ban on forming new political parties, Taiwan authorities did not prohibit the DPP from operating, and in the 1986 island-wide elections, DPP and independent candidates captured more than 20% of the vote. In 1987, President Chiang Ching-kuo lifted the emergency decree, which had been in place since 1948 and which had granted virtually unlimited powers to the President for use in the anti-communist campaign. This decree provided the basis for nearly four decades of martial law under which individuals and groups expressing dissenting views were dealt with harshly. Expressing views contrary to the authorities’ claim to represent all of China or supporting independent legal status for Taiwan was treated as sedition. Since ending martial law, Taiwan has taken dramatic steps to improve respect for human rights and create a democratic political system. Almost all restrictions on the press have ended, restrictions on personal freedoms have been relaxed, and the prohibition against organizing new political parties has been lifted. Lee Teng-hui succeeded Chiang Ching-kuo as President when Chiang died on January 13, 1988. The Civic Organizations Law passed in 1989 allowed for the formation of new political parties, thereby legalizing the DPP, and its support and influence increased. Lee was elected by the National Assembly to a 6-year term in 1990, marking the final time a President was elected by the National Assembly. In the 1992 Legislative Yuan elections, the DPP won 51 seats in the 161-seat body. While this was only half the number of KMT seats, it made the DPP’s voice an important factor in legislative decisions. Winning the Taipei mayor’s position in December 1994 significantly enhanced the DPP’s image. The DPP continued its strong showing in the 1995 LY race, winning 45 of the 157 seats to the KMT’s 81. In 1996, Lee Teng-hui was elected President and Lien Chan Vice President in the first direct election by Taiwan voters. In the November 1997 local elections, the Democratic Progressive Party (DPP) won 12 of the 23 county magistrate and city mayor contests to the Kuomintang (KMT)’s 8, outpolling the KMT for the first time in a major election. In the 2001 LY elections, the DPP won a plurality of seats for the first time. In March 2000, DPP candidate Chen Shui-bian became the first opposition party candidate to win the presidency. His victory resulted in the first-ever transition of the presidential office from one political party to another, validating Taiwan’s democratic political system. In a hotly contested election on March 20, 2004, President Chen Shui-bian was re-elected by 50.1% of the popular vote to a second term. The election was marred by a shooting incident the day before the election during which President Chen and his running mate Vice President Annette Lu were slightly wounded. While the opposition contested the results, it was the first time that the DPP had won an outright majority in an island-wide election.

The March election also included a “defensive referendum.” Historically, the issue of referenda has been closely tied to the question of Taiwan independence, and thus has been a sensitive issue in cross Strait relations. There were two referenda before the voters on March 20. The first asked in light of the PRC missile threat whether Taiwan should purchase anti-missile systems. The second asked whether Taiwan should adopt a “peace framework” for addressing cross Strait differences with the PRC. However both referenda failed to obtain support from over 50% of registered voters, as required to be valid.

President Chen Shui-bian called for major constitutional reforms by 2006–later changed to 2008–aimed at further reducing layers of government, and making other structural changes aimed at improving governance. The People’s Republic of China has accused Chen of using the constitution issue to move Taiwan towards independence. Chen pledged, however, in his May 20, 2004 inaugural address not to use constitutional reform to alter the constitution’s approach to Taiwan’s status vis-à-vis China.

The final National Assembly passed a set of constitutional amendments in June, 2005 that will halve the number of LY seats from 225 to 113 and create single-member legislative election districts beginning with the next legislative election scheduled for 2007. The constitutional revisions also abolished the National Assembly and provided for the public to confirm or reject future constitutional amendments passed by the LY. President Chen has called for “Round Two” of constitutional revision focusing on the form of government (presidential or parliamentary, 5-branch or 3-branch) and on human, labor, and aborigine rights. He has pledged not to include independence or name change in his proposed constitutional revisions.

In the December 2004 Legislative election, the ruling DPP won a plurality with 89 of the 225 seats, gaining 2 seats more than it did in 2001. The opposition KMT won 79 seats, or 11 more than it did in 2001. The KMT’s “pan-Blue” coalition partner, the PFP, won only 34, 12 fewer than it won in 2001, while the DPP’s partner, TSU won 12 seats. The New Party won one seat. The ruling “pan-Green” coalition’s inability to secure a majority has left the LY in virtual gridlock since the election. The KMT won a landslide victory in December 2005 local elections, however, winning 14 of the 23 city mayor and county magistrate races to the ruling DPP’s 6.

Political Parties

In addition to the KMT (described above in ‘History’ and ‘Political Conditions’), there are three other major parties. The DPP, membership is made up largely of native Taiwanese, and its platform includes outspoken positions on some of the most sensitive issues in Taiwan politics. For example, the DPP maintains that Taiwan is an entity separate from mainland China, in contrast to the KMT position that Taiwan and the mainland, though currently divided, are both part of “one China.” In sharp contrast to the tenets of both KMT and PRC policy, a number of ranking DPP officials openly advocate independence for Taiwan.

The People First Party (PFP) was formed in the wake of the March 2000 presidential election, composed of former KMT members who supported former KMT Taiwan Provincial Governor James Soong’s presidential bid. PFP and KMT subsequently formed the “Pan-Blue” Alliance to oppose the DPP government. Former KMT President Lee Teng-hui, in turn, broke with the KMT and formed the pro-independence Taiwan Solidarity Union (TSU) in 2001. The TSU, which advocates changing Taiwan’s official name and completely replacing the 1947 constitution, allied itself with the DPP as part of the ruling “Pan-Green” alliance.

Taiwan and the Mainland

Despite differences between Taiwan and the PRC, contact between the two sides of the Taiwan Strait has grown significantly over the past decade. Taiwan has continued to relax restrictions on unofficial contacts with the PRC, and cross-Strait interaction has mushroomed. In January 2001, Taiwan formally allowed the “three mini-links” (direct trade, travel, and postal links) from Quemoy and Matsu Islands to Fujian Province and permitted direct cross-strait trade in February 2002. Cross-Strait trade has grown rapidly over the past 10 years. China is Taiwan’s largest trading partner, and Taiwan is China’s fifth largest. Estimates of Taiwan investment on the mainland, both officially approved by Taiwan authorities and investment made by Taiwan firms through third parties, start from $100 billion, making Taiwan and Hong Kong the two largest investors. This trade runs heavily in Taiwan’s favor and continues to grow, providing another engine for the island’s economy. The trend in cross-Strait economic interaction is one of steady growth with, so far, only temporary setbacks due to political factors such as the PRC’s March 2005 passage of an Anti-Secession Law. In August 2001, President Chen accepted the recommendation of the Economic Development Advisory Council to set aside the “no haste, be patient” policy of the Lee administration and replace it with an “active opening, effective management policy.” However, in January 2006, President Chen reversed the policy to “active management, effective opening.” In February 2003, Taiwan and the PRC agreed to allow Taiwan carriers to fly non-stop via Hong Kong or Macao to bring Taiwan residents on the mainland home for the Lunar New Year holiday. The two sides agreed to conduct Lunar New Year charter flights again in 2005, with flights operated by both Taiwan and P.R.C. carriers flying over, but not having to land in, Hong Kong or Macau. The two sides agreed on an expanded series of Lunar New Year charter flights in January-February 2006, and in June 2006 regularized these charter flights to include the other 3 major holidays—Dragon Boat festival, Mid-Autumn festival and January 1 New Year.

The development of semiofficial cross-Strait relations has been halting. Prior to April 1993, when talks were held in Singapore between the heads of two private intermediary organizations—Taiwan’s Straits Exchange Foundation (SEF) and the PRC’s Association for Relations Across the Taiwan Strait (ARATS)—there had been some lower-level exchanges between the two sides of the Strait. The April 1993 SEFARATS talks primarily addressed technical issues relating to cross-Strait interactions. Lower-level talks continued on a fairly regular basis until they were suspended by Beijing in 1995 after President Lee’s U.S. visit. Unofficial exchanges resumed in 1997 through informal meetings between personnel of the two sides’ unofficial representative organizations. Direct SEF-ARATS contacts resumed in April 1998, and SEF Chairman Koo Chen-fu visited the mainland in October 1998. A planned visit by ARATS Chairman Wang Daohan to Taiwan in the fall, however, was postponed following statements made by then-President Lee Teng-hui that relations between the PRC and Taiwan should be conducted as “state-to-state” or at least as “special state-to-state relations.” Since his May 20, 2000 inauguration, President Chen has called for resuming the cross-Strait dialogue without any preconditions. President Chen has stated that such talks should be conducted in the spirit of the 1992 Hong Kong talks, a reference to a meeting the two sides held to discuss how to handle political barriers to cross-Strait interaction. The PRC has responded that the Chen administration must acknowledge that the two sides reached a consensus that there is only “one China” before any dialogue can be restarted. In his May 20, 2004 inaugural address, President Chen recognized the PRC’s insistence on “one China” but stopped short of endorsing the concept. He called for a new “Cross-Strait Framework for Peace and Stability” and enhanced political, economic, and social exchanges between the two sides. In the face of the “one China” recognition obstacle and Taiwan’s resentment over the PRC’s March 2005 “Anti-Secession Law,” Taipei and Beijing have been cautiously feeling each other out on a series of smaller, intermediary steps, including cross-Strait cargo and passenger charter flights, sale of Taiwan agricultural products in the PRC, and PRC tourists visiting Taiwan. The United States has welcomed and encouraged the cross-Strait dialogue as a process which contributes to a reduction of tension and to an environment conducive to the eventual peaceful resolution of the outstanding differences between the two sides. The United States believes that differences between Taipei and Beijing should be resolved by the people on both sides of the Strait themselves. The United States has consistently stated that its abiding interest is that the process be peaceful.

ECONOMY

Through nearly five decades of hard work and sound economic management, Taiwan has transformed itself from an underdeveloped, agricultural island to an economic power that is a leading producer of high-technology goods. In the 1960s, foreign investment in Taiwan helped introduce modern, labor-intensive technology to the island, and Taiwan became a major exporter of labor-intensive products. In the 1980s, focus shifted toward increasingly sophisticated, capital-intensive and technology-intensive products for export and toward developing the service sector. At the same time, the appreciation of the New Taiwan dollar (NT$), rising labor costs, and increasing environmental consciousness in Taiwan caused many labor-intensive industries, such as shoe manufacturing, to move to the Chinese mainland and Southeast Asia. Taiwan has transformed itself from a recipient of U.S. aid in the 1950s and early 1960s to an aid donor and major foreign investor, especially in Asia. Taiwan is now a creditor economy, holding the world’s third largest stock of foreign exchange reserves ($261 billion as of August 2006). Although Taiwan enjoyed sustained economic growth, full employment, and low inflation for many years, in 2001, the combination of the slowing global economy, weaknesses in parts of the financial sector, and sagging consumer and business confidence in the government’s economic policymaking resulted in the first recession since 1952. The economy began to recover in 2002, but the outbreak of severe acute respiratory syndrome (SARS) slowed growth to 3.4% in 2003. The world economic upturn drove growth in 2004 to 6.1%. However, slower world growth in 2005, higher energy prices and interest rates, and excess inventory dragged 2005 growth to 4%. Continued expansion of exports will sustain Taiwan’s economic growth above 4% in 2006 and 2007.

Foreign Trade

Foreign trade has been the engine of Taiwan’s rapid growth during the past 50 years. Taiwan’s economy remains export-oriented, so it depends on an open world trade regime and remains vulnerable to fluctuations in the world economy. The total value of trade increased more than five-fold in the 1960s, nearly ten-fold in the 1970s, and doubled again in the 1980s. The 1990s saw a more modest, slightly less than two-fold, growth. In the first half of the 2000’s, exports grew 60%. Export composition changed from predominantly agricultural commodities to industrial goods (now 98%). The electronics sector is Taiwan’s most important industrial export sector and is the largest recipient of U.S. investment. Taiwan became a member of the World Trade Organization (WTO) as a special customs territory in January 2002.

Taiwan firms are the world’s largest supplier of computer monitors and leaders in PC manufacturing. Textile production, though of declining importance as Taiwan loses its competitive advantage in labor-intensive markets, is another major industrial export sector. Imports are dominated by raw materials and capital goods, which account for more than 90% of the total. Taiwan imports coal, oil and gas to meet most of its energy needs. Reflecting the large Taiwan investment in the mainland, China supplanted the United States as Taiwan’s largest trade partner in 2003. In 2005, China (including Hong Kong) accounted for over 26% of Taiwan’s total trade and almost 40% of Taiwan’s exports. Japan was Taiwan’s second-largest trading partner with 16% of total trade, including 25% of Taiwan’s imports. The U.S. is now Taiwan’s third-largest trade partner, taking 15% of Taiwan’s exports and supplying 11.6% of its imports. Taiwan is the United States’ eighth-largest trading partner; Taiwan’s two-way trade with the United States amounted to $56 billion in 2004 and rose 1% to $57 billion in 2005. Imports from the United States consist mostly of agricultural and industrial raw materials as well as machinery and equipment. Exports to the United States are mainly electronics and consumer goods. The United States, Hong Kong, the PRC, and Japan account for nearly 61.4% of Taiwan’s exports, and the United States, Japan, and the PRC provide almost 50% of Taiwan’s imports. As Taiwan’s per capita income level has risen, demand for imported, high-quality consumer goods has increased. The U.S. trade deficit with Taiwan in 2003 was $14 billion, fell slightly to $13 billion in 2004, and leveled off to $13 billion in 2005. The lack of formal diplomatic relations with all but a score of its trading partners appears not to have seriously hindered Taiwan’s rapidly expanding commerce, but has made free trade agreements extremely difficult to pursue. Taiwan maintains trade offices in nearly 100 countries with which it does not have official relations. Taiwan is a member of the Asian Development Bank, the WTO, and the Asia-Pacific Economic Cooperation (APEC) forum. Taiwan is also an observer at the OECD. These developments reflect Taiwan’s economic importance and its desire to become further integrated into the global economy.

Agriculture

Although only about one-quarter of Taiwan’s land area is arable, 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. Agriculture only comprises about 1.7% of Taiwan’s GDP. Taiwan’s main crops are rice, sugarcane, fruit, and vegetables. While largely self-sufficient in rice production, Taiwan imports large amounts of wheat, corn, and soybeans, mostly from the United States. Poultry and pork production are mainstays of the livestock sector and the major demand drivers for imported corn and soybeans. Rising standards of living have led to increased demand for a wide variety of high-quality food products, much of it imported. Overall, U.S. agricultural and food products account for more than 30% of Taiwan’s agricultural import demand. U.S. food and agricultural exports total about $2.5 billion annually, making Taiwan the United States’ sixth-largest agricultural export destination. Taiwan’s agricultural exports include frozen fish, aquaculture and sea products, canned and frozen vegetables, and grain products. Taiwan’s imports of agricultural products have increased since its WTO accession in 2002, and it is slowly liberalizing previously protected agricultural markets.

Economic Outlook

Taiwan now faces many of the same economic issues as other developed economies. With the prospect of continued relocation of labor-intensive industries to countries with cheaper work forces, Taiwan’s future development will have to rely on further transformation to a high technology and service-oriented economy. In recent years, Taiwan has successfully diversified its trade markets, cutting its share of exports to the United States from 49% in 1984 to 15% in 2005 and 2006. However, a significant proportion of Taiwan’s rapidly growing exports to the PRC are ultimately dependent on consumer demand in the U.S. Taiwan firms are increasingly acting as management centers that take in orders, produce them in Taiwan, the Mainland or South East Asia and then ship the final products to the U.S. Taiwan’s accession to the WTO and its desire to become an Asia-Pacific “regional operations center” are spurring further economic liberalization.

DEFENSE

In proportion to its population, Taiwan still maintains a large military establishment accounting for 15.3% of the central budget and 2.1% of GDP in FY 2006. However, the defense budget as a proportion of GDP has shrunk significantly over the past decade from about 22.5% of the central budget and 4% of GDP in 1994. (Taiwan has pledged to increase its military spending to 3% of GDP. In the proposed 2007 central budget proposal, military expenditures would increase to 19% of the total central budget, or between 2.6% and 2.85% of GDP.) The military’s primary mission is the defense of Taiwan against the PRC, which is seen as the predominant threat and which has not renounced the use of force against Taiwan. Taiwan’s armed forces were reduced as part of a reform initiative from 1997 to 2001, going from about 450,000 to 385,000, with further reductions since then bringing the total force level down to just under 300,000. Registered reservists reportedly totaled 3,870,000 in 1997. Conscription remains universal for qualified males reaching age 18.

Taiwan’s armed forces are equipped with weapons obtained primarily from the United States. In recent years, however, Taiwan also has procured some weapons from other Western nations and has stressed military “self-reliance,” which has resulted in the growth of indigenous military production in certain fields. Taiwan’s legislature is currently debating the approval of defense budget proposals to purchase defensive weapons systems the U.S. agreed to sell Taiwan in 2001 and earlier. The proposals would provide funds to purchase the Patriot Advanced Capability (either PAC-3 or PAC-2 upgraded) missile defense system, P-3C maritime patrol aircraft, and diesel-electric submarines. These systems would give Taiwan key capabilities in missile defense and anti-submarine warfare to remedy vulnerabilities in countering the PRC’s accelerated military modernization. Taiwan adheres to the principles of the nuclear Non-Proliferation Treaty and has stated that it does not intend to produce nuclear weapons.

FOREIGN RELATIONS

The People’s Republic of China replaced Taiwan at the United Nations in 1971, and Taiwan’s diplomatic position has continued to erode, as many countries changed their official recognition from Taipei to Beijing. As of fall 2006, Taiwan had formal diplomatic ties with 24 countries. At the same time, Taiwan has cultivated informal ties with most countries to offset its diplomatic isolation and to expand its economic relations. A number of nations have set up unofficial organizations to carry out commercial and other relations with Taiwan. Including its official overseas missions and its unofficial representative and/or trade offices, Taiwan is represented in 122 countries. Recently, Taiwan has lobbied strongly for admission into the United Nations and other international organizations, such as the WHO. The PRC opposes Taiwan’s membership in such organizations, most of which require statehood for membership, because Beijing considers Taiwan to be a province of China, not a separate sovereign state.

U.S.-TAIWAN RELATIONS

On January 1, 1979, the United States changed its diplomatic recognition from Taipei to Beijing. In the U.S.-PRC Joint Communiqué that announced the change, the United States recognized the Government of the People’s Republic of China as the sole legal government of China and acknowledged the Chinese position that there is but one China and Taiwan is part of China. The Joint Communiqué also stated that within this context the people of the United States will maintain cultural, commercial, and other unofficial relations with the people on Taiwan.

On April 10, 1979, President Carter signed into law the Taiwan Relations Act (TRA), which created domestic legal authority for the conduct of unofficial relations with Taiwan. U.S. commercial, cultural, and other interaction with the people on Taiwan is facilitated through the American Institute in Taiwan (AIT), a private nonprofit corporation. The Institute has its headquarters in the Washington, DC area and has offices in Taipei and Kaohsiung. It is authorized to issue visas, accept passport applications, and provide assistance to U.S. citizens in Taiwan. A counterpart organization, the Taipei Economic and Cultural Representative Office in the United States (TECRO), has been established by the Taiwan authorities. It has its headquarters in Taipei, the representative branch office in Washington, DC, and 11 other Taipei Economic and Cultural Offices (TECO) in the continental U.S. and Guam. The Taiwan Relations Act (TRA) continues to provide the legal basis for the unofficial relationship between the U.S. and Taiwan, and enshrines the U.S. commitment to assisting Taiwan maintain its defensive capability.

Following de-recognition, the United States terminated its Mutual Defense Treaty with Taiwan. However, the United States has continued the sale of appropriate defensive military equipment to Taiwan in accordance with the Taiwan Relations Act, which provides for such sales and which declares that peace and stability in the area are in U.S. interests. Sales of defensive military equipment also are consistent with the 1982 U.S.-PRC Joint Communiqué. In this document, the United States stated that “it does not seek to carry out a long-term policy of arms sales to Taiwan” and that U.S. arms sales would “not exceed, either in qualitative or in quantitative terms, the level of those supplied in recent years,” and that the U.S. intends “gradually to reduce its sale of arms to Taiwan.” The PRC, in the 1982 Communiqué, stated that its policy was to strive for a peaceful resolution of the Taiwan question.

The United States position on Taiwan is reflected in the Three Communiqués and the Taiwan Relations Act (TRA). The U.S. insists on the peaceful resolution of cross-Strait differences and encourages dialogue to help advance such an outcome. The U.S. does not support Taiwan independence. President Bush stated y on December 9, 2003 that the United States is opposed to any attempt by either side to unilaterally alter the status quo in the Taiwan Strait. The United States has endorsed dialogue and exchanges between the two sides and has encouraged the PRC to engage the democratically elected leadership of Taiwan, as well as the opposition. U.S. commercial ties with Taiwan have been maintained and have expanded since 1979. Taiwan continues to enjoy Export-Import Bank financing, Overseas Private Investment Corporation guarantees, normal trade relations (NTR) status, and ready access to U.S. markets. In recent years, AIT commercial dealings with Taiwan have focused on expanding market access for American goods and services. AIT has been engaged in a series of trade negotiations, which have focused on protection of intellectual property rights, market access, and issues relating to Taiwan’s accession to the WTO, which occurred in 2002.

Maintaining diplomatic relations with the PRC has been recognized to be in the long-term interest of the United States by seven consecutive administrations; however, maintaining strong, unofficial relations with Taiwan also a major U.S. goal, in line with our desire to further peace and stability in Asia. In keeping with our one-China policy, the U.S. does not support Taiwan independence, but it does support Taiwan’s membership in appropriate international organizations, such as the WTO, APEC forum, and the Asian Development Bank, where statehood is not a requirement for membership. In addition, the U.S. supports appropriate opportunities for Taiwan’s voice to be heard in organizations where its membership is not possible.

Principal U.S. Embassy Officials

KAOHSIUNG (BO) Address: 5F, #2 Chung Cheng 3rd Road; Phone: 886-7-238-7744; Fax: 886-7-238-5237; Workweek: 8:00 am to 5:00 pm; Web-site: http://WWW.AIT.ORG.TW/en/ait_kaohsiung/.

Last Updated: 10/18/2005

TAIPEI Address: 7, Lane 134, Hsin Yi Road, Sec 3, Taipei 106, Taiwan; Phone: [886] (2) 2162-2000; Fax: [886] (2) 2162-2251; Workweek: 8:00 a.m. until 5:00 p.m.; Website: http://ait.org.tw.

Last Updated: 10/31/2006

TRAVEL

Consular Information Sheet : March 2, 2007

Reminder: The Department of State provides information to assist travelers in better understanding foreign locations they may visit and the known risks that they should consider. Travelers traveling to Taiwan are encouraged to inform themselves about Taiwan prior to commencement of travel. It is the traveler’s responsibility to obtain a U.S. passport from the Department of State and the appropriate visas from the Taiwan Economic and Cultural Representative’s Office (TECRO) in Washington, D.C., or the nearest office of the Taipei Economic and Cultural Office (TECO). Canceling a scheduled trip abroad may cost money. When making reservations, travelers should discuss cancellation policies with their travel agent, travel insurer or airline. The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and whether it will cover emergency expenses such as a medical evacuation; Medicare does not cover medical expenses abroad.

Country Description: Taiwan is a stable democracy with a strong and well-developed economy. Tourist facilities are widely available.

Entry Requirements: U.S. passport holders will be allowed to enter Taiwan without a visa for up to thirty days (no extensions allowed) if their passport is valid for at least six months from the date of entry into Taiwan and the traveler has a confirmed return or onward air ticket. Travelers must have already met any additional visa requirements for the next destination, if applicable. If the passport is valid for less than six months from the date of entry into Taiwan, travelers may apply for a landing visa that has a duration of stay of no more than thirty days. The processing fee is NT$4,400.00 and no extensions are allowed. Travelers also have the additional option of applying for and receiving a Taiwan visa prior to arrival in Taiwan. The processing fee is US$100.00.

Please Note: No extension of stay or change of status is allowed if the traveler enters on the visa waiver program (30 day stay, no extensions). Travelers arriving in Taiwan with a valid passport and valid Taiwan visas may be admitted for up to 90 days even if their passports are valid for less than 6 months. Travelers who apply for a landing visa upon arrival will be admitted for 30 days or up to the day the passport expires, whichever comes first. For specific information about entry requirements, travelers may contact the Taipei Economic and Cultural Representative Office (TECRO), 4201 Wisconsin Avenue, N.W., Washington, D.C. 20016-2137, via either its main telephone number, (202) 895-1800, or its visa section telephone number, (202) 895-1814. The main fax number at TECRO is (202) 363-0999, and the visa section fax number is (202) 895-0017. Internet address: http://www.tecro.com. TECO (Taipei Economic and Cultural Office) also has offices in Atlanta, Boston, Chicago, Guam, Honolulu, Houston, Kansas City, Los Angeles, Miami, New York, San Francisco and Seattle.

Safety and Security: For the latest security information, Americans traveling abroad should regularly monitor the Department’s Internet web site, where the current Travel Warnings and Public Announcements, including the Worldwide Caution Public Announcement, can be found. Up to date information on security can also be obtained by calling 1-888-407-4747 toll free in the U.S., or, for callers outside the United States and Canada, a regular toll line at 1-317-472-2328. These numbers are available from 8:00 a.m. to 8:00 p.m. Eastern Standard Time, Monday through Friday (except U.S. federal holidays).

Crime: Although Taiwan is considered a medium risk location for crime, the overall violent crime rate in Taiwan remains relatively low. Travelers should avoid business establishments such as massage parlors, illegal “barbershops”, and illegal “nightclubs” because many of these establishments are run by criminals and are located in high crime areas. In contrast to their counterparts, legal barbershops prominently display the usual grooming services. Illegal nightclubs have no advertisement and are publicized by word of mouth only. Public transportation, including the buses and the subway, is generally safe in Taiwan, but women should exercise caution when traveling alone in taxis late at night. In several parts of Taiwan, incidents of purse snatching by thieves on motorcycles have been reported.

Information for Victims of Crime: The loss or theft abroad of a U.S. passport should be reported immediately to the National Immigration Agency and to AIT-Taipei or AITKaohsiung. The National Immigration Agency has foreign affairs sections that are usually staffed by English-speaking officers. National Immigration Agency contact numbers for the major cities in Taiwan are as follows: Taipei (02) 2389-9983, Kaohsiung (07) 282-1400, Tainan (06) 203-7641, Taichung (04) 2254-9981, Taitung (089) 342-251, Pingtung (08) 721-6665.

If you are the victim of a crime while in Taiwan, in addition to reporting to the local police, contact AIT Taipei or AIT Kaohsiung for assistance. AIT’s consular staff can, for example, help you find appropriate medical care, contact family members or friends, and explain how funds can be transferred. Although the investigation and prosecution of the crime is solely the responsibility of local authorities, consular officers can help explain the local criminal justice process and assist with finding an attorney if needed.

Medical Facilities and Health Information: Health facilities in Taiwan are adequate for routine and emergency medical treatment. Physicians are well trained and many have studied in the U.S. and speak English. State of the art medical equipment is available at many clinics and hospitals. Hospitals’ nursing services provide medication dispensing and wound care, but generally not the daily patient maintenance functions found in U.S. hospitals. Ambulances are available in Taiwan but are not like those in the U.S. There are no trained Emergency Medical System Technicians accompanying an ambulance, unless within 2 kilometers of National Taiwan University Hospital or Veterans General Hospital. For information on specific clinics and hospitals, please refer to the AIT web page at http://www.ait.org.tw.

Information on vaccinations and other health precautions, such as safe food and water precautions and insect bite protection, may be obtained from the Centers for Disease Control and Prevention’s hotline for international travelers at 1-877-FYI-TRIP (1-877-394-8747); fax 1-888-CDC-FAXX (1-888-232-3299), or via the CDC’s Internet site at http://www.cdc.gov/travel. For information about outbreaks of infectious diseases abroad consult the World Health Organization’s (WHO) website at http://www.who.int/en. Further health information for travelers is available at http://www.who.int/ith.

Medical Insurance: Doctors and hospitals in Taiwan expect immediate cash payment for health services. The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and whether it will cover emergency expenses such as a medical evacuation.

Traffic Safety and Road Conditions: While outside the United States, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Taiwan is provided for general reference only, and may not be totally accurate in a particular location or circumstance. Roads in Taiwan’s major cities are generally congested, and the many scooters and motorcycles that weave in and out of traffic make driving conditions worse.

Pedestrians should exercise caution when crossing streets because many drivers do not respect the pedestrian’s right of way. Special caution should be taken when driving on mountain roads, which are typically narrow, winding, and poorly banked, and which may be impassable after heavy rains. The national authority responsible for road safety in Taiwan is the Traffic Safety Committee, MOTC. Information regarding road safety may be found on their website at www.motc.gov.tw.

For general information on tourism in Taiwan information may be found at www.tbroc.gov.tw (Taiwan Tourism Bureau - Ministry of Transportation and Communication).

For specific information concerning Taiwan’s driver’s permits, vehicle inspection road tax and mandatory insurance, contact the nearest TECO office.

Aviation Safety Oversight: The U.S. Federal Aviation Administration (FAA) has assessed the Civil Aviation Authority of Taiwan as being in compliance with International Civil Aviation Organization (ICAO) aviation safety standards for oversight of Taiwan’s air carrier operations. For more information, travelers may visit the FAA’s Internet website at http://www.faa.gov.

Avian Influenza Screening Procedures: All passengers arriving in Taiwan on flights from Vietnam, Thailand, Indonesia and Cambodia are asked by the Taiwan Center for Disease Control to self-screen for symptoms of avian influenza. Persons arriving from those countries, regardless of nationality, are instructed to take their temperatures twice a day for ten days and record the results on a form provided at the airport. Persons experiencing a fever over 38 degrees Celsius (100.4 degrees Fahrenheit), coughing, or sore threat within ten days of arrival is instructed to begin wearing a mask and see a doctor immediately to report their symptoms. Travelers arriving in Taiwan with any of these symptoms are instructed to fill out a “Communicable Disease Survey Form” upon landing and inform the quarantine personnel at the airport. Anyone failing to report their symptoms to the Taiwan health authorities, who subsequently transmits avian influenza to others will be subject to a fine between NT $30,000 and NT $15,000.

Customs Regulations: Taiwan customs authorities may enforce strict regulations concerning temporary import or export of items such as: firearms, antiquities, medications, currency, ivory, etc. It is advisable to contact the Taipei Economic and Cultural Office (TECRO) in Washington or one of the TECO office’s in the United States for specific information regarding customs requirements. In many countries around the world, counterfeit and pirated goods are widely available. Transactions involving such products are illegal and bringing them back to the United States may result in forfeitures and/or fines.

Disaster Preparedness: Taiwan is subject to strong earthquakes that can occur anywhere on the island. Taiwan is also hit by typhoons, usually from July to October. Travelers planning a trip to Taiwan can obtain general information about natural disaster preparedness on the Internet from the U.S. Federal Emergency Management Agency (FEMA) at http://www.fema.gov/. Additional information about currently active typhoons can be obtained on the University of Hawaii tropical storm page at http://www.solar.ifa.hawaii.edu/Tropical/tropical.html. The Central Weather Bureau of Taiwan also maintains a website that provides information about typhoons and earthquakes. Its Internet address is http://www.cwb.gov.tw.

Dual Nationality and Compulsory Military Service: Taiwan law provides for compulsory military service. Men between the ages of 18 and 40 who were born in Taiwan or who have ever held a Taiwan passport should be aware that they may be subject to compulsory military service in Taiwan, even if they are also U.S. citizens, and even if they have entered Taiwan on U.S. passports. Potentially affected individuals are urged to consult with the nearest office of the Taipei Economic and Cultural Office (TECO) in the United States before visiting Taiwan to determine whether they are subject to the military service requirement.

English Language Programming: The International Community Radio Taipei (ICRT) provides all of Taiwan with English-language programming 24 hours a day. In the event of an emergency or an approaching typhoon, travelers should tune their radios to FM 100.7. English speakers experiencing a personal crisis in Taiwan can contact the Community Services Center in Taipei at (02) 2836-8134 or 2838-4947 to arrange counseling or to contact a support group.

Judicial Assistance: AUTHORITY - 22 U.S.C. 3306(b) provides acts performed by officers of the American Institute on Taiwan under 22 U.S.C. 3306 are valid, as if performed by any other person authorized under the laws of the United States to perform such acts (consular officers). The American Institute in Taiwan (AIT) is a nonprofit corporation under the laws of the District of Colombia. 22 U.S.C. 3305, 3306(a)(3). The judicial assistance acts of AIT personnel parallel the acts performed by U.S. consular officers under 28 U.S.C. 1781 (a)(2). See Sec. 1-201(h) of Executive Order No. 121043, 44 Fed. Reg. 37191 (June 23, 1979). Pursuant to Section 10(a) of the Taiwan Relations Act (TRA), 22 U.S.C. 3309(a), the Taiwan Economic Cultural Representative’s Office (“TECRO”) is the instrumentality established by the people of Taiwan having the necessary authority under the laws of Taiwan to take actions on behalf of Taiwan in accordance with the Act.

Judicial assistance is provided by authorities on Taiwan in response to letters rogatory from foreign courts in accordance with Taiwan’s “Law Governing Extension of Assistance to Foreign Courts.” For further information regarding judicial assistance in Taiwan please go to the following website: http://www.ait.org.tw/en/uscitizens/judicial.asp.

Criminal Penalties: While outside the United States, a U.S. citizen is subject to local laws and regulations, which sometimes differ significantly from those in the United States and may not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. Persons violating Taiwan’s laws, even unknowingly, may be expelled, arrested or imprisoned.

Penalties for possession, use, or trafficking in illegal drugs in Taiwan are severe and convicted offenders can expect long jail sentences and heavy fines. Engaging in sexual conduct with children or using or disseminating child pornography in a foreign state is a crime, prosecutable in the United States. Please see our information on Criminal Penalties.

Children’s Issues: For information on international adoption of children and international parental child abduction, see the Office of Children’s Issues website at http://travel.state.gov/family/family_1732.html.

Registration, Passports, and Embassy Location: The American Institute in Taiwan (AIT) is authorized by law to perform American citizen services. Americans living or traveling in Taiwan are encouraged to register with AIT through the State Department’s travel registration website, and to obtain updated information on travel and security within Taiwan. Americans without Internet access may register directly with AIT Taipei or AIT Kaohsiung. By registering, American citizens make it easier for the Embassy or Consulate to contact them in case of emergency. The American Institute in Taiwan is a full passport services agency. Processing time for routine passports is about two weeks.

The American Institute in Taiwan is located at No.7 Lane 134, Hsin Yi Road Section 3, Taipei, Taiwan, telephone: (886) 2-2162-2000; fax: (886) 2-2162-2239, website: http://www.ait.org.tw. The American Institute in Taiwan branch office is located at No. 2 Chung Cheng 3rd Road, 5th Floor, Kaohsiung, Taiwan, telephone: (886) 7-238-7744; fax: (886) 7-238-5237. AIT’s citizen services section can also be contacted by e-mail at [email protected]. In case of emergencies after working hours, the duty officer at the American Institute in Taiwan at Taipei may be contacted at (886) 2-2162-2013.

International Adoption : November 2006

The information below has been edited from a report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Adoption section of this book and review current reports online at www.travel.state.gov/family.

Disclaimer: The information contained in this flyer on the legal requirements of specific foreign countries is based on public sources and current understanding. This flyer reflects current understanding of the law and is not legally authoritative. Questions involving foreign and U.S. immigration laws and legal interpretation should be addressed to qualified foreign or U.S. legal counsel.

Please Note: The United States does not have formal diplomatic relations with Taiwan. All Consular and other representative functions are handled by the American Institute in Taiwan (AIT), a non-profit, private corporation authorized by the Taiwan Relations Act to conduct and carry out programs, transactions, and other relations between the United States and Taiwan.

Patterns of Immigration: Please review current reports online at www.travel.state.gov/family.

Adoption Authority:
Children’s Bureau (Er Tong Ju),
Ministry of Interior
7F, No. 503 Li-Ming Road, Section 2
Nantun, Taichung 408, Taiwan
Tel: (04)-2250-2850
Fax: (04)-2250-2903
Website: http://www.cbi.gov.tw

Eligibility Requirements for Adoptive Parents: The articles of law relating to adoption in Taiwan are found in the Civil Code (Family and Children Welfare Act in Book VI), Articles 1072 through 1083.

The adopting parents must be at least twenty years older than the child(ren) to be adopted. No child adopted may be:

• Directly related by blood;
• Directly related by marriage, except in the adoption of the other spouse’s child as a stepchild; and
• Indirectly related by blood, such as cousins (unless removed by a certain degree), the spouse of a sibling, or a sibling of your spouse. (Taiwan law is very detailed about what degree of indirect blood relation is excluded from adoption. If prospective adoptive parents are concerned about possible blood ties with the child they wish to adopt, they should contact AIT for clarification before proceeding with the adoption.)

Taiwanese regulations further stipulate that adopting parents must be adults not older than 55 years of age. A married person who adopts a child shall do so jointly with his/her spouse.

Residency Requirements: There are currently no residency requirements that prospective adoptive parents must meet in order to adopt an orphan from Taiwan.

Time Frame: The average time to complete an international adoption in Taiwan is approximately 10 months from initial contact with the adoption agency in the U.S. until the immigrant visa is issued.

Adoption Agencies and Attorneys: For U.S.—based agencies, prospective adoptive parents can contact the Better Business Bureau and/or the licensing office of the appropriate state government agency in the U.S. state where the agency is located or licensed. U.S. prospective adoptive parents interested in hiring a Taiwan attorney to assist them with this process may find a list of local attorneys at: http://www.ait.org.tw/en.

Adoption Fees:

Court proceeding fee: U.S. $5

Taiwan passport application fee (regular passport): U.S. $30

Expedited application: U.S. $70

Taiwan Household Registry (HHR)
application fee: U.S. $0.30 per copy
(All Taiwan citizens are part of a very efficient household registry system that tracks events such as births, deaths, marriage, and divorce)

Translation fees: variable

Notary fees: U.S. $25 per document

Adoption Procedures: Most adoptions are processed through local orphanages identified by U.S. or other foreign-based adoption agencies.

An application for adoption is first submitted to the Taiwan District Court. After one to two months, the adoptive parent(s) or a designated representative will receive a notice to appear. During this waiting period, a Taiwan social worker from the local bureau of social affairs or a designated agency will review the foreign (U.S.) home study. After the hearing, the court will rule on the adoption (usually within two months) and publish a final ruling three weeks later.

The third step is to register the adoption at the Taiwan Registrar’s office by submitting the original court ruling, final ruling, and the power of attorney certified at the Taiwan Foreign Affairs Police Station at the Taiwan Registrar’s office. This usually takes only one hour.

Documentary Requirements: After a child has been identified, the prospective parents must submit the following documents to the Taiwan authorities to process the local adoption:

• Power of Attorney, in English and Chinese, appointing the Taiwan orphanage or social worker to represent them;
• U.S. home study and Chinese translation;
• Evidence of prospective adoptive parents’ right to adopt in the United States (included in U.S.-certified home study);
• I-797 approval notice of I-600A from DHS;
• Copy of U.S. prospective adoptive parents’ home state adoption laws and Chinese translation;
• Signed adoption agreement notarized by the TECO (Taipei Economic and Cultural Office) having jurisdiction over the place of the parent(s)’ residence (in English and Chinese); and
• Other documents (birth certificates, marriage certificates, etc.) may be requested by the orphanage, agency, or Taiwan authorities.

Chinese translations prepared in the U.S. must be certified by the TECRO/TECO office for that district and English versions must be notarized by a U.S. notary public.

Adoption by U.S. Citizens Resident in Taiwan: In the event that U.S. citizens resident in Taiwan wish to adopt a child from Taiwan and obtain a U.S. immigrant visa for that child, they first need to obtain authorization from the Department of Homeland Security’s U.S. Citizenship and Immigration Service (DHS/USCIS) regional office in Hong Kong.

A U.S. citizen resident in Taiwan who is planning to return to the U.S. with an adopted child needs the following documentation to submit an I-600A package:

• A completed I-600A;
• Proof of U.S. citizenship, (e.g. a U.S. passport, birth certificate, naturalization certificate, etc.);
• Marriage certificate (if any) and evidence of termination of previous marriages (if any) for both prospective adoptive parents;
• A certified U.S. home study prepared by an authorized or licensed individual or agency;
• Evidence of compliance with state pre-adoption requirements, if any;
• Fingerprints taken on U.S.G. FD-258 forms for every adult resident in the home, regardless of their citizenship or nationality, and;
• A Taiwan police clearance for every adult resident in the home.

The Community Services Center (CSC), located in Taipei, has U.S.-educated social workers who are authorized to prepare home studies for foreign adoptions. For more information about conducting home studies in Taiwan, interested families may contact the CSC at:

Community Services Center
No. 25, Lane 290, Chung Shan North
Road, Section 6
Taipei, Taiwan 111
Tel: 886-2-2836-8134 or 2838-4947
Fax: (886)-(2)-2835-2530
Website: www.community.com.tw

Please see the International Adoption section of this book for more details and review current reports online at www.travel.state.gov/family.

Taiwan Economic and Cultural Representation Office (TECRO) Washington:
4201 Wisconsin Avenue, N.W.
Washington, DC 20016
(202) 895-1800
E-mail [email protected]

There are also Taiwan Economic and Cultural Offices (TECO) in Atlanta, Boston, Chicago, Guam, Honolulu, Houston, Kansas City, Los Angeles, Miami, New York, San Francisco and Seattle.

U.S. Immigration Requirements: Prospective adoptive parents are strongly encouraged to consult USCIS publication M-249, The Immigration of Adopted and Prospective Adopting Children, as well as the Department of State publication, International Adoptions. Please see the International Adoption section of this book for more details and review current reports online at www.travel.state.gov/family.

American Institute in Taiwan (AIT): As soon as prospective adoptive parents arrive in Taiwan, they should contact AIT’s Consular Section to register their presence in Taiwan:

Consular Section
Immigrant Visa Unit, 3rd Floor
American Institute in Taiwan
Number 7, Lane 134
Hsin Yi Rd, Section 3
Taipei 106, Taiwan
Tel: (886) 02-2162-2005
Fax: (886) 02-2162-2253
Email: [email protected]

Additional Information: Specific questions about adoption in Taiwan should be addressed to the American Institute in Taiwan (AIT). General questions regarding intercountry adoption may be addressed to the Office of Children’s Issues, U.S. Department of State, CA/OCS/CI, SA-29, 4th Floor, 2201 C Street, NW, Washington, D.C. 20520-4818, toll-free Tel: 1-888-407-4747.

International Parental Child Abduction : February 2007

The information below has been edited from the report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Child Abduction section of this book and review current reports online at www.travel.state.gov.

Disclaimer: The information in this flyer relating to the legal requirements of specific foreign countries is provided for general information only. Questions involving interpretation of specific foreign laws should be addressed to foreign legal counsel.

General Information: Taiwan is not a party to the Hague Convention on the Civil Aspects of International Child Abduction; nor are there any international or bilateral treaties in force between Taiwan and the United States dealing with international parental child abduction. American citizens who travel to Taiwan place themselves under the jurisdiction of local courts. American citizens may wish to consider this before planning a trip to Taiwan with dual national children.

Custody Disputes: In Taiwan, parents who are legally married share the custody of their children. If they are not married, by law the custody is granted to the mother unless there are known facts of inappropriate behavior, mental or social problems.

Enforcement of Foreign Judgements: Custody orders and judgments of foreign courts are enforceable in Taiwan. Custody court orders are placed on the Household Registry. If a court order is violated, the custodial parent can submit a complaint to the police to have them enforce the court order.

Visitation Rights: In cases where legal custody has been granted and the judgment has been rendered, the non-custodial parent can petition the court for visitation rights within the court ordered decision or come to a verbal agreement with the custodial parent.

Dual Nationality: Dual nationality is recognized under Taiwan law.

Travel Restrictions: No exit permits are normally required to leave Taiwan on a U.S passport with evidence of legal entry. However, in the case that a replacement U.S. passport is issued to an American who entered Taiwan on a U.S. passport which was subsequently lost or stolen, then an exit permit must be obtained from the Foreign Affairs Police. Taiwan also insists that anyone who in a Taiwan passport holder enter and leave Taiwan on that passport. If Taiwan citizens, including minors, attempt to leave Taiwan on valid foreign passports or other travel documents, they will be stopped by Taiwan Immigration at the port-of-exit and refused permission to depart until they have obtained a valid Taiwan passport. A custodial parent also may ask that a child’s name be placed on a watch list and not be allowed to depart Taiwan without the custodial parent’s permission.

Criminal Remedies: For information on possible criminal remedies, please contact your local law enforcement authorities or the nearest office of the Federal Bureau of Investigation (FBI). Information is also available on the Internet at the website of the U.S. Department of Justice, Office of Juvenile Justice and Delinquency Prevention (OJJDP) at http://www.ojjdp.ncjrs.org.

Persons who wish to pursue a child custody claim in a Taiwan court should retain an attorney in Taiwan. In the absence of diplomatic relations, the American Institute in Taiwan (AIT) conducts unofficial relations between the people of the United States and the people of Taiwan. The American Institute in Taiwan maintains a list of attorneys willing to represent American clients. A copy of this list may be obtained from the American Institute of Taiwan at:

American Institute in Taiwan
Consular Section
No. 7 Lane 134
Hsin Yi Road, Section 3
Taipei
Taiwan
Telephone: 011-886-2-2709-2000
Fax: 011-886-2-2702-7675
Web site: http://usembassy.state.gov

Questions involving Taiwan law should be addressed to a Taiwan attorney or to the Economic and Cultural Representative Office of Taiwan in the United States at:

Taipei Economic and Cultural Representative Office (TECRO)
4201 Wisconsin Avenue, NW
Washington, DC 20016-2137
Telephone: (202) 895-1800
Fax: (202) 895-0017

For further information on international parental child abduction, contact the Office of Children’s Issues, U.S. Department of State at 1-888-407-4747 or visit its website on the Internet at http://travel.state.gov. You may also direct inquiries to: Office of Children’s Issues; U.S. Department of State; Washington, DC 20520-4811; Phone: (202) 736-9090; Fax: (202) 312-9743.

Taiwan

PROFILE
PEOPLE
HISTORY
ADMINISTRATION
POLITICAL CONDITIONS
ECONOMY
DEFENSE
FOREIGN RELATIONS
U.S.-TAIWAN RELATIONS
TRAVEL

Compiled from the October 2007 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:

Taiwan

PROFILE

Geography

Area: 35,967 sq. km. (13,887 sq. mi.).

Cities: (2006) Capital—Taipei (pop. 2.6 million). Other cities—(Kaohsi-ung 1.5 million), Taichung (1.0 million).

Terrain: Two thirds of the island is largely mountainous with 100 peaks over 3000 meters (9843 ft.).

Climate: Maritime subtropical.

People

Population: (July 2007) 22.9 million.

Annual growth rate: (2006) 0.47%.

Languages: Mandarin Chinese (official), Taiwanese, Hakka.

Education: Years compulsory—9. Attendance (2006)—99.0%. Literacy (2006)—97.5%.

Health: Infant mortality rate: (2006)—0.46%. Life expectancy (2006)—77.46 yrs; male 74.57 yrs.; female 80.81 yrs.

Work force: (2006)10.6 million.

Government

Type: Multi-party democracy. There are four major parties forming two alliances known as Pan-Blue and Pan-Green. The Pan-Blue includes the Kuomintang (KMT) and the People First Party (PFP). The Pan-Green includes the Democratic Progressive Party (DPP) and the Taiwan Solidarity Union (TSU). The Pan-Blue coalition holds a slight majority of seats in the Legislative Yuan (LY).

Constitution: December 25, 1946; last amended 2005.

Government branches: (Yuan) Executive, Legislative, Judicial, Control, Examination.

Political parties: Democratic Progressive Party (DPP); Kuomintang (KMT or Nationalist Party); People First Party (PFP); Taiwan Solidarity Union (TSU).

Suffrage: Universal over 20 years of age.

Budget: (FY 2008) $51.5 billion.

Defense: proposed (2008) 20.1% of entire budget.

Economy

GDP: (2007) $379 billion.

Real annual growth rate: (2007 estimated) 4.6%.

Per capita GDP: (2007 estimated) $16,596.

Unemployment: (2006) 3.9%.

Natural resources: Small deposits of coal, natural gas, limestone, marble, and asbestos.

Agriculture: (1.5% of GDP) Major products—pork, rice, fruit and vegetables, sugarcane, poultry, shrimp, eel.

Services: (71.7% of GDP).

Industry: (26.8% of GDP) Types—electronics and computer products, chemicals and petrochemicals, basic metals, machinery, textiles, transport equipment, plastics, machinery.

Trade: (2006) Exports—$224 billion: electronics, optical and precision instruments, information and communications products, textile products, basic metals, plastic and rubber products. Major markets—U.S. $32 billion, P.R.C. and Hong Kong $89 billion, Japan $16 billion. Imports—$203 billion: electronics, optical and precision instruments, information and communications products, machinery and electrical products, chemicals, basic metals, transport equipment, crude oil. Major suppliers—Japan $46 billion, P.R.C. $27 billion, U.S. $23 billion.

PEOPLE

Taiwan has a population of 22.9 million. More than 18 million, the “native” Taiwanese, are descendants of Chinese who migrated from Fujian and Guangdong Provinces on the mainland, primarily in the 18th and 19th centuries. The “mainlanders,” who arrived in Taiwan after 1945, came from all parts of mainland China. About 475,000 “aborigines” inhabit the mountainous central and eastern parts of the island and are believed to be of Malayo-Polynesian origin. Of Taiwan's total population, approximately one million, or 4.4%, currently reside in mainland China.

Education

A 9-year public educational system has been in effect since 1979. Six years of elementary school and 3 years of junior high are compulsory for all children. About 94.9% of junior high graduates continue their studies in either a senior high or vocational school. Taiwan has an extensive higher education system with more than 160 institutions of higher learning. Each year, over 100,000 students attempt to enter higher education institutes; about 89% of the candidates are admitted to a college or university. Opportunities for graduate education are expanding in Taiwan, but many students travel abroad for advanced education. In FY 2006, over 16,000 U.S. student visas were issued to Taiwan passport holders.

Languages

A large majority of people in Taiwan speak Mandarin Chinese, which has been the medium of instruction in the schools for more than five decades. Native Taiwanese and many others also speak one of the Southern Fujianese dialects, Min-nan, also known as Taiwanese. Recently there has been a growing use of Taiwanese in the broadcast media. The Hakka, who are concentrated in several counties throughout Taiwan, have their own distinct dialect. As a result of the half-century of Japanese rule, many older people also can speak Japanese. The method of Chinese romanization most commonly used in Taiwan is the Wade-Giles system. In 2002, Taiwan authorities announced adoption of the pinyin system also used on the mainland to replace the Wade-Giles system, but its use is not consistent throughout society, often resulting in two or more romanizations for the same place or person.

Religions

According to Taiwan's Interior Ministry figures, there are about 11.2 million religious believers in Taiwan, with more than 75% identifying themselves as Buddhists or Taoists. At the same time, there is a strong belief in traditional folk religion throughout the island. These are not mutually exclusive, and many people practice a combination of the three. Confucianism also is an honored school of thought and ethical code. Christian churches have been active on Taiwan for many years, and today, the island has more than 600,000 Christians, a majority of whom are Protestant.

Culture

Taiwan's culture is a blend of its distinctive Chinese, Japanese, and Western influences. Fine arts, folk traditions, and popular culture embody traditional and modern, Asian, and Western motifs. One of Taiwan's greatest attractions is the Palace Museum, which houses over 650,000 pieces of Chinese bronze, jade, calligraphy, painting, and porcelain. This collection was moved from the mainland in 1949 when Chiang Kai-shek's Nationalist Party (KMT) fled to Taiwan. The collection is so extensive that only 1% is on display at any one time.

HISTORY

Taiwan's aboriginal peoples, who originated in Austronesia and southern Asia, have lived on Taiwan for 12,000 to 15,000 years. Significant migration to Taiwan from the Chinese mainland began as early as A.D. 500. Dutch traders first claimed the island in 1624 as a base for Dutch commerce with Japan and the China coast. Two years later, the Spanish established a settlement on the northwest coast of Taiwan, which they occupied until 1642 when they were driven out by the Dutch. Dutch colonists administered the island and its predominantly aboriginal population until 1661. The first major influx of migrants from the Chinese mainland came during the Dutch period, sparked by the political and economic chaos on the China coast during the Manchu invasion and the end of the Ming Dynasty.

In 1664, a fleet led by the Ming loyalist Cheng Ch’eng-kung (Zheng Chenggong, known in the West as Koxinga) retreated from the mainland and occupied Taiwan. Cheng expelled the Dutch and established Taiwan as a base in his attempt to restore the Ming Dynasty. He died shortly thereafter, and in 1683, his successors submitted to Manchu (Qing Dynasty) control. From 1680, the Qing Dynasty ruled Taiwan as a prefecture and, in 1875, divided the island into two prefectures, north and south. In 1887 the island was made into a separate Chinese province.

During the 18th and 19th centuries, migration from Fujian and Guangdong provinces steadily increased, and Chinese supplanted aborigines as the dominant population group. In 1895, a weakened Imperial China ceded Taiwan to Japan in the Treaty of Shimonoseki following the first Sino-Japanese war.

During its 50 years (1895-1945) of rule, Japan expended considerable effort in developing Taiwan's economy. At the same time, Japanese rule led to the “Japanization” of the island, including compulsory Japanese education and forcing residents of Taiwan to adopt Japanese names.

At the end of World War II in 1945, Taiwan reverted to Chinese rule. During the immediate postwar period, the Nationalist Chinese (KMT) administration on Taiwan was repressive and corrupt, leading to local discontent. Anti-mainlander violence flared on February 28, 1947, prompted by an incident in which a cigarette seller was injured and a passerby was shot to death by Nationalist authorities. The island-wide rioting was brutally put down by Nationalist Chinese troops, who killed thousands of people. As a result of the February 28 Incident, the native Taiwanese felt a deep-seated bitterness toward the mainlanders. For 50 years the KMT authorities suppressed accounts of this episode in Taiwan history. In 1995 a monument was dedicated to the victims of the “2-28 Incident,” and for the first time, Taiwan's leader, President Lee Teng-hui, publicly apologized for the Nationalists’ brutality.

Starting before World War II and continuing afterwards, a civil war was fought on the mainland between

Chiang Kai-shek's KMT government and the Chinese Communist Party led by Mao Zedong. When the civil war ended in 1949, 2 million refugees, predominately from the Nationalist government, military, and business community, fled to Taiwan. In October 1949 the People's Republic of China (P.R.C.) was founded on the mainland by the victorious communists. Chiang Kai-shek established a “provisional” KMT capital in Taipei in December 1949. During the 1950s, the KMT authorities implemented a far-reaching and highly successful land reform program on Taiwan. They redistributed land among small farmers and compensated large landowners with commodities certificates and stock in state-owned industries. Although this left some large landowners impoverished, others turned their compensation into capital and started commercial and industrial enterprises. These entrepreneurs were to become Taiwan's first industrial capitalists. Together with refugee businessmen from the mainland, they managed Taiwan's transition from an agricultural to a commercial, industrial economy.

Taiwan has developed steadily into a major international trading power with $427 billion in two-way trade (2006). Taiwan's accession to the World Trade Organization in 2002 has expanded its trade opportunities and further strengthened its standing in the global economy. Tremendous prosperity on the island has been accompanied by economic and social stability. Chiang Kai-shek's successor, his son Chiang Ching-kuo, began to liberalize Taiwan's political system, a process that continued when President Lee Teng-hui took office in 1988. The direct election of Lee Teng-hui as president in 1996 was followed by opposition Democratic Progressive Party candidate Chen Shui-bian's election victory in March 2000. Chen was re-elected in March 2004 in a tightly contested election

ADMINISTRATION

The authorities in Taipei exercise control over Taiwan, Kinmen, Matsu, the Penghus (Pescadores) and several other smaller islands. Taiwan is divided into counties, provincial municipalities, and two special municipalities, Taipei and Kaohsi-ung. At the end of 1998, the Constitution was amended to make all counties and cities directly administered by the Executive Yuan. From 1949 until 1991, the authorities on Taiwan claimed to be the sole legitimate government of all of China, including the mainland. In keeping with that claim, when the Nationalists retreated to Taiwan in 1949, they re-established the full array of central political bodies, which had existed on the mainland. While much of this structure remains in place, the authorities on Taiwan in 1991 abandoned their claim of governing mainland China, stating that they do not “dispute the fact that the P.R.C. controls mainland China.” The first National Assembly, elected on the mainland in 1947 to carry out the duties of choosing the President and amending the constitution, was re-established on Taiwan when the KMT moved. Because it was impossible to hold subsequent elections to represent constituencies on the mainland, representatives elected in 1947-48 held these seats “indefinitely.” In June 1990, however, the Council of Grand Justices mandated the retirement, effective December 1991, of all remaining “indefinitely” elected members of the National Assembly and other bodies.

The second National Assembly, elected in 1991, was composed of 325 members. The majority were elected directly, while 100 were chosen from party slates in proportion to the popular vote. This National Assembly amended the Constitution in 1994, paving the way for the direct election of the President and Vice President the first of which was held in March 1996. In April 2000, the members of the National Assembly voted to permit their terms of office to expire without holding new elections. The National Assembly elected in May 2005 voted to abolish itself the following month, leaving Taiwan with a unicameral legislature. The President is both leader of Taiwan and Commander-in-Chief of its armed forces. The President has authority over four of the five administrative branches (Yuan) Executive, Control, Judicial, and Examination. The President appoints the President of the Executive Yuan, who also serves as the Premier. The Premier and the cabinet members are responsible for government policy and administration.

The main lawmaking body, the Legislative Yuan (LY), was originally elected in the late 1940s in parallel with the National Assembly. The first LY had 773 seats and was viewed as a “rubber stamp” institution. The second LY was not elected until 1992. The third LY, elected in 1995, had 157 members serving 3-year terms, while the fourth LY, elected in 1998, was enlarged to 225 members. The LY has greatly enhanced its standing in relation to the Executive Yuan and has established itself as a major player on the central level. With increasing strength, size, and complexity, the LY now mirrors Taiwan's recently liberalized political system. In the 1992 and 1995 elections, the main opposition party—the Democratic Progressive Party (DPP)—challenged the half-century of KMT dominance of the Legislature. In both elections, the DPP won a significant share of the LY seats, leaving only half of the LY seats in the hands of the KMT. In 2001, the DPP won a plurality of LY seats-88 to KMT's 66, PFP's 45, TSU's 13, and other parties’ 13. In the December 2004 LY election, the Pan-Blue coalition won a slender majority of 114 of the 225 seats (later increased to 115) compared to the Pan-Green coalition's 101 (later reduced to 111 and 97 seats, respectively, of the 220 occupied seats). Taiwan has created single-member legislative election districts and will halve the number of LY seats from 225 to 113 during the next election, scheduled for January 2008.

In 1994, when the National Assembly voted to allow direct popular election of the President, the LY passed legislation allowing for the direct election of the Governor of Taiwan Province and the mayors of Taipei and Kaohsi-ung Special Municipalities. These elections were first held in December 1994. In a move to streamline administration, the position of elected Governor was abolished at the end of 1998, and most other elements of the Taiwan Provincial Government have been eliminated.

The Control Yuan (CY) monitors the efficiency of public service and investigates instances of corruption. The 29 Control Yuan members are appointed by the President and approved by the National Assembly; they serve 6-year terms. In recent years, the Control Yuan has become more activist, and it has conducted several major investigations and impeachments. Since December 2004, however, the pan-Blue dominated LY has refused to approve the new slate of CY members proposed by President Chen, leaving the CY inactive.

The Judicial Yuan (JY) administers Taiwan's court system. It includes a 16-member Council of Grand Justices (COGJ) that interprets the constitution. Grand Justices are appointed by the President, with the consent of the National Assembly, to 9-year terms.

The Examination Yuan (EY) functions as a civil service commission and includes two ministries: the Ministry of Examination, which recruits officials through competitive examination, and the Ministry of Personnel, which manages the civil service. The President appoints the President of the Examination Yuan.

Principal Government Officials

Last Updated: 2/1/2008

President: CHEN Shui-bian

Vice President: Annette LU

Pres., Executive Yuan (Premier): SU Tseng-chang

Vice Pres., Executive Yuan (Vice Premier): TSAI Ing-wen

Sec. Gen., Executive Yuan: Arthur IAP

Pres., Control Yuan: Fredrick CHIEN

Pres., Examination Yuan: YAO Chia-wen

Pres., Judicial Yuan: WENG Yueh-sheng

Pres., Legislative Yuan: WANG Jin-pyng

Min. of Economic Affairs: Morgan HWANG Ingsan

Min. of Education: TU Cheng-sheng

Min. of Finance: LIN Chuan

Min. of Foreign Affairs: Mark CHEN

Min. of Health: CHEN Chien-jen

Min. of Interior: SU Jia-chyuan

Min. of Justice: SHIH Mao-lin

Min. of National Defense: LI Chieh

Min. of Transportation & Communications: LIN Ling-san

Min. Without Portfolio: CHEN Chi-mai

Min. Without Portfolio: FU Li-yeh

Min. Without Portfolio: HU Sheng-cheng

Min. Without Portfolio: KUO Yao-chi

Min. Without Portfolio: LIN Ferng-ching

Min. Without Portfolio: LIN Sheng-Fong

Min. Without Portfolio: LIN Yi-fu

Chmn., Agricultural Council: LEE Ching-lung

Chmn., Atomic Energy Council:OUYANG Min-sheng

Chmn., Central Election Commission: CHANG Masa

Chmn., Consumer Protection: YEH Chu-lan

Chmn., Cultural Affairs: CHEN Chi-nan

Chmn., Economic Planning & Development Council: HU Sheng-cheng

Chmn., Fair Trade Commission: HWANG Tzong-leh

Chmn., Labor Affairs Council: CHEN Chu

Chmn., Mainland Affairs Council: Joseph WU

Chmn., Mongolian & Tibetan Affairs Commission: HSU Chih-hsiung

Chmn., National Council on Physical Fitness & Sports: CHEN Chuan-show

Chmn., National Palace Museum: SHIH Shou-chien

Chmn., National Science Council: WU Mau-kuen

Chmn., National Youth Commission: CHENG Li-chiun

Chmn., Overseas Chinese AffairsCommission: CHANG Fu-mei

Chmn., Public Construction Commission: KUO Yao-chi

Chmn., Research Development &Evaluation Commission: YEH Jiunn-rong

Chmn., Veterans Affairs Commission: KAO Hua-chu

Governor, Central Bank of China: PERNG Fai-nan

Representative to the US: David LEE

POLITICAL CONDITIONS

Until 1986, Taiwan's political system was effectively controlled by one party, the Kuomintang (KMT), the chairman of which was also Taiwan's President. As the ruling party, the KMT was able to fill appointed positions with its members and maintain political control of the island.

After 1986, the KMT's hold on power was challenged by the emergence of competing political parties. Before 1986, candidates opposing the KMT ran in elections as independents or “nonpartisans.” Before the 1986 island-wide elections, many “nonpartisans” grouped together to create Taiwan's first new political party, the Democratic Progressive Party (DPP). Despite the official ban on forming new political parties, Taiwan authorities did not prohibit the DPP from operating, and in the 1986 island-wide elections, DPP and independent candidates captured more than 20% of the vote. In 1987, President Chiang Ching-kuo lifted the emergency decree, which had been in place since 1948 and which had granted virtually unlimited powers to the President for use in the anti-communist campaign. This decree provided the basis for nearly four decades of martial law under which individuals and groups expressing dissenting views were dealt with harshly. Expressing views contrary to the authorities’ claim to represent all of China or supporting independent legal status for Taiwan was treated as sedition. Since ending martial law, Taiwan has taken dramatic steps to improve respect for human rights and create a democratic political system. Almost all restrictions on the press have ended, restrictions on personal freedoms have been relaxed, and the prohibition against organizing new political parties has been lifted. Lee Teng-hui succeeded Chiang Ching-kuo as President when Chiang died on January 13, 1988. The Civic Organizations Law passed in 1989 allowed for the formation of new political parties, thereby legalizing the DPP, and its support and influence increased. Lee was elected by the National Assembly to a 6-year term in 1990, marking the final time a President was elected by the National Assembly. In the 1992 Legislative Yuan elections, the DPP won 51 seats in the 161-seat body. While this was only half the number of KMT seats, it made the DPP's voice an important factor in legislative decisions. Winning the Taipei mayor's position in December 1994 significantly enhanced the DPP's image. The DPP continued its strong showing in the 1995 LY race, winning 45 of the 157 seats to the KMT's 81. In 1996, Lee Teng-hui was elected President and Lien Chan Vice President in the first direct election by Taiwan voters. In the November 1997 local elections, the Democratic Progressive Party (DPP) won 12 of the 23 county magistrate and city mayor contests to the Kuomintang (KMT)'s 8, outpolling the KMT for the first time in a major election. In the 2001 LY elections, the DPP won a plurality of seats for the first time. In March 2000, DPP candidate Chen Shui-bian became the first opposition party candidate to win the presidency. His victory resulted in the first-ever transition of the presidential office from one political party to another, validating Taiwan's democratic political system. In a hotly contested election on March 20, 2004, President Chen Shui-bian was re-elected by 50.1% of the popular vote to a second term. The election was marred by a shooting incident the day before the election during which President Chen and his running mate Vice President Annette Lu were slightly wounded. While the opposition contested the results, it was the first time that the DPP had won an outright majority in an island-wide election

The March election also included a “defensive referendum.” Historically, the issue of referenda has been closely tied to the question of Taiwan independence, and thus has been a sensitive issue in cross Strait relations. There were two referenda before the voters on March 20. The first asked in light of the P.R.C. missile threat whether Taiwan should purchase anti-missile systems. The second asked whether Taiwan should adopt a “peace framework” for addressing cross Strait differences with the P.R.C. However both referenda failed to obtain support from over 50% of eligible voters, as required to be valid.

President Chen Shui-bian called for major constitutional reforms by 2006—later changed to 2008—aimed at further reducing layers of government, and making other structural changes aimed at improving governance. The People's Republic of China has accused Chen of using the constitution issue to move Taiwan towards independence. Chen pledged, however, in his May 20, 2004 inaugural address not to use constitutional reform to alter the constitution's approach to Taiwan's status vis-a-vis China.

The final National Assembly passed a set of constitutional amendments in June 2005 that will halve the number of LY seats from 225 to 113 and create single-member legislative election districts beginning with the next legislative election, scheduled for 2008. The constitutional revisions also abolished the National Assembly and provided for the public to confirm or reject future constitutional amendments passed by the LY. President Chen has called for “Round Two” of constitutional revision focusing on the form of government (presidential or parliamentary, 5-branch or 3-branch) and on human, labor, and aborigine rights. He has pledged not to include independence or name change in his proposed constitutional revisions.

In the December 2004 Legislative election, the ruling DPP won a plurality with 89 of the 225 seats, gaining 2 seats more than it did in 2001. The opposition KMT won 79 seats, or 11 more than it did in 2001. The KMT 's coalition partner, the PFP, won only 34, 12 fewer than it won in 2001, while the DPP's partner, TSU won 12 seats. The New Party won one seat. The ruling “pan-Green” coalitions to secure a majority has left the LY in virtual gridlock since the election. The KMT won a landslide victory in December 2005 local elections, however, winning 14 of the 23 city mayor and county magistrate races to the ruling DPP's 6. In December 2006, the KMT won the mayoral election in Taipei City, while the DPP won in Kaohsiung City. Taiwan will hold its next round of legislative and presidential elections in January and March 2008, respectively.

Political Parties

In addition to the KMT (described above in ‘History’ and ‘Political Conditions’), there are three other major parties. The DPP, membership is made up largely of native Taiwanese, and its platform includes outspoken positions on some of the most sensitive issues in Taiwan politics. For example, the DPP maintains that Taiwan is an entity separate from mainland China, in contrast to the KMT position that Taiwan and the mainland, though currently divided, are both part of “one China.” In sharp contrast to the tenets of both KMT and P.R.C. policy, a number of ranking DPP officials openly advocate independence for Taiwan. The People First Party (PFP) was formed in the wake of the March 2000 presidential election, composed of former KMT members who supported former KMT Taiwan Provincial Governor James Soong's presidential bid. PFP and KMT subsequently formed the “Pan-Blue” Alliance to oppose the DPP government. Former KMT President Lee Teng-hui, in turn, broke with the KMT and formed the pro-independence Taiwan Solidarity Union (TSU) in 2001. The TSU, which advocates changing Taiwan's official name and completely replacing the 1947 constitution, allied itself with the DPP as part of the ruling “Pan-Green” allincee

Taiwan and the Mainland

Despite differences between Taiwan and the P.R.C., contact between the two sides of the Taiwan Strait has grown significantly over the past decade. Taiwan has continued to relax restrictions on unofficial contacts with the P.R.C., and cross-Strait interaction has mushroomed. In January 2001, Taiwan formally allowed the “three mini-links” (direct trade, travel, and postal links) from Quemoy and Matsu Islands to Fujian Province and permitted direct cross-Strait trade in February 2002. Taiwan authorities permitted residents of Penghu Islands starting on April 1, 2007, to begin visiting mainland China via Kinmen and Matsu. Cross-Strait trade has grown rapidly over the past 10 years. China is Taiwan's largest trading partner, and Taiwan is China's fifth largest. Estimates of Taiwan investment on the mainland, both officially approved by Taiwan authorities and investment made by Taiwan firms through third parties, start from $100 billion, making Taiwan and Hong Kong the two largest investors. This trade runs heavily in Taiwan's favor and continues to grow, providing another engine for the island's economy. The trend in cross-Strait economic interaction is one of steady growth with, so far, only temporary setbacks due to political factors such as the P.R.Cs March 2005 passage of an Anti-Secession Law. In August 2001, President Chen accepted the recommendation of the Economic Development Advisory Council to set aside the “no haste, be patient” policy of the Lee administration and replace it with an “active opening, effective management policy.” However, in January 2006, President Chen reversed the policy to “active management, effective opening.” In February 2003, Taiwan and the P.R.C. agreed to allow Taiwan carriers to fly non-stop via Hong Kong or Macao to bring Taiwan residents on the mainland home for the Lunar New Year holiday. The two sides agreed to conduct Lunar New Year charter flights again in 2005, with flights operated by both Taiwan and P.R.C. carriers flying over, but not having to land in, Hong Kong or Macau. The two sides agreed on an expanded series of Lunar New Year charter flights in January-February 2006, and in June 2006 regularized these charter flights to include the other 3 major holidays—Dragon Boat festival, Mid-Autumn festival and January 1 New Year. These charter flights continue.

The development of semiofficial cross-Strait relations has been halting. Prior to April 1993, when talks were held in Singapore between the heads of two private intermediary organizations—Taiwan's Straits Exchange Foundation (SEF) and the P.R.C.'s Association for Relations Across the Taiwan Strait (ARATS)— there had been some lower-level exchanges between the two sides of the Strait. The April 1993 SEF-ARATS talks primarily addressed technical issues relating to cross-Strait interactions. Lower-level talks continued on a fairly regular basis until they were suspended by Beijing in 1995 after President Lee's U.S. visit. Unofficial exchanges resumed in 1997 through informal meetings between personnel of the two sides’ unofficial representative organizations. Direct SEF-ARATS contacts resumed in April 1998, and SEF Chairman Koo Chen-fu visited the mainland in October 1998. A planned visit by ARATS Chairman Wang Dao-han to Taiwan in the fall, however, was postponed following statements made by then-President Lee Teng-hui that relations between the P.R.C. and Taiwan should be conducted as "state-to-state or at least as "special state-to-state relations.” Since his May 20, 2000 inauguration, President Chen has called for resuming the cross-Strait dialogue without any preconditions. President Chen has stated that such talks should be conducted in the spirit of the 1992 Hong Kong talks, a reference to a meeting the two sides held to discuss how to handle political barriers to cross-Strait interaction. The P.R.C. has responded that the Chen administration must acknowledge that the two sides reached a consensus that there is only "one China"before any dialogue can be restarted. In his May 20, 2004 inaugural address, President Chen recognized the P.R.C.'s insistence on "one China” but stopped short of endorsing the concept. He called for a new "Cross-Strait Framework for Peace and Stability" and enhanced political, economic, and social exchanges between the two sides. In the face of the "one China” recognition obstacle and Taiwan's resentment over the P.R.C.'sMarch 2005 “Anti-Secession Law," Taipei and Beijing have been cautiously feeling each other out on a series of smaller, intermediary steps, including cross-Strait cargo and passenger charter flights, sale of Taiwan agricultural products in the P.R.C., and P.R.C. tourists visiting Taiwan. The United States has welcomed and encouraged the cross-Strait dialogue as a process which contributes to a reduction of tension and to an environment conducive to the eventual peaceful resolution of the outstanding differences between the two sides. The United States believes that differences between Taipei and Beijing should be resolved peacefully in a manner acceptable to people on both sides of the Taiwan Strait.

ECONOMY

Through over five decades of hard work and sound economic management, Taiwan has transformed itself from an underdeveloped, agricultural island to an economic power that is a leading producer of high-technology goods. In the 1960s, foreign investment in Taiwan helped introduce modern, labor-intensive technology to the island, and Taiwan became a major exporter of labor-intensive products. In the 1980s, focus shifted toward increasingly sophisticated, capital-intensive and technology-intensive products for export and toward developing the service sector. At the same time, the appreciation of the New Taiwan dollar (NT$), rising labor costs, and increasing environmental consciousness in Taiwan caused many labor-intensive industries, such as shoe manufacturing, to move to China and Southeast Asia. Taiwan has transformed itself from a recipient of U.S. aid in the 1950s and early 1960s to an aid donor and major foreign investor, especially in Asia. Taiwan is now a creditor economy, holding the world's fourth-largest stock of foreign exchange reserves ($261 billion as of August 2007). Although Taiwan enjoyed sustained economic growth, full employment, and low inflation for many years, in 2001, Taiwan joined other regional economies in its first recession since 1949. The economy began to recover in 2002, but the outbreak of severe acute respiratory syndrome (SARS) slowed growth to 3.5% in 2003. The world economic upturn drove growth in 2004 to 6.2%. However, slower world growth in 2005, higher energy prices and interest rates, and excess inventory dragged 2005 growth to 4.1%. Continued expansion of exports sustained Taiwan's economic growth at 4.6% in 2006. Economic growth is expected to remain well above 4% in 2007.

Foreign Trade

Foreign trade has been the engine of Taiwan's rapid growth during the past 50 years. Taiwan's economy remains export-oriented, so it depends on an open world trade regime and remains vulnerable to fluctuations in the world economy. The total value of trade increased more than five-fold in the 1960s, nearly ten-fold in the 1970s, doubled in the 1980s, and nearly doubled again in the 1990s. In the first half of this decade, exports grew 60%. Export composition changed from predominantly agricultural commodities to industrial goods (now 98%). The electronics sector is Taiwan's most important industrial export sector and is the largest recipient of U.S. investment. Taiwan became a member of the World Trade Organization (WTO) as a special customs territory in January 2002.

Taiwan firms are the world's largest suppliers of computer monitors and leaders in PC manufacturing, although now much of the final assembly of these products occurs overseas, typically in China. Textile production continues to move to lower-cost locations overseas, but is still a major industrial export sector and employs nearly 190,000 people. Imports are dominated by raw materials and capital goods, which account for more than 90% of the total. Taiwan imports coal, oil and gas to meet most of its energy needs. Reflecting the large Taiwan investment in China, it supplanted the United States as Taiwan's largest trade partner in 2003.

In 2006, China (including Hong Kong) accounted for over 27% of Taiwan's total trade and almost 40% of Taiwan's exports. Japan was Taiwan's second-largest trading partner with 15% of total trade, including 23% of Taiwan's imports. The U.S. is now Taiwan's third-largest trade partner, taking 14% of Taiwan's exports and supplying 11% of its imports. Taiwan is the United States’ ninth-largest trading partner; Taiwan's two-way trade with the United States amounted to $57 billion in 2005 and rose 7.6% to $62 billion in 2006. Imports from the United States consist mostly of agricultural and industrial raw materials as well as machinery and equipment. Exports to the United States are mainly electronics and consumer goods. The United States, Hong Kong, China, and Japan account for 61.5% of Taiwan's exports, and the United States, Japan, and China provide almost 50% of Taiwan's imports. As Taiwan's per capita income level has risen, demand for imported, high-quality consumer goods has increased. The U.S. trade deficit with Taiwan in 2006 was $15.2, up 19% from $12.8 billion in 2005. Even though Taiwan maintains formal diplomatic relations with about a score of its trading partners, Taiwan maintains trade offices in nearly 100 countries. Taiwan is a member of the Asian Development Bank, the WTO, and the Asia-Pacific Economic Cooperation (APEC) forum. Taiwan is also an observer at the Organization for Economic Cooperation and Development (OECD). These developments reflect Taiwan's economic importance and its desire to become further integrated into the global economy.

Agriculture

Although only about one-quarter of Taiwan's land area is arable, 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. Agriculture only comprises about 1.5% of Taiwan's GDP. Taiwan's main crops are rice, sugarcane, fruit, and vegetables. While largely self-sufficient in rice production, Taiwan imports large amounts of wheat, corn, and soybeans, mostly from the United States. Poultry and pork production are mainstays of the livestock sector and the major demand drivers for imported corn and soybeans. Rising standards of living have led to increased demand for a wide variety of high-quality food products, much of it imported. Overall, U.S. agricultural and food products account for more than 30% of Taiwan's agricultural import demand.

U.S. food and agricultural exports total about $2.5 billion annually, making Taiwan the United States’ sixth-largest agricultural export destination. Taiwan's agricultural exports include frozen fish, aquaculture and sea products, canned and frozen vegetables, and grain products. Taiwan's imports of agricultural products have increased since its WTO accession in 2002, and it is slowly liberalizing previously protected agricultural markets.

Economic Outlook

Taiwan faces many of the same economic issues as other developed economies. As labor-intensive industries have relocated to countries with low-cost labor, Taiwan's future development will rely on further transformation to a high technology and service-oriented economy and carving out its niche in the global supply chain. Taiwan's economy has become increasingly linked with China.

Taiwan official statistics indicate that Taiwan firms had invested about U.S. $55 billion in China through 2006, which is more than half of Taiwan's stock of direct foreign investment. Many unofficial estimates put the actual number well over U.S. $100 billion. More than one million Taiwan people are estimated to be residing in China, and more than 70,000 Taiwan companies have operations there. Taiwan firms are increasingly acting as management centers that take in orders, produce them in Taiwan, the mainland, or Southeast Asia and then ship the final products to the U.S. and other markets. This process is made more difficult by the lack of direct transportation links between China and Taiwan.

DEFENSE

In proportion to its population, Taiwan still maintains a large military establishment. Defense expenditures account for 2.69% of GDP in 2007, and the 2008 central budget proposal increases defense expenditures to 3% of GDP. The military's primary mission is the defense of Taiwan against the P.R.C., which is seen as the predominant threat and which has not renounced the use of force against Taiwan. Taiwan's armed forces were reduced as part of a reform initiative from 1997 to 2001, going from about 450,000 to 385,000, with further reductions since then bringing the total force level down to just under 300,000. Registered reservists reportedly totaled 3,870,000 in 1997. Conscription remains universal for qualified males between the ages of 18 and 30. In 2007 the length of conscription service was dropped from 16 to 14 months, with a view toward eventually creating an all-volunteer force. For qualified applicants, alternative service is available in police and fire departments and public clinics, as well as through teaching in some rural schools. Applicants with advanced degrees may qualify for National Defense Service, consisting of reserve officer training followed by four years of work in a government or academic research institution.

Taiwan's armed forces are equipped with weapons obtained primarily from the United States. In recent years, however, Taiwan also has procured some weapons from other Western nations and has stressed military “self-reliance,” which has resulted in the growth of indigenous military production in certain fields. In 2007 Taiwan's legislature approved funding for certain defensive weapons systems the U.S. agreed to sell Taiwan in 2001 and earlier. These included the Patriot Advanced Capability (PAC-2 upgrade) missile defense system, P-3C maritime patrol aircraft, and a preliminary study of diesel-electric submarines. These systems would give Taiwan key capabilities in missile defense and anti-submarine warfare to remedy vulnerabilities in countering the P.R.C.'s accelerated military modernization. Taiwan adheres to the principles of the nuclear Non-Proliferation Treaty and has stated that it does not intend to produce nuclear weapons.

FOREIGN RELATIONS

The People's Republic of China replaced Taiwan at the United Nations in 1971, and Taiwan's diplomatic position has continued to erode, as many countries changed their official recognition from Taipei to Beijing. As of September 2007, Taiwan had formal diplomatic ties with 24 countries. At the same time, Taiwan has cultivated informal ties with most countries to offset its diplomatic isolation and to expand its economic relations. A number of nations have set up unofficial organizations to carry out commercial and other relations with Taiwan. Including its offi-¥cial overseas missions and its unofficial representative and/or trade offices, Taiwan is represented in 122 countries. Recently, Taiwan has lobbied strongly for admission into the United Nations and other international organizations, such as the World Health Organization (WHO). The P.R.C. opposes Taiwan's membership in such organizations, most of which require statehood for membership, because Beijing considers Taiwan to be a province of China, not a separate sovereign state.

U.S.-TAIWAN RELATIONS

On January 1, 1979, the United States changed its diplomatic recognition from Taipei to Beijing. In the U.S.-P.R.C. Joint Communique that announced the change, the United States recognized the Government of the People's Republic of China as the sole legal government of China and acknowledged the Chinese position that there is but one China and Taiwan is part of China. The Joint Communique also stated that within this context the people of the United States will maintain cultural, commercial, and other unofficial relations with the people on Taiwan. On April 10, 1979, President Carter signed into law the Taiwan Relations Act (TRA), which created domestic legal authority for the conduct of unofficial relations with Taiwan. U.S. commercial, cultural, and other interaction with the people on Taiwan is facilitated through the American Institute in Taiwan (AIT), a private nonprofit corporation. The Institute has its headquarters in the Washington, DC area and has offices in Taipei and Kaohsiung. It is authorized to issue visas, accept passport applications, and provide assistance to U.S. citizens in Taiwan. A counterpart organization, the Taipei Economic and Cultural Representative Office in the United States (TECRO), has been established by the Taiwan authorities. It has its headquarters in Taipei, the representative branch office in Washington, DC, and 11 other Taipei Economic and Cultural Offices (TECO) in the continental U.S. and Guam. The Taiwan Relations Act (TRA) continues to provide the legal basis for the unofficial relationship between the U.S. and Taiwan, and enshrines the U.S. commitment to assisting Taiwan maintain its defensive capability. Following de-recognition, the United States terminated its Mutual Defense Treaty with Taiwan. However, the United States has continued the sale of appropriate defensive military equipment to Taiwan in accordance with the Taiwan Relations Act, which provides for such sales and which declares that peace and stability in the area are in U.S. interests. Sales of defensive military equipment are also consistent with the 1982 U.S.-P.R.C. Joint Communique. The United States position on Taiwan is reflected in the Three Communiques and the Taiwan Relations Act (TRA). The U.S. insists on the peaceful resolution of cross-Strait differences and encourages dialogue to help advance such an outcome. The U.S. does not support Taiwan independence. President Bush stated on December 9, 2003 that the United States is opposed to any attempt by either side to unilaterally alter the status quo in the Taiwan Strait.

While the United States welcomes recent exchanges that enhance channels of communication between leaders in Beijing and Taipei, the United States urges Beijing and Taipei to further advance cross-Strait cooperation and dialogue, including direct discussions between the authorities in Beijing and elected leaders in Taipei. U.S. commercial ties with Taiwan have been maintained and have expanded since 1979. Taiwan continues to enjoy Export-Import Bank financing, Overseas Private Investment Corporation guarantees, normal trade relations (NTR) status, and ready access to U.S. markets. In recent years, AIT commercial dealings with Taiwan have focused on expanding market access for American goods and services. AIT has been engaged in a series of trade discussions, which have focused on protection of intellectual property rights and market access for U.S. goods and services. Maintaining diplomatic relations with the P.R.C. has been recognized to be in the long-term interest of the United States by seven consecutive administrations; however, maintaining strong, unofficial relations with Taiwan also a major U.S. goal, in line with our desire to further peace and stability in Asia. In keeping with our one China policy, the U.S. does not support Taiwan independence, but it does support Taiwan's membership in appropriate international organizations, such as the World Trade Organization, Asia-Pacific Economic Cooperation (APEC) forum, and the Asian Development Bank, where statehood is not a requirement for membership. In addition, the U.S. supports appropriate opportunities for Taiwan's voice to be heard in organizations where its membership is not possible.

U.S. Representative Offices American Institute in Taiwan
Washington Headquarters
Suite 1700, 1700 North Moore Street
Arlington, VA 22209
Tel: 703-525-8474 Fax:
703-841-1385

American Institute in Taiwan
Taipei Office
No. 7, Lane 134, Hsin Yi Road
Section 3, Taipei, Taiwan
Tel: 011-886-2-2162-2000
Fax: 011-886-2-2162-2239

American Institute in Taiwan
Kaohsiung Office
5F, No. 2, Chung Cheng 3rd Road
Kaohsiung, Taiwan 800
Tel: 011-886-7-238-7744
Fax: 011-886-7-238-5237

Taiwan Representative Office Taipei Economic and Cultural Representative Office (TECRO)
4201 Wisconsin Avenue, NW
Washington, DC 20016-2137
Tel: 202-895-1800
Fax: 202-895-0825

Principal U.S. Embassy Officials Last Updated: 2/19/2008

KAOHSIUNG (BO) 5F, #2 Chung Cheng 3rd Road, 886-7-238-7744, Fax 886-7-238-5237, Workweek: 8:00 am to 5:00 pm.

TAIPEI 7, Lane 134, Hsin Yi Road, Sec 3, Taipei 106, Taiwan, [886] (2) 2162-2000, Fax [886] (2) 2162-2251, Workweek: 8:00 a.m. until 5:00 p.m., Website: http://www.ait.org.tw/en.

TRAVEL

Consular Information Sheet

October 15, 2007

Country Description: Taiwan is a stable democracy with a strong and well-developed economy. Tourist facilities are widely available.

Entry Requirements: U.S. passport holders will be allowed to enter Taiwan without a visa for up to thirty days (no extensions allowed) if they have a passport valid for at least six months from the date of entry into Taiwan and they have a confirmed return or onward air ticket. Travelers must have already met any additional visa requirements for the next destination, if applicable. If the passport is valid for less than six months from the date of entry into Taiwan, travelers may apply for a landing visa that has a duration of stay of no more than thirty days. The processing fee is NT $5,100.00 (equivalent to approximately US $157.00; U.S. currency is not accepted) and no extensions are allowed. Travelers also have the additional option of applying for and receiving a Taiwan visa prior to arrival in Taiwan. The processing fee is US$131.00.

Please Note: No extension of stay or change of status is allowed if the traveler enters on the visa waiver program (30 day stay, no extensions). Travelers arriving in Taiwan with a valid passport and valid Taiwan visas may be admitted for up to 90 days even if their passports are valid for less than 6 months. Travelers who apply for a landing visa upon arrival will be admitted for 30 days or up to the day the passport expires, whichever comes first. For specific information about entry requirements, travelers may contact the Taipei Economic and Cultural Representative Office (TECRO), 4201 Wisconsin Avenue NW, Washington, DC 20016-2137, via either its main telephone number, (202) 895-1800, or its visa section telephone number, (202) 895-1814. The main fax number at TECRO is (202) 363-0999, and the visa section fax number is (202) 895-0017. TECO (Taipei Economic and Cultural Office) also has offices in Atlanta, Boston, Chicago, Guam, Honolulu, Houston, Kansas City, Los Angeles, Miami, New York, San Francisco and Seattle.

Safety and Security: For the latest security information, Americans traveling abroad should regularly monitor the Department's Internet web site at http://travel.state.gov where the current Worldwide Caution Travel Alert, Travel Warnings and Travel Alerts can be found. Up to date information on security can also be obtained by calling 1-888-407-4747 toll free in the United States and Canada, or for callers outside the United States and Canada, a regular toll line at 1-202-501-4444. These numbers are available from 8:00 a.m. to 8:00 p.m. Eastern Standard Time, Monday through Friday (except U.S. federal holidays).

Public Demonstrations: Taiwan is a modern democracy with vibrant public participation. Political demonstrations are common, especially around election time. Since Taiwan democratized in the early 1990s, there have been very few cases of violence associated with political demonstrations. But even demonstrations intended to be peaceful can turn confrontational. American citizens are therefore urged to avoid the areas of demonstrations if possible, and to exercise caution if within the vicinity of any political demonstrations.

Crime: Although Taiwan is considered a medium risk location for crime, the overall violent crime rate in Taiwan remains relatively low. Travelers should avoid business establishments such as massage parlors, illegal “barbershops,” and illegal “nightclubs”because many of these establishments are run by criminals and are located in high crime areas. In contrast to their counterparts, legal barbershops prominently display the usual grooming services. Illegal nightclubs have no advertisement and are publicized by word of mouth only. Public transportation, including the buses and the subway, is generally safe in Taiwan, but women should exercise caution when traveling alone in taxis late at night. In several parts of Taiwan, incidents of purse snatching by thieves on motorcycles have been reported.

In many countries around the world, counterfeit and pirated goods are widely available. Transactions involving such products may be illegal under local law. In addition, bringing them back to the United States may result in forfeitures and/ or fines. More information on this serious problem is available at www.cybercrime.gov.

Information for Victims of Crime: The loss or theft abroad of a U.S. passport should be reported immediately to the National Immigration Agency and to AIT-Taipei or AIT-Kaohsiung. The National Immigration Agency has foreign affairs sections that are usually staffed by English-speaking officers. National Immigration Agency contact numbers for the major cities in Taiwan are as follows: Taipei (02) 2389-9983, Kaohsiung (07) 282-1400, Tainan (06) 293-7641, Taichung (04) 2254-9981, Taitung (089) 342-251, Pingtung (08) 721-6665.

If you are the victim of a crime while in Taiwan, in addition to reporting to the local police, contact AIT Taipei (02) 2162-2000 or AIT Kaohsiung (07) 238-7744 for assistance. AIT's consular staff can, for example, help you find appropriate medical care, contact family members or friends, and explain how funds can be transferred. Although the investigation and prosecution of the crime is solely the responsibility of local authorities, consular officers can help explain the local criminal justice process and assist with finding an attorney if needed.

Medical Facilities and Health Information: Health facilities in Taiwan are adequate for routine and emergency medical treatment. Physicians are well trained and many have studied in the U.S. and speak English. State of the art medical equipment is available at many clinics and hospitals. Hospitals’ nursing services provide medication dispensing and wound care, but generally not the daily patient maintenance functions found in U.S. hospitals. Ambulances are available in Taiwan but are not like those in the U.S. There are no trained Emergency Medical System Technicians accompanying an ambulance, unless within 2 kilometers of National Taiwan University Hospital or Veterans General Hospital. For information on specific clinics and hospitals, please refer to the AIT web page at http://www.ait.org.tw/en/uscitizens.

Information on vaccinations and other health precautions, such as safe food and water precautions and insect bite protection, may be obtained from the Centers for Disease Control and Prevention's hotline for international travelers at 1-877-FYI-TRIP (1-877-394-8747); fax 1-888-CDC-FAXX (1-888-232-3299), or via the CDC's Internet site at http://wwwn.cdc.gov/travel. For information about outbreaks of infectious diseases abroad consult the World Health Organization's (WHO) web site at http://www.who.int/en. Further health information for travelers is available at http://www.who.int/ith/en.

Medical Insurance: Doctors and hospitals in Taiwan expect immediate cash payment for health services, although some private clinics may accept credit cards. The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and whether it will cover emergency expenses such as a medical evacuation.

Traffic Safety and Road Conditions: While outside the United States, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Taiwan is provided for general reference only, and may not be totally accurate in a particular location or circumstance. Roads in Taiwan's major cities are generally congested, and the many scooters and motorcycles that weave in and out of traffic make driving conditions worse. Pedestrians should exercise caution when crossing streets because many drivers do not respect the pedestrian's right of way. Special caution should be taken when driving on mountain roads, which are typically narrow, winding, and poorly banked, and which may be impassable after heavy rains. The national authority responsible for road safety in Taiwan is the Traffic Safety Committee, MOTC. For general information on tourism in Taiwan information may be found at www.tbroc.gov.tw (Taiwan Tourism Bureau—Ministry of Transportation and Communication).

Aviation Safety Oversight: The U.S. Federal Aviation Administration (FAA) has assessed Taiwan's Civil Aeronautics Administration (CAA) as being in compliance with International Civil Aviation Organization (ICAO) aviation safety standards for oversight of Taiwan's air carrier operations. For more information, travelers may visit the FAA's Internet web site at http://www.faa.gov.

Screening Process: The need for early detection and prevention of communicable diseases requires all arriving passengers to have their body temperatures scanned with an infrared thermal apparatus. Only passengers showing symptoms are required to fill out the Communicable Disease Survey Form. Depending on the severity of the symptoms and travel history, those individuals reported with possible symptoms are required to give an onsite specimen and/or follow up with local health authorities.

Customs Regulations: Taiwancustoms authorities may enforce strict regulations concerning temporary import or export of items such as: firearms, antiquities, medications, currency, ivory, etc. It is advisable to contact the Taipei Economic and Cultural Office (TECRO) in Washington or one of the TECO office's in the United States for specific information regarding customs requirements.

Disaster Preparedness: Taiwan is subject to strong earthquakes that can occur anywhere on the island. Taiwan is also hit by typhoons, usually from July to October. Travelers planning a trip to Taiwan can obtain general information about natural disaster preparedness on the Internet from the U.S. Federal Emergency Management Agency (FEMA) at http://www.fema.gov. Additional information about currently active typhoons can be obtained on the University of Hawaii tropical storm page at http://www.solar.ifa.hawaii.edu/Tropical/tropical.html. The Central Weather Bureau of Taiwan also maintains a web site that provides information about typhoons and earthquakes. Its Internet address is http://www.cwb.gov.tw.

Dual Nationality and Compulsory Military Service: Taiwan law provides for compulsory military service. Men between the ages of 18 and 36 who were born in Taiwan or who have ever held a Taiwan passport should be aware that they may be subject to compulsory military service in Taiwan, even if they are also U.S. citizens, and even if they have entered Taiwan on U.S. passports. Potentially affected individuals are urged to consult with the nearest office of the Taipei Economic and Cultural Office (TECO) in the United States before visiting Taiwan to determine whether they are subject to the military service requirement.

English Language Programming: The International Community Radio Taipei (ICRT) www.icrt.com.tw provides all of Taiwan with English-language programming 24 hours a day. In the event of an emergency or an approaching typhoon, travelers in the Taipei and Kaohsiung areas should tune their radios to FM 100.7 for English-language updates. Travelers can find ICRT in Taichung at FM 100.1. Travelers can listen to ICRT's live broadcasting on the Internet at http://www.icrt.com.tw/en/D01.php. TV news in English is available on channel 53 at 6:00 a.m. and at 11:45 pm on Formosa Television, or at its web site http://englishnews.ftv.com.tw. The three main English-language daily newspapers published in Taiwan are Taipei Times, Taiwan News and China Post. In addition to the print versions, readers can read their content online at http://www.taipeitimes.com, http://www.etaiwannews.com and http://www.chinapost.com.tw. English speakers experiencing a personal crisis in Taiwan can contact the Community Services Center in Taipei (www.community.com.tw) at (02) 2836-8134 or (02) 2838-4947 to arrange counseling or to contact a support

Judicial Assistance: Judicial assistance is provided by authorities on Taiwan in response to letters rogatory from foreign courts in accordance with Taiwan's “Law Governing Extension of Assistance to Foreign Courts.”

AUTHORITY—22 U.S.C. 3306(b) provides acts performed by officers of the American Institute on Taiwan under 22 U.S.C. 3306 are valid, as if performed by any other person authorized under the laws of the United States to perform such acts (consular officers). The American Institute in Taiwan (AIT) is a nonprofit corporation under the laws of the District of Colombia. 22 U.S.C. 3305, 3306(a)(3). The judicial assistance acts of AIT personnel parallel the acts performed by U.S. consular officers under 28 U.S.C. 1781 (a)(2). See Sec. 1-201(h) of Executive Order No. 12143, 44 Fed. Reg. 37191 (June 23, 1979). Pursuant to Section 10(a) of the Taiwan Relations Act (TRA), 22 U.S.C. 3309(a), the Taiwan Economic Cultural Representative's Office (“TECRO”) is the instrumentality established by the people of Taiwan having the necessary authority under the laws of Taiwan to take actions on behalf of Taiwan in accordance with the Act.

Criminal Penalties: While outside the United States, a U.S. citizen is subject to local laws and regulations, which sometimes differ significantly from those in the United States and may not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. Persons violating Taiwan's laws, even unknowingly, may be expelled, arrested or imprisoned. Penalties for possession, use, or trafficking in illegal drugs in Taiwan are severe and convicted offenders can expect long jail sentences and heavy fines. Engaging in illicit sexual conduct with children or using or disseminating child pornography in a foreign state is a crime, prosecutable in the United States.

Children's Issues: For information on international adoption of children and international parental child abduction, see the Office of Children's Issues website at http://travel.state.gov/family.

Registration and Embassy Locations: The American Institute in Taiwan (AIT) is authorized by law to perform American citizen services. Americans living or traveling in Taiwan are encouraged to register with AIT through the State Department's travel registration web site, and to obtain updated information on travel and security within Taiwan. Americans resident in Taiwan are encouraged also to become a member of AIT's group email notifications by sending an email to [email protected]. Americans without Internet access may register directly with AIT Taipei or AIT Kaohsiung. By registering, American citizens make it easier for the Embassy or Consulate to contact them in case of emergency.

The American Institute in Taiwan is a full passport services agency. Processing time for routine passports is about two weeks. The American Institute in Taiwan is located at No.7 Lane 134, Hsin Yi Road Section 3, Taipei, Taiwan, telephone: (886) 2-2162-2000; fax: (886) 2-2162-2239, web site: http://www.ait.org.tw. The American Institute in Taiwan branch office is located at No. 2 Chung Cheng 3rd Road, 5th Floor, Kaohsiung, Taiwan, telephone: (886) 7-238-7744; fax: (886) 7-238-5237. AIT's citizen services section can also be contacted by e-mail at [email protected]. In case of emergencies after working hours, the duty officer at the American Institute in Taiwan at Taipei may be contacted at (886) 2-2162-2000.

International Adoption

November 2006

The information in this section has been edited from a report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services.

For more information, please read the International Adoption section of this book and review current reports online at http://travel.state.gov/family.

Disclaimer: The information contained in this flyer on the legal requirements of specific foreign countries is based on public sources and current understanding. Moreover, U.S. immigration law, including regulations and interpretation, changes from time to time. This flyer reflects current understanding of the law and is not legally authoritative. Questions involving foreign and U.S. immigration laws and legal interpretation should be addressed to qualified foreign or U.S. legal counsel.

Please Note: The United States does not have formal diplomatic relations with Taiwan. All Consular and other representative functions are handled by the American Institute in Taiwan (AIT), a non-profit, private corporation authorized by the Taiwan Relations Act to conduct and carry out programs, transactions, and other relations between the United States and Taiwan.

Patterns of Immigration: Please review current reports online at http://travel.state.gov/family.

Adoption Authority:
Children's Bureau (Er Tong Ju),
Ministry of Interior
7F, No. 503 Li-Ming Road, Section 2
Nantun, Taichung 408, Taiwan
Tel: (04)-2250-2850
Fax: (04)-2250-2903
Website: http://www.cbi.gov.tw

Eligibility Requirements for Adoptive Parents: The articles of law relating to adoption in Taiwan are found in the Civil Code (Family and Children Welfare Act in Book VI), Articles 1072 through 1083. The adopting parents must be at least twenty years older than the child(ren) to be adopted.

No child adopted may be:

• Directly related by blood;
• Directly related by marriage, except in the adoption of the other spouse's child as a stepchild; and
• Indirectly related by blood, such as cousins (unless removed by a certain degree), the spouse of a sibling, or a sibling of your spouse.

Taiwan law is very detailed about what degree of indirect blood relation is excluded from adoption. If prospective adoptive parents are concerned about possible blood ties with the child they wish to adopt, they should contact AIT for clarification before proceeding with the adoption.

Taiwanese regulations further stipulate that adopting parents must be adults not older than 55 years of age. A married person who adopts a child shall do so jointly with his/her spouse.

Residency Requirements: There are currently no residency requirements that prospective adoptive parents must meet in order to adopt an orphan from Taiwan.

Time Frame: The average time to complete an international adoption in Taiwan is approximately 10 months from initial contact with the adoption agency in the U.S. until the immigrant visa is issued.

Adoption Agencies and Attorneys: U.S. prospective adoptive parents interested in hiring a Taiwan attorney to assist them with this process may find a list of local attorneys at: http://www.ait.org.tw/en.

Adoption Fees:

• Court proceeding fee: US $5
• Taiwan passport application fee (regular passport): US $30
• Expedited application: US $70
• Taiwan Household Registry (HHR) application fee: US $0.30 per copy
• (All Taiwan citizens are part of a very efficient household registry system that tracks events such as births, deaths, marriage, and divorce)
• Translation fees: variable
• Notary fees: US $25 per document

Adoption Procedures: Most adoptions are processed through local orphanages identified by U.S. or other foreign-based adoption agencies.

An application for adoption is first submitted to the Taiwan District Court. After one to two months, the adoptive parent(s) or a designated representative will receive a notice to appear. During this waiting period, a Taiwan social worker from the local bureau of social affairs or a designated agency will review the foreign (U.S.) home study. After the hearing, the court will rule on the adoption (usually within two months) and publish a final ruling three weeks later. The third step is to register the adoption at the Taiwan Registrar's office by submitting the original court ruling, final ruling, and the power of attorney certified at the Taiwan Foreign Affairs Police Station at the Taiwan Registrar's office. This usually takes only one hour.

Required Documents: After a child has been identified, the prospective parents must submit the following documents to the Taiwan authorities to process the local adoption:

• Power of Attorney, in English and Chinese, appointing the Taiwan orphanage or social worker to represent them;
• U.S. home study and Chinese translation;
• 1-797 approval notice of I-600A from DHS;
• Copy of U.S. prospective adoptive parents’ home state adoption laws and Chinese translation;
• Evidence of prospective adoptive parents’ right to adopt in the United States (included in U.S.-certified home study);
• Signed adoption agreement notarized by the TECO (Taipei Economic and Cultural Office) having jurisdiction over the place of the parent(s)’ residence (in English and Chinese); and
• Other documents (birth certificates, marriage certificates, etc.) may be requested by the orphanage, agency, or Taiwan authorities.

Chinese translations prepared in the U.S. must be certified by the TECRO/ TECO office for that district and English versions must be notarized by a U.S. notary public.

Adoption by Resident U.S. Citizens: In the event that U.S. citizens resident in Taiwan wish to adopt a child from Taiwan and obtain a U.S. immigrant visa for that child, they first need to obtain authorization from the Department of Homeland Security's US Citizenship and Immigration Service (DHS/USCIS) regional office in Hong Kong.

Please see the International Adoption section of this book for more details and review current reports online at http://travel.state.gov/family.

U.S. Immigration Requirements: Prospective adoptive parents are strongly encouraged to consult USCIS publication M-249, The Immigration of Adopted and Prospective Adoptive Children, as well as the Department of State publication, International Adoptions.

American Institute In Taiwan(AIT): As soon as prospective adoptive parents arrive in Taiwan, they should contact AIT's Consular Section to register their presence in Taiwan:

Consular Section
Immigrant Visa Unit, 3rd Floor
American Institute in Taiwan
Number 7, Lane 134
Hsin Yi Rd, Section 3
Taipei 106, Taiwan
Tel: (886) 02-2162-2005
Fax: (886) 02-2162-2253
Email: [email protected]

Additional Information: Specific questions about adoption in Taiwan should be addressed to the American Institute in Taiwan (AIT). General questions regarding intercountry adoption may be addressed to the Office of Children's Issues, U.S. Department of State, CA/OCS/CI, SA-29, 4th Floor, 2201 C Street, NW, Washington, D.C. 20520-4818, toll-free Tel: 1-888-407-4747.

International Parental Child Abduction

February 2008

The information in this section has been edited from a report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Parental Child Abduction section of this book and review current reports online at http://travel.state.gov/family.

Disclaimer: The information in this flyer relating to the legal requirements of specific foreign countries is provided for general information only. Questions involving interpretation of specific foreign laws should be addressed to foreign legal counsel.

General Information: Taiwan is not a party to the Hague Convention on the Civil Aspects of International Child Abduction; nor are there any international or bilateral treaties in force between Taiwan and the United States dealing with international parental child abduction.

American citizens who travel to Taiwan place themselves under the jurisdiction of local courts. American citizens may wish to consider this before planning a trip to Taiwan with dual national children.

Custody Disputes: In Taiwan, parents who are legally married share the custody of their children. If they are not married, by law the custody is granted to the mother unless there are known facts of inappropriate behavior, mental or social problems.

Enforcement of Foreign Judgments: Custody orders and judgments of foreign courts are enforceable in Taiwan. Custody court orders are placed on the Household Registry. If a court order is violated, the custodial parent can submit a complaint to the police to have them enforce the court order.

Visitation Rights: In cases where legal custody has been granted and the judgment has been rendered, the non-custodial parent can petition the court for visitation rights within the court ordered decision or come to a verbal agreement with the custodial parent.

Dual Nationality: Dual nationality is recognized under Taiwan law.

Travel Restrictions: No exit permits are normally required to leave Taiwan on a U.S passport with evidence of legal entry. However, in the case that a replacement U.S. passport is issued to an American who entered Taiwan on a U.S. passport which was subsequently lost or stolen, then an exit permit must be obtained from the Foreign Affairs Police. Taiwan also insists that anyone who in a Taiwan passport holder enter and leave Taiwan on that passport.

If Taiwan citizens, including minors, attempt to leave Taiwan on valid foreign passports or other travel documents, they will be stopped by Taiwan Immigration at the port-of-exit and refused permission to depart until they have obtained a valid Taiwan passport.

A custodial parent also may ask that a child's name be placed on a watch list and not be allowed to depart Taiwan without the custodial parent's permission.

Criminal Remedies: For information on possible criminal remedies, please contact your local law enforcement authorities or the nearest office of the Federal Bureau of Investigation (FBI). Information is also available on the Internet at the web site of the U.S. Department of Justice, Office of Juvenile Justice and Delinquency Prevention (OJJDP) at http://www.ojjdp.ncjrs.org.

Persons who wish to pursue a child custody claim in a Taiwan court should retain an attorney in Taiwan. In the absence of diplomatic relations, the American Institute in Taiwan (AIT) conducts unofficial relations between the people of the United States and the people of Taiwan. The American Institute in Taiwan maintains a list of attorneys willing to represent American clients. A copy of this list may be obtained from the American Institute of Taiwan at:

American Institute in Taiwan
Consular Section
No. 7 Lane 134
Hsin Yi Road, Section 3

Taipei, Taiwan
Telephone: 011-886-2-2709-2000
Fax: 011-886-2-2702-7675
Web site: http://usembassy.state.gov

For further information on international parental child abduction, contact the Office of Children's Issues, U.S. Department of State at 1-888-407-4747 or visit its web site on the Internet at http://travel.state.gov/family. You may also direct inquiries to: Office of Children's Issues, U.S. Department of State, Washington, DC 20520-4811; Phone: (202) 736-9090; Fax: (202) 312-9743.

TAIWAN

Compiled from the December 2005 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:
Taiwan

PROFILE

Geography

Area:

35,967 sq. km. (13,887 sq. mi.).

Cities (June 2004):

Capital—Taipei (pop. 2.6 million). Other cities—(Kaohsiung 1.5 million), Taichung (1.0 million).

Terrain:

Two thirds of the island is largely mountainous with 100 peaks over 3,000 meters (9,843 ft.).

Climate:

Maritime subtropical.

People

Population (2004 est.):

22.7 million.

Annual growth rate (2004 est.):

0.34%.

Language:

Mandarin Chinese (official), Taiwanese, Hakka.

Education:

Years compulsory—9. Attendance (2003)—99.5%. Literacy (2003)—97.0%.

Health:

Infant mortality rate (2004)—0.54%. Life expectancy (2003)—male 73.4 yrs.; female 79.1 yrs.

Work force (June, 2004):

10.126 million.

Political Establishment

Type:

Multi-party democracy. There are four major parties forming two alliances known as Pan-Blue and Pan-Green. The Pan-Blue includes the Kuomintang (KMT) and the People First Party (PFP). The Pan-Green includes the Democratic Progressive Party (DPP) and the Taiwan Solidarity Union (TSU). The Pan-Blue coalition holds a slight majority of seats in the Legislative Yuan (LY).

Constitution:

December 25, 1946; last amended 2005.
Branches (Yuan): Executive, Legislative, Judicial, Control, Examination.

Major political parties:

Democratic Progressive Party (DPP); Kuomintang (KMT or Nationalist Party); People First Party (PFP); Taiwan Solidarity Union (TSU).

Suffrage:

Universal over 20 years of age.
Central budget proposed (FY 2005): $50.1 billion.
Defense (2005): 15.90% of entire budget.

Economy

GNP (2005 est.):

$355 billion.

Real annual growth rate (2005 est.):

3.8%.

Per capita GNP (2005):

$15,659.

Unemployment (Oct. 2005) 4.07%.

Natural resources:

Small deposits of coal, natural gas, limestone, marble and asbestos.

Agriculture (1.7% of GDP):

Major products—pork, rice, fruit and vegetables, sugarcane, poultry, shrimp, eel.

Services:

(72.7% of GDP). Industry (25.6% of GDP): Types—electronics and computer products, chemicals and petrochemicals, basic metals, machinery, textiles, transport equipment, plastics, machinery.

Trade (2004):

Exports—$174 billion: electronics, information and communications products, textile products, basic metals, plastic and rubber products. Major markets—U.S. $28 billion, P.R.C. and Hong Kong $64 billion, Japan $13 billion. Imports—$168 billion: electronics, information & communications products, machinery & electrical products, chemicals, basic metals, transport equipment, crude oil. Major suppliers—Japan $43.6 billion, U.S. $21.6 billion, P.R.C. $18.8 billion.

PEOPLE

Taiwan has a population of 22.7 million. More than 18 million, the "native" Taiwanese, are descendants of Chinese who migrated from Fujian and Guangdong Provinces on the mainland, primarily in the 18th and 19th centuries. The "mainlanders," who arrived in Taiwan after 1945, came from all parts of mainland China. About 370,000 aborigines inhabit the mountainous central and eastern parts of the island and are believed to be of Malayo-Polynesian origin. Of Taiwan's total population, approximately one million, or 4.4%, currently reside in Mainland China,

Education

A 9-year public educational system has been in effect since 1979. Six years of elementary school and 3 years of junior high are compulsory for all children. About 93.5% of junior high graduates continue their studies in either a senior high or vocational school. Taiwan has an extensive higher education system with more than 150 institutions of higher learning. Each year, over 100,000 students attempt to enter higher education institutes; about 75% of the candidates are admitted to a college or university. Opportunities for graduate education are expanding in Taiwan, but many students travel abroad for advanced education. In 2005, over 15,000 U.S. student visas were issued to Taiwan passport holders.

Languages

A large majority of people in Taiwan speak Mandarin Chinese, which has been the medium of instruction in the schools for more than four decades. Native Taiwanese and many others also speak one of the Southern Fujianese dialects, Min-nan, also known as Taiwanese. Recently there has been a growing use of Taiwanese in the broadcast media. The Hakka, who are concentrated in several counties throughout Taiwan, have their own distinct dialect. As a result of the half-century of Japanese rule, many people over age 60 also can speak Japanese. The method of Chinese romanization most commonly used in Taiwan is the Wade-Giles system. In 2002, Taiwan authorities announced adoption of the pinyin system also used on the Mainland to replace the Wade-Giles system, but its use is not consistent throughout society, resulting in two or more romanizations for the same place or person.

Religions

According to Taiwan's Interior Ministry figures, there are about 11.2 million religious believers in Taiwan, with more than 75% identifying themselves as Buddhists or Taoists. At the same time, there is a strong belief in Chinese folk religion throughout the island. These are not mutually exclusive, and many people practice a combination of the three. Confucianism also is an honored school of thought and ethical code. Christian churches have been active on Taiwan for many years, and today, the island has more than 600,000 Christians, a majority of whom are Protestant.

Culture

Taiwan's culture is a blend of its distinctive Chinese heritage and Western influences. Fine arts, folk traditions, and popular culture embody traditional and modern, Asian, and Western motifs. One of Taiwan's greatest attractions is the Palace Museum, which houses over 650,000 pieces of Chinese bronze, jade, calligraphy, painting, and porcelain. This collection was moved from the mainland in 1949 when Chiang Kai-shek's Nationalist Party (KMT) fled to Taiwan. The collection is so extensive that only 1% is on display at any one time.

HISTORY

Taiwan's aboriginal peoples, who originated in Austronesia and southern China, have lived on Taiwan for 12,000 to 15,000 years. Significant migration to Taiwan from the Chinese mainland began as early as A.D. 500. Dutch traders first claimed the island in 1624 as a base for Dutch commerce with Japan and the China coast. Two years later, the Spanish established a settlement on the northwest coast of Taiwan, which they occupied until 1642 when they were driven out by the Dutch. Dutch colonists administered the island and its predominantly aboriginal population until 1661. The first major influx of migrants from the Chinese mainland came during the Dutch period, sparked by the political and economic chaos on the China coast during the Manchu invasion and the end of the Ming Dynasty.

In 1664, a Chinese fleet led by the Ming loyalist Cheng Ch'eng-kung (Zheng Chenggong, known in the West as Koxinga) retreated from the mainland and occupied Taiwan. Cheng expelled the Dutch and established Taiwan as a base in his attempt to restore the Ming Dynasty. He died shortly thereafter, and in 1683, his successors submitted to Manchu (Qing Dynasty) control. From 1680, the Qing Dynasty ruled Taiwan as a prefecture and, in 1875, divided the island into two prefectures, north and south. In 1887 the island was made into a separate Chinese province.

During the 18th and 19th centuries, migration from Fujian and Guangdong provinces steadily increased, and Chinese supplanted aborigines as the dominant population group. In 1895, a weakened Imperial China ceded Taiwan to Japan in the Treaty of Shimonoseki following the first Sino-Japanese war.

During its 50 years (1895-1945) of colonial rule, Japan expended considerable effort in developing Taiwan's economy. At the same time, Japanese rule led to the "Japanization" of the island, including compulsory Japanese education and forcing residents of Taiwan to adopt Japanese names.

At the end of World War II in 1945, Taiwan reverted to Chinese rule. During the immediate postwar period, the Nationalist Chinese (KMT) administration on Taiwan was repressive and corrupt, leading to local discontent. Anti-mainlander violence flared on February 28, 1947, prompted by an incident in which a cigarette seller was injured and a passerby was shot to death by Nationalist authorities. The island-wide rioting was brutally put down by Nationalist Chinese troops, who killed thousands of people. As a result of the February 28 Incident, the native Taiwanese felt a deep-seated bitterness toward the mainlanders. For 50 years the KMT authorities suppressed accounts of this episode in Taiwan history. In 1995 a monument was dedicated to the victims of the "2-28 Incident," and for the first time, Taiwan's leader, President Lee Teng-hui, publicly apologized for the Nationalists' brutality.

Starting before World War II and continuing afterwards, a civil war was

fought on the mainland between Chiang Kai-shek's KMT government and the Chinese Communist Party led by Mao Zedong. When the civil war ended in 1949, 2 million refugees, predominately from the Nationalist government, military, and business community, fled to Taiwan. In October 1949 the People's Republic of China (P.R.C.) was founded on the mainland by the victorious communists. Chiang Kai-shek established a "provisional" KMT capital in Taipei in December 1949. During the 1950s, the KMT authorities implemented a far-reaching and highly successful land reform program on Taiwan. They redistributed land among small farmers and compensated large landowners with commodities certificates and stock in state-owned industries. Although this left some large landowners impoverished, others turned their compensation into capital and started commercial and industrial enterprises. These entrepreneurs were to become Taiwan's first industrial capitalists. Together with refugee businessmen from the mainland, they managed Taiwan's transition from an agricultural to a commercial, industrial economy.

Taiwan has developed steadily into a major international trading power with nearly $342 billion in two-way trade (2004) and the world's 17th largest economy. Taiwan's accession to the World Trade Organization in 2002 has expanded its trade opportunities and further strengthened its standing in the global economy. Tremendous prosperity on the island has been accompanied by economic and social stability. Chiang Kai-shek's successor, his son Chiang Ching-kuo, began to liberalize Taiwan's political system, a process that continued when President Lee Teng-hui took office in 1988. The direct election of Lee Teng-hui as president in 1996 was followed by opposition Democratic Progressive Party candidate Chen Shui-bian's election victory in March 2000. Chen was re-elected in March 2004 in a tightly contested election.

ADMINISTRATION

The authorities in Taipei exercise control over Taiwan, Kinmen, Matsu, the Penghus (Pescadores) and several other smaller islands. Taiwan is divided into counties, provincial municipalities, and two special municipalities, Taipei and Kaohsiung. At the end of 1998, the Constitution was amended to make all counties and cities directly administered by the Executive Yuan. From 1949 until 1991, the authorities on Taiwan claimed to be the sole legitimate government of all of China, including the mainland. In keeping with that claim, when the Nationalists moved to Taiwan in 1949, they reestablished the full array of central political bodies, which had existed on the mainland. While much of this structure remains in place, the authorities on Taiwan in 1991 abandoned their claim of governing mainland China, stating that they do not "dispute the fact that the P.R.C. controls mainland China."

The first National Assembly, elected on the mainland in 1947 to carry out the duties of choosing the President and amending the constitution, was re-established on Taiwan when the KMT moved. Because it was impossible to hold subsequent elections to represent constituencies on the mainland, representatives elected in 1947-48 held these seats "indefinitely." In June 1990, however, the Council of Grand Justices mandated the retirement, effective December 1991, of all remaining "indefinitely" elected members of the National Assembly and other bodies.

The second National Assembly, elected in 1991, was composed of 325 members. The majority were elected directly; 100 were chosen from party slates in proportion to the popular vote. This National Assembly amended the Constitution in 1994, paving the way for the direct election of the President and Vice President that was held in March 1996. In April 2000, the members of the National Assembly voted to permit their terms of office to expire without holding new elections. In June 2005 the National Assembly voted to dissolve itself, leaving Taiwan with a unicameral legislature. The President is both leader of Taiwan and Commander-in-Chief of its armed forces. The President has authority over four of the five administrative branches (Yuan): Executive, Control, Judicial, and Examination. The President appoints the President of the Executive Yuan, who also serves as the Premier. The Premier and the cabinet members are responsible for government policy and administration.

The main lawmaking body, the Legislative Yuan (LY), was originally elected in the late 1940s in parallel with the National Assembly. The first LY had 773 seats and was viewed as a "rubber stamp" institution. The second LY was not elected until 1992. The third LY, elected in 1995, had 157 members serving 3-year terms, while the fourth LY, elected in 1998, was enlarged to 225 members. The LY has greatly enhanced its standing in relation to the Executive Yuan and has established itself as a major player on the central level. With increasing strength, size, and complexity, the LY now mirrors Taiwan's recently liberalized political system. In the 1992 and 1995 elections, the main opposition party—the Democratic Progressive Party (DPP)—challenged the half-century of KMT dominance of the Legislature. In both elections, the DPP won a significant share of the LY seats, leaving only half of the LY seats in the hands of the KMT. In 2001, the DPP won a plurality of LY seats (88), compared to the KMT's 66. The PFP won 45 seats, the TSU 13, and all other parties 13. In the December 2004 LY election, the Pan-Blue coalition won a slender majority of 114 of the 225 seats (later increased to 115) compared to the Pan-Green coalition's 101 (later reduced to 100). Election of four KMT legislators to city mayor and county magistrate positions in the December 2005 local elections further reduced the Pan-Blue majority to 111 seats of the FLY's 220 occupied seats.

In 1994, when the National Assembly voted to allow direct popular election of the President, the LY passed legislation allowing for the direct election of the Governor of Taiwan Province and the mayors of Taipei and Kaohsiung Special Municipalities. These elections were held in December 1994, with the KMT winning the Governor and Kaohsiung Mayor posts, and the DPP winning the Taipei Mayor's position. In 1998, the KMT's Ma Ying-jeou wrestled back control of the mayorship of Taipei from the opposition DPP leader Chen Shuibian. In the same election, however, DPP leader Frank Hsieh managed to defeat the KMT incumbent to become Mayor of Kaohsiung. Additionally, in a move to streamline the administration, the position of elected Governor and many other elements of the Taiwan Provincial Government were eliminated.

The Control Yuan (CY) monitors the efficiency of public service and investigates instances of corruption. The 29 Control Yuan members are appointed by the President and approved by the National Assembly; they serve 6-year terms. In recent years, the Control Yuan has become more activist, and it has conducted several major investigations and impeachments. Since December 2004, however, the LY has refused to approve the new slate of CY members proposed by President Chen, leaving the CY moribund.

The Judicial Yuan (JY) administers Taiwan's court system. It includes a 16-member Council of Grand Justices (COGJ) that interprets the constitution. Grand Justices are appointed by the President, with the consent of the National Assembly, to 9-year terms.

The Examination Yuan (EY) functions as a civil service commission and includes two ministries: the Ministry of Examination, which recruits officials through competitive examination, and the Ministry of Personnel, which manages the civil service. The President appoints the President of the Examination Yuan.

Principal Government Officials

Last Updated: 2/11/2005

President: CHEN Shui-bian
Vice President: Annette LU
Pres., Executive Yuan (Premier): Frank HSIEH
Vice Pres., Executive Yuan (Vice Premier): Sec. Gen., Executive Yuan: Arthur IAP
Pres., Control Yuan: Fredrick CHIEN
Pres., Examination Yuan: YAO Chia-wen
Pres., Judicial Yuan: WENG Yueh-sheng
Pres., Legislative Yuan: WANG Jin-pyng
Min. of Economic Affairs: HO Mei-yueh
Min. of Education: TU Cheng-sheng
Min. of Finance: LIN Chuan
Min. of Foreign Affairs: Mark CHEN
Min. of Health: CHEN Chien-jen
Min. of Interior: SU Jia-chyuan
Min. of Justice: SHIH Mao-lin
Min. of National Defense: LEE Jye
Min. of Transportation & Communications: LIN Ling-san
Min. Without Portfolio: HU Sheng-cheng
Min. Without Portfolio: LIN Yi-fu
Min. Without Portfolio: LIN Sheng-Fong
Min. Without Portfolio: KUO Yao-chi
Min. Without Portfolio: CHEN Chi-mai
Min. Without Portfolio: LIN Ferng-ching
Min. Without Portfolio: FU Li-yeh
Chmn., Agricultural Council: LEE Ching-lung
Chmn., Atomic Energy Council: OUYANG Min-sheng
Chmn., Central Election Commission: CHANG Masa
Chmn., Consumer Protection: YEH Chulan
Chmn., Cultural Affairs: CHEN Chi-nan
Chmn., Economic Planning & Development Council: HU Shengcheng
Chmn., Fair Trade Commission: HWANG Tzong-leh
Chmn., Labor Affairs Council: CHEN Chu
Chmn., Mainland Affairs Council: Joseph WU
Chmn., Mongolian & Tibetan Affairs Commission: HSU Chih-hsiung
Chmn., National Council on Physical Fitness & Sports: CHEN Chuan-show
Chmn., National Palace Museum: SHIH Shou-chien
Chmn., National Science Council: WU Mau-kuen
Chmn., National Youth Commission: CHENG Li-chiun
Chmn., Overseas Chinese Affairs Commission: CHANG Fu-mei
Chmn., Public Construction Commission: KUO Yao-chi
Chmn., Research Development & Evaluation Commission: YEH Jiunnrong
Chmn., Veterans Affairs Commission: KAO Hua-chu
Representative to the US: David LEE
Governor, Central Bank of China: PERNG Fai-nan

POLITICAL CONDITIONS

Until 1986, Taiwan's political system was effectively controlled by one party, the Kuomintang (KMT), the chairman of which was also Taiwan's President. As the ruling party, the KMT was able to fill appointed positions with its members and maintain political control of the island.

After 1986, the KMT's hold on power was challenged by the emergence of competing political parties. Before 1986, candidates opposing the KMT ran in elections as independents or "nonpartisans." Before the 1986 island-wide elections, many "nonpartisans" grouped together to create Taiwan's first new political party, the Democratic Progressive Party (DPP). Despite the official ban on forming new political parties, Taiwan authorities did not prohibit the DPP from operating, and in the 1986 island-wide elections, DPP and independent candidates captured more than 20% of the vote. In 1987, President Chiang Ching-kuo lifted the emergency decree, which had been in place since 1948 and which had granted virtually unlimited powers to the President for use in the anti-communist campaign. This decree provided the basis for nearly four decades of martial law under which individuals and groups expressing dissenting views were dealt with harshly. Expressing views contrary to the authorities' claim to represent all of China or supporting independent legal status for Taiwan was treated as sedition. Since ending martial law, Taiwan has taken dramatic steps to improve respect for human rights and create a democratic political system. Almost all restrictions on the press have ended, restrictions on personal freedoms have been relaxed, and the prohibition against organizing new political parties has been lifted. Lee Teng-hui succeeded Chiang Ching-kuo as President when Chiang died on January 13, 1988. The Civic Organizations Law passed in 1989 allowed for the formation of new political parties, thereby legalizing the DPP, and its support and influence increased. Lee was elected by the National Assembly to a 6-year term in 1990, marking the final time a President was elected by the National Assembly. In the 1992 Legislative Yuan elections, the DPP won 51 seats in the 161-seat body. While this was only half the number of KMT seats, it made the DPP's voice an important factor in legislative decisions. Winning the Taipei mayor's position in December 1994 significantly enhanced the DPP's image. The DPP continued its strong showing in the 1995 LY race, winning 45 of the 157 seats to the KMT's 81. In 1996, Lee Teng-hui was elected President and Lien Chan Vice President in the first direct election by Taiwan voters. In the November 1997 local elections, the Democratic Progressive Party (DPP) won 12 of the 23 county magistrate and city mayor contests to the Kuomintang (KMT)'s 8, outpolling the KMT for the first time in a major election. In the 2001 LY elections, the DPP won a plurality of seats for the first time. In March 2000, DPP candidate Chen Shui-bian became the first opposition party candidate to win the presidency. His victory resulted in the first-ever transition of the presidential office from one political party to another, validating Taiwan's democratic political system. In a hotly contested election on March 20, 2004, President Chen Shui-bian was re-elected by 50.1% of the popular vote to a second term. The election was marred by a shooting incident the day before the election during which President Chen and his running mate Vice President Annette Lu were slightly wounded. While the opposition contested the results, it was the first time that the DPP had won an outright majority in an island-wide election.

The March election also included a "defensive referendum." Historically, the issue of referenda has been closely tied to the question of Taiwan independence, and thus has been a sensitive issue in cross Strait relations. There were two referenda before the voters on March 20. The first asked in light of the P.R.C. missile threat whether Taiwan should purchase anti-missile systems. The second asked whether Taiwan should adopt a "peace framework" for addressing cross Strait differences with the P.R.C. However both referenda failed to obtain support from over 50% of registered voters, as required to be valid.

President Chen Shui-bian has called for major constitutional reforms by 2006 aimed at further reducing layers of government, and making other structural changes aimed at improving governance. The People's Republic of China has accused Chen of using the constitution issue to move Taiwan towards independence. He expressed opposition, however, in his May 20, 2004 inaugural address to using constitutional reform to alter the constitution's definition of Taiwan sovereignty.

The final National Assembly passed a set of constitutional amendments on June 7, 2005 that will halve the number of LY seats from 225 to 113 and create single-member legislative election districts. The revisions also abolished the National Assembly and provided for the public to confirm or reject future constitutional amendments passed by the LY. President Chen has called for "Round Two" of constitutional revision focusing on the form of government (presidential or parliamentary, 5-branch or 3-branch) and on human, labor, and aborigine rights. He has pledged not to include independence or name change in his proposed constitutional revisions.

In the December 2004 Legislative election, the ruling DPP won a plurality with 89 of the 225 seats, gaining 2 seats more than it did in 2001. The opposition KMT won 79 seats, or 11 more than it did in 2001. The KMT's coalition partner, the PFP, won only 34, 12 fewer than it won in 2001, while the DPP's partner, TSU won 12 seats. The New Party won one seat. The ruling coalition's inability to secure a majority has left the LY in virtual gridlock since the election. The KMT won a landslide victory in December 2005 local elections, winning 14 of the 23 city mayor and county magistrate races to the ruling DPP's 6.

Political Parties

In addition to the KMT (described above in 'History' and 'Political Conditions'), there are three other major parties. One is the DPP, with its membership made up largely of native Taiwanese. Its platform includes outspoken positions on some of the most sensitive issues in Taiwan politics. For example, the DPP maintains that Taiwan is an entity separate from mainland China, in contrast to the KMT position that Taiwan and the mainland, though currently divided, are both part of "one China." In sharp contrast to the tenets of both KMT and P.R.C. policy, a number of ranking DPP officials openly advocate independence for Taiwan. The recent downplaying of Taiwan independence by the DPP as a party, however, led to the formation by hard-line advocates of a new political party called the Taiwan Independence Party in December 1996.

The People's First Party (PFP) was formed in the wake of the March 2000 presidential election, composed of former KMT members who supported former KMT Taiwan Provincial Governor James Soong's presidential bid. PFP and KMT subsequently formed the "Pan-Blue" Alliance to oppose the DPP government. Former KMT President Lee Teng-hui, in turn, broke with the KMT and formed the proindependence Taiwan Solidarity Union (TSU) in 2001. The TSU, which advocates changing Taiwan's official name and completely replacing the 1947 constitution, allied itself with the DPP as part of the ruling "Pan-Green" alliance.

Taiwan and the Mainland

Despite differences between Taiwan and the P.R.C., contact between the two sides of the Taiwan Strait has grown significantly over the past decade. Taiwan has continued to relax restrictions on unofficial contacts with the P.R.C., and cross-Strait interaction has mushroomed. In January 2001, Taiwan formally allowed the "three mini-links" (direct trade, travel, and postal links) from Quemoy and Matsu Islands to Fujian Province. Taiwan opened direct cross-strait trade in February 2002. Cross-Strait trade has grown rapidly over the past 10 years. China is Taiwan's largest trading partner, and Taiwan is China's fifth largest. Estimates of Taiwan investment on the mainland, both officially approved by Taiwan authorities and investment made by Taiwan firms through third parties, start from $100 billion, making Taiwan and Hong Kong the two largest investors. This trade runs heavily in Taiwan's favor and continues to grow, providing another engine for the island's economy. The trend in cross-Strait economic interaction is one of steady growth with, so far, only temporary setbacks due to political factors such as the P.R.C.'s passage of its Anti-Secession Law. In August 2001, President Chen accepted the recommendation of the Economic Development Advisory Council to set aside the "no haste, be patient" policy of the Lee administration and replace it with an "economic opening and effective management policy." In February 2003, Taiwan and the P.R.C. agreed to allow Taiwan carriers to fly via Hong Kong or Macao to bring Taiwan residents on the mainland home for the Lunar New Year holiday. The two sides agreed to conduct Lunar New Year charter flights again in 2005, with flights operated by both Taiwan and P.R.C. carriers flying over, but not having to land in, Hong Kong or Macau. The two sides agreed on an expanded series of Lunar New Year charter flights in January - February 2006.

The development of semiofficial cross-Strait relations has been halting. Prior to April 1993, when talks were held in Singapore between the heads of two private intermediary organizations—Taiwan's Straits Exchange Foundation (SEF) and the P.R.C.'s Association for Relations Across the Taiwan Strait (ARATS)—there had been some lower-level exchanges between the two sides of the Strait. The April 1993 SEFARATS talks primarily addressed technical issues relating to cross-Strait interactions. Lower-level talks continued on a fairly regular basis until they were suspended by Beijing in 1995 after President Lee's U.S. visit. Unofficial exchanges resumed in 1997 through informal meetings between personnel of the two sides' unofficial representative organizations. Direct SEF-ARATS contacts resumed in April 1998, and the SEF Chairman visited the mainland in October 1998. A planned visit by ARATS Chairman Wang Daohan to Taiwan in the fall, however, was postponed following statements made by then-President Lee Teng-hui that relations between the P.R.C. and Taiwan should be conducted as "state-to-state" or at least as "special state-to-state relations." Since his May 20, 2000 inauguration, President Chen has called for resuming the cross-Strait dialogue without any preconditions. President Chen has stated that such talks should be conducted in the spirit of the 1992 Hong Kong talks, a reference to a meeting the two sides held to discuss how to handle political barriers to cross-Strait interaction. The P.R.C. has responded that the Chen administration must acknowledge that the two sides reached a consensus that there is only "one China" before any dialogue can be restarted. In his May 20, 2004 inaugural address, President Chen recognized the P.R.C.'s insistence on "one China" but stopped short of endorsing the concept. He called for a new "Cross-Strait Framework for Peace and Stability" and enhanced political, economic, and social exchanges between the two sides. In the face of the "one China" recognition obstacle and Taiwan's resentment over the P.R.C.'s March 2005 "Anti-Secession Law," Taipei and Beijing have been cautiously feeling each other out on a series of smaller, intermediary steps, including cross-Strait cargo and passenger charter flights, sale of Taiwan agricultural products in the P.R.C., and P.R.C. tourists visiting Taiwan. The United States has welcomed and encouraged the cross-Strait dialogue as a process which contributes to a reduction of tension and to an environment conducive to the eventual peaceful resolution of the outstanding differences between the two sides. The United States believes that differences between Taipei and Beijing should be resolved by the people on both sides of the Strait themselves. The United States has consistently stated that its abiding interest is that the process be peaceful.

ECONOMY

Through nearly five decades of hard work and sound economic management, Taiwan has transformed itself from an underdeveloped, agricultural island to an economic power that is a leading producer of high-technology goods. In the 1960s, foreign investment in Taiwan helped introduce modern, labor-intensive technology to the island, and Taiwan became a major exporter of labor-intensive products. In the 1980s, focus shifted toward increasingly sophisticated, capital-intensive and technology-intensive products for export and toward developing the service sector. At the same time, the appreciation of the New Taiwan dollar (NT$), rising labor costs, and increasing environmental consciousness in Taiwan caused many labor-intensive industries, such as shoe manufacturing, to move to the Chinese mainland and Southeast Asia. Taiwan has transformed itself from a recipient of U.S. aid in the 1950s and early 1960s to an aid donor and major foreign investor, especially in Asia. Taiwan is now a creditor economy, holding the world's third largest stock of foreign exchange reserves ($252 billion as of October 2005). Although Taiwan enjoyed sustained economic growth, full employment, and low inflation for many years, in 2001, the combination of the slowing global economy, weaknesses in parts of the financial sector, and sagging consumer and business confidence in the government's economic policymaking resulted in the first recession since 1952. The economy began to recover in 2002, but the outbreak of severe acute respiratory syndrome (SARS) slowed growth to 3.4% in 2003. The world economic upturn had driven growth in 2004 to 6.1%. However, slower world growth in 2005, higher energy prices and interest rates, and excess inventory could drag 2005 growth to under 4%.

Foreign Trade

Foreign trade has been the engine of Taiwan's rapid growth during the past 50 years. Taiwan's economy remains export-oriented, so it depends on an open world trade regime and remains vulnerable to downturns in the world economy. The total value of trade increased more than five-fold in the 1960s, nearly ten-fold in the 1970s, and doubled again in the 1980s. The 1990s saw a more modest, slightly less than twofold, growth. Export composition changed from predominantly agricultural commodities to industrial goods (now 98%). The electronics sector is Taiwan's most important industrial export sector and is the largest recipient of U.S. investment. Taiwan became a member of the World Trade Organization (WTO) as a special customs territory in January 2002.

Taiwan firms are the world's largest supplier of computer monitors and leaders in PC manufacturing. Textile production, though of declining importance as Taiwan loses its competitive advantage in labor-intensive markets, is another major industrial export sector. Imports are dominated by raw materials and capital goods, which account for more than 90% of the total. Taiwan imports coal, oil and gas to meet most of its energy needs. Reflecting the large Taiwan investment in the mainland, China supplanted the United States as Taiwan's largest trade partner in 2003. In 2004, China (including Hong Kong) accounted for over 23% of Taiwan's total trade and almost 37% of Taiwan's exports. Japan was Taiwan's second largest trading partner with 15% of total trade, including 26% of Taiwan's imports. The U.S. is now Taiwan's third-largest trade partner, taking 16% of Taiwan's exports and supplying 13% of its imports. Taiwan is the United States' eighth-largest trading partner; Taiwan's two-way trade with the United States amounted to $49 billion in 2003 and rose 15% to $56 billion in 2004. Imports from the United States consist mostly of agricultural and industrial raw materials. Exports to the United States are mainly electronics and consumer goods. The United States, Hong Kong, the P.R.C. and Japan account for nearly 61% of Taiwan's exports, and the United States and Japan provide almost 40% of Taiwan's imports. As Taiwan's per capita income level has risen, demand for imported, high-quality consumer goods has increased. The U.S. trade deficit with Taiwan in 2003 was $14 billion and fell slightly to $13 billion in 2004. The lack of formal diplomatic relations with all but 24 of its trading partners appears not to have seriously hindered Taiwan's rapidly expanding commerce, but has made free trade agreements extremely difficult to pursue. Taiwan maintains trade offices in more than 96 countries with which it does not have official relations. Taiwan is a member of the Asian Development Bank, the WTO, and the Asia-Pacific Economic Cooperation (APEC) forum. Taiwan is also an observer at the OECD. These developments reflect Taiwan's economic importance and its desire to become further integrated into the global economy.

Agriculture

Although only about one-quarter of Taiwan's land area is arable, 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. Agriculture only comprises about 1.7% of Taiwan's GDP. Taiwan's main crops are rice, sugarcane, fruit, and vegetables. While largely self-sufficient in rice production, Taiwan imports large amounts of wheat, corn, and soybeans, mostly from the United States. Meat production (poultry and pork) and consumption are rising sharply, reflecting a rising standard of living. Agricultural exports include frozen fish, aquaculture and sea products, canned and frozen vegetables, and grain products. Imports of agricultural products have increased since Taiwan's WTO accession, which is slowly liberalizing previously protected agricultural markets. In December 2003, in response to the first BSE detection in the United States, Taiwan decided to suspend the import of U.S. beef. While Taiwan reopened its market in April 2005 to American beef from cattle under 30 months old, imports were suspended in June 2005 due to a second BSE detection in the United States. Taiwan authorities have committed to base their decision to reopen the market on science, and AIT expects Taiwan to make a decision in late December 2005 or early 2006.

Economic Outlook

Taiwan now faces many of the same economic issues as other developed economies. With the prospect of continued relocation of labor-intensive industries to countries with cheaper work forces, Taiwan's future development will have to rely on further transformation to a high technology and service-oriented economy. In recent years, Taiwan has successfully diversified its trade markets, cutting its share of exports to the United States from 49% in 1984 to 16% by the end of 2004. However, a significant proportion of Taiwan's rapidly growing exports to the P.R.C. are ultimately dependent on consumer demand in the U.S. Taiwan firms are increasingly acting as management centers that take in orders, produce them in Taiwan, the Mainland or South East Asia and then ship the final products to the U.S. Taiwan's accession to the WTO and its desire to become an Asia-Pacific "regional operations center" are spurring further economic liberalization.

DEFENSE

In proportion to its population, Taiwan still maintains a large military establishment accounting for 15.9% of the central budget and 2.3% of GDP in FY 2005. However, the defense budget as a proportion of GDP has shrunk significantly over the past decade from about 22.5% of the central budget and 4% of GDP in 1994. The military's mission is the defense of Taiwan against the P.R.C., which is seen as the predominant threat and which has not renounced the use of force against Taiwan. Taiwan's armed forces were reduced as part of a reform initiative from 1997 to 2001, going from about 450,000 to 385,000, with further reductions since then bringing the total force level down to just under 300,000. Registered reservists reportedly totaled 3,870,000 in 1997. Conscription remains universal for qualified males reaching age 18.

Taiwan's armed forces are equipped with weapons obtained primarily from the United States. In recent years, however, Taiwan also has procured some weapons from other Western nations and has stressed military "self-reliance," which has resulted in the growth of indigenous military production in certain fields. Taiwan's legislature is currently debating the approval of a special defense budget proposal to purchase defensive systems the U.S. agreed to sell Taiwan in 2001 and earlier. The special budget would provide funds to purchase the Patriot Advanced Capability (PAC-3) missile defense system, P-3C maritime patrol aircraft, and diesel-electric submarines. Taiwan's opposition parties have blocked attempts to pass the special budget on the legislative agenda. These systems would give Taiwan key capabilities in missile defense and anti-submarine warfare to remedy vulnerabilities in countering the P.R.C.'s accelerated military modernization. Taiwan adheres to the principles of the nuclear Non-Proliferation Treaty and has stated that it does not intend to produce nuclear weapons.

FOREIGN RELATIONS

The People's Republic of China replaced Taiwan at the United Nations in 1971, and Taiwan's diplomatic position has eroded, as many countries changed their official recognition from Taipei to Beijing. As of the end of 2005, Taiwan has formal diplomatic ties with 25 countries. At the same time, Taiwan has cultivated informal ties with most countries to offset its diplomatic isolation and to expand its economic relations. A number of nations have set up unofficial organizations to carry out commercial and other relations with Taiwan. Including its official overseas missions and its unofficial representative and/or trade offices, Taiwan is represented in 122 countries. Recently, Taiwan has lobbied strongly for admission into the United Nations and other international organizations, such as the WHO. The P.R.C. opposes Taiwan's membership in such organizations, most of which require statehood for membership, because Beijing considers Taiwan to be a province of China, not a separate sovereign state.

U.S.-TAIWAN RELATIONS

On January 1, 1979, the United States changed its diplomatic recognition from Taipei to Beijing. In the U.S.-P.R.C. Joint Communique that announced the change, the United States recognized the Government of the People's Republic of China as the sole legal government of China and acknowledged the Chinese position that there is but one China and Taiwan is part of China. The Joint Communique also stated that within this context the people of the United States will maintain cultural, commercial, and other unofficial relations with the people on Taiwan.

On April 10, 1979, President Carter signed into law the Taiwan Relations Act (TRA), which created domestic legal authority for the conduct of unofficial relations with Taiwan. U.S. commercial, cultural, and other interaction with the people on Taiwan is facilitated through the American Institute in Taiwan (AIT), a private nonprofit corporation. The Institute has its headquarters in the Washington, DC area and has offices in Taipei and Kaohsiung. It is authorized to issue visas, accept passport applications, and provide assistance to U.S. citizens in Taiwan. A counterpart organization, the Taipei Economic and Cultural Representative Office in the United States (TECRO), has been established by the Taiwan authorities. It has its headquarters in Taipei, the representative branch office in Washington, DC, and 11 other Taipei Economic and Cultural Offices (TECO) in the continental U.S. and Guam. The Taiwan Relations Act (TRA) continues to provide the legal basis for the unofficial relationship between the U.S. and Taiwan, and enshrines the U.S. commitment to assisting Taiwan's defensive capability.

Following de-recognition, the United States terminated its Mutual Defense Treaty with Taiwan. However, the United States has continued the sale of appropriate defensive military equipment to Taiwan in accordance with the Taiwan Relations Act, which provides for such sales and which declares that peace and stability in the area are in U.S. interests. Sales of defensive military equipment also are consistent with the 1982 U.S.-P.R.C. Joint Communique. In this communique, the United States stated that "it does not seek to carry out a long-term policy of arms sales to Taiwan" and that U.S. arms sales would "not exceed, either in qualitative or in quantitative terms, the level of those supplied in recent years," and that the U.S. intends "gradually to reduce its sale of arms to Taiwan." The P.R.C., in the 1982 communique, stated that its policy was to strive for a peaceful resolution of the Taiwan question.

The United States position on Taiwan has been clear and consistent, as reflected in the Three Communique's and the Taiwan Relations Act (TRA). The U.S. "one-China" policy acknowledges that both Taiwan and the Mainland are part of China. The U.S. insists on the peaceful resolution of cross-Strait differences and encourages dialogue to help advance such a resolution. The U.S. does not support Taiwan independence. President Bush clearly stated U.S. policy on December 9, 2003. The United States is opposed to any attempt by either side to unilaterally alter the status quo in the Taiwan Strait. The United States has endorsed dialogue and exchanges between the two sides and has encouraged the P.R.C. to engage the democratically elected leadership of Taiwan.

U.S. commercial ties with Taiwan have been maintained and have expanded since 1979. Taiwan continues to enjoy Export-Import Bank financing, Overseas Private Investment Corporation guarantees, normal trade relations (NTR) status, and ready access to U.S. markets. In recent years, AIT commercial dealings with Taiwan have focused on expanding market access for American goods and services. AIT has been engaged in a series of trade negotiations, which have focused on protection of intellectual property rights, market access, and issues relating to Taiwan's accession to the WTO, which occurred in 2002.

Maintaining diplomatic relations with the P.R.C. has been recognized to be in the long-term interest of the United States by six consecutive administrations; however, maintaining strong, unofficial relations with Taiwan also is in the U.S. interest. The United States is committed to these efforts because they are important for America's global position and for peace and stability in Asia. In keeping with its one-China policy, while the U.S. does not support Taiwan independence, it does support Taiwan's membership in appropriate international organizations, such as the WTO, APEC forum, and the Asian Development Bank, where statehood is not a requirement for membership. In addition, the U.S. supports appropriate opportunities for Taiwan's voice to be heard in organizations where its membership is not possible.

Principal U.S. Embassy Officials

KAOHSIUNG (BO) Address: 5F, #2 Chung Cheng 3rd Road; Phone: 886-7-238-7744; Fax: 886-7-238-5237; Workweek: 8:00 am to 5:00 pm; Website: HTTP://WWW.AIT.ORG.TW/en/ait_kaohsiung/.

TAIPEI Address: 7, Lane 134, Hsin Yi Road, Sec 3, Taipei 106, Taiwan; Phone: [886] (2) 2162-2000; Fax: [886] (2) 2162-2251; Workweek: 8:00 a.m. until 5:00 p.m.; Website: http://ait.org.tw.

TRAVEL

Consular Information Sheet

December 27, 2005

Description:

Taiwan is a stable democracy and it has a strong and well-developed economy. Tourist facilities are widely available.

Entry Requirements:

U.S. passport holders will be allowed to enter Taiwan without a visa for up to thirty days (no extensions allowed) if their passport is valid for at least six months from the date of entry into Taiwan and the traveler has a confirmed return or onward air ticket. Travelers must have already met any additional visa requirements for the next destination, if applicable. If the passport is valid for less than six months from the date of entry into Taiwan, travelers may apply for a landing visa that has a duration of stay of no more than thirty days. The processing fee is US $124.00 and no extensions are allowed. Travelers also have the additional option of applying for and receiving a Taiwan visa prior to arrival in Taiwan. The processing fee is US$100.00.

Please Note:

No extension of stay or change of status is allowed if the traveler enters on the visa waiver program (30 day stay, no extensions). Travelers arriving in Taiwan with a valid passport and valid Taiwan visas may be admitted for up to 90 days even if their passports are valid for less than 6 months. Travelers who apply for a landing visa upon arrival will be admitted for 30 days or up to the day the passport expires, which ever comes first. For specific information about entry requirements, travelers may contact the Taipei Economic and Cultural Representative Office (TECRO), 4201 Wisconsin Avenue, N.W., Washington, D.C. 20016-2137, via either its main telephone number, (202) 895-1800, or its visa section telephone number, (202) 895-1814. The main fax number at TECRO is (202) 363-0999, and the visa section fax number is (202) 895-0017. There is also an Internet address: http://www.taipei.org/TECO (Taipei Economic and Cultural Office) also has offices in Atlanta, Boston, Chicago, Guam, Honolulu, Houston, Kansas City, Los Angeles, Miami, New York, San Francisco and Seattle.

Safety and Security:

For the latest security information, Americans traveling abroad should regularly monitor the Department's Internet web site at http://travel.state.gov where the current Worldwide Caution Public Announcement, Travel Warnings and Public Announcements can be found. Up to date information on security can also be obtained by calling 1-888-407-4747 toll free in the U.S., or, for callers outside the United States and Canada, a regular toll line at 1-317-472-2328. These numbers are available from 8:00 a.m. to 8:00 p.m. Eastern Standard Time, Monday through Friday (except U.S. federal holidays).

Crime:

Although Taiwan is considered a medium risk location for crime, the overall violent crime rate in Taiwan remains relatively low. Travelers should avoid business establishments such as massage parlors, illegal "barbershops", and illegal "nightclubs" because many of these establishments are run by criminals and are located in high crime areas. In contrast to their counterparts, legal barbershops prominently display the usual grooming services. Illegal nightclubs have no advertisement and are publicized by word of mouth only. Public transportation, including the buses and the subway, is generally safe in Taiwan, but women should exercise caution when traveling alone in taxis late at night. In the past few years there have been several incidents of violence committed by taxi drivers against solitary female passengers. In several parts of Taiwan, incidents of purse snatching by thieves on motorcycles have been reported.

Information for Victims of Crime:

The loss or theft abroad of a U.S. passport should be reported immediately to the local police, and to the AIT-Taipei or AIT-Kaohsiung. Local police departments have foreign affairs sections that are normally staffed by English-speaking officers. Police contact numbers for the major cities in Taiwan are as follows: Taipei (02) 2556-6007, Kaohsiung (07) 215-4342, Tainan (06) 222-9704, Taichung (04) 2327-3875, Taitung (089) 322-034, ext. 2122, Pingtung(08) 733-6283, ext. 2122.

If you are the victim of a crime while in Taiwan, in addition to reporting to local police, contact AIT Taipei or AIT Kaohsiung for assistance. AIT's consular staff can, for example, assist you to find appropriate medical care, contact family members or friends and explain how funds could be transferred. Although the investigation and prosecution of the crime is solely the responsibility of local authorities, consular officers can help you to understand the local criminal justice process and to find an attorney if needed.

Medical Facilities and Health Information:

Health facilities in Taiwan are fully adequate for routine and emergency medical treatment. Physicians are well trained and many have studied in the U.S. and speak English. State of the art medical equipment is available at many clinics and hospitals. Hospitals' nursing services provide medication dispensing and wound care, but generally not the daily patient maintenance functions found in U.S. hospitals. Ambulances are available in Taiwan but are not like those in the U.S. There are no trained Emergency Medical System Technicians accompanying an ambulance, unless within 2 kilometers of National Taiwan University Hospital or Veterans General Hospital.

For information on specific clinics and hospitals, please refer to the AIT web page at http://www.ait.org.tw.

Information on vaccinations and other health precautions, such as safe food and water precautions and insect bite protection, may be obtained from the Centers for Disease Control and Prevention's hotline for international travelers at 1-877-FYI-TRIP (1-877-394-8747); fax 1-888-CDC-FAXX (1-888-232-3299), or via the CDC's Internet site at http://www.cdc.gov/travel. For information about outbreaks of infectious diseases abroad consult the World Health Organization's (WHO) website at http://www.who.int/en. Further health information for travelers is available at http://www.who.int/ith.

Medical Insurance:

Doctors and hospitals in Taiwan expect immediate cash payment for health services. The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and whether it will cover emergency expenses such as a medical evacuation.

Traffic Safety and Road Conditions:

While outside the United States, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Taiwan is provided for general reference only, and may not be totally accurate in a particular location or circumstance. Roads in Taiwan's major cities are generally congested, and the many scooters and motorcycles that weave in and out of traffic make driving conditions worse.

Pedestrians should exercise caution when crossing streets because many drivers may not respect their right of way. Special caution should be taken when driving on mountain roads, which are typically narrow, winding, and poorly banked, and which may be made impassable by mudslides after heavy rains.

The national authority responsible for road safety in Taiwan is the Traffic Safety Committee, MOTC. Information regarding road safety may be found on their website at www.motc.gov.tw.

For general information on tourism in Taiwan information may be found at www.tbroc.gov.tw (Taiwan Tourism Bureau - Ministry of Transportation and Communication).

For specific information concerning Taiwan's driver's permits, vehicle inspection road tax and mandatory insurance, contact the nearest TECO office.

Aviation Safety Oversight:

The U.S. Federal Aviation Administration (FAA) has assessed the Civil Aviation Authority of Taiwan as being in compliance with ICAO international aviation safety standards for oversight of Taiwan's air carrier operations.

Avian Influenza Screening Procedures:

As of October 10, 2005, all passengers arriving in Taiwan on flights from Vietnam, Thailand, Indonesia and Cambodia will be asked by the Taiwan Center for Disease Control to self-screen for symptoms of avian influenza. Persons arriving from those countries, regardless of nationality, are instructed to take their temperatures twice a day for ten days and record the results on a form provided at the airport. Anyone experiencing a fever over 38 degrees Celsius (100.4 degrees Fahrenheit), coughing, or sore threat within ten days of arrival is instructed to begin wearing a mask and see a doctor immediately to report your symptoms. Travelers arriving in Taiwan with any of these symptoms are instructed to fill out a "Communicable Disease Survey Form" upon landing and inform the quarantine personnel at the airport. Anyone failing to report their symptoms to the Taiwan health authorities, who subsequently transmits avian influenza to others will be subject to a fine between NT $30000 and NT $15,000 (US $90 to US $450).

Customs Regulations:

Taiwan customs authorities may enforce strict regulations concerning temporary import or export of items such as: firearms, antiquities, medications, currency, ivory, etc. It is advisable to contact the Taipei Economic and Cultural Office (TECRO) in Washington or one of the TECO office's in the United States for specific information regarding customs requirements. In many countries around the world, counterfeit and pirated goods are widely available. Transactions involving such products are illegal and bringing them back to the United States may result in forfeitures and/or fines.

Disaster Preparedness:

Taiwan is subject to strong earthquakes that can occur anywhere on the island. Taiwan is also hit by typhoons, usually from July to October. Travelers planning a trip to Taiwan can obtain general information about natural disaster preparedness on the Internet from the U.S. Federal Emergency Management Agency (FEMA) at http://www.fema.gov/. Additional information about currently active typhoons can be obtained on the University of Hawaii tropical storm page at http://www.solar.ifa.hawaii.edu/Tropical/tropical.html. The Central Weather Bureau of Taiwan also maintains a web site that provides information about typhoons and earthquakes. Its Internet address is http://www.cwb.gov.tw.

Dual Nationality and Compulsory Military Service:

Taiwan law provides for compulsory military service. Men between the ages of 18 and 40 who were born in Taiwan or who have ever held a Taiwan passport should be aware that they may be subject to compulsory military service in Taiwan, even if they are also U.S. citizens, and even if they have entered Taiwan on U.S. passports. Potentially affected individuals are urged to consult with the nearest office of the Taipei Economic and Cultural Office (TECO) in the United States before visiting Taiwan to determine whether they are subject to the military service requirement.

English Language Programming:

The International Community Radio Taipei (ICRT) provides all of Taiwan with English-language programming 24 hours a day. In the event of an emergency or an approaching typhoon, travelers should tune their radios to FM 100.7. English speakers experiencing a personal crisis in Taiwan can contact the Community Services Center in Taipei at (02) 2836-8134 or 2838-4947 to arrange counseling or to contact a support group.

Judicial Assistance:

Authority - 22 U.S.C. 3306(b) provides acts performed by officers of the American Institute on Taiwan under 22 U.S.C. 3306 are valid, as if performed by any other person authorized under the laws of the United States to perform such acts (consular officers). The American Institute in Taiwan (AIT) is a nonprofit corporation under the laws of the District of Colombia. 22 U.S.C. 3305, 3306(a)(3). The judicial assistance acts of AIT personnel parallel the acts performed by U.S. consular officers under 28 U.S.C. 1781 (a)(2). See Sec. 1-201(h) of Executive Order No. 12143, 44 Fed. Reg. 37191 (June 23, 1979). Pursuant to Section 10(a) of the Taiwan Relations Act (TRA), 22 U.S.C. 3309(a), the Taiwan Economic Cultural Representative's Office ("TECRO") is the instrumentality established by the people of Taiwan having the necessary authority under the laws of Taiwan to take actions on behalf of Taiwan in accordance with the Act.

Judicial assistance is provided by authorities on Taiwan in response to letters rogatory from foreign courts in accordance with Taiwan's "Law Governing Extension of Assistance to Foreign Courts." For further information regarding judicial assistance in Taiwan please go to the following Website: http://www.ait.org.tw/ait/TSS/acs/judicial.htm.

Criminal Penalties:

While outside the United States, a U.S. citizen is subject to local laws and regulations, which sometimes differ significantly from those in the United States and may not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. Persons violating Taiwan's laws, even unknowingly, may be expelled, arrested or imprisoned. Penalties for possession, use, or trafficking in illegal drugs in Taiwan are severe and convicted offenders can expect long jail sentences and heavy fines. Engaging in illicit sexual conduct with children or using or disseminating child pornography in a foreign state is a crime, prosecutable in the United States.

Children's Issues:

For information on international adoption of children and international parental child abduction, see the Office of Children's Issues website at http://travel.state.gov/family/family_1732.html.

Registration, Passports, and Embassy Location:

The American Institute in Taiwan (AIT) is authorized by law to perform American citizen services. Americans living or traveling in Taiwan are encouraged to register with AIT through the State Department's travel registration website, https://travelregistration.state.gov, and to obtain undated information on travel and security with Taiwan. Americans without Internet access may register directly with AIT Taipei or AIT Kaohsiung. By registering, American citizens make it easier for the Embassy or Consulate to contact them in case of emergency. The American Institute in Taiwan is a full passport services agency. Processing time for routine passports is about two weeks.

The American Institute in Taiwan is located at No.7 Lane 134, Hsin Yi Road Section 3, Taipei, Taiwan, telephone: (886) 2-2162-2000; fax: (886) 2-2162-2239. The American Institute in Taiwan branch office is located at No. 2 Chung Cheng 3rd Road, 5th Floor, Kaohsiung, Taiwan, telephone: (886) 7-238-7744; fax: (886) 7-238-5237. AIT's citizens' services section can also be contacted by e-mail at [email protected]. In case of emergencies after working hours, the duty officer at the American Institute in Taiwan at Taipei may be contacted at (886) 2-2162-2013.

International Adoption

January 2006

The information below has been edited from a report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Adoption section of this book and review current reports online at www.travel.state.gov/family.

Disclaimer:

The information in this flyer relating to the legal requirements of specific foreign countries is based on public sources and our current understanding. Questions involving foreign and U.S. immigration laws and legal interpretation should be addressed respectively to qualified foreign or U.S. legal counsel.

Availability of Children for Adoption:

Recent U.S. immigrant visa statistics reflect the following pattern for visa issuance to orphans:

FY-1996: IR-3 immigrant visas issued to Taiwan orphans adopted abroad - 8; IR-4 immigrant visas issued to Taiwan orphans adopted in the U.S. - 9
FY-1997: IR-3 Visas - 4;
IR-4 Visas - 10
FY-1998: IR-3 Visas - 14;
IR-4 Visas - 14
FY-1999: IR-3 Visas - 4;
IR-4 Visas - 27 FY-2000: IR-3 Visas - 5;
IR-4 Visas - 23

Adoption Authority:

Children's Bureau, Ministry of Interior. The articles of law relating to adoption in Taiwan are found in the Civil Code (Family and Children Welfare Act in Book VI), Articles 1072 through 1083.

Adoption Procedures:

An application for adoption is first submitted to the Taiwan Supreme Court which designates an office of the Taiwan District Court to process the adoption. This step takes four to eight weeks.

After two to three months, the adoptive parent(s) or a designated representative will receive a notice to appear before the District Court. During this waiting period, a Taiwan social worker from the local bureau of the social affairs or a designated agency will interview the prospective adoptive parent(s) or review the home study. The court will rule on the adoption within two or three months and publish a final ruling one week later.

The third step is to register the adoption at the Taiwan Registrar's office submitting the original court ruling, final ruling, and the power of attorney certified at the Taiwan Foreign Affairs Police Station at the Taiwan Registrar's office. This usually takes only one hour. All of the original documents from the United States must be notarized by a U.S. notary and the Taiwan Economic and Cultural Representative Office (TECRO) and must be translated into Chinese.

Persons wishing to adopt a child in Taiwan should follow through and complete adoption procedures in Taiwan and obtain a Taiwan travel document for the child. Without the completed adoption and travel documents in order, it is illegal to take the child out of Taiwan. It is generally faster for the child to obtain a Taiwan passport through the biological parent(s) before the adoption in order to prevent additional delay cause by different spellings of the child's name. Adoptive parent(s) can apply for a Taiwan passport for the child at the Ministry of Foreign Affairs by submitting the household registration, and, if the adoptive parent(s) are not going to appear, the guardian's passport and power of attorney.

Age and Civil Status Requirements:

A single parent may adopt a child in Taiwan. The adoptive parent must be at least twenty years older than the person being adopted. If there are two adoptive parents then both must be at least twenty years older than the person being adopted.

Adoption Agencies:

Please review current reports online at travel.state.gov/family for details.

Doctors:

The American Institute in Taiwan maintains current lists of doctors and sources for medicine should either you or your child experience health problems while in Taiwan.

Documentary Requirements:

The following documents are required:

• Home study;
• Taiwan household registration of the child;
• Certified statement from the adoptive parent(s) to claim under which provision of U.S. law the child is being adopted;
• Notarized contract between the biological parent(s) and adoptive parent(s);
• Power of Attorney (if the adoptive parents will not appear).

U.S. Immigration Requirements:

A child from Taiwan adopted by an American citizen must obtain an immigrant visa before he or she can enter the U.S. as a lawful permanent resident. Please see the International Adoption section of this book for more details and review current reports online at travel.state.gov/family.

Taiwan Representative Office in the United States:

The Taiwan Economic and Cultural Representative Office (TECRO)
4201 Wisconsin Ave, NW
Washington, DC 20016-2137
Tel: (202) 895-1800
Fax: (202) 363-0999

Additional TECRO offices are located in Atlanta, Boston, Chicago, Coral Gables, Hagatna (Guam), Honolulu, Houston, Kansas City, Los Angeles, New York, San Francisco, and Seattle.

American Institute in Taiwan (AIT):

U.S. mailing address
Travel Services Section
American Institute in Taiwan
Department of State
4170 AIT-Taipei Pl
Washington, DC 20521-4170
Street address
Travel Services Section
American Institute in Taiwan
Number 7, Lane 134
Hsin Yi Rd, Section 3
Taipei 106, Taiwan
Tel: (886) 02-2709-2000
Fax: (886) 02-2709-0908).

Additional Information:

Prospective adoptive parents are strongly encouraged to consular BCIS publication M-249, The Immigration of Adopted and Prospective Adopted Children, as well as the Department of State publication, International Adoptions.

Questions:

Specific questions regarding adoptions in Taiwan may be addressed to the Travel Services Section, Immigrant Visa Unit, American Institute in Taiwan (7, Lane 134, Hsin Yi Rd, Section 3, Taipei 106, Taiwan, tel: 02-2709-2000, fax: 02-2709-0908). You may also contact the Office of Children's Issues, SA-29, 2201 C Street, NW, U.S. Department of State, Washington, DC 20520-2818, tel: 1-888-407-4747.

International Parental Child Abduction

January 2006

The information below has been edited from the report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Child Abduction section of this book and review current reports online at travel.state.gov.

Disclaimer:

The information in this flyer relating to the legal requirements of specific foreign countries is based on public sources and our current understanding. Questions involving foreign and U.S. immigration laws and legal interpretation should be addressed respectively to qualified foreign or U.S. legal counsel.

General Information:

Taiwan is not a party to the Hague Convention on the Civil Aspects of International Child Abduction; nor are there any international or bilateral treaties in force between Taiwan and the United States dealing with international parental child abduction. American citizens who travel to Taiwan place themselves under the jurisdiction of local courts. American citizens may wish to consider this before planning a trip to Taiwan with dual national children.

Custody Disputes:

In Taiwan, parents who are legally married share the custody of their children. If they are not married, by law the custody is granted to the mother unless there are known facts of inappropriate behavior, mental or social problems.

Enforcement of Foreign Judgments:

Custody orders and judgments of foreign courts are enforceable in Taiwan. Custody court orders are placed on the Household Registry. If a court order is violated, the custodial parent can submit a complaint to the police to have them enforce the court order.

Visitation Rights:

In cases where legal custody has been granted and the judgment has been rendered, the non-custodial parent can petition the court for visitation rights within the court ordered decision or come to a verbal agreement with the custodial parent.

Dual Nationality:

Dual nationality is recognized under Taiwan law.

Criminal Remedies:

For information on possible criminal remedies, please contact your local law enforcement authorities or the nearest office of the Federal Bureau of Investigation (FBI). Information is also available on the Internet at the web site of the U.S. Department of Justice, Office of Juvenile Justice and Delinquency Prevention (OJJDP) at http://www.ojjdp.ncjrs.org.

For further information on international parental child abduction, contact the Office of Children's Issues at 202-736-7000, visit the State Department website on the Internet at http://travel.state.gov, or send a nine-by-twelve-inch, self-addressed envelope to: Office of Children's Issues, SA-29, U.S. Department of State, 2201 C Street, NW, Washington, DC 20520-2818; Phone: (202) 736-9090; Fax: (202) 312-9743.