TaiwanTaiwanCayla O’Connor, Jayla Moore, Melissa Stober,PhuongNguyen, and Natalie Sereseroz
Demographics• Capital: Taipei• 13hrs ahead of Washington, DC• Location: Eastern Asia – Southeastern coast of China• slightly smaller the Delaware and Maryland combined• Climate: Tropical with a monsoon season June to August• Terrain: – East – mostly mountains – West – flat to gently rolling plains
Political Climate• 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• Population: 23,071,779
Political Climate •Age majority in Population: 73% of 15-64 years old• 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 the 3rd largest trade partner of Taiwan, China being the first• Developed Economy• Taiwan relies on its transformation to high technology and service–oriented economy.
Labor Laws •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.• 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.
Labor Standards •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• 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
Firms in Taiwan• Invista•Rhodia•Dupont•Solutia•BASF•ASAHI
Trade Regulations• 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 on produce – Often regarded as an important step toward FTAs
Nylon 6,6 • 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.• Price point- $1.70-$1.73/lb market price.
Characteristics of Nylon 6,6• Nylon 6,6 is the strongest of all nylon• Abrasion Resistance• Low friction coefficients• Lightweight• Windproof• Stretchy• Colorfast• Resistance to Organic substances like oils and alcohols
Interesting Facts• 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
Foreign Presence• 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
So, Why Taiwan? •Link Between East and West coast• Taiwan acts as an intermediary to facilitate long term relationships with the foreign buyers and various manufacturers.• Taiwans 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• Newer Technology• Increased focused on Research and Devlopment
So, Why Taiwan?Region Aim Tax Operating Authority BusinessesTaiwan Global operational 17% Private, single Import, export, storage, management window labeling, in-depth processing and manufacturingSingapore Logistics 17% Private, single Export windowKorea The central 22% Central or local Storage, sales, simple government processingMainland Center of 25% Local government Processing,China commodities and manufacturing, and gatherings international tradeJapan International 30% Local government Processing and interaction manufacturing