The Political Environment on Taiwan

This paper examines the political framework within which foreign businessmen operate on Taiwan. In brief, the government supervises the economy and the foreign businessman more closely than has been the case in, for example, Singapore and Hong Kong. On the other hand, the Taiwan government does not approach the extremes of protectionism and interventionism that are practiced by the Japanese government. In fact, Taiwan actively seeks many kinds of foreign investment and provides encouragement and practical assistance to the potential investor. The discussion of government and politics in Taiwan is divided into three sections. A first part reviews some relevant aspects of the Chinese political heritage. Taiwans government still pays annual homage to the 2000-year-old Confucian tradition and it is important to grasp the image that Chinese officials have of their social functions and the role of government in society. A second part notes some major themes in the political history of the Republic of China and the ruling Nationalist party in the twentieth century suggesting how past experiences have shaped the governments view of its present situation. This section also sketches the present governmental structure of the Republic of China and briefly examines a question relevant to potential foreign investors, namely the question of Taiwans ability to defend itself against external attack in the 1970s. A third part discusses the specific government agencies with which foreign investors must deal.