Location: Eastern Asia – Southeastern coast of China
slightly smaller than Delaware and Maryland combined
Climate: Tropical with a monsoon season June to August
East – mostly mountains
West – flat to gently rolling plains
Government: Multiparty Democracy
Economy: Capitalist economy with gradually decreasing government guidance of investment and foreign trade.
Foreign trade is the engine powering Taiwan’s economy.
Military: Large military establishment
Legal System: Civil Law system
Language: Mandarin Chinese
Religion: 93% Buddhist
GDP – per capita: $ 35,700
Industry Sector(textile, electronics, and consumer products): is 36% of the labor force
Exports: #17 in the world ($273 billion)
Culture: blend of Chinese, Japanese, and western influences. The United States is the 3 rd largest trade partner of Taiwan, China being the first.
Taiwan relies on its transformation to high technology and service–oriented economy.
Age majority in Population: 73% of 15-64 years old
Labor Insurance act : insurance coverage to employees in the private sector, like industrial workers including workers in the textile area
Labor Standards law: defines wages, contracts, and outlines the rights and obligations of workers and employers.
Prescribes working hours, work leave and employment of women and children.
Offers protections against unreasonable work hours and forced labor
allows workers the right to receive compensation for occupational injuries and layoffs.
World Trade Organization (WTO) in Jan. 2002 and reduced about 4,500 tariffs
Labor Laws protect the rights of workers and addresses labor issues like workers welfare, gender equality, labor management relations, safety and health.
Employers must provide a safe and clean workplace
Wages must be paid twice a month unless otherwise specified and cannot fall behind basic wage. Overtime is paid between 1/3-2/3 of the normal rate.
May not exceed more then 84 working hours for 2 weeks with one regular day off and at least a 30 min break for 4 continuous work hours
Children under 15 are prohibited to work and between 15-16 can not work more then an 8 hour day
Employers can not make an employee who is already employed somewhere else perform work for them. Employers must have worker record cards which include main and background information of employees
Firms in Taiwan
Trade Regulations & Taiwan and the U.S.
Tax Value of 5% applied on the Cost, Insurance Freight value (CIF)
Port charge of .5% applied to CIF + Duty + Value-Added tax (VAT) for shipments by sea
U.S.-Taiwan Trade and Investment Framework Agreement (TIFA)
Trade regulation in the food industry
Often regarded as an important step toward FTAs
Invented American organic chemist Wallace Hume Carothers
In 1935 Nylon became the world’s first silk substitute.
Today it is used in soft goods that require high tensile strength, resilience, and abrasion resistance. Nylon 6,6 is commonly used in carpet fiber, sports apparel, outdoor apparel, wash and wear clothing, airbags, hoses, and conveyor belts
$1.70-$1.73/lb market price.
Leading Fiber: Nylon 6,6
Nylon 6,6 is the strongest of all nylon
Low friction coefficient
Resistance to Organic substances like oils and alcohols
Characteristics of Nylon 6,6
Nylon 6,6 was initially developed in order to replace silk stockings during World War II. Silk was used for parachutes for soldiers
Nylon was the world’s first thermoplastic- a plastic that is liquid when heated to melting point then turns solid when significantly cooled.
70% of the suppliers of world famous Athletic Brands come from Taiwan
With the use of foreign direct investment, many foreign firms have expanded manufacturing and Research and Development operations to Taiwan.
Firms in Taiwan reap the benefits of tax incentives implemented in the early 1980s by the Executive Yuan in order to encourage Taiwan’s economic growth. Rising labor cost ushered in the era of Research and Development in the Synthetic textile industry.
The Taiwan Miracle
Taiwan acts as an intermediary to facilitate long term relationships with the foreign buyers and various manufacturers.
Taiwan's Free Trade Zone is the most competitive and has already established production bases in countries all around the world.
Highly efficient customs system, strong manufacturing capabilities, and a B2B infrastructure