Research Paper Sample on Taiwan Economy

a. Geographic location, population, land area, etc.

Taiwan is a state in East Asia. It neighbors Japan to the North East and the Philippines to the south. It lies 100 miles off the coast of China to the West. This puts it in the middle of economic Giants. Taiwan is 245 miles long, and its widest point is 90 miles resulting to 13855 square miles ("Frontmatter," n.d.). It is lies under tectonic boundaries which are active therefore making it experience constant earthquakes that result in the destruction of properties hence affecting its economy. It has a population of 23.55 million making it one of the densely populated state. Taipei is its capital city and has over 2.5 million people.

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b. A form of government

Taiwan is a self-governing republic that is recognized by many countries in the world having the US as one of its friend countries. The international bodies and other trade bodies recognize it as a republic too. Taiwan is a multi-party democratic republic that is headed by the president. The president is the overall ruler and is elected by a popular vote of two-term for four years each term ("Government and Politics in Taiwan," 2018).

Taiwan has five branches of government, i.e., the executive, legislature, judiciary, Control Yuan, and examination. The executive is headed by a president who is appointed by the president of Taiwan and approved by the legislature. The legislature role is passing laws and overseeing administration ("Government and Politics in Taiwan," 2018). The main judiciary role is to interpret the constitution while the role of the Examination Yuan is validating civil servants to assess if they are qualified and suitable for public office. They also have the role of deciding the salaries of all the government officials to ensure that the government is not overburdened by the salary and wages of the civil servants.

c. Major industries

Taiwan is home to many industries. Most of the industries are the manufacturing industries which includes; electronics and vehicle manufacture industries. There are also food processing industries and textile industries. The country also has huge oil and refinery industries that contribute largely to its ever-rising economy.

This country is known all over the world for its semiconductor industry. It has become home for some of the IC founders that are renown in the world making it a global leader in the field of technology. Taiwan Semiconductor Manufacturing Corporation (TSMC) is a world leading corporation and operates in Taiwan (Chintay Shih, n.d). It also has some significant players in ROM production and IC packaging holding 57% and 32% of the global market share which undoubtedly puts it among the leading nations.

d. Exports and imports.

Taiwan main exports are technology and machines. The country is a major exporter of electrical machinery and equipment which makes up to 44.5% of the total exports made. The computers follow next with 11.5 %. Plastic items such as tanks are the third with 6.5% of the total exports ("Forbes sees increased tank exports). Other exports include; minerals and fuels, vehicles, iron, and steel, organic chemical, and copper.

Taiwan also imports some of the products that it exports such as Electrical and Machinery which is the main import with 26% of the total imports. Other imports include; minerals and fuel, medical equipment organic chemical and vehicle among others products.

e. General relationship with the U.S.

Taiwan and the US have been close allies since the Second World War. After the Second World War, the ROC government relocated to Taiwan in 1949, and the US continued recognizing it as the sole legal government of China and had always worked closely with them. They are up to date very close allies in trade and other sectors.

Section II Business and Accounting Environment

Economy growth

The economic growth of Taiwan is on moderate growth based on 2017 economic reports. The economy grew by 2.86% 2017 which was lower than the previous year. There was a 5.0% growth in export with a 2.0% growth in consumer spending yet there was negligible growth in business investment. The economic growth in Taiwan is even expected to grow at a slower rate this year at a rate of 2.58%. The government has come up with the Forward-Looking Infrastructure Development Program that will boost the private investments.

Interest rate

There has been an average of 1.98 of interest rate in Taiwan from 2000 to 2018. The highest interest rate was experienced in December 2000 at a rate of 4.68%. The country has experienced times of very low-interest rate with February 2009 recording the lowest rate of 1.25 percent.

Inflation rateTaiwan has had an average of the inflation rate of 1.46% between 1982 and 2018. The highest inflation rate was in May 1989 and reached to 4.95%. The country has its lowest inflation rate in August 1985 which went as low as -1.85%. In February this year, the core consumer price in Taiwan has increased to 2.36% ("Taiwan Core Inflation Rate | 1982-2018 | Data | Chart | Calendar | Forecast," 2018).

Unemployment Rate

The average unemployment rate since 1978 to 2018 is 3.04. It has had its lowest unemployment rate at a rate of 1.o4 in February 1979 and its highest in July 2009 at 6.02%. This makes Taiwan be one of the countries in the world that have a low rate of unemployment in the world ("Unemployment rate).

Currency valuation and GDP

The currency valuation has been moderate in Taiwan. The average rate of exchange has been US$ 1= 29.1 NT$. Taiwan has had its GDP averaging to 6.83 percent between 1962 and 2018. In the third quarter of 1978, the GDP reached as high as 17.06% indicating that the country did best in its economy that year. The Fast quarter of 2009 the country dropped to a GDP of -8.12%. The GDP per capita in the year 2016 and 2017 was USD 49,000 and USD49, 800 respectively. The PPP is projected to increase again this year.

The balance of trade

The balance of Trade in Taiwan averages to 1539.18 USD million between 1981 and 2018. This indicates that it has a good way of balancing its exports and imports for its economic gain. However, there has been a decrease in its trade surplus from USD 3.34 billion in February 2017 to USD 2.91 billion this year. It indicates that there has been a decline in exports not forgetting the lower sales of plastics and rubber. However, this is expected to rise as the year progress ("Taiwan Balance of Trade | 1981-2018 | Data | Chart | Calendar | Forecast," 2018).

Financial Accounting regulation (IFRS or GAAP or other? Licensure for accountants? Stock exchange?)

The current regulations and laws in Taiwan require businesses registered in the country to maintain their records for accounts and prepare annual financial statements. This is in accordance with GAAP- Taiwan Accepted Accounting Principles. GAAP follows the guidelines of IFRS- International Financial Reporting Standards ("ASC 105 Accepted Accounting Principles," 2016). This is to help the government in calculating the taxable income. The law requires that any profit-generating company must adhere to the GAAP or otherwise the government will shut the business down. This is what has made the economy of Taiwan to remain on top because there are no businesses that are exempting taxes.

Wealth distribution in Taiwan

Wealth is evenly distributed in Taiwan compared to other countries in Asia. There is wealth possession of over US$100,100 in the wealth of a total of 38% of the total adults. The country has only under 20% of the total adults' population owning less than US$10, 000 ("Taiwan's average wealth higher than most Asia-Pacific nations: report | Most Viewed | FOCUS TAIWAN - CNA ENGLISH NEWS," 2016). This puts the country at the top because the global average percent of Over US$100,100 and US$10, 000 is 8% and 73% respectively.

References

ASC 105 Generally Accepted Accounting Principles. (2016). Wiley GAAP 2017 - Interpretation and Application of Generally Accepted Accounting Principles, 1-24. doi:10.1002/9781119357032.ch1

Chintay Shih. (n.d.). Challenges For Taiwan Semiconductor Industry In 21st Century. 1998 Semiconductor Manufacturing Technology Workshop (Cat. No.98EX133). doi:10.1109/smtw.1998.722643

Forbes sees increased tank exports. (2011). Reinforced Plastics, 55(3), 8. doi:10.1016/s0034-3617(11)70044-3

Frontmatter. (n.d.). Colonial Development and Population in Taiwan.Government and Politics in Taiwan. (2018). doi:10.4324/9781315643120

Taiwan Balance of Trade | 1981-2018 | Data | Chart | Calendar | Forecast. (2018, April 6). Retrieved from https://tradingeconomics.com/taiwan/balance-of-trade

Taiwan Core Inflation Rate | 1982-2018 | Data | Chart | Calendar | Forecast. (2018, April 6). Retrieved from https://tradingeconomics.com/taiwan/core-inflation-rate

Taiwan's average wealth higher than most Asia-Pacific nations: report | Most Viewed | FOCUS TAIWAN - CNA ENGLISH NEWS. (2016, November 23). Retrieved from http://focustaiwan.tw/news/afav/201611230015.aspx

Unemployment rate. (2014). Unemployment. doi:10.1787/997c8750-en