Taiwan Travel Guide

Abstract 

Taiwan better known as the Republic of China is a country in East Asia. The country is located near some of the major East Asia nations as the Peoples Republic of China borders it to the West, Japan to the Northeast, and Philippines to the south. The following paper discusses various aspects of the country that influence possibility of establishing a profitable business. Some of the factors include the natural resources and environmental sustainability that is associated with Taiwan. The sociocultural forces are particularly important in understanding how citizens and the people in the country are able to maintain high levels of productivity. The economic and socioeconomic forces are also integral to identifying the possibility of developing a foreign division in the country. The competitive and distributive forces in Taiwan help identify the ability of firms within its boundaries in competing at the international level. Finally, the labor laws of the country and how much they are followed by individual companies will help determine how a foreign division will operate and its ability to incorporate local workers while maintaining its values. 

Introduction 

Taiwan officially recognized as the Republic of China (ROC) is a state in East Asia. The country is located near some of the major East Asia nations as the Peoples Republic of China borders it to the West, Japan to the Northeast, and Philippines to the south. The state is also recognized as one of the largest in terms of population and economy which is not a member of the United Nations. The island country has a rich history where it was previously known as Formosa and previously inhabited by the Taiwanese indigenous people before the 17 th century. It was only after the arrival of the Dutch and Spanish colonies in that period that opened the island to large masses of Han migration. Throughout the history, the island state has been a source of conflict as each of the powers around it. Mainland China along with Japan sought to take control of it. 

The Qing dynasty would serve as the last dynasty to control it after a brief rule under the Kingdom of Tungning. However, the Qing dynasty ceded the island in 1895 to Japan, but a few years later the Republic of China would take over power in mainland China in 1912. ROC would take up the opportunity to take control of the island when the Japanese surrendered during the Second World War in 1945. However, calamity fell as the Chinese Civil War resumed and the ROC lost control of the mainland to the communists. The ROC government would establish themselves in the island but still claim to be the legitimate government of China. Since the major loss in the Haainan Campaign in 1950, the ROC lost its powers and its jurisdiction was limited to Taiwan and other small islands around it. A similar move was made in the UN where despite being a founding member, ROC lost its seat to PRC in 1971. 

There is incredibly more information to discuss on Taiwan as an integral measure of understanding and evaluating the progress of the country. Records of the country have shown significant progress evident from the 1960s. Through a critical study of the five main aspects of the country it is possible to develop effective understanding of it as an independent and free state. One of the aspects includes natural resources and environmental sustainability will provide information on how the country utilized its physical characteristics to supply to the needs of the society. The second is the sociocultural forces used in the understanding of the cultures and how the characterize the human population present in the state. The third is the economic and socioeconomic forces which are the most essential. International managers should demonstrate understanding of how scarce resources are utilized and distributed as well as the nature of economic changes that affect the country. The fourth issue of consideration is the competitive and distributive forces to better understand how the organization may be able to participate in firms in the country. Finally, an assessment of human relations will critically evaluate the treatment of women, racial bias, and labor laws in enterprise’s ability to perform businesses in the country. 

Natural Resources and Environmental Sustainability 

Geographical Elements 

The Republic of China commonly known as Taiwan is an island state bordering main China some 112miles off its Southeast coast. The current record of ROC jurisdiction is 36,193 square kilometers giving the country the 137 th country in terms of size which is larger than Belgium. Taiwan is divided into two major parts the flat plains to the West where approximately 90% of the population resides and the steepest forest-covered mountains occupying two-third of the eastern side. Additionally, the country lies across the Tropic of Cancer with the East Asian Monsoon affecting the climate. Higher rains experienced in the north than in the south particularly during the winter monsoon occurring from November to March. The country has small deposits of copper, gold, limestone, marble, natural gas, asbestos, and coal which have been depleted due to extensive exploitation in the modern era. The same is evident on the wild animals of the country including birds, deer, and various carnivores which may be classified as endangered or completely extinct. 

Location Importance in Political and Trade Relationships 

The location of Taiwan is of critical importance to political and trade relationships with other countries. It is evident that the political and legal status of the country is under contention where PRC refers to ROC’s government as illegitimate and merely “Taiwan Authority. However, this has not stopped ROC from establishing its own constitution, an elected president, and armed forces. The state also experiences controversy on its existence per international law as it lacks worldwide diplomatic recognition. In this regard, Taiwan has a high potential for military conflict with PRC should the former declare de jure independence. The latter’s official policy allows it to use military force to achieve unification if peaceful approach is not possible. 

Taiwan is recognized as among the Four Asian Tigers along with Hong Kong, Singapore, and South Korea. The rapid growth beginning in the 1950s was a major contributor. In terms of trade relations, the state occupies an opportune location where over $150 billion has been invested by Taiwanese firms in mainland China and 10% of its labor force run their businesses in the mainland. The ROC has also invested in Thailand, Vietnam, Malaysia, Philippines, and Indonesia. However, many have expressed concern over the dependence of Taiwan on the economy of Mainland China. An alternative view is that the heavy investment made by in economic activities would prove too costly if PRC ever made military intervention into ROC and making it highly improbable. 

Do surface features of the country contribute to economic, cultural, political, and social differences among different regions of the country? 

The country has experienced extensive contribution of the surface features to the differences among regions in the country. The North-South Divide is a common terminology used in Taiwan as it identifies the political, social, economic, and cultural differences in the country. Voters in the south-western regions are seen to favor pan-green political parties like the Democratic Progressive Party while those in the northern regions prefer the pan-blue like the Kuomintang. The latter party has been the primary administration in the country for over 60 years. As a result, majority of investment in the country occurred in the northern regions and minimal was conducted in the Southern areas. The Hsinchu and greater Taipei Metropolis have been the recipients of investments in technological fields. The southern regions would receive significant investment in industry instead. In the recent times, majority of these industries have been relocated to the mainland China causing even slower growth of the southern regions. Furthermore, it is evident that the availability of technological professions has led to a brain drain where multiple young college-educated Taiwanese from the south relocate to the north where there are high paying jobs. 

Influences of Inland Waterways and Outlets to the Sea 

Taiwan is one of the countries with multiple water ways that significantly influence the climate and physical features of the country. The state has over sixty natural rivers with each extending at least 19 kilometers long with others extending over 150 kilometers. Zhuoshui River is the longest river in the country flowing from its source in Nantou County all the way to the western border of the county. The river has been able to create a distinct boundary between Yunlin and Changhua Counties establishing a total length of 186 km. Such waterways are particularly important to the country for their use in the production of electricity. Wujie and Wushoh Dams have been constructed in the upper reaches of the river and play an important role in the industrialization of the country. The Zhuoshui River has been seen as the unofficial boundary between North and South of Taiwan. 

Does the climate influence business and/or the marketing mix? 

The climate of Taiwan is a significant influence on business and the marketing mix. Naturally the country experiences marine tropical climate due to fact that it lies on the tropic of cancer. The climate in the northern and southern regions are somewhat distinct. However, it is clear that the climate of the land will have significant effect on business. For instance, from June to September the entire island experiences hot humid weather with likelihood of typhoons in July, August, and September. During this period, there are high levels of flooding and landslides that lead to the destruction of crops. Additionally, this climate may be a major factor to outbreaks of diseases like cholera. Three or four of these extreme weathers may hit the shores of the island in each year making them a common and regular occurrence. According to figures provided by the country’s government, temperatures in Taiwan have risen by 1.4° Celcius over the past 100 years. The rise is double that of what is experienced in the entire world. As a result, the government would be forced to regulate the emissions of the industrial sector while find effective alternatives to supplement the agricultural sector which will heavily be affected by the low precipitation that is expected. 

What has been the influence of discovery and use of mineral resources and energy sources? 

The discovery of mineral resources and energy sources in Taiwan has been a cause for major concern in the country. It is evident that the early history of country in terms of leadership and regulation was lacking. Majority of the natural mineral resources including coal, marble, and gold have been exhausted. Natural forests particularly under the Japanese rule were greatly affected as majority of the forest cover that was cut down was previously a natural habitat for wild animals like deer many of which have now become endangered or extinct. The country has significant coal deposits as well as insignificant deposits of petroleum and natural gas. The three have been of major use in the total energy consumption within the country where oil accounts for 49%, coal 32.1%, nuclear energy 8.3%, natural gas 10.2%, an renewable energy at 0.5%. However, majority of the oil and gas used in power and transportation has to be imported. There has been discovery of wind energy resources which is a renewable energy that will particularly help in minimizing dependence on oil or natural gas. Additionally, there has been extensive use of nuclear power where in 2012 it accounted for 38,890 GWh electricity generation. 

Discuss changes in the country’s infrastructure and its potential influence on business. 

The Taiwanese government since taking over from the Japanese have embarked on industrial development of the country. Heavy investment has been on the infrastructure which has been a contributor to the growth of business in the country. The government through its legislature approved a special budget of $3.57 billion that would be used in the Forward-looking Infrastructure Development Program (FIDP). it noted that this first-term of the project would run for four years between 2017 and 2021. In total, the initiative will cost approximately $14 billion and is intended to serve the development needs for the future three decades. The FIDP comes at a time when investment has been sluggish in Taiwan and there has been negative growth in the country. The World Economic Forum ranked Taiwan as the 13 th in its 2016-2017 Global Competitiveness Report which was recognized as a significant decline from 12 th and 11 th in the previous two years. 

What has been the impact, if any, from industrial disasters, or what is being done to protect against such events? 

Industrial disasters are some of the worrying issues in the modern global economy. The improper handling of chemicals, raw materials, unstable compounds, or industrial waste could result in catastrophic disasters. Taiwan has also experienced major disasters including the 2014 Kaohsiung gas explosion. The series of gas explosions caused by gas leaks earlier that night led to 32 deaths and 321 people were injured. The industrial disaster was an issue of astronomical impact as it led to 6km of road completely destroyed along with gas supplies to 23,600, electricity to 12,000, and water for 8,000 households. The extensive damage caused also led to a shortage of resources with emergency rooms in the nearby hospitals all packed with casualties. Chemical safety management has become integral to the country as a measure of preventing future incidences. The entire underground petrochemical pipeline network was inspected to gather and sort out information while establishing an effective management system. Another legislator called for local government to create a chemical hazards agency that would incorporate trained professionals for disaster management. Additionally, educating firefighters would be an appropriate approach towards the nature of different chemicals in the network as a means of better decision making in future and minimizing casualties. 

Sociocultural Forces 

Cultural Aspects 

The ROC is largely populated by Han Chinese who make up 95% of the people while 2.3% are the Taiwanese aborigines. Despite the grouping of the people into two major distinct groups, it is evident that Taiwan has a diverse cultural society that seeks to preserve it the best way it can. ROC is considered to have preserved arts, crafts, and customs of Traditional Chinese culture than anywhere else in the world. The traditions of the Taiwanese includes beliefs that the landscape has flow of cosmic energy known as qi and use divination practice of fengshui to tap into it at varied point known as xue . As a result, many have used this practices to identifying the appropriate areas of building a house believing that it will bring good fortune to the family. To showcase the history of the country and cultural diversity there have been numerous museums built Traditional architecture is evident in the temple like the Lungshan Temple of Manka located in Taipei. 

Attitudes and Beliefs 

The Taiwanese people demonstrate positive attitudes towards work. Throughout their history, Taiwanese people have been traders as evidenced by the practices of the aborigines prior to the first Han settlers. These communities were seen engaging in trade of dried deer meat with merchants from Japan and China. As the Dutch colonists came in they expanded into the grain and sugar markets. In the 19 th Century, the Taiwanese would become major exporters of camphor and tea and under the Japanese rule the country would become a major producer ad exporter of tea. In this regard, it is evident that the members of the country are aware that change is bound to occur at one point or another. Therefore, they are open to embracing aspects that will help improve their lives. They believe in equality despite having been in a society that is authoritarian for a while now. 

Religion 

The majority of people in the country adhere to the three China traditional religions including Taoism, Confucianism, and Buddhism. These three are considered as the teachings or sanjiao . There are a host of Temples in the country that primarily from the traditional times. Although majority of them usually get destroyed during incidences of natural disasters, the people will usually come together and make the necessary repairs of the temple. There are members in the community who can make distinctions between the three different religions in order to practice one of them. However, majority of the Taiwanese will engage in a syncretic blend identified as the folk religion. As a result, the popular religion has elements from each teaching including aspects such as ghosts, magic, ancestors, and efficacy of religious medium. There are nearly 200 gods who were previously founders of the communities in Fujian and were carried to Taiwan by the Ham immigrants. There are also at least two percent of the population that are protestants including the aborigines and Hakka due to the influence of Canadian Presbyterian missionary George Leslie MacKay in 1870. 

Material Culture 

The citizens of Taiwan have varying fortunes in terms of material culture. It is evident that the richest members of the society live in the Taipei and other cities or counties in the northern region where there has been extensive development. The people believe that once you have a good education in finance or technology, these are the areas to go to as they have the highest paying jobs. On the other hand, the southern regions, particularly to the south west, these are areas that have minimal access to high paying jobs. These are the areas that have been involved in the allocation of industrial plants. As a result, these organizations offered little room for locking down high paying jobs. Following their relocation into Mainland China, people are looking to relocate to the northern region to seek better fortunes. The ability to adapt to the changing times can be an appropriate attitude towards accumulating wealth in future. 

Education 

Taiwan is one of the countries believed believed to have the highest rate of human development. Since the time when it was under Japanese rule, the members were required to follow the system universal primary education from grade one to six. However, the Nationalists would come and change that by pushing it further to the ninth grade. This was made a compulsory requirement of all members in 1982. Over a decade later in 1993, the government ensured that all members had access to an education by making it completely free to the 12 th grade. About 90% of the junior high graduates would continue to senior high school or vocational high school, In this approach of learning, the society identified the need to recognize the various talents of the individual students as an effective measure of directing them to careers they would flourish in. After grade nine, a student has three routes, an academic high school, vocational school, or a vocational junior college. There are more than 100 institutions that admit over 60,000 students in a year for undergraduate study with National Taiwan University identified as the most prestigious. For the graduate programs, many of them travel abroad including over ten thousand who are currently in the US. 

Communication 

Communication is particularly an important factor in the cultivation of effective social relationships. The people Taiwan are very friendly ad courteous. Mandarin Chinese is the national language and is used in educational learning, government, and cultural interactions. One has to demonstrate some level of fluency to establish relationships. Other languages include Taiyu, nanminhua, or Hakka. Some of the Taiwanese or aborigines usually speak one of the seven local languages and the national language. Although hugging is a common practice in other modern societies in the West, it is evident that it serves as an issue of concern where hugging more than once may be seen as falling towards the romantic love. As a result, it may make some of the individuals one encounters to feel very uncomfortable. Although teahouses, and homes serve as effective places to interact and build relationships, individuals are only able to do this with their peers. Therefore, a manager should not expect his or her workers to invite him for meal or dinner at home. 

Business Protocol 

The business protocol in Taiwan is clearly evident in Hofstede’s dimensions including individualism/collectivism, power distance, uncertainty avoidance, and masculinity/femininity. In the first dimension, the members of the country define themselves in terms of group membership. These groups may refer to social status, location of origin, or their specific professions. As a result, when they begin to identify with a group they give unquestioning loyalty. Their actions are to the benefit and success of the group. Power distance, may be an issue that members in Taiwan’s society can no longer stand. It is evident that they blame KMT for the unequal investment and development of the society. The people do not wish to continue with a similar experience. The dimension uncertainty avoidance, it is clear that the members of the community value seniority and loyalty. This belief shows that the members have a high need for stability and reluctant to frequent changes in the organizational setting. The final dimension identifies the masculinity or femininity of the members of the firm. It is clear that the Taiwanese demonstrate towards the femininity as they seek to achieve quality and high value is given to people and relationships ensuring that work takes a lesser role. The individual members doe not seek to pursue careers as a basic means of achieving material wealth. 

Implications for International Business 

The ROC is seen as having major challenges particularly to international businesses that may bar it from achieving success. There has been low levels of competition in the area as evidenced by the continued growth in China. With the co-location of electronic brand in China and good infrastructure, there is no longer the need to seek supplies fro Taiwan. As a result, many of the supply companies are closing down or moving to the mainland. There has been the enforcement of regulatory measures on foreign direct investment making the entry on international companies very low or close to impossible. The society is seeking the effective increase in investment in R&D practices. As pointed out earlier, the country is highly ranked in terms of technological advancement. However, the country has experienced a steady decline in competitiveness dropping from 11 th in 2015 to 13 th in 2017. Through increased research and development the country will be able to develop goods or materials that are unique from the rest in the global economy. 

Some of the opportunities associated with doing business in Taiwan is the desperate need for foreign investment. It is evident that the country has been experiencing low levels of inward investment at $56.2 billion which is quite low comparing with Japan, Korea, and Malaysia at $222bn, $134bn, and $115bn respectively. President Ma Ying-jeou has identified the need for eradicating the barriers for FDI as a priority for ensuring forward growth. Another opportunity is that FDI may bring about introduction of new technology that will help in driving economic and employment growth. The Managerial, financial, and legal skills brought by the foreigners may be critical in realizing effective growth in the country. The Taiwanese hope to attract FDI through Economic Cooperation Framework Agreement with China (ECFA) which may help in utilizing the extensive skilled workforce available and prevent losing it to foreign countries. 

Economic and Socioeconomic Forces 

Gross National Product (GNP) & Gross Domestic Product (GDP) 

The Gross National Product of Taiwan has been fluctuating in recent years with significant highs and lows prevalent. It is evident that the highest peak performance of GNP was evident in December 2017 when the country realized $156.156 US bn in production while the lowest was noted in June 2016 at $131.225 US bn. The fluctuation is a clear indicator of the changes in foreign investment in the country as seen in the chart below.

The Gross Domestic Product (GDP) of Taiwan has been experiencing a steady increase since the global financial crisis of 2007 will the only significant decline noted in 2009. The performance of the country is a clear indicator of high levels of economic value of the finished products and services that are available within the country within the identified periods of time. It is evident that Taiwan has high potential for continued growth based on its ability to increase investment in the country and minimize the unemployment rate in the country. The following table clearly highlights the GDP over the past five years including rate of growth and per capita GDP. The findings indicate a slow economic growth rate over the periods between 2015 and 2017. Lack of foreign investment in the country and significant evidence of brain drain could be a major cause for the issue. 

Year	GDP (in Bil. US$PPP)	GDP per capita (in US$ PPP)	GDP Growth	Percentage Unemployment
2013	1,022.3	43,739	2.2%	4.2%
2014	1,082.5	46,195	4.0%	4.0%
2015	1,103.1	46,956	0.8%	3.8%
2016	1,132.9	48,128	1.4%	3.9%
2017	1,185.5	50,294	2.8%	3.8%

Income 

The incomes of the citizens in Taiwan is a great indicator of the performance of the country towards economic achievement. It is evident that the members demonstrate low levels of disposable income meaning the individuals are living in abject poverty. Approximately 6.5 million of the country’s population have a disposable income of less than 400,000 New Taiwanese Dollars. This amount is equivalent to $13,000 US making it almost impossible for the individuals to afford some basic amenities including healthcare. The country also demonstrates poor income distribution where majority of income is available only to a select few in the country. For instance, only 382,685 individuals in the country have a disposable income of above 1.4 million New Taiwan Dollars an equivalent of $45,475 US. 

Labor 

Although most countries establish a minimum wage through which each individual worker must be paid, Taiwan does not hold the same standard. It recognizes that the workers through collective negotiation by unions should negotiate their pay in an attempt to achieve a fair living wage. In 2017, the minimum wage an individual could earn was NT $ 21,009 per month which is equivalent to $654 US and approximately $4.14 US per hour. While this wage is significantly above the international poverty line, it is quite low compared to developed countries in the West. The per capita income for the Taiwanese ranged from $17,445 US to $30,699 US depending on geographical location of the individuals. It is evident that nearly all citizens have a basic education of elementary through to high school. As of 2006, over 90% of high school graduates were accepted into university to pursue tertiary education. In this regard, the young population in the country has been able to attain the highest level of educational learning. There has been rapid incidence of labour mobility in Taiwan due to the extensive changes in the industrial structure of the country. Workers are more likely to move to industries that utilize their skills to prevent lack of exploitation of accumulated skills. 

Population by Demographics 

The country has a total population of 23.5 million people as of recent estimates spread across 36,000 square kilometers. The Republic of China has realized extensive growth of the population over the past century from 3 million in 1905 to approximately 22 million in the early years of the 21 st century. The country experienced high fertility and low mortality rates in the 1960s during the industrialization of the country. Additionally, a surge of the population came about due to the end of the Chinese Civil War where the Kuomintang forces retreated to the island. Since the turn of the 21 st century the country has been experiencing a declining birth rate from 13.8 in 2000 to 7.6 in 2018 per 1000. The fertility rate in Taiwan is currently the lowest in the world at 1.11 per female the lowest level was recorded in 2010 at 0.90 per female. 

Investment 

Since the defeat of the Japanese in 1945 by the Western Allies, Taiwan has been experiencing a steady increase in industrial investment. For instance, little attention was paid to agriculture and more was given to technological based investments. This has been a common practice in the country as seen in the transfer of labour-intensive industries to the mainland China and Vietnam where labor costs are significantly cheaper. Additionally high levels of investments are made on capital and technological-intensive industries. High technology industrial parks have been developed in different regions in the country. 

National Economic Plans 

The government of the Republic of China has recognize the slow growth experienced in the country over the last few years. As a result, the country intends to relax the laws that hinder foreign direct investment. It is evident that lack of investment has made it difficult for the country to compete with others on the global market. The country also intends to maximize the number of job opportunities available to the young population across all regions in the country, the practice will ensure high levels of the Gross National Product output. The government also intends to compete with its Asian neighbors in various service and technological industries as a measure of continuing its growth. The country has been able to minimize its dependence on the US economy and instead focused on improving relations with PRC while seeking to open up markets in Europe. 

Inflation Patterns 

Since the turn of the 21 st century, Taiwan has been able to stabilize its inflation. Unlike the previous decades, the country has been able to maintain inflation rate below 5%. The highest incidences of high inflation occurred in 2005 and 2007 at 2.3% and 3.5% respectively. It at this period that the global market experienced financial crisis, but there was minimal effect on Taiwan. Over the past five years, Taiwan has maintained an inflation rate below 2% demonstrating the ability of the market to attract consumers to purchase goods while also encouraging borrowing of money as the interest rates are usually low at the time. 

Balance of Payment History 

The current account surplus in Taiwan decreased by USD 6.99 billion to USD 18.65 billion in the Q4 2018 from USD 25.64 billion in Q4 2017. The goods surplus went down to USD 17.47 billion from USD 22.92 billion, as exports decreased by USD 6.25 billion affected by the slowdown in global growth and higher base periods while imports shrank by USD 0.80 billion. The primary income surplus also narrowed to USD 2.79 billion from USD 4.99 billion, as foreign direct investment income fell to USD 2.68 billion from USD 4.36 billion. Meanwhile, the services deficit declined to USD 0.78 billion from USD 1.51 billion, mainly due to the decrease in processing fee and the increase in transportation revenue; and the secondary income shortfall rose slightly to USD 0.83 billion from USD 0.77 billion in Q4 2017, explained by the large amount of trade liquidated damages in the same quarter last year. In 2018, the current account surplus shrank to USD 68.26 billion from USD 82.84 billion in 2017. Current Account in Taiwan averaged 6041.74 USD Million from 1981 until 2018, reaching an all time high of 25639 USD Million in the fourth quarter of 2017 and a record low of -851 USD Million in the first quarter of 1981. 

Exchange Rates 

The Republic of China utilizes the New Taiwan Dollar as its official currency. The most recent exchange rate identifies that 1 New Taiwan Dollar is equal to 0.032 United States Dollar. Reversibly, one US dollar is equivalent to 30.79 New Taiwan Dollar. The following chart presents the last 6-month history of the exchange rate converted to dollars. 

Implications for international business - Based upon your research, summarize barriers and opportunities for locating business opportunities. Of what factors should MNC managers be aware? 

Competitive and Distributive Forces 

Trade Barriers in Taiwan 

Taiwan has recently become more open to Foreign Direct Investment (FDI) from other countries across the world as a measure of improving its ability to compete effectively in the global market. However, the practices still encounter significant barriers to trade where some of them include the following. Tariffs are a considerable barrier to trade between Taiwan and the US where tariff cuts on 1,130 items of interest to the US have been implemented. The significant quotas evident in performing government procurement contracts has made it difficult for US firms to realize the set goals of the projects. Lack of clear wage control in the country poses a major hindrance to US firms who seek to enter the market and minimize labor costs. The concerns by numerous technological companies is the extensive problem evident in the enforcement of intellectual property rights where numerous counterfeit goods are likely to be made in the market. 

Attitude Toward Labor Unions 

The Republic of China has a positive attitude towards labor unions. It is evident that teachers and other foreign workers are allowed to exercise their right to unionize and participate in union activities. However, this does not mean that the government allows for strikes. It is important to note that strikes do not occur in Taiwan and workers are expected to abide by labor agreements set during negotiations between the labor unions and the employer. The employer has the power to take severe action against employees who may organize strikes. 

Typical Government Restrictions against Foreign MNCs, e.g., Hit List, Keiretsu, Industrial Targeting. 

There are numerous restrictions that the Taiwanese government may enforce against foreign Multinational Corporations. One of the includes restriction and delay of local licensing. There are 10,247 official import product categories of which 1,027 are regulated and require approval of the authorities associated with the particular product, the qualification of the importer, and the origin of the good among other factors. In business operations, in Taiwan, such restrictions result in delays for the organization which may lead to losses and declining trust with suppliers. There are also cases where the rules on the local licensing of professionals may be a hindrance to the MNCs as the approval process may be length, costly, and non-transparent. The practice of Keiretsu in business operations is a restrictive practice to the entrance of foreign investment. Despite financial independence, organizations work closely to ensure their success while increasing potential failure of another. 

Counterfeit Products on Competition 

The incidence of counterfeit products in the Republic of China is a major hindrance to the success of foreign investments. Approximately $42 million worth of goods from Taiwan were confiscated by the US Customs Service as they were identified as counterfeit. The practice long continues in the society despite extensive cooperation with organizations in the US and other nations in cracking down on counterfeiting products in the island-nation. 

Strong Industries 

The Taiwanese market has significant industries that are strong performers making it difficult for entry by foreign companies. The electronics and information technology sector is among those considered a strong industry due to extensive production of Mask ROM, IC packaging, and IC testing. However, the offshoring of such industries to the mainland and Vietnam has led to the development of other major industries. The semiconductor industry continues to contribute to a large proportion of the GDP. As a result, MNCs will find it difficult to enter the market as it already has major players. 

Typical Distribution Network 

The development of a production company in Taiwan will require the investors to identify the distribution network in the country. A typical network recognizes the movement of goods from the supplier to the distributor, then the retailer, and finally the consumer. There are suppliers that shorten the distribution network by sending products directly to the retailers. The practice enables maximization of profits by the organization while improving capability of providing customers with the desired product. 

Competition or Marketing Restrictions 

The Taiwanese government has set up laws that are expected to act against organizations that may restrict appropriate competition or marketing of a product. In this case, the Fair Trade Law is used to prohibit the monopolistic organization, cartel activity, and unfair competition. It is evident that the telecommunications sector is one the major opportunities for entry of the foreign organizations. However, the government limits the foreign ownership of such firms to 60% and direct foreign investment within that sector to 49%. 

Implications for International Business 

While the Taiwanese government and its local corporations have established a stiff market for entry of the foreign investors, there are multiple opportunities for entry and ensuring success within a given industry. Over the last few years, the government officials have recognized the lack of competitive advantage of the country in the global market. As a result, the country will lessen its grip on the restrictive laws in a bid to welcome more FDI. It is important that MNCs consider the restrictive practices employed by the local organizations in collaboration with the government to identify the profitability of an industry. 

Human Relations 

Women in Management 

Human resource management is recognized as an integral factor towards the development of the society as it provides to the competitiveness of the businesses in the land. One of the major factors considered in human relations is the opportunities offered to women among other discriminated groups in the modern society. In the Republic of China, the government has taken a major step towards ensuring a universal education system where all members are able to receive quality education enabling a modern industrial economy. However, the country has not swayed from the patriarchal structure where men take up the most important jobs in the community. Very few if any women are able to attain positions in management despite being able to work in every industry. They usually occupy the lower tier of managerial positions. The salaries and wages of men and women are generally unequal will the latter only earning 72% of the income earned by the former for equivalent work done. There are women who have been able to take up positions of power through running their own businesses and running for government positions as they seek to change the perspective in the society. 

Racial or Class Bias 

The majority of the population in Taiwan are the Chinese immigrants who came into the country during the reign of the Han dynasty. They make up nearly 95% of the population while the rest in made of the Taiwanese aborigines among other groups including Japanese who came into the country. As a result, their is minimal bias in the country attributed to race. Nevertheless, the class system includes the chronically unemployed, beggars, and the poor, the working and middle classes, and the upper and lower bourgeoisie. The upper bourgeoisie account for only 5% of the population, but take up majority of the wealth in the country as they own the biggest private companies or control the state-owned organizations. In the past, the class system coincided with ethnic groups where the people living in Mainland China constituted the bulk of upper bourgeoisie while the Taiwanese made up the chronically poor. However, due to the Taiwan’s economic miracle, many residents of the island were able to turn their fortunes and skills to become part of the middle class. In this regard, there are minimal biases that could restrict the staffing process in the area. 

Evidence of “Brain Drain” 

The Republic of China is currently experiencing high levels of “Brain Drain”. This incidence is evident where educated members of the country seek alternative options of employment other than the available opportunities in the country. The majority of the young people opt to move to the mainland China as it offers a big market and multiple opportunities to achieve success in a variety of fields. The PRC is seen to actively seek out the cream of the Taiwanese by providing incentives like tax breaks and subsidies to the high-tech organizations, research grants for academics, and an assurance to the organizations that they would receive opportunity to bid for government projects. As a result, it may be difficult to attract the required talent in the country due to the numerous opportunities available in the mainland and other countries in Asia. 

Taiwanese Labor Laws 

The Republic of China recently enforced changes in its labor laws that would affect working overtime, paying overtime, bonuses for workers, pay rises, and unionization of the employees. It is evident that the government has increased maximum overtime from 46 hours in a month to 54 hrs but the overall cap per three months has been at 138 hours. The employers are required to provide the employees with pay for every hour worked during overtime and not just the every four hours. Alternatively workers may opt for compensatory leave in place of pay for overtime worked. The country does not include laws on giving bonuses though majority of the organizations offer their managers bonuses at the end of the year usually at the discretion of the board of directors. The same is evident in giving large pay raises as it is at the discretion of the firm. The Taiwanese Legislature passed significant amendments in 2010 that allowed teachers and foreign workers to form and join unions that protect their rights at the workplace. 

Attitudes on Bribery 

Although corruption does not present as a major hindrance towards conducting business or making investments in Taiwan, there have been cases of its occurrence. The close ties between business and politics have brought about risks of possible corruption in public procurement. However, the incidence of petty corruption or bribery is not common in majority of the sectors. The members of the community demonstrate a positive attitude towards upholding ethical behavior in business practices. The citizens usually identify the judicial system as being corrupt as bribes and irregular payments are used to receive favorable court decisions. Impartiality of judges only comes when settling high-profile cases that could have a political effect on the country. The businesses are not at risk of corruption in relation to public services as few organizations report the need to bribe officials as a measure of obtaining public utilities. 

Laws Similar to OSHA 

The Republic of China has developed significant measures that are essential in the protection of the workers’ health and safety at the workplace. The Taiwanese government recognizes the importance of the employees in the continued development and advancement of the country. With the extensive number of industries in Taiwan, there are numerous risks and hazards that the workers may encounter on a daily basis. The laws were promulgated in 1974 before being fully implemented in 2013 serving all workers from the employed, self-employed, contractors, interns, and others who may be supervised in a workplace setting. There are numerous prohibitions that are set for the employer regarding the conditions under which the workers should operate along with safety measures they should employ to ensure minimal risk of injury and protection from health hazard. 

Conclusion 

The country of Taiwan officially known as the Republic of China is one of the most attractive nations in Asia in terms of setting up a foreign direct investment or establishing an international division. The country is recognized as one of the largest economies in the world and in Asia with its significant focus on service and technological investments. Over the past few years, the country has experienced rather slow growth in its economy and lack of competitiveness on the global front. This incidence is primarily attributed to the lacking presence of foreign investment. The Taiwanese government had set up significant measures that made it nearly impossible for foreign organizations to establish divisions in the country. However, with stiff competition from its neighboring Asian countries, the Republic of China wishes to open up its borders to foreign investors to boost their competitiveness. 

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