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TAIWAN


 

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2002)
GDP
Millions of US $  406,000    
         
GNI per capita
 US $ 18,000
Ranking is given out of 208 nations - (data from the World Bank)

Books on Taiwan

REPUBLICAN REFERENCE

Area (sq.km) 
35,980 

Population 
22,603,001

Capital 
Taipei

Currency 
New Taiwan dollar (TWD)

President 
Chen shui-bian




Update No: 014 - (15/03/05)

The move by China to enact an anti-secession law has again inflamed passions just at a time when the heat was going out of the relationship with China in expectation of a rapid move forward in the economic and the political arenas. However, the current brouhaha is expected to be short-lived with both sides signalling that they want a continued improvement in ties. 
Expect no serious further escalation in tension, and business continuing as usual beneath the surface. However, no great leap forward can be expected for the foreseeable future.

Enter the rooster
In February, the Chinese world celebrated the start of the Year of the Rooster (leaving behind a "Monkey" year). Those in the know claim that the colourful Rooster brings bright and happy days, but he also dissipates energy very quickly. Translate this into the Chinese environment (and while Taiwanese will vehemently deny they are Chinese in the political definition of the term, culturally they leave room for little else), the year is destined to be marked by a good deal of oratory but little by way of practical action. The rooster is also destined to make simple things more complicated.
Well then, the year seems to have started on cue. The lunar New Year holiday was marked by a marked easing of tension with China and the first direct air flights between China and Taiwan in more than 50 years. At the end of the 10-day charter period, China proposed, and Taiwan responded positively, to extend the direct flight regime towards regular cargo flights between Taiwan and the mainland.
Another positive sign of an easing of tension came with the visit to Taiwan of the highest-ranking Chinese delegation in more than a decade.
The passing of veteran business leader and cross-straits negotiator Koo Chen-fu prior to the lunar New Year holiday provided the opportunity for China to show respect for the person who really got the first ever political dialogue underway. Ms. Sun Yafu, vice chairman of the mainland Association for Relations Across the Taiwan Straits (ARATS) and deputy director of China's Taiwan Affairs Office (TAO), together with ARATS secretary-general Li Yafei made a brief visit on behalf of ARATS chairman Wang Daohan.
Koo and Wang made international headlines in the early 1990s with groundbreaking negotiations known as the "Koo-Wang Talks." As the respective heads of Taiwan's Straits Exchange Foundation (SEF) and its Chinese counterpart, ARATS-both semi-official organisations oversighting cross-strait ties in the absence of formal relations-Koo and Wang met in 1993 in Singapore and later in 1998 in Beijing. 
The 1993 meeting paved the way for cross-strait communication, and the 1998 meeting was hailed as a resumption of dialogue following former president Lee Teng-hui's visit to the US in 1995. Sun is the most senior official from the Taiwan Affairs Office to have visited Taiwan since 1995. However, lest too much be read into the present visit Beijing stressed (as it had to do), that Sun was visiting Taiwan strictly in his capacity as an envoy. Nevertheless, the fact that they came at all was full of significance.
And then just as things were starting to look up, China went ahead with its Anti-Secession Law. Now for a period, we are back to square one, but probably not for long. Let the heat die down and it will be back to business as usual.

China throws in a spanner
Just as relations with China looked to be on an upswing, again comes another spanner into the works. It has happened before and it seem, to the dismay of the rest of the world, that it will keep on happening. Do China and Taiwan really want to see a better relationship developing? Or are they both really more comfortable with an antagonistic status quo?
The spanner this time has come in the form of China's Anti Secession Law. Talk of this new law, which many have long suspected (and which has now been all but confirmed) was directed against Taiwan, has been around for several months. The trouble was that until recently nobody, outside of a small coterie in Beijing, had actually seen a copy of it.
The National Peoples Congress, China's rubber-stamp parliament which met in early March, did get to see the new law and they voted on it. And they voted 2897-0 in favour of a law that completely ignores the rights and choice of Taiwan's people and which seeks to unilaterally determine Taiwan's future. 
The Anti-Secession law condones the use of military action against Taiwan, not only should Taiwan seek independence from the mainland but also if progress towards unification is not (in Beijing's eyes) moving ahead fast enough.
Naturally, reaction in Taiwan to this move has been swift and negative. President Chen Shui-bian has called the Chinese action "a major threat to regional stability." Demonstrations are planned for the island on March 26 and are expected to draw more than 1 million marchers.
Aside from the marching and the banner waving, it seems that cooler heads may be prevailing when it comes to any further escalation of tensions. Taiwan has indicated that it will not, for the time being, introduce counterpart legislation but will rather ignore the provocation and continue with confidence-building measures.
This is probably a wise course of action. Very few consider that China will actually come to blows with Taiwan at any time in the near future. With the Chinese economy continuing to grow at a clip of around 9 percent per annum and with foreign direct investment reaching new highs, military intervention is the last thing China needs. The leadership in China is after all (so goes their pervasive mantra) pragmatic.
So why did China do it - and just at a time when relations with the island province appeared to be on the mend. The most likely reason is that President Hu Jintau wanted to place his mark on the leadership and how better to do it than to be hawkish on Taiwan especially at a time when Mr. Hu is replacing former President Jiang Zhemin at the helm of China's Central Military Commission. After all, it is the military that has been the most hawkish of all on the Taiwan question with civilian politicians restraining the military commanders. Mr. Hu was promoted to the Chairmanship of the Chinese Communist Party's Central Military Commission in September last year. Most recently he has also replaced Mr. Zhiang as Chairman of the State Military Commission, effectively consolidating his hold on the reins of power.

Mr. Hsieh fine tunes his cabinet
While earlier it had been hoped, at least in some quarters, that Taiwan's new premier, former Kaohsiung mayor, Mr. Frank Hsieh would pick an opposition KMT stalwart as his vice premier, the KMT it seems, could not make up their minds. Tired of waiting for an answer, Mr. Hsieh swore in Taiwan Institute of Economic Research (TIER) President Wu Rong-il into the post. Hsieh had pledged to form a "Cabinet of Consultation" and had suggested Kuomintang lawmaker Chiang Pin-kun to assume the post but instead invited the prominent economist to take the position after waiting more than two weeks for a response from the opposition camp.
Mr. Wu is best known for his role as an advisor to former President Lee Teng-hui and for his staunch support for the former president's "no haste, be patient" policy that sought to dissuade local companies for over-reliance on the mainland. Now the watchwords are to be "active opening, effective management" and he has vowed to coordinate the efforts of the different branches of government to enhance economic growth.

…And seeks to cool tempers
A mark of Mr. Hsieh's premiership is his conciliatory stance towards Beijing. Nowhere was this more needed than in cooling tempers over the Anti Secession Law. Even ahead of action by the (Chinese) National People's Congress Mr. Hsieh had reaffirmed that Taiwan does not need formal independence from any country and will not change its official name despite pressures to do so from the pro-independence movements. Mr. Hsieh's remarks were clearly intended to cut the ground from under such activists and were in step with similar moves made by President Chen Shui-bian to distance the government from a formal declaration of independence. 
Late in February, President Chen met with opposition People First Party chair, James Soong, to end partisan bickering between the extremes of the political spectrum. Following that meeting the two leaders issued a joint statement that committed Mr. Chen to four pledges, namely: that the government "will not declare independence, will not change the name of the country, will not embed the state-to-state formula for relations with China in the Constitution and will not promote a referendum to change the status quo relating either to independence or to unification during his term as president.
This represents a significant backing off from the position taken prior to the December election in which President Chen floated the idea of using "Taiwan" instead of "China" in government agencies, much to the ire of Beijing. China has taken note. So it seems, have Tokyo and Washington.

Exchange Rates
The exchange rate to the US dollar as of February 2005 stood at 31.124 (as of 31 January the rate stood at 31.70). In the first week of March the currency appreciated further to close at 30.751. Against the UK Pound the rate was 59.823 (59.66). Against the Euro, the rate stood at 41.314 (41.22).

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