Taiwan business and trade.

An island less than 250 miles long, Taiwan has to be considered en economic miracle by any standard. Its 21 million people are jammed into 14,000 square miles where less than one-third of the land is arable. With virtually no natural resources, it was considered an agrarian backwater well into the 1960s. Born in horrific conflict, the Taiwanese people have remained literally under the gun of China - Asia's biggest geopolitical player - since Chiang Kai-shek's retreat from Mao's armies in 1949.

Nothing has ever come easy to Taiwan. But its people just keep racking up those numbers.

With over 4,000 computer firms, Taiwan is the world's largest supplier of motherboards, monitors, scanners, and mouse devices. The unemployment rate is currently 1.4%. It is the Number One investor in Vietnam and has all but taken over the maquiladora trade just over the border in Mexico. In a joint venture with Texas Instruments, it has set industry records in yield and output of computer chips since 1991. And the list goes on.

The country's average growth rate for the past 50 years has been around 10%. It is now the worlds 14th largest economy and the 6th largest United States trading partner. The typical Taiwanese savings from earnings is around 30%, and this is reflected in a staggering national statistic: foreign exchange reserves currently hover around $87 billion.

THE ENTRYWAY

TO ASIA 

This wealth of capital in Taiwanese banks could, in one sense, be viewed as having been set aside for the ultimate "rainy day": an eventual armed conflict with the People's Republic of China (PRC). But as the "little dragon's" relationship with the "big dragon" across the 100-mile straits of Taiwan has warmed, more creative - and demanding - applications for capital investment are springing up. Investment in China itself has been substantial, with more than 20,000 Republic of China(ROC) business people and technicians currently working and living on the mainland. These "dual citizens" all come from the private sector (the PRC forbids ROC officials to visit the mainland) and work, indirectly to oversee about $15 billion a year in sales. The Taiwanese in China are doing business primarily with family members who still live there, as well as old friends. These relationships have led to an extremely interesting situation in world trade.

Sharing 6,000 years of history and a common language, the Taiwanese nationals and mainland Chinese have developed a strongly symbiotic relationship, far away from the glare of international politics. Enduring suspicion of the West on the mainland has presented United States firms with many obstacles to doing business there. But "unofficial" contacts in Taiwan are readily acceptable - to the Chinese - as business partners, thus making them ideally suited as representatives of Western interests.

In a curious way, Taiwan's lack of UN recognition - which has placed it in a sort of diplomatic limbo - has positioned the country as the perfect middleman to access difficult but potentially huge markets in China, their publicly avowed enemy. The result of this odd situation is that commercial and financial pipelines to China are open, and Taiwan - with its manufacturing and banking savvy - is the conduit.

ADAPTING TO SUCCESS

But quite apart from its strategic role in trade with China, the ROC is currently obsessed with managing the effects of its extraordinary successes. By the 1970s, Taiwan had leapt from an agricultural base to become the "next Japan," as that country moved on to global industrial dominance. As worldwide competition heated up, firms from the United States and Europe moved many of their manufacturing operations to Taiwan which quickly assimilated its new role as a technology-driven country. But recognition of Taiwanese excellence quickly resulted in a greater demand on its limited space than the new industrial base could harmoniously plan for.

A partial effect of this was tumultuous industrial growth with little thought being given to quality of life issues and an infra-structure that lagged far behind the nation's ability to produce. One of the answers to problems caused by this embarrassment of riches is the current six-year national development plan, now halfway to its completion.

Under this plan, $245 billion has been apportioned to reinvent the island nation in an effort to catapult it to truly industrial nation status. A visit to the Taipei area will convince you just how serious the Taiwanese are. To get a glimpse of what that city is becoming, take a look at the Dinghao area in eastern Taipei where modernity is taking on a pleasing shape. Elsewhere, office highrises and hotels are springing up all along the horizon. Port facilities are being enormously expanded and becoming more efficiently linked with rail services. And urban housing comes in for a healthy slice of the budgetary pie which should brighten the street-level appeal of the major cities.

Of the total funds available under the current plan, 34% has been allotted to improve transportation and communications. There are virtually no major roads which are not undergoing some kind of expansion or improvement. [But a brief aside: though roads are quite excellent in Taiwan, they are occasionally not up to the task of heavy commuting or holiday traffic. If you're unlucky enough to have to travel over a holiday, you can verify that there are indeed 21 million people on the island: they'll all be parked alongside you on the freeway and you will have time to count them all.]

But major building along the main traffic corridors is only one aspect of Taiwan's effort to reinvent itself. And with its soaring rate of industrial production, but with virtually no energy resources, the island is building a $5.8 billion nuclear power plant to provide for its electrical needs. Also under way is a $17 billion high-speed rail system.

THE AMERICAN CONNECTION

In all of its planned improvements, Taiwan is seeking close cooperation with such American firms as Bechtel and Fluor Daniel. AT&T was recently asked to bid on automated toll booth operations for existing and planned highways. The courtship of these powerfull partners is all a part of various China External Trade Development Council (CETRA) "Buy American!" plans. The government is actively trying to address trade imbalances with the US. Their trade surplus has steadily slid from $16 billion in 1987 to just under $4 billion in 1992.

But lest you think only huge, multinationals need apply, think again. The ROC government is especially interested in doing business with smaller United States firms, especially where they can become subcontractors in environmental, building and highway construction, and transport and communications areas. The climate for American investment in general is warm. Indeed, 7-Eleven party tents were recently seen mushrooming on the parade grounds of the Chiang Kai-shek Memorial in Taipei. And McDonald's is seen as the "arch" enemy of traditional Chinese cooks.

Taiwan, with its industry, work ethic, determination to excel as a nation, and even its rugged mountains, may one day soon be thought of as the "Switzerland of Asia." How it is perceived abroad is incredibly important to Taiwanese success and to the pride of its people. With the lifting of martial law in 1987, it took a giant step towards joining the family of progressive nations. But there are still problems to wrestle with.

A recent hour-long national TV broadcast in the United States documented how Taiwan's demand for tiger and rhino derivative products is contributing to the extinction of those two species. The timing couldn't have been worse for Taiwan. Shortly after the broadcast, a "National Award of Excellence" festival was under way in Taipei, intended to enhance the international image of the country. The sanctions imposed by the United States as a result of Taiwan's continued tolerance of this taboo trade are perceived as largely symbolic and will probably have little effect. But the damage to the image and prestige of the country caused great pain in Taipei.

There is a sincere desire to be seen as good partners on the part of the Taiwanese people from all walks of life. They are a generous and gracious people who are quite willing to learn from differing opinions. When there is pressure to change, in order to succeed and fulfill what they perceive as their destiny, they seem ever eager to change. And on their road to becoming a major force in Asia and in world commerce, their rapid ascendancy as a nation has proven their ability to deal with problems.

In the coming century, betting on Taiwan is a safe bet.

American firms interested in investment or trade with Taiwan should get in contact with CETRA (China External Trade Development Council.). As the trade promotional agency of Taiwan, CETRA facilitates more than 3,000 daily business missions throughout Asia. It has been instrumental in bringing Taiwan's trade from a $23 billion figure in 1978 to a 1993 figure of $161 billion.

Through the World Trade Center in Taipei, CETRA organizes more than 20 international trade shows every year covering trends and products in all major global industries. About 300,000 products are on display at the Center, including those made in other Asian countries by Taiwan manufacturers.

CETRA provides trade information through a system of linked databases. In its Taipei headquarters, it has established Asia's largest business and trade library of periodicals, books, computer networks, and professional consultants.

CETRA has prepared an information - packed book entitled, "Doing Business With Taiwan," which is available, free of charge, through the local Commercial Division of the Coordination Council for North American Affairs. To get a free copy of the book, or to find out more about CETRA programs in trade and manufacturing opportunities in and with Taiwan, please contact:

Coordination Council for North American Affairs (CCNAA) Commercial Division 900 N. Western Avenue Los Angeles, CA 90029 Ph: [phone] Fax: [phone]