Why Taiwan , Hub in Asia-Pacific & Global Logistics
Located at the heart of the Asia-Pacific region.
Less than 3 hours flying time to seven major cities in Western Pacific on average.
Adjacent to the center of the world economic growth.
The best partners for multi-national companies operating in the Asia-Pacific region.
The global economic center is moving from the west to the east. The focused marketplace is also moving from mature marketplace to emerging and developing marketplace. Taiwan is located at the heart of the Asia-Pacific region.
The average flying time from Taiwan to the seven major cities in Western Pacific is merely 2 hours and 55 minutes. And the average sailing time from Taiwan’s largest international harbor, Kaohsiung harbor, to the 5 major Asia-Pacific harbors (Hong Kong, Manila, Shanghai, Tokyo and Singapore) is merely 53 hours. After the opening of cross-strait direct links, Taipei has become the hub of the dual golden routes in Asia-Pacific. The routes from Taipei go north to Tokyo and Seoul, west to Shanghai, south to Hong Kong, Singapore and the capitals of the ASEAN countries.
Taiwan’s location is of economic and strategic importance. It is the gateway between Europe, America, Japan and the booming Asia-Pacific markets. It is also the first choice for multi-national company headquarters in the Asia-Pacific region. Taiwan is closely adjacent to mainland China’s market. It has geographical and language advantages.
Taiwan and mainland China have signed 6 agreements since the cross-strait contact channels were reestablished in May 2008. Besides, to reduce tariffs and commercial barriers between the two sides, the governments of the People’s Republic of China (mainland China) and the Republic of China (Taiwan) signed The Economic Cooperation Framework Agreement (abbreviated ECFA) on June 29, 2010, which was seen as the most significant agreement. The cross-strait negotiations have stepped into a normal phase, which help Taiwan continue its role as a testing stone for global multi-national companies to enter Chinese market and also help local companies deploy their business globally.
Taiwan businesses can further become the best partners for multi-national companies operating in the Asia-Pacific region. With the normalization of cross-strait trade, both local and foreign companies can completely make use of Taiwan’s potential advantages and can establish cooperative partner relationships with multi-national companies through the “platform” Taiwan, enhance their cross-strait industrial deployment, and increase their competitiveness in the global market. (The information from invest in Taiwan)
Complete Infrastructure
- Complete international transportation facilities and logistic capability.
- Quality and inexpensive utilities and telecommunication services.
Taiwan has complete international transportation facilities and logistic capability. Currently, Taiwan has two international airports-Taoyuan and Kaohsiung airports, and 7 international harbors, consisting of Kaohsiung harbor, Keelung harbor, Taichung harbor, Hwalian harbor, Anping harbor, Suaou harbor and Taipei harbor, in the order of their business volume.
First, Taiwan has passenger transportation systems, railways, highways and domestic airports for domestic long distance transportation. Taiwan has complete railway networks throughout the island. The high speed railways started operations in 2005, which has tremendously reduced the traveling time between north and south Taiwan. Domestic airports are available in Taipei, Taichung, Hwalian, Taitung, Chiayi, Tainan, Pingtung, Kinmen and Machu. The metropolitan areas are being developed with MRT systems, including the Taipei MRT and the Kaohsiung MRT systems, which make the metropolitan life more convenient.
Second, compared to other countries, Taiwan provides quality and inexpensive utilities and telecommunication services. It provides favorable prices or rates to users of oil and gas, environmental protection fees, and transportation fees. Among the newly industrialized countries in Asia, Taiwan’s average water unit rate was lower than Japan, Singapore and Hong Kong, only higher than Korea. The average water unit rates in the European countries are 3 times to 9 times higher than in Taiwan.
Finally, the internet penetration rate is high in Taiwan. About 80% (82.5%) of households have access to the internet, 80% (87.5%) have computers, 90% of the households with the internet access use 2Mbps or faster broadband. World Economic Forum (WEF) has released its ” 2013 Network Readiness Rating (Network Readiness Index, NRI)” rankings, Taiwan has moved up one place from 11th last year to 10th spot worldwide. WEF Network Readiness rating is the most representative of the global IT competitiveness ranking of countries. There are 144 economies evaluated in 2013 NRI report by four subindexes which include Environment, Readiness, Usage, and Impact and are divided in to 10 pillars composed of 54 individual indicators in total. The percentage of the population accessing to the internet in Taiwan has been greatly increased which makes the ranking of the indicator of Households with Internet access moved from 31st place to 14th place and is the main reason why the overall ranking of Taiwan has been improved. In addition, the indicator of Government success in ICT promotion is ranked 7th place. Taiwan’s ranking is moving up gradually in recent five years. The increasing scores yearly indicate the development of Information and Technology in Taiwan has been improved upwardly and affirmed internationally. (The information from invest in Taiwan)
High Economic Freedom
As a member of the international organizations such as WTO and APEC, Taiwan is highly free in economic activities. It follows the international practices and has a healthy system to protect property rights. According to the “2014 Index of Economic Freedom” published by the Heritage Foundation (a United States think tank) and the Wall Street Journal, Taiwan was ranked 17th among the 185 countries, up 3 places from last year’s ranking at 20th in the world. The ranking was Taiwan’s best performance in the index to date. Taiwan was ranked 5th in the Asia-Pacific region, only behind Hong Kong(1st), Singapore(2nd), Australia(3rd), and New Zealand(5th), ahead of Japan (25th) and South Korea (34th).
The index comprises 10 categories – property rights, freedom from corruption, fiscal freedom, government spending, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom and financial freedom. Based on its aggregate score, each of 185 countries graded in the 2014 index was classified as “free” if it scored 80 or higher; “mostly free” if scoring between 70-79.9; “moderately free,” 60-69.9; “mostly unfree,” 50-59.9; or “repressed,” if the score fell below 50.. Taiwan’s overall score was slightly better than last year due to the biggest improvements in financial freedom and investment freedom.
The report indicated that Taiwan government made significant improvement in market openness in the past 20 years, especially its financial freedom score in 2014 climbed up 10 points to 60 on the 100-point scale. Competitive corporate tax rates and role of small and medium-sized enterprises in creating a dynamic economy were singled out. The report also praised Taiwan for continuous advancements in economic freedom by promising legal reforms and opening of the investment market since 2009 and continues to be ranked one of the world’s 20 freest economies.
Besides, Taiwan is ranked 15th out of 144 countries in the 2012 Annual Report of Economic Freedom of the World released by U.S.-based Cato Institute Sept. 18, 2012. Taiwan jumps up 15 places from the previous year and this is the best score that Taiwan has never had.
The annual Economic freedom of the World report is measured in five different areas: (1) size of government, (2) legal structure and security of property rights, (3) access to sound money, (4) freedom to trade internationally, and (5) regulation of credit, labor, and business and uses 42 distinct variables to create an index ranking countries around the world based on policies that encourage economic freedom. According to the report, Taiwan has scored ten out of 10 in the following four variables: (1) Freedom to own foreign currency bank accounts, (2) Black-market exchange rates, (3) Interest rate controls/negative real interest rates, (4) Hours regulations.
According to aforementioned report, the main reason for Taiwan’s score increased in economic freedom is because the government makes its effort in enhancing administrative efficiency, promoting deregulation, and providing a more business-friendly environment. Moreover, a well-developed legal framework and the private sector benefits from a well-developed commercial code and open-market policies facilitating the free flow of capital and goods are firmly institutionalized.(The information from invest in Taiwan)