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Taiwan

Overview

New Zealand does not maintain diplomatic relations with Taiwan, but does maintain economic and cultural links.  New Zealand’s economic and cultural interests in Taiwan are represented by the New Zealand Commerce and Industry Office and Taiwan's interests in New Zealand by the Taipei Economic and Cultural Offices in Wellington and Auckland.  Informal and unofficial visits or exchanges also take place.

The absence of political or diplomatic links does not stand in the way of a vibrant trading, economic and cultural relationship.  Taiwan is a key export market, an important source of imports, a significant tourism market and a source of investment.  There is a large Taiwanese community in New Zealand and the New Zealand community in Taiwan is growing.  Cultural links between the aboriginal people of Taiwan and Māori are also growing. 

New Zealand and Taiwan are both members of APEC where Taiwan (as Chinese Taipei) is a member and the WTO (where Taiwan is known as the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei), as well as in a number of fisheries conventions and the OECD (where Taiwan participates in the Steel, Competition Policy and Trade Committees).

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Key facts

Geography/Demographics

Land Area - The island of Taiwan has an area of 36,000 sq km.
Population - 23 million
Capital City - Taipei
Religion - Buddhism, Daoism and Christianity have the greatest following
Official Language - Mandarin but Taiyu (Hokkien dialect) is also in usage.

Political

Political system - Representative democracy
Executive branch - The Executive is headed by the president who appoints the premier. The Premier, in turn, appoints Ministers of the Executive Yuan.
Legislative branch - Legislative Yuan
Last election - President & Legislative Yuan – January 2012
Next election due - President 2012; Legislative Yuan - 2016
Senior office holders -President Ma Ying-jeou; Vice-President Wu Den-yih; Premier Sean Chen

Economic

GDP - US$467 billion (2011) US$430 billion (2010)
GDP Breakdown - (2009) Manufacturing 21.4%; Commerce 18.9%; Finance, insurance & business services 18.7%; Government services 11.0%; Transport & communications 6.3%; Construction 1.7%; Agriculture, forestry & fishing 1.6%; Electricity, gas & water 1.5%
GDP Per Capita - US$41,386 (2011)* when adjusted using purchasing power parity
Exports - US$307.0 billion (2011) US$274.3 billion (2010)
Imports -US$279.2 billion (2011) US$247.4 billion (2010)
Main exports - (2009) Electronic products: US$62.8 billion; Optical, photographic measuring and medical instruments: US$14.7 billion; Machinery: US$17.1 billion; Iron, Steel and articles: US$14.3 billion; Chemicals: US$11.3 billion; Electrical machinery products: US$9.9 billion; IT&C Products: US$9.3 billion; Other metal goods US$10.9 billion; Yarns: US$8.7 billion; Transportation equipment: US$7.4 billion
Current account - US$41.6 billion (2011) US$39.9 billion (2010)
Inflation - 1.4% (2011) 1.4% (2010)
Unemployment - 4.4% (2011) 5.2% (2010)
Foreign Exchange Reserves US$390.6 billion (2011)
Total External Debt - US$125.7 billion (2010)*

Source: 'EIU' = Economist Intelligence Unit

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History

The island of Taiwan has a long history of human settlement.  DNA evidence suggests that Taiwan was the original source of the Malay peoples, who occupied much of Southeast Asia, and the peoples of Polynesia.  The arrival of the Māori in New Zealand marked the final stage in this journey.

In the period prior to the 16th and 17th centuries, the majority of Taiwan’s population was non-Han Chinese, belonging to more than a dozen indigenous tribal groups, with distinct languages and cultures.  Although Taiwan also became the home to pirates and limited numbers of other Chinese from Fujian Province across the Strait, it was by and large left alone until the onset of European colonisation.  The Dutch occupied the south-western part of the island in 1624, only to be expelled in 1661 by Ming Dynasty soldiers who had fled the mainland.  The Ming forces surrendered to the Qing in 1683 and the Qing Dynasty administration was replaced by the Japanese in 1895.  The Japanese were replaced by the government of the Republic of China in 1945.  In 1949 Taiwan became the final refuge of the forces of the defeated mainland Chinese Nationalist administration under the leadership of Chiang Kai-shek.

Over the past five centuries, Taiwan has experienced several waves of Han Chinese settlement, the most recent being Chiang Kai-shek and his supporters in the late 1940s.  The indigenous (non-Han) peoples who originally inhabited the island tended either to retreat into the mountainous interior or become assimilated.  Only two percent of Taiwan's population is now non-Han.  In recent years indigenous and Hakka cultures have experienced a renaissance, and have reached out to form links with overseas indigenous communities, including Māori.

The history of Taiwan since 1949 was initially one of authoritarian one-party rule by the Kuomintang (KMT), confrontation with the mainland, and the development of a highly successful export-focused economy.  Democratic change began slowly in the 1980s and in the course of the 1990s Taiwan developed a democratic political system.  The KMT lost power in 2000 when the Democratic Progressive Party’s (DPP’s) Chen Shui-bian was elected President.  Chen won a second four-year term in March 2004.  In March 2008 the KMT candidate Ma Ying-jeou won the Presidential election.

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Political situation

The KMT won a majority in Taiwan’s Legislative Yuan (parliamentary) elections in January 2012.  KMT’s Ma Ying-jeou was re-elected as Taiwan’s President in January 2012. 

The relationship with the mainland remains a domestic political issue for Taiwan.  Some members of the DPP continue to favour a declaration of de jure independence by Taiwan.  President Ma Ying-jeou’s election has seen dramatic developments in cross-Strait dialogue, with the mainland and Taiwan making significant progress with  cross-Strait cooperation.  This has included developing an Economic Cooperation Framework Agreement (ECFA) and establishing direct air links, postal services, tourism links, and greater business and investment connections. 

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Economic situation

Over the last decade, Taiwan has had strong economic growth driven largely by its export performance.  It has accumulated one of the largest foreign exchange reserves in the world.

Taiwan has managed two significant economic reversals in this time, with SARS making a significant impact in 2003 and the global economic crisis affecting Taiwan significantly in 2008/09. In the first half of 2009, Taiwan saw a 36% drop in exports, rising unemployment and a 10% year-on-year drop in GDP growth.  Taiwan took a number of steps to generate growth in response to the economic downturn including interest rate cuts and increased public spending aimed at job creation.  Taiwan also looked to strengthen economic and trade relations across the strait through an Economic Cooperation Framework Agreement (ECFA) with China, signed in June 2010.  Strong export performance and industrial activity in the fourth quarter of 2009, and a growing cross-Strait relationship, saw a lift in investor and consumer confidence and GDP yoy growth in 2010 of 14% and 5.2% in 2011.

Longer term, Taiwan will need to address the redevelopment of its manufacturing sector, as increasing integration with the mainland presents both challenges and opportunities.  While high-tech manufacturing has been Taiwan’s strength, Taiwan’s future prosperity is likely to be linked to the further development of its services industries.  Major reforms of the services sector will be required to allow Taiwan to become an efficient service-based economy.  Taiwan has placed great emphasis on its transformation into a "green silicon island" over the next six years (based on high-tech/new economy sectors). Increased investment in tourism, education, research and development and infrastructure including IT infrastructure is envisaged.  top of page

 

Relations with others

Taiwan's relations can be divided into several areas of activity: managing the relationship with the mainland; developing its relationship with the United States; and, developing as good as possible a relationship with the rest of the world within the constraints of the one China policy (adopted by all but the 23 countries that recognise the Republic of China).

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Cross-Strait relations

Relations with the mainland deteriorated under Lee Teng-hui’s presidency (1988 – 2000) and remained tense during Chen Shui-bian’s terms in office (2000 – 2008).  Chen’s proposals for a re-engineered constitution, and rhetoric used during the 2004 electoral campaigns raised tensions across the Strait. 

President Ma Ying-jeou has introduced several measures that have improved cross-Strait relations since his inauguration in 2008 including improved dialogue with the mainland.  . The improved cross-Strait environment was demonstrated by the historic meeting in April 2008 between Taiwan’s Vice-President Vincent Siew and Chinese President Hu Jintao.

Since 2008, there have been fifteen cross-Strait agreements concluded between Beijing’s Association for Relations Across the Taiwan Strait (ARATS) and Taipei’s Straits Exchange Foundation (SEF), covering direct air, mail and shipping links, increased tourists from mainland China, food safety, financial cooperation, joint crime-fighting mechanisms, agricultural quarantine inspections, industrial product standards, nuclear safety and fishing crew cooperation.

Following four rounds of preliminary talks in 2009 and three formal negotiation rounds in early 2010, a cross-Strait Economic Cooperation Framework Agreement (ECFA) was signed on 29 June 2010.  This was a landmark achievement in cross-Strait relations.  The ECFA entered into force on 1 January 2011, and included an “early harvest” list covering 539 Taiwanese products valued at US$13.8 billion and 267 Chinese products valued at US$2.9 billion receiving zero tariffs, though some on phase-downs of up to three years.  This represents around 15% of total cross-Strait trade.

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New Zealand and Taiwan linkages

In the absence of formal diplomatic relations, contact between the Taiwan and New Zealand takes place through informal representative offices.  In New Zealand's case, relations are managed by the New Zealand Commerce and Industry Office in Taipei.  The office is a subsidiary of the Wellington Regional Chamber of Commerce.  The work of this office is supplemented by informal travel by officials.  There are annual economic consultations between agencies responsible for trade and economic matters.

People-to-people links are extensive.  Large numbers of Taiwanese have migrated to New Zealand over the past 20 years, with a particularly strong Taiwanese community in Auckland.  In addition, employment opportunities in Taiwan are good for certain professions – teachers in particular.  There are growing numbers of cultural and art exchanges.

Taiwan is an important economic partner for New Zealand and our twelfth largest export market.  New Zealand dairy, meat, fruit, seafood and forest products are very popular with local consumers (New Zealand is the largest butter supplier to Taiwan).  Taiwan is our fifteenth largest source of imports, and is an important source of tourists and investment.  There are aviation and shipping linkages.  A three month visa waiver for Taiwanese visitors to New Zealand was introduced in November 2009 and has strengthened tourist, education and business links.  12,519 Taiwanese visited New Zealand in the six months after the visa waiver was introduced – a year on year increase of 43%.

Although trade ties are healthy, and WTO accession has seen a number of improvements to New Zealand's market access conditions, there are still a number of barriers to trade that are of concern to New Zealand exporters.  Trade access issues form a major part of the work of the New Zealand Commerce and Industry Office in Taipei. 

In May 2012, the New Zealand Commerce and Industry Office and the Taipei Economic and Cultural Office commenced negotiations on an economic cooperation agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei).  The start of negotiations followed individual and joint feasibility studies that identified benefits to both economies from an economic cooperation agreement.top of page

 

New Zealand-Taiwan trade

NZ Exports (FOB) NZ$804 million (year ending June 2012) – 12th largest export market

Main Exports

Dairy, Meat, Fruits and nuts, Wood and wood items, Preparations of cereals etc

NZ Imports (CIF)

NZ$823 million (year ending June 2012) – 15th largest import market

Main Imports

Mineral fuels, Electrical machinery, Machinery, Iron and steel, Plastics

Tourism

18,112 (year ending June 2012)

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Representation

New Zealand does not have diplomatic relations with Taiwan.

 

Travel advice

The Safetravel website provides a travel advisory for travellers to Taiwan [external link].

Enquiries may be directed to Consular Division at the following numbers: Ph: +64 4 439 8000; Fax: +64 4 439 8532.

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Page last updated: Monday, 09 December 2013 13:00 NZDT