| Abstract | The Republic of China on Taiwan, which emerged in 1948 after a civil war on the
mainland, comprises a population of 21.1 million occupying an island of 36,000 square
kilometers. The international trade of Taiwan was basically in balance in 1980. Taiwan
enjoyed strong economic expansion throughout the decade, with growth averaging
approximately 8 percent per year. But unlike earlier periods of strong growth, the 1980s were
characterized by large trade and savings surpluses. At the same time, imports declined steadily
relative to the size of GNP. By 1986, the trade surplus in Taiwan accounted for almost 10
percent of its GNP. Thus, Taiwan experienced an increasing serious macroeconomic imbalance
since the 1980s. This may offer more opportunity for Taiwan enterprises to engage in the
outward investment.
The meaning of outward investment in this research study is that Taiwan enterprises in
foreign countries build factories, offices to operate production, sale, export, and so on, and not
just selling or buying of securities. The policy of Taiwan government on outward investment
range is from prohibition to some degree of openness. For indirect Mainland China investment
there is control and for the other areas there may be open but have limitation about procedure
and amount. Taiwan outward direct investment began in 1959 and indirect Mainland China
investment started in 1991 . The evolution of Taiwan outward investment can be divided into
four periods. The biggest investment took place from 1989 to present- the Golden Age. In
this period, the government policy has a lot of adjustment. One of the adjustment measures is
to permit that enterprises can freely remit fifty million US dollars and individuals can freely
remit five million US dollars each year, which enhance outward investment. The permitted
industries also expand from few to most industries. The investment areas also spread to most
areas, but these areas focus on Mainland China, Southeast Asia, and USA. At the same time,
the Taiwan domestic economy still maintains boom and develops gradually. In 1997, the
economic growth rate was 6.77%, and the rate decreased to 5.07% in 1998, due to economic
and financial troubles in many parts of the world. However, the outward investment is a world
trend. By outward investment, Taiwan can easily enter international society and participate in
non specific international affairs.
Based on the survey findings, some recommendations are given to the public and private
sector of Taiwan, Republic of China. |