An Analysis Of The Business Environment Finance Essay

Small archeological grounds remains from Taiwans early history. People – likely from Austronesia – are though to hold inhabited the island since 10,000 BC with migration from China in the fifteenth century. In 1517 Lusitanian crewmans reached Taiwan and named it Ilha Formosa ( Beautiful Island ) . The Dutch invaded in 1624 and built a capital at Tainan – two old ages subsequently they lost the island to a Spanish invasion but returned the favor by booting the Spanish out in 1641. During the 1660s the Ming and Manchu ( Qing ) dynasties arrived on the scene, kicking out the Dutch and wrestling one another for control of the island. The Manchus finally won, doing Taiwan a county of Fujian state and triping a inundation of Chinese in-migration.

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At the terminal of the nineteenth century, the Nipponeses decided to weigh in every bit good: Taiwan was ceded to them in 1895 following China ‘s licking in the Sino-Japanese War. The Japanese quashed a republican rebellion organised by the local Chinese population and went on to set up a military base on the island and to advance instruction and economic development. After Japan ‘s licking in at the terminal of WWII, Taiwan was handed back to China.

Modern History

When Communist forces took control of China in 1949, the president, General Chiang Kai-shek and his Nationalist Party, the Kuomintang ( KMT ) , fled to Taiwan to be after their reconquest of the mainland. They ‘re still be aftering. One and a half million Chinese besides left the mainland for Taiwan when Mao took control. The leaders of both Communist mainland China and the Republic of China ( Taiwan ) claim to be the voice of all China, but the international community has, about without exclusion, chosen the mainland. In 1971 the KMT lost the Chinese United Nations place, and in 1979 the USA withdrew its acknowledgment of the Republic.

When Chiang Kai-shek died in 1975 and was replaced by his boy Ching-kuo, Taiwanese started mumbling the word ‘dynasty ‘ , and unfavorable judgment of the one-party system rose. In 1986, those opposed to Chiang formed the Democratic Progressive Party and were granted seats in the legislative assembly. Two old ages subsequently Chiang died and was replaced by the first native-born president, Lee Teng-hui.

Chinese political relations is divided among those who want reunion with China ( the KMT line ) , those who want Chinese independency, and those who want the position quo preserved. In 1995 dealingss between the two Chinas, ever chilly, plummetted to a new low. Lee Teng-hui ‘s high-profile visit to the United States brought mainland China out in a roseola of nervous green-eyed monster. Determined to insulate Taiwan and rock the heads of its electors, China held intense military exercisings near the Chinese seashore. In response, the United States donned its planetary bull chapeau and sent a twosome of war vessels to supervise the state of affairs. Despite the part ‘s sudden high concentration of antsy trigger fingers, the first direct presidential election was held without incident, and Lee Teng-hui was returned to office.

Taiwan ‘s lucks took a bend for the worse in September 1999 when a monolithic temblor hit the island, the largest in its history, go forthing over 2000 island-dwellers dead and a rubble-strewn state. Even in this clip of crisis, nevertheless, the snippy relationship between mainland China and the aspirant republic continued. A rebelliously huffish China demanded that any state come ining Taiwan to offer temblor alleviation acquire permission from the Chinese authorities foremost: a demand that was met with less-than-hearty understanding from human-centered administrations and other states around the universe.

Recent History

In March 2000, Taiwan elected its following president Chen Shui-bian, the campaigner of Taiwan ‘s Democratic Progressive Party, who believe in a formal declaration of independency for the island. The disturbance ended 55 old ages of Nationalist regulation and alarmed China, which regards Taiwan as a rebel state.

In 2004, Chen Shui-bian was re-elected by a narrow border following a possibly-dubious blackwash effort on him merely hours before the election. In a grant to political oppositions and a state fearful over its changeless Chinese menace, Chen Shui-bian vowed to hammer closer dealingss with China and leave the volatile issue of Taiwan ‘s sovereignty off the political reform docket.


To declare whether or non a state is suited for investing chances we must utilize certain parametric quantities these can run from descriptive tools like studies available from assorted established organisations like The World Bank or The IMF. Else we can do usage of diagnostic tools like PEST analysis which we will use to analyze the concern environment of Taiwan and expression at the possibility of investing chances.

Plague Analysis


The political position of Taiwan is a contention over whether Taiwan, including the Pescadores ( Penghu ) , should stay the effectual district of the Republic of China ( ROC ) , become incorporate with the districts now governed by the People ‘s Republic of China ( PRC ) , or go the Republic of Taiwan. Taiwan ‘s political position is complicated by the contention over the Republic of China ‘s being as a province.

Presently, Taiwan, Kinmen ( Quemoy ) , Wuchiu ( Wuciou ) and Matsu off the seashore of mainland Fukien, and Taiping ( Itu Aba ) and Pratas in the South China Sea efficaciously make up the full province known as the Republic of China. The ROC authorities has in the yesteryear considered itself to be the exclusive legitimate authorities over Taiwan, every bit good as its former districts on the continent that include mainland China, Outer Mongolia and Tannu Uriankhai ( portion of which is present twenty-four hours Tuva ) . This place started to be mostly ignored in the early 1990s, altering to one that does non dispute the legitimacy of PRC regulation over mainland China, although the ROC ‘s claims have ne’er been renounced through a constitutional amendment. Different groups have different constructs of what the current formal political state of affairs of Taiwan is.

In add-on, the state of affairs can be confounding because of the different parties and the attempt by many groups to cover with the contention through a policy of calculated ambiguity. The political solution that is accepted by many of the current groups is the undermentioned position of the position quo: that is, to on the side handle Taiwan as a province and at a lower limit, to officially declare no support for the authorities of this province doing a formal declaration of independency. What a formal declaration of independency would dwell of is non clear and can be confounding given the fact that the People ‘s Republic of China has ne’er controlled Taiwan since its initiation and the fact that the Republic of China, whose authorities controls Taiwan, considers itself a de jure crowned head province. The position quo is accepted in big portion because it does non specify the legal position or future position of Taiwan, go forthing each group to construe the state of affairs in a manner that is politically acceptable to its members. At the same clip, a policy of position quo has been criticized as being unsafe exactly because different sides have different readings of what the position quo is, taking to the possibility of war through brinkmanship or misreckoning.

Hence we can state that Taiwan has a volatile political state of affairs but is stable presently.


Taiwan has a dynamic capitalist economic system with bit by bit diminishing counsel of investing and foreign trade by authorities governments. In maintaining with this tendency, some big government-owned Bankss and industrial houses are being privatized. Exports have provided the primary drift for industrialisation. The trade excess is significant, and foreign militias are the universe ‘s 3rd largest. Agribusiness contributes less than 2 % to GDP, down from 32 % in 1952. Taiwan is a major investor throughout Southeast Asia. China has overtaken the US to go Taiwan ‘s largest export market. Because of its conservative fiscal attack and its entrepreneurial strengths, Taiwan suffered small compared with many of its neighbours from the Asiatic fiscal crisis in 1998. The planetary economic downswing, combined with jobs in policy coordination by the disposal and bad debts in the banking system, pushed Taiwan into recession in 2001, the first twelvemonth of negative growing of all time recorded. Unemployment besides reached record degrees. Output recovered reasonably in 2002 in the face of continued planetary lag, delicate consumer assurance, and bad bank loans ; and the basically vivacious economic system pushed in front in 2003-04. Turning economic ties with China are a dominant long-run factor, e.g. , exports to China of parts and equipment for the assembly of goods for export to developed states.



buying power para – $ 576.2 billion ( 2004 est. )

GDP – existent growing rate

6 % ( 2004 est. )

GDP – per capita

buying power para – $ 25,300 ( 2004 est. )

GDP – composing by sector

agribusiness:1.7 %
industry:30.9 %
services:67.4 % ( 2004 est. )

Inflation rate ( consumer monetary values )

1.7 % ( 2004 est. )

Labor force – by business

agriculture 8 % , industry 35 % , services 57 % ( 2001 est. )

Unemployment rate

4.5 % ( 2004 est. )


grosss:$ 67.41 billion
outgos:$ 76.7 billion, including capital outgos of $ 14.4 billion ( 2004 est. )


electronics, crude oil refinement, armaments, chemicals, fabrics, Fe and steel, machinery, cement, nutrient processing, vehicles, consumer merchandises, pharmaceuticals

Industrial production growing rate

12.2 % ( 2004 est. )

Oil – ingestion

988,000 bbl/day ( 2001 est. )

Agriculture – merchandises

rice, maize, veggies, fruit, tea ; hogs, domestic fowl, beef, milk ; fish


$ 170.5 billion f.o.b. ( 2004 est. )

Exports – trade goods

computing machine merchandises and electrical equipment, metals, fabrics, plastics and gum elastic merchandises, chemicals ( 2002 )

Exports – spouses

China, including Hong Kong 37 % , US 16 % , Japan 7.7 % ( 2003 )


$ 165.4 billion f.o.b. ( 2004 est. )

Imports – trade goods

machinery and electrical equipment 44.5 % , minerals, preciseness instruments ( 2002 )

Imports – spouses

Japan 26 % , US 13 % , China, including Hong Kong 11 % , South Korea 6.9 % ( 2003 )

Debt – external

$ 55.5 billion ( 2004 est. )

Investing ( gross fixed )

18 % of GDP ( 2004 est. )

Public debt

32.4 % of GDP ( 2004 est. )

Current history balance

$ 21.16 billion ( 2004 est. )

Militias of foreign exchange & A ; gold

$ 246.5 billion ( 2004 est. )

Therefore after holding a expression at the economic construction we can state that a few indexs like the handiness of labour forces, growing rates, rising prices rates point to the fact that Taiwan is a stable economic system and hence suitable for investing chances.


Although the bulk of the people shacking in Taiwan ( 84 % ) are descended from seventeenth century migrators from China, the political power ( and a significant portion of the economic power ) of the island has been, until late, about entirely held by less than fifth part of the population. A population who fled to Taiwan in 1949 after the communist coup d’etat of the mainland. Almost a half-century of co-residence has seen an integrating of these two populations to some grade, with both pride in Chinese heritage and civilization and national pride in being a occupant of Taiwan, uniting successfully to day of the month.

Taiwan is a society that supports strong Confucian values, reflecting the island ‘s preponderantly Chinese heritage ( the native natives of Taiwan do up merely 2 % of the population ) . European influences have besides made their grade, in the signifier of trading links ( and some colonial aspirations ) from the Spanish and Dutch in the 17th and 18th centuries. Japan has besides had a more recent influence over the character of Taiwan: the island was occupied by Japan from 1895 to 1946, but this business – although repressive at times – was besides a period of prosperity for Taiwan.

Taiwan today is a vivacious and comfortable patriarchal society, which maintains the household as its basic foundation. Multi-generational families are the norm, with age being respected and kids prized. The people are reserved, respectful and low, although single accomplishment and a hearty entrepreneurial attitude is found throughout the Chinese society. The pattern of spiritual dogmas, more so than pure belief entirely, influences the Chinese character. Approximately 24 % of the population is Buddhist, 16 % is Taoist ( Confucian ) and 3 % Christian.

Much like other Chinese societies, regard and formality mark societal relationships, and guanxi ( guanji ) is rather strong in Taiwan. Open struggle or direct unfavorable judgment is avoided, as is any other action which could make embarrassment. Boasting or loud behavior is to be avoided, although regards are appreciated but normally denied.

While many educated Chinese speak English, the national ( and commercial ) linguistic communication is Mandarin Chinese, with many besides talking the local Taiwanese ( Chinese ) linguistic communication. Changing grades of English is spoken by many of the younger coevals and the internationally educated.

Taiwan is one of the most urbanized states in Asia with over 60 % of the population life in metropoliss. Taipei, the capital, houses about 13 % of the population, or about 2.75 million. Other major metropoliss include Kaohsiung and Keelung.

The people of Taiwan are good educated and have relevant cognition of topics like English and scientific discipline. The society is a peaceable one and non really different from other South East Asiatic states. The metropoliss are good developed and the on the job conditions are contributing to carry oning concern. Hence investings with regard to the societal construction will be a safe stake.


Measures attach toing Science & A ; Technology ( S & A ; T ) development include the four chief facets of educating, preparation, recruiting, and honoring S & A ; T work force ; the S & A ; T research environment ; engineering diffusion, rational belongings rights, and criterions ; and international S & A ; T cooperation. The end of manpower preparation is to set up superior S & A ; T research and development work force, which may be considered a R & A ; D package input. The end of common research installations is to supply the substructure needed for research, and this substructure may be considered a R & A ; D hardware input. Superior R & A ; D end products can be obtained merely after these two inputs are suitably matched with support.

1. Manpower instruction and preparation

The instruction and preparation of S & A ; T development work force includes the three facets: ( 1 ) instruction in colleges and universities, ( 2 ) advanced surveies in Chinese establishments and overseas for forces selected by authorities bureaus, and ( 3 ) preparation by vocational and professional preparation establishments. In add-on, the Executive Yuan ‘s “ Implementation Regulations for Commendation of Outstanding Scientific and Technological Personnel, Executive Yuan ” and the Academia Sinica ‘s “ Topical Research and High-level Manpower Training Program ” both serve to actively advance cardinal S & A ; T research and train S & A ; T work force. Apart from instruction in universities and colleges, the authorities besides promotes the preparation of S & A ; T manpower via advanced surveies or research in Taiwan and overseas for forces selected by authorities bureaus, and preparation by vocational and professional preparation establishments.

A sum of 37,945 pupils received Ph.D. or maestro ‘s grades in the natural scientific disciplines, technology, medical specialty, agribusiness, or the humanistic disciplines and societal scientific disciplines from domestic universities during the 2003 academic twelvemonth. This figure represented an addition of 16.3 % over the 2002 academic twelvemonth from this entire 35,981 individuals, or 94.8 % , received maestro ‘s grades. See Table VI-1 for an overview of the assorted advanced S & A ; T manpower preparation and proficient accomplishments instruction developing systems and their consequences in 2004.

2. Manpower recruiting

In order to run into deficits of S & A ; T work force, the authorities has implemented a figure of policies and plans to develop domestic hi-tech work force and recruit outstanding abroad work force to work in Taiwan. It has established long-run marks for S & A ; T work force recruiting, preparation, and use. The authorities has adopted coincident long- and short-run attacks to the recruiting of S & A ; T work force. The Academia Sinica recruits abroad post-doctoral research forces, foreign advisers, specializers, and bookmans, and the NSC financess the recruiting of S & A ; T work force, the hiring of post-doctoral research workers, the recruiting of research bookmans, and the invitation of scientific and technological figures from China to take part in research in Taiwan

3. Honoring Forces

The authorities offers a assortment of grants and awards aimed at promoting S & A ; T forces to prosecute in academic research, engineering development, and innovation. Relevant awards include the Outstanding Achievement in Science and Technology Award, Academic Award, National Lectureship, Outstanding Research Award, and the Ta – You Wu Memorial Award.

Hence we can state that technologically besides Taiwan is really superior and backed by Government. Technologically there should be no jobs with investings in Taiwan.

Therefore after making a PEST analysis we can reason that weighing all options Taiwan is a comparatively safe topographic point to put resources. Now let us hold a expression at the assorted industries in Taiwan and seek to zero in on an industry or a sector where a investings are a possibility.


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