Background Notes: Taiwan, October 1998
Released by the Bureau of East Asian and Pacific Affairs
U.S. Department of State
Area: 14,000 sq. mi.; about the size of West Virginia.
Cities (1997): Capital -- Taipei (pop. 2.6 million). Other cities
-- (Kaohsiung 1.4 million), Taichung (910,000).
Terrain: Largely mountainous.
Climate: Maritime subtropical.
Population (mid-1998): 21.8 million.
Annual growth rate (1998): 0.7%.
Languages: Mandarin Chinese (official), Taiwanese, Hakka.
Education: Years compulsory -- 9. Attendance (1997) -- 99.9%.
Literacy (1997) -- 93%.
Health: Infant mortality rate (1996) -- 0.6%. Life expectancy
(1997) -- male 72 yrs.; female 78 yrs.
Work force (June 1997): 9.5 million.
Type: Multi-party democracy. With the direct presidential
election in 1996, Taiwan completed its transition from a one-
party, authoritarian system to an open, vigorous democracy with
three major parties and a total of more than 70 registered
Constitution: December 25, 1947; last amended 1997.
Branches (Yuan): Executive, Legislative, Judicial, Control,
Major administrative subdivisions: Taiwan Province, Fujian
Province (for Kinmen and Matsu and nearby smaller islands),
Taipei and Kaohsiung Special Municipalities.
Major political parties: Kuomintang (KMT--Nationalist Party);
Democratic Progressive Party (DPP); Chinese New Party (CNP).
Suffrage: Universal over 20 years of age.
Central budget proposed (FY 1998): U.S. $44.38 billion.
Defense (1998): 24% of entire budget.
Flag: Red field with white sun in blue rectangle in upper left
GDP (1997): $284.8 billion.
Annual growth rate (1997): 5.3%; (1991-97 average 6.5%).
Per capita GDP (1997): $13,130.
Natural resources: Small deposits of coal, natural gas,
limestone, marble and asbestos.
Agriculture (2.7% of GDP): Major products -- pork, rice, betel
nuts, sugar cane, poultry, shrimp, eel.
Industry (34.9% of GDP): Major sectors -- electronics and
computer products, chemicals and petrochemicals, basic metals,
textiles, transport equipment, plastics, machinery.
Trade (1997): Exports -- $122.1 billion: electronics and computer
products, textile products, basic metals, plastic and rubber
products. Major markets -- U.S. $29.6 billion, Hong Kong
(including indirect trade with the P.R.C.) $28.7 billion, Japan
$11.7 billion. Imports -- $114.4 billion: electronics and
computer products, machinery and electrical products, chemicals,
iron and steel, transport equipment, crude oil. Major suppliers
(1997) -- Japan $29.0 billion, U.S. $23.2 billion, Europe $21.6
Official exchange rate --
January 1996: NT $32.8 to U.S. $1
January 1997: NT $27.4 to U.S. $1
January 1998: NT $32.7 to U.S. $1
Fiscal year: July 1 to June 30.
Taiwan has a population of 21.5 million. More than 18 million,
the "native" Taiwanese are descendants of Chinese who migrated
from Fujian and Guangdong Provinces on the mainland, primarily in
the 18th and 19th centuries. The "mainlanders," who arrived on
Taiwan after 1945, came from all parts of mainland China. About
370,000 aborigines inhabit the mountainous central and eastern
parts of the island and are believed to be of Malayo-Polynesian
A 9-year public educational system has been in effect since 1979.
Six years of elementary school and three years of junior high are
compulsory for all children. About 90.7% of junior high graduates
continued their studies in either a senior high or vocational
school. Reflecting a strong commitment to education, in FY 1997
15% of Taiwan's budget was allocated for education.
Taiwan has an extensive higher education system with over 100
institutions of higher learning. Each year over 100,000 students
take the joint college entrance exam, about 61.9% of the
candidates are admitted to a college or university. Opportunities
for graduate education are expanding in Taiwan, but many students
travel abroad for advanced education, including 13,000 who study
in the United States annually.
A large majority of people on Taiwan speak Mandarin Chinese,
which has been the medium of instruction in the schools for more
than four decades. Native Taiwanese and many others also speak
one of the Southern Fujianese dialects, Min-nan, also known as
Taiwanese. Recently there has been a growing use of Taiwanese in
the broadcast media. The Hakka who are concentrated in several
counties throughout Taiwan have their own distinct dialect. As a
result of the half century of Japanese rule, many people over age
60 can also speak Japanese. The method of Chinese romanization
most commonly used in Taiwan is the Wade-Giles system.
According to Taiwan's Interior Ministry figures, there are
approximately 11.2 million religious believers in Taiwan, with
over 75% identifying themselves as Buddhists or Taoists. At the
same time there is a strong belief in Chinese folk religion
throughout the island. These are not mutually exclusive, and many
people practice a combination of the three. Confucianism is also
an honored school of thought and ethical code.
Christian churches have been active on Taiwan for many years, and
today the island has more than 600,000 Christians, a majority of
whom are Protestant.
Taiwan's culture is a blend of its distinctive Chinese heritage
and Western influences. Fine arts, folk traditions, and popular
culture embody traditional and modern, Asian and Western motifs.
One of Taiwan's greatest attractions is the Palace Museum, which
houses over 650,000 pieces of Chinese bronze, jade, calligraphy,
painting, and porcelain. This collection was moved from the
mainland in 1949 when Chiang Kai-shek's Nationalist Party (KMT)
fled to Taiwan. The collection is so extensive that only 1% is on
display at any one time.
Taiwan's aboriginal peoples, who originated in Austronesia and
southern China, have lived on Taiwan for 12,000 to 15,000 years.
Significant migration to Taiwan from the Chinese mainland began
as early as A.D. 500. Dutch traders first claimed the island in
1624 as a base for Dutch commerce with Japan and the China coast.
Two years later, the Spanish established a settlement on the
northwest coast of Taiwan which they occupied until 1642 when
they were driven out by the Dutch. Dutch colonists administered
the island and its predominantly aboriginal population until
1661. The first major influx of migrants from the Chinese
mainland came during the Dutch period, sparked by the political
and economic chaos on the China coast during the Manchu invasion
and the end of the Ming Dynasty.
In 1664, a Chinese fleet led by the Ming loyalist Cheng Ch'eng-
kung (Zheng Chenggong, known in the West as Koxinga) retreated
from the mainland and occupied Taiwan. Cheng expelled the Dutch
and established Taiwan as a base in his attempt to restore the
Ming Dynasty. He died shortly thereafter, and in 1683 his
successors submitted to Manchu (Qing Dynasty) control. From 1680
the Qing Dynasty ruled Taiwan as a prefecture and in 1875 divided
the island into two prefectures, north and south. In 1887 the
island was made into a separate Chinese province.
During the 18th and 19th centuries, migration from Fujian and
Guangdong provinces steadily increased, and Chinese supplanted
aborigines as the dominant population group. In 1895, a weakened
Imperial China ceded Taiwan to Japan in the Treaty of Shimonoseki
following the first Sino-Japanese war.
During its 50 years (1895-1945) of colonial rule, Japan expended
considerable effort in developing Taiwan's economy. At the same
time, Japanese rule led to the "Japanization" of the island
including compulsory Japanese education and forcing residents of
Taiwan to adopt Japanese names.
At the end of World War II in 1945, Taiwan reverted to Chinese
rule. During the immediate postwar period, the Nationalist
Chinese (KMT) administration on Taiwan was repressive and
corrupt, leading to local discontent. Anti-mainlander violence
flared on February 28, 1947, prompted by an incident in which a
cigarette seller was injured and a passerby was shot to death by
Nationalist authorities. The island-wide rioting was brutally put
down by Nationalist Chinese troops, who killed thousands of
people. Until recently, accounts of this episode in Taiwan
history had been suppressed by the KMT. As a result of the
February 28 Incident the native Taiwanese felt a deep-seated
bitterness to the Mainlanders. In 1995 a monument was dedicated
to the victims of the "2-28 Incident," and for the first time
Taiwan's leader, President Lee Teng-hui, publicly apologized for
the Nationalists' brutality.
From the 1930s onward a civil war was underway on the mainland
between Chiang Kai-shek's KMT government and the Chinese
Communist Party led by Mao Zedong. When the civil war ended in
1949, two million refugees, predominately from the Nationalist
government, military, and business community, fled to Taiwan. In
October 1949 the People's Republic of China (P.R.C.) was founded
on the mainland by the victorious communists, several months
before Chiang Kai-shek had established in December 1949 a
"provisional" KMT capital in Taipei.
During the 1950s, the KMT authorities implemented a far-reaching
and highly successful land reform program on Taiwan. They
redistributed land among small farmers and compensated large
landowners with commodities certificates and stock in state-owned
industries. Although this left some large landowners
impoverished, others turned their compensation into capital and
started commercial and industrial enterprises. These
entrepreneurs were to become Taiwan's first industrial
capitalists. Together with refugee businessmen from the mainland,
they managed Taiwan's transition from an agricultural to a
commercial, industrial economy.
Taiwan has developed steadily into a major international trading
power with more than $218 billion in two-way trade. Tremendous
prosperity on the island was accompanied by economic and social
stability. Chiang Kai-shek's successor, his son Chiang Ching-kuo,
began to liberalize Taiwan's political system, a process that has
continued since President Lee Teng-hui took office in 1988.
The authorities in Taipei exercise control over Taiwan, Kinmen,
Matsu, and the Penghus (Pescadores), and several of the smaller
islands. Taiwan's two major cities, Taipei and Kaohsiung, are
centrally administered municipalities. The rest of Taiwan and the
Penghu Islands are administered together as the Province of
Taiwan. Kinmen, Matsu, and smaller nearby islands are
administered by the Taiwan authorities as counties of Fujian
From 1949 until 1991, the authorities on Taiwan claimed to be the
sole legitimate government of all of China, including the
mainland. In keeping with that claim, when the Nationalists moved
to Taiwan in 1949, they re-established the full array of central
political bodies, which had existed on the mainland. While much
of this structure remains in place, the authorities on Taiwan in
1991 have abandoned their claim of governing mainland China,
stating that they do not "dispute the fact that the P.R.C.
controls mainland China."
The first National Assembly, elected on the mainland in 1947 to
carry out the duties of choosing the President and amending the
constitution, was re-established on Taiwan when the KMT moved.
Because it was impossible to hold subsequent elections to
represent constituencies on the mainland, representatives elected
in 1947-48 held these seats "indefinitely." In June l990,
however, the Council of Grand Justices mandated the retirement,
effective December, 1991, of all remaining "indefinitely" elected
members of the National Assembly and other bodies.
The second National Assembly, elected in 1991, was composed of
325 members. The majority was elected directly; 100 were chosen
from party slates in proportion to the popular vote. This
National Assembly amended the constitution in 1994, paving the
way for the direct election of the President and Vice President
that was held in March 1996. The third National Assembly, also
elected in March 1996, comprises 334 members serving 4-year
terms. The National Assembly's powers now are to amend the
constitution, recall or impeach the President and the Vice
President, and ratify certain senior-level presidential
The President is both leader of Taiwan and commander-in-chief of
its armed forces. The President has authority over the five
administrative branches (Yuan): Executive, Legislative, Control,
Judicial, and Examination. The President appoints the Premier,
the head of the Executive Yuan. The Executive Yuan comprises the
Premier and the cabinet members who are responsible for policy
The main lawmaking body, the Legislative Yuan (LY), was
originally elected in the late 1940s in parallel with the
National Assembly. The first LY had 773 seats and was viewed as a
"rubber stamp" institution. The second LY was elected in 1992.
The third LY, elected in 1995, has 157 members serving three-year
terms. The LY has greatly enhanced its standing in relation to
the Executive Yuan and has established itself as an important
player on the central level. This growing influence can be seen
in the expected expansion of this institution predicted for the
end of 1998. Along with increasing strength and size this body is
beginning to reflect the recently liberalized political system.
In the 1992 and 1995 elections, the main opposition party -- the
Democratic Progressive Party (DPP) -- challenged the KMT
dominance on control of the Legislature. In both elections the
DPP won a significant share of the LY seats, and the KMT now
holds only half the seats in the LY.
As the National Assembly took action in 1994 to allow for the
popular election of the President, the LY in 1994 passed
legislation to allow for the direct election of the governor of
Taiwan Province and the mayors of Taipei and Kaohsiung
Municipalities. These elections were held in December 1994, with
the KMT winning the governor and Kaohsiung mayor posts, and the
DPP winning the Taipei mayor's position. In a move to streamline
the administration, the position of elected governor and many
other elements of the Taiwan Provincial Government are being
eliminated at the end of 1998. In November 1997 local elections,
the DPP won 12 of the 23 county magistrate and city mayor
contests to the KMT's 8, outpolling the KMT for the first time in
a major election.
The Control Yuan (CY) monitors the efficiency of public service
and investigates instances of corruption. The 29 Control Yuan
members are appointed by the President and approved by the
National Assembly; they serve 6-year terms. In recent years, the
Control Yuan has become more activist, and it has conducted
several major investigations and impeachments.
The Judicial Yuan (JY) administers Taiwan's court system. It
includes a 16-member Council of Grand Justices (COGJ) that
interprets the constitution. Grand Justices are appointed by the
President, with the consent of the National Assembly, to nine-
The Examination Yuan (ExY) functions as a civil service
commission and includes two ministries: the Ministry of
Examination, which recruits officials through competitive
examination, and the Ministry of Personnel, which manages the
civil service. The President appoints the Examination Yuan's
President -- Lee Teng-hui
Vice President -- Lien Chan
Premier -- Vincent Siew (Hsiao Wan-chang)
Vice-Premier -- Liu Chao-shiuan
Lee Teng-hui succeeded Chiang Ching-kuo as President when Chiang
died on January 13, 1988. Lee was elected by the National
Assembly to a 6-year term in 1990, marking the final time a
President was elected by the National Assembly. In 1996 Lee Teng-
hui was elected President and Lien Chan Vice-President in the
first direct election by Taiwan's voters.
This change in the political process is the result of the
liberalizing trend that began in the 1980s under President
Chiang Ching-kuo. In 1987, he lifted the emergency decree, which
had been in place since 1948 and which had granted virtually
unlimited powers to the President for use in the anti-Communist
campaign. This decree provided the basis for nearly four decades
of martial law under which individuals and groups expressing
dissenting views were dealt with harshly. Expressing views
contrary to the authorities' claim to represent all of China or
supporting independent legal status for Taiwan was treated as
Since ending martial law, Taiwan has taken dramatic steps to
improve respect for human rights and create a democratic
political system. Most restrictions on the press have ended,
restrictions on personal freedoms have been relaxed, and the
prohibition against organizing new political parties has been
Until 1986, Taiwan's political system was effectively controlled
by one party, the KMT, the chairman of which has also been
Taiwan's President. Many top political officials are members of
the party's Central Standing Committee, which is the most
influential organ within the party. The KMT claims 2.1 million
members, about two-thirds of whom are of Taiwanese origin. The
party's net assets are reputed to total more than NT $61.2
billion, and profits from KMT-operated businesses help fund party
organizations and operations. As the ruling party, the KMT was
able to fill appointed positions with its members and maintain
political control of the island.
Since 1986 the KMT's hold on power has been challenged by the
emergence of competing political parties. Before 1986, candidates
opposing the KMT ran in elections as independents or
"nonpartisans." Before the 1986 island-wide elections many
"nonpartisans" grouped together to create Taiwan's first new
political party, the Democratic Progressive Party (DPP). Despite
the official ban on forming new political parties, Taiwan
authorities did not prohibit the DPP from operating, and in the
1986 Island-wide elections DPP and independent candidates
captured more than 20% of the vote.
The Civic Organizations Law passed in 1989 allowed for the
formation of new political parties, thereby legalizing the DPP,
and its support and influence increased. Currently it has
approximately 90,000 members. In the 1992 Legislative Yuan
elections, the DPP won 51 seats in the 161-seat body. While this
was only half the number of KMT seats, it made the DPP's voice an
important factor in legislative decisions. Winning the Taipei
mayor's position in December, 1994, significantly enhanced the
DPP's image. The DPP continued its strong showing in the 1995 LY
race winning 45 of the 157 seats to the KMT's 81. The DPP for the
first time succeeded in outpolling the KMT in the November 1997
local elections, gaining 12 of the 23 magistrate and mayoral
seats as opposed to the KMT's 8 and winning 43% of the vote
versus the KMT's 41%.
The DPP membership is made up largely of native Taiwanese. Its
platform includes outspoken positions on some of the most
sensitive issues in Taiwan politics. For example, the DPP
maintains that Taiwan is an entity separate from mainland China,
in contrast to the KMT position that Taiwan and the mainland,
though currently divided, are both part of "one China." In sharp
contrast to the tenets of both KMT and P.R.C. policy, a number of
ranking DPP officials openly advocate independence for Taiwan.
The recent downplaying of Taiwan independence by the DPP as a
party, however, led to the formation by hard-line advocates of a
new political party called the Taiwan Independence Party in
The second major opposition party, the Chinese New Party (CNP),
was formed in August 1993, by a group made up largely of second-
generation mainlander KMT members who were unhappy both with
corruption in the KMT and with what they saw as the
"Taiwanization" of KMT ideology and leadership. The CNP
emphasizes "clean government" and the original KMT focus on
reunification with the mainland. CNP influence remains modest; it
won 21 of the 164 LY seats in the 1995 elections. The CNP claimed
72,000 members in 1996.
Although some friction between mainlanders and native Taiwanese
still exists, it has abated with time and the gradual melding of
the two communities. In 1972, then Premier Chiang Ching-kuo began
a concentrated effort to bring Taiwanese into more senior
position in the central administration and the KMT. Since his
accession to the Presidency in January 1988, Lee Teng-hui, who is
native Taiwanese, has continued this process. Recent steps by the
authorities to redress past wrongs such as setting up a memorial
to the victims of the February 28 Incident have contributed to
Through nearly five decades of hard work and sound economic
management, Taiwan has transformed itself from an underdeveloped,
agricultural island to an economic power that is a leading
producer of high-technology goods. Taiwan is now a creditor
economy, holding one of the world's largest foreign exchange
reserves of more than $80 billion in 1998. Despite the Asian
financial crisis, the economy continues to expand at about 5% per
year, with virtually full employment and low inflation. The
population also enjoys an annual average income equal to U.S.
In the 1960s, foreign investment in Taiwan helped introduce
modern, labor-intensive technology to the island, and Taiwan
became a major exporter of labor-intensive products. In the
1980s, focus shifted toward increasingly sophisticated, capital-
intensive and technology-intensive products for export and toward
developing the service sector. At the same time, the appreciation
of the New Taiwan Dollar (NT$), rising labor costs, and
increasing environmental consciousness in Taiwan caused many
labor-intensive industries, such as shoe manufacturing, to move
to the Chinese mainland and Southeast Asia.
Taiwan has transformed itself from a recipient of U.S. aid in the
1950s and early 1960s to an aid donor and major foreign investor,
especially in Asia. Private Taiwan investment in the P.R.C. is
estimated to total more than $30 billion, and Taiwan has invested
a comparable amount in Southeast Asia.
Foreign trade has been the engine of Taiwan's rapid growth during
the past 40 years. Taiwan's economy remains export-oriented, so
it depends on an open world trade regime and remains vulnerable
to downturns in the world economy. The total value of trade
increased more than five-fold in the 1960s, nearly ten-fold in
the 1970s, and doubled again in the 1980s. The 1990s has seen a
more modest, slightly less than two-fold, growth. Export
composition has changed from predominantly agricultural
commodities to industrial goods (now 98%). The electronics sector
is Taiwan's most important industrial export sector and is the
largest recipient of U.S. investment. Taiwan is the world's
largest supplier of computer monitors and is a leading PC
manufacturer. Textile production, though of declining importance
as Taiwan loses its competitive advantage in labor-intensive
markets, is another major industrial export sector. Imports are
dominated by raw materials and capital goods, which account for
more than 86% of the total. Taiwan imports most of its energy
The United States is Taiwan's largest trading partner, taking 24%
of Taiwan's exports and supplying 20% of its imports. Taiwan is
the U.S.'s seventh-largest trading partner and seventh-largest
export market. In 1997, Taiwan's two-way trade with the U.S.
amounted to U.S. $53.0 billion. Imports from the U.S. consist
mostly of agricultural and industrial raw materials. Exports to
the U.S. are mainly electronics and consumer goods.
The United States, Hong Kong (including indirect trade with the
P.R.C.), and Japan account for 60% of Taiwan's exports, and the
U.S. and Japan provide over half of Taiwan's imports. As Taiwan's
per capita income level has risen, demand for imported, high-
quality consumer goods has increased. This trend has driven
imports to rise faster than exports and has cut into Taiwan's
global trade surplus. Another important factor in the substantial
increase in Taiwan's imports has been industrial upgrading, which
has pushed up imports of capital goods, raw materials, parts, and
components. Taiwan's l997 trade surplus with the United States
was $12.2 billion, a significant amount, but a decline from a
high of $17 billion in 1987.
The lack of formal diplomatic relations with all but 27 of its
trading partners appears not to have seriously hindered Taiwan's
rapidly expanding commerce, and Taiwan is currently the world's
14th-largest trading economy. Taiwan maintains trade offices in
more than 58 countries with which it does not have official
relations. Taiwan is a member of the Asian Development Bank, and
it is engaged in negotiations to join the World Trade
Organization (WTO) as a special customs territory. In 1991
Taiwan, under the name "Chinese Taipei," became a member of the
Asia-Pacific Economic Cooperation (APEC) forum. These
developments reflect Taiwan's economic importance and its desire
to become further integrated into the global economy.
Taiwan's agricultural sector is extremely productive. Although
only about one-quarter of its land area is arable, virtually all
farmland is intensely cultivated, with some areas suitable for
two and even three crops a year. However, increases in
agricultural production have been much slower than industrial
growth. Agriculture only comprises approximately 2.7% of Taiwan's
GDP. Taiwan's main crops are rice, betel nuts, sugar cane, and
Although self-sufficient in rice production, Taiwan imports large
amounts of wheat, mostly from the United States. Meat production
and consumption are rising sharply, reflecting a rising standard
of living. Taiwan has exported large amounts of frozen pork,
although this was affected by an outbreak of hoof and mouth
disease in 1997. Other agricultural exports include fish,
aquaculture and sea products, canned and frozen vegetables, and
grain products. Imports of agriculture products are expected to
increase due to the approaching WTO accession, which will open
previously protected agricultural markets.
Taiwan now faces many of the same economic issues as other
developed economies. With the prospect of continued relocation of
labor-intensive industries to countries with cheaper work forces,
Taiwan's future development will have to rely on further
transformation to a high technology and service-oriented economy.
In recent years, Taiwan has successfully diversified its trade
markets, cutting its share of exports to the U.S. from 49% in
1984 to 24% in l997. Taiwan's dependence on the U.S. market
should continue to decrease as its exports to Southeast Asia and
the P.R.C. grow and its efforts to develop European markets
produce results. Taiwan's bid to join the WTO and its desire to
become an Asia-Pacific "regional operations center" are spurring
further economic liberalization.
Taiwan maintains a large military establishment, which will
absorb about 2.86% of the GNP and accounted for 21.0% of the
central budget in FY99. The military's foremost mission is the
defense of Taiwan, a defense primarily against the P.R.C., which
is seen as the predominant threat and which has not renounced the
use of force against Taiwan. Taiwan's armed forces number
approximately 430,000, and reserves reportedly total 3,870,000.
Taiwan has implemented a force reduction program to scale down
its military to a level of 400,000 by FY 2001. Conscription
remains universal for qualified males reaching age 18.
Taiwan's armed forces are equipped with weapons obtained
primarily from the United States. In recent years, however,
Taiwan has also procured some weapons from other Western nations
and has stressed military "self-reliance," which has resulted in
the growth of indigenous military production in certain fields.
Taiwan adheres to the principles of the Nuclear Nonproliferation
Treaty and has stated that it does not intend to produce nuclear
The People's Republic of China replaced Taiwan at the United
Nations in 1971, and Taiwan's diplomatic position eroded, as many
countries changed their official recognition from Taipei to
Beijing. In mid-l998, Taiwan had formal diplomatic ties with 27
At the same time, Taiwan has cultivated informal ties with most
countries to offset its diplomatic isolation and to expand its
economic relations. A number of nations have set up unofficial
organizations to carry out commercial and other relations with
Taiwan. Between its official overseas missions and its unofficial
representative and/or trade offices, Taiwan is represented in 149
countries. Recently, Taiwan has lobbied strongly for admission
into international organizations such as the UN. The P.R.C.
opposes Taiwan's membership in such organizations, most of which
require statehood for membership, because Beijing considers
Taiwan to be a province of China, not a separate sovereign state.
THE U.S. AND TAIWAN
On January 1, 1979, the United States changed its diplomatic
recognition from Taipei to Beijing. In the U.S.-P.R.C. Joint
Communiqu that announced the change, the United States
recognized the Government of the People's Republic of China as
the sole legal government of China and acknowledged the Chinese
position that there is but one China and Taiwan is part of China.
The Joint Communiqu also stated that within this context the
people of the United States will maintain cultural, commercial,
and other unofficial relations with the people on Taiwan.
On April 10, 1979, President Carter signed into law the Taiwan
Relations Act (TRA), which created domestic legal authority for
the conduct of unofficial relations with Taiwan. U.S. commercial,
cultural, and other interaction with the people on Taiwan is
facilitated through the American Institute in Taiwan (AIT), a
private non-profit corporation. The Institute has its
headquarters in the Washington, DC area and has offices in Taipei
and Kaohsiung. It is authorized to issue visas, accept passport
applications, and provide assistance to U.S. citizens in Taiwan.
A counterpart organization, the Taipei Economic and Cultural
Representative Office in the United States (TECRO), has been
established by the Taiwan authorities. It has its headquarters in
Taipei, the representative branch office in Washington, DC, and
11 other Taipei Economic and Cultural Offices (TECO) in the
continental U.S. and Guam.
Following derecognition, the United States terminated its Mutual
Defense Treaty with Taiwan. However, the United States has
continued the sale of appropriate defensive military equipment to
Taiwan in accordance with the Taiwan Relations Act which provides
for such sales and which declares that peace and stability in the
area are in U.S. interests. Sales of defensive military equipment
is also consistent with the 1982 U.S.-P.R.C. Joint Communiqu. In
this communiqu, the United States stated that "it does not seek
to carry out a long-term policy of arms sales to Taiwan" and that
U.S. arms sales would "not exceed, either in qualitative or in
quantitative terms, the level of those supplied in recent years,"
and that the U.S. intends "gradually to reduce its sale of arms
to Taiwan." The P.R.C., in the 1982 communiqu, stated that its
policy was to strive for a peaceful resolution of the Taiwan
U.S. commercial ties with Taiwan have been maintained and have
expanded since 1979. Taiwan continues to enjoy Export-Import Bank
financing, Overseas Private Investment Corporation guarantees,
normal trade relations (NTR) status, and ready access to U.S.
In recent years, U.S. Government economic dealings with Taiwan
have focused on expanding market access for American goods and
services. AIT has been engaged in a series of trade negotiations
which have focused on protection of intellectual property rights,
and issues relating to Taiwan's accession to the WTO. In February
1998, the U.S. completed a bilateral market access agreement with
Taiwan, an important step forward in Taiwan's WTO accession
Maintaining diplomatic relations with the P.R.C. has been
recognized to be in the long-term interest of the United States
by six consecutive administrations; however, maintaining strong,
unofficial relations with Taiwan is also in the U.S. interest.
The United States is committed to these efforts because they are
important for America's global position and for peace and
stability in Asia. In keeping with its one-China policy, the U.S.
does not support "two Chinas," "one China, one Taiwan," or Taiwan
independence. Nor does the United States support Taiwan's efforts
to become a member of the UN or other organizations in which
membership is limited to states. The U.S. does support Taiwan's
membership in other appropriate international organizations, such
as the APEC forum and the Asian Development Bank, in which
statehood is not a requirement for membership. In addition, the
U.S. supports opportunities for Taiwan's voice to be heard in
organizations where statehood is not a requirement.
Trade and Investment
Over five decades, Taiwan transformed itself from an
underdeveloped, agricultural island to an economic power that is
a leading producer of high-technology goods. Taiwan has moved
from being a recipient of U.S. aid in the 1950s and early 1960s
to an aid donor and major foreign investor, especially in Asia.
U.S. commercial ties with Taiwan have expanded since
derecognition. Taiwan continues to enjoy Export-Import Bank
financing, Overseas Private Investment Corporation guarantees,
most-favored nation (MFN) status, and ready access to U.S.
In recent years, U.S. economic dealings with Taiwan have focused
on expanded market access for American goods and services. AIT
has been engaged in a series of trade negotiations which have
focused on protection of intellectual property rights and issues
relating to Taiwan's accession to the WTO, as well as other
market access issues. Taiwan's bid to join the WTO and its desire
to become an Asia-Pacific regional operations center are spurring
economic liberalization. As noted, Taiwan is a member of APEC, to
which the U.S. also belongs.
The United States is Taiwan's largest trading partner, absorbing
23% of Taiwan's exports and supplying 20% of its imports. Taiwan
was the eighth-largest trading partner of the U.S. and seventh-
largest export market. In 1996, Taiwan's two-way trade with the
U.S. was about $48 billion. Imports from the U.S. consisted
mostly of agricultural and industrial raw materials. Exports to
the U.S. were mainly electronics and consumer goods. Electronics
is Taiwan's most important industrial export sector and is the
largest recipient of U.S. investment.
As Taiwan's income level has risen, demand for imported, high-
quality consumer goods has increased. In recent years, Taiwan has
successfully diversified its trade markets, cutting its share of
exports to the U.S. from 49% in 1984 to 23% in 1996. Taiwan's
1996 total trade surplus with the United States was $11.5
billion, down from a high of $17 billion in 1987. The U.S. trade
deficit with Taiwan expanded during early 1997 compared to the
corresponding period in 1996. Taiwan's dependence on the U.S.
market should continue to decrease as its exports to the P.R.C.
and elsewhere in Asia grow and its efforts to develop markets in
Europe and other areas produce results. Due to the Asian regional
economic situation, Taiwan's economic indicators have seen a
gradual decline in recent months. Exports to Southeast Asia have
also decreased in 1998.
TAIWAN AND THE MAINLAND
Despite the differences between Taiwan and the P.R.C., contact
between the two sides of the Taiwan Strait has grown
significantly over the past decade. Taiwan has continued to relax
restrictions on unofficial contacts with the P.R.C., and cross-
Strait interaction has mushroomed. Since 1987, when the ban on
travel to the P.R.C. was lifted, Taiwan residents have made more
than 10 million trips to the mainland. Taiwan's Board of Foreign
Trade estimates that indirect trade between Taiwan and the
P.R.C., including Hong Kong, reached about $26.1 billion in 1996.
This indirect trade runs heavily in Taiwan's favor, providing
another outlet for the island's booming economy. In an attempt to
facilitate trade, in 1995 the Executive Yuan approved the
construction of an offshore transshipment center at the port of
Kaohsiung through which direct shipping with the P.R.C. would be
permitted. In April 1997 the first sanctioned direct cross-Strait
shipping began between selected P.R.C. ports and Kaohsiung for
cargo being transshipped through Taiwan.
The Taiwan authorities have indicated they hope that the message
of Taiwan's political and economic success will influence the
pace and character of change in the P.R.C., and thus hasten the
day when the reunification of China will take place on terms
acceptable to Taiwan.
Beijing has expressed a mixed view of these developments. P.R.C.
leaders are pleased at the development of economic ties and
exchanges, which they believe helps their cause of reunification.
However, the increase in contacts, combined with domestic
political liberalization on Taiwan, has also resulted in more
open discussion in Taiwan of the future of Taiwan, including the
option of independence, to which Beijing is strongly opposed.
The trend in cross-Strait interaction is one of steady growth
with, so far, only temporary setbacks due to political factors
such as Lee Teng-hui's private visit to the U.S. in 1995. Taiwan
business representatives have concerns about issues such as
safety, corruption, and contract disputes, which have led to
increased caution and a search for alternative investment venues,
but not to pulling out from the mainland altogether. President
Lee has called for a "no haste, be patient" policy regarding
Taiwan mainland investment to prevent over dependence on the
P.R.C. As a result of this policy Taiwan has placed restrictions
on large-scale infrastructure investments on the mainland in
1997, although billions of dollars has been invested by smaller
The development of semi-official cross-Strait relations has been
incremental. Prior to April 1993, when talks were held in
Singapore between the heads of two private intermediary
organizations, Taiwan's Straits Exchange Foundation (SEF) and the
P.R.C.'s Association for Relations Across the Taiwan Strait
(ARATS) there had been some lower-level exchanges between the two
side of the Strait. The April 1993 SEF-ARATS talks primarily
addressed technical issues relating to cross-Strait
interactions. Lower-level talks continued on a fairly regular
basis until they were suspended by Beijing in 1995 after
President Lee's U.S. visit. Unofficial exchanges resumed in 1997
through informal meetings between personnel of the two sides'
unofficial representative organizations. Direct SEF-ARATS
contacts resumed in April 1998 and the SEF Chairman visited the
Mainland in October 1998.
The U.S. has welcomed and encouraged the cross-Strait dialogue as
a process which contributes to a reduction of tension and to an
environment conducive to the eventual peaceful resolution of the
outstanding differences between the two sides. The United States
believes that differences between Taipei and Beijing should be
resolved by the Chinese people on both sides of the Strait
themselves. The U.S. has consistently stated that its abiding
interest is that the process be peaceful.
United States Representative Offices
American Institute in Taiwan, Washington Headquarters
Suite 1700, 1700 North Moore Street, Arlington, VA 22209
Tel: 703-525-8474; fax 703-841-1385.
American Institute in Taiwan, Taipei Office
No. 7, Lane 134, Hsin Yi Road, Section 3, Taipei, Taiwan
Tel: 011-886-2-2709-2000; fax 011-886-2-2702-7675
American Institute in Taiwan, Kaohsiung Office
5F, No. 2, Chung Cheng 3rd Road; Kaohsiung, Taiwan 800
Tel: 011-886-7-224-0154; fax 011-886-7-223-8237
Taiwan Representative Office
Taipei Economic and Cultural Representative Office (TECRO)
4201 Wisconsin Ave. NW, Washington, DC 20016-2137
Tel: 202-895-1800; fax 202-363-0999.
TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program
provides Travel Warnings and Consular Information Sheets. Travel
Warnings are issued when the State Department recommends that
Americans avoid travel to a certain country. Consular Information
Sheets exist for all countries and include information on
immigration practices, currency regulations, health conditions,
areas of instability, crime and security, political disturbances,
and the addresses of the U.S. posts in the country. Public
Announcements are issued as a means to disseminate information
quickly about terrorist threats and other relatively short-term
conditions overseas which pose significant risks to the security
of American travelers. Free copies of this information are
available by calling the Bureau of Consular Affairs at 202-647-
5225 or via the fax-on-demand system: 202-647-3000. Travel
Warnings and Consular Information Sheets also are available on
the Consular Affairs Internet home page: http://travel.state.gov
and the Consular Affairs Bulletin Board (CABB). To access CABB,
dial the modem number: 301-946-4400 (it will accommodate up to
33,600 bps), set terminal communications program to N-8-1(no
parity, 8 bits, 1 stop bit); and terminal emulation to VT100. The
login is travel and the password is info. (Note: Lower case is
required). The CABB also carries international security
information from the Overseas Security Advisory Council and
Department's Bureau of Diplomatic Security. Consular Affairs
Trips for Travelers publication series, which contain information
on obtaining passports and planning a safe trip abroad, can be
purchased from the Superintendent of Documents, U.S. Government
Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954;
telephone: 202-512-1800; fax 202-512-2250.
Emergency information concerning Americans traveling abroad may
be obtained from the Office of Overseas Citizens Services at
(202) 647-5225. For after-hours emergencies, Sundays and
holidays, call 202-647-4000.
Passport Services information can be obtained by calling the 24-
hour, 7-day a week automated system ($.35 per minute) or live
operators 8 a.m. to 8 p.m. (EST) Monday-Friday ($1.05 per
minute). The number is 1-900-225-5674 (TDD: 1-900-225-7778).
Major credit card users (for a flat rate of $4.95) may call 1-
888-362-8668 (TDD: 1-888-498-3648).
Travelers can check the latest health information with the U.S.
Centers for Disease Control and Prevention in Atlanta, Georgia. A
hotline at (404) 332-4559 gives the most recent health
advisories, immunization recommendations or requirements, and
advice on food and drinking water safety for regions and
countries. A booklet entitled Health Information for
International Travel (HHS publication number CDC-95-8280) is
available from the U.S. Government Printing Office, Washington,
DC 20402, tel. (202) 512-1800.
Information on travel conditions, visa requirements, currency and
customs regulations, legal holidays, and other items of interest
to travelers also may be obtained before your departure from the
U.S. (see "Representative Offices" listing in this publication).
U.S. citizens who are long-term visitors or traveling in
dangerous areas are encouraged to register at U.S. offices upon
arrival overseas (see "Representative Offices" listing in this
publication). This may help family members contact you in case of
Further Electronic Information
Department of State Foreign Affairs Network. Available on the
Internet, DOSFAN provides timely, global access to official U.S.
foreign policy information. Updated daily, DOSFAN includes
Background Notes; Dispatch, the official magazine of U.S. foreign
policy; daily press briefings; Country Commercial Guides;
directories of key officers of foreign service posts; etc.
DOSFAN's World Wide Web site is at http://www.state.gov.
U.S. Foreign Affairs on CD-ROM (USFAC). Published on an annual
basis by the U.S. Department of State, USFAC archives information
on the Department of State Foreign Affairs Network, and includes
an array of official foreign policy information from 1990 to the
present. Contact the Superintendent of Documents, U.S. Government
Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954. To
order, call (202) 512-1800 or fax (202) 512-2250.
National Trade Data Bank (NTDB). Operated by the U.S. Department
of Commerce, the NTDB contains a wealth of trade-related
information. It is available on the Internet (www.stat-usa.gov)
and on CD-ROM. Call the NTDB Help-Line at (202) 482-1986 for more
SPECIFIC NOTES ON TRAVEL TO TAIWAN
Immigration: For a stay of less than 14 days, no visa is required
for U.S. citizens; for a longer stay, a visitor visa, valid for a
stay of 2 months and extendible twice for a total of 6 months, is
required. Persons coming from or passing through disease-infected
areas should have inoculations as appropriate. Since health
requirements often change, travelers should check the latest
information by calling the TECRO/TECO office nearest to them.
Climate and clothing: Taiwan is hot and humid in summer and
chilly and damp in winter. The climate in the northern half of
the island resembles that of the south-central U.S.; the southern
part is similar to Florida. In winter, raincoats, light jackets
and sweaters are recommended; in summer, lightweight garments are
essential. An umbrella is useful year round, but essential in the
winter and early spring.
Health: Major epidemics and serious diseases are infrequent in
Taiwan, although in 1998 an outbreak of enterovirus occurred
which has resulted in a number of deaths of infants and children.
High pollen counts and air pollution can cause discomfort to
people who suffer from allergies or asthma. Care must be taken
with drinking water, as hepatitis is a major problem.
Telecommunications: Telephone and telegraph services are modern
and efficient. Bilingual assistance is available through most
hotel switchboards. Taipei is 13 hours ahead of U.S. Eastern
Transportation: Car rentals are available in Taiwan. Taipei has
an extensive bus system and an expanding metro network, but many
foreign visitors rely on the inexpensive taxis for
transportation. For domestic travel, trains and planes are both
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