#1Taiwan's Trade and Investment Scenario and FTA Strategy Seminar on "The Current status and Future Prospects of India-Taiwan Relations" ICRIER, India Kristy Hsu Chung Hua Institution for Economic Research, Taiwan Chung-Hua Institution for Economic Research (Taiwan WTO Center) 中華 經濟 研 究 CIER Chung-Mututions t for Economic mic Research WO 1#2Presentation Outline Taiwan's Trade Scenario Taiwan's Investment Scenario Recent Efforts to promote "Invest in Taiwan" ■Taiwan's Strategy of Integrating into the world and the regional economy Jan 17 2011 Chung-Hua Institution for Economic Research (Taiwan WTO Center) 經 研 CIER 究 Chung-Hua Institution for Free Rese WTO 2#3A Quick Glance Taiwan is an export-oriented economy; trade contribution to economic growth has accounted for around 60-70% in recent years Milestones in trade performance: in 2004, total trade value exceeded US$300 billion; in 2006 exceeded US$400 billion; in 2010 exceeded US$500 billion. Ranked by WTO as the 17th exporter and 18th importer in merchandise trade, and 27th exporter and 29th importer in commercial services trade in the world Faced with challenges such as accelerated regional 研 CIER Chung-Hua institution to 究 Economic Research integration, increasing dependence on Chinese market, etc. Jan 17 2011 Chung-Hua Institution for Economic Research (Taiwan WTO Center) WTO 3#4Taiwan's Foreign Trade Performance (2003-2010) Unit: US$ billion Surplus (+) Deficit (-) Total trade Export Import Year Amount Growth Rate Amount Growth Rate Amount Growth Rate Growth Amount Rate 2003 278.6 12.1 150.6 11.3 128.0 13 22.6 2.3 2004 351.1 26 182.4 21.1 168.8 31.8 13.6 -39.7 2005 381.0 8.5 198.4 8.8 182.6 8.2 15.8 16.2 2006 426.7 12 224.0 12.9 202.7 11 21.3 34.8 2007 465.9 9.2 246.7 10.1 219.3 8.2 27.4 28.6 2008 496.4 6.5 255.6 3.6 240.8 9.8 14.9 -45.8 2009 378.0 -23.8 203.7 -20.3 174.4 -27.5 29.3 93.0 2010 526.0 39.1 274.6 34.8 251.4 44.2 23.3 -20.7 Chung-Hua Institution for Economic Research (Taiwan WTO Center)#52010 Taiwan' Export by Destinations China and Hong Kong Others, 31% 42% South Korea, 4% Singapore, 5% United States, Japan, 7% 11% Chung-Hua Institution for Economic Research (Taiwan WTO Center) 5#62010 Taiwan' Import by Source Countries Others, 44% China and Hong Kong, 15% United States, 10% Japan, 21% South Korea, 6% Australia, 6% Chung-Hua Institution for Economic Research (Taiwan WTO Center)#7Export to China & Hong Kong (2005-2011) million USD 40,000 32,000 24,000 Export 16,000 Trade Balance Import 8,000 0 2005 Q1 2007 Q1 2009 Q1 Chung-Hua Institution for Economic Research (Taiwan WTO Center) the forecast period 2011Q1 7#8million USD 18,000 Export to Japan (2005-2011) 12,000 Import Export 6,000 0 Trade Balance -6,000 -12,000 2005 Q1 2007 Q1 the Forecast Period 2009 Q1 2011 Q1 Chung-Hua Institution for Economic Research (Taiwan WTO Center) 8#9million USD 4,250 3.400. Export to Singapore (2005-2011) Export 2,550 Trade Balance 1.700 Import 850 0 2005 Q1 2007 Q1 2009 Q1 Chung-Hua Institution for Economic Research (Taiwan WTO Center) the Forecast Period 2011 Q1#10million USD 2,400 1.920 Export to Vietnam (2005-2011) 1,440 Export 960 480 Import 20 QI Trade Balance 2007Q1 the Forecast Period 2009 Q1 201101 Chung-Hua Institution for Economic Research (Taiwan WTO Center) 10#11million USD 1.150 850 Export to India (2005~2011) Export 550 250 -50 -350 Import Trade Balance 2005 Q1 2007 QI 2009 Q1 Chung-Hua Institution for Economic Research (Taiwan WTO Center ) the Forecast period 2011Q1 11#12million USD 10,000 8,000 Export to USA (2005-2011) Export Import 6,000 4,000 Trade Balance 2,000 0 2005 Q1 I 2007 Q1 2009 Q1 Chung-Hua Institution for Economic Research ( Taiwan WTO Center) the Forecast Period 2011 Q1 12#13Taiwan's Major Export Products 2010 Nov. 2009 Nov. Unit: US$ Billion; % Comparative Increase/ Product Decrease Amount % Amount % Amount % Total Exports 24.4 100.0 20.0 100.0 4.4 21.8 Electronic Products 6.8 27.7 5.8 29.0 1.0 16.4 Iron, Steel and Articles Thereof 15.0 6.0 1.2 5.7 0.3 27.6 Optical, Photographic, Measuring and Medical Instrument 1.7 7.1 1.8 8.7 0.0 -0.3 Machinery 1.6 6.4 1.0 5.0 0.6 55.8 Chemicals 1.4 5.5 1.0 4.9 0.4 37.2 IT&Com Products 1.7 6.9 1.1 5.3 0.6 58.0 Other Metal Products 0.8 3.3 0.7 3.3 0.2 23.0 Electrical Machinery Products 0.9 3.6 0.9 4.6 -0.1 -5.7 Yarn 0.8 3.2 0.6 3.1 0.2 24.4 Transportation Equipments 0.8 3.2 0.6 3.0 0.2 26.5 Others 6.6 27.0 5.5 27.2 1.1 21.0 Chung-Hua Institution for Economic Research (Taiwan WTO Center) 13#14Taiwan Major Import Products Unit: US$ Billion; % Comparative Increase/ 2010 Nov. 2009 Nov. Product Decrease Amount % Amount % Amount % Total Imports Electronic Products Machinery 240.0 100.0 17.9 100.0 6.1 33.8 3.7 15.3 3.4 19.0 0.3 7.7 2.6 10.8 1.8 9.8 0.8 47.0 Crude Oil 2.4 10.1 1.4 7.7 1.0 75.4 Other Metal Products 1.1 4.5 0.9 5.2 0.2 17.0 Iron, Steel and Articles Thereof 1.1 4.6 0.9 4.9 0.2 23.8 Organic Chemicals 1.0 4.2 0.8 4.5 0.2 22.4 Optical, Photographic, Medical Instrument 0.7 2.8 0.6 3.2 0.1 16.5 Electrical Machinery Products 0.7 2.8 0.5 2.7 0.2 37.9 Transportation Equipments 1.0 4.0 0.5 2.6 0.5 104.1 IT&Communication Products 0.6 2.6 0.5 2.6 0.2 33.2 Others 9.2 38.5 6.8 37.8 2.5 42.7 Chung-Hua Institution for Economic Research (Taiwan WTO Center) 14#15Taiwan's Investment Policy & Scenario Outbound investments started in the 1970s Active investor in China, Southeast Asia Government now actively promotes "Invest in Taiwan” Global Index Publisher 2010 Ranking Global Competitiveness WEF 13 Index Risk Assessment on BERI 4 Business Environment World Competitiveness IMD 8 Yearbook Entrepreneurship IMD 3 Development Ease of Doing Business World Bank Chung-Hua Institution for Economic Research (Taiwan WTO Center) 46 WIO 15#16cases cases 2500 2,000 1,500 1,000 500 Taiwan's Outward Investment (1992-2009) case unit: million USD 12,000 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Chung-Hua Institution for Economic Research (Taiwan WTO Center) 10,000 8,000 6,000 4,000 2,000 16#17121.38 0.00 2.23 1.64 1952-2008 Approved Overseas Chinese and Private Foreign Investment by Industry 0.12 13.77 ■1.87 5.14 ■0.95 5.50 9.61 16.97 1.57 6.94 ■ 0.00 1.23 3.74 2.56 ■ Agriculture, Forestry, Fishing ЯAnimal Husbandry Food & Beverage Manufacturing ■■■Textiles Mills Chemicals ■■■Rubber and Plastic Products Manufacturing Non-metallic Mineral Products Manufacturing Basic Metal and Fabricated Metal Manufacturing Machinery and Equipment Manufacturing Electronic Parts and Components Manufacturing Computers, Electronic and Optical Products Electrical Equipment Manufacturing Construction 14.79 Wholesale and Retail Trade Transportation and Storage Accommodation and Food Services Information and Communication Source The Directorate General of Budget, Accounting and Statistics (DGBAS) of Executive Yuan Financial and Insurance Professional, Scientific and Technical Services Others#18Why Invest in Taiwan Operations Hub in Asia-Pacific Located at the heart of the Asia-Pacific region Gateway to China - geographical and language advantages Global Logistics Capabilities Comprehensive Industrial Cluster Intellectual Advantage Superior Innovation Capability Complete Infrastructure Sound legal Framework Comprehensive IP Protection Abundant Capital Funds Jan 17 2011 Chung-Hua Institution for Economic Research (Taiwan WTO Center) 經 研 CIER 究 Chung-Hua Institution for Free Rese WTO 18#19International Trade: Strategy and Objectives Maintaining traditional markets and exploring emerging markets Participating in international trade and economic organizations: APEC (1991), WTO (2002) Building bilateral economic and trade relationships as well as regional cooperation: de facto integration in Asia Pacific Strengthening international competitiveness by promoting Taiwan brand value, strategizing alliances, etc. Shaping a new FTA strategy in the “Post ECFA Era" 經 研 究 WTO Jan 17 2011 Chung-Hua Institution for Economic Research (Taiwan WTO Center) CIER -Mua institution for 19#20Progress of FTA Initiatives PANAMA GUATEMALA NICARAGUA DOMINICAN REPUBLIC PARAGUAY HONDURAS EL SALVADOR SINGAPORE UNITED STATES JAPAN EU ASEAN Signed or in force ▪Under negotiations: Diplomatic Allies Major Trading Partners 研 CIER Jan 17 2011 Chung-Hua Institution for Economic Research ( Taiwan WTO Center) -Hua Institution for 究 Economic Research WTO 20#21Thank You for Your Attention! Kristy Hsu Associate Research Fellow Taiwan WTO Center, CIER TEL: 886-2-27356006*318 Email: [email protected] Jan 17 2011 Chung-Hua Institution for Economic Research (Taiwan WTO Center) 經 研 CIER 究 Chung-Hua Institution for Free Rese WTO 21