Case Study

Presentation
Group 3
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TAIWAN
(Republic of China)
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1.
Transition headline
Let’s start with the first set of slides
- It has an area of 36,188 sq. km (13,972 sq. miles,
it is shaped like a leaf that is narrow at both ends
and similarly a sweet potato.

- It has 23 cities, Taipei as the seat of government.

New Taipei City, Taiwan’s largest city

Taichung, second largest city
Kaohsiung, third largest city and Taiwan’s
leading port
Taipei, Taiwan’s capital and 4th largest
city

- Taiwan’s population of 23.2 million is

concentrated in the western lowlands, with the
main cities of Taipei, New Taipei, Taoyuan,
Taichung, Tainan, and Kaohsiung accounting for
over 15 million people.
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SHORT HISTORY

• Taiwan was founded in 1912, • Taiwan was returned to Nationalist

making it the first democratic Chinese control in 1945
republic in Asia.
• 1949 Chinese communist armies
• Prior to 1600s, Taiwan was
defeated Nationalist forces on the
self-governing, It was
mainland and established the People’s
colonized by the Dutch,
Republic of China
Spanish, and Japanese. It’s
also been under the rule of
Kingdom of Tungning and
the Qing dynasty.
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People

- With a population 23
million, it is composed of 4
ethnic or subethnic groups.
- Mandarin Chinese, Min Nan
Chinese (Taiwanese) and
Hakka as the languages.
- Taoism, Buddhism, and
Christianity as for religions.
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ECONOMY

▸ 7th largest economy in Asia and the 21th largest economy in the world in
terms of Gross Domestic Product based on International Monetary Fund
2018 statistics.
▸ According to World Trade Organization, Taiwan was the 16th largest exporter
and the 18th largest importer of merchandise in 2017.
▸ Its foreign reserves are the world’s 5th largest, behind those of China, Japan,
Saudi Arabia, and Switzerland. (2017)
▸ Taiwan has a dynamic capitalist and export-dependent economy
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Economic History

▸ Several centuries ago, the island was a major trading center

in East Asia.
▸ The first step towards industrialization was land reforms,
“developing industry through agriculture and developing
agriculture through industry”
▸ Taiwan moved from cheap, labor-intensive manufactures into
an expansion of heavy industry and infrastructure in the
1970s.
▸ By the 1980s, the economy was becoming increasingly open
and the government moved towards privatization of
government enterprises
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Economic Development

The first 4 years plan (1953-56)  In the late 1990s, economic

emphasized reconstruction and
increase production of rice,
fertilizers, and hydroelectric power
which resulted in an increase of 37%
in GNP and 17% in income per capita.
development was focused on a
continuing privatization of government
enterprises, opening of the Taiwan
market to foreigners, and high
investment in the technological sector.

Economic plans of Taiwan  Taiwan’s six years development plan for

emphasized labor-intensive export 2002 to 2008 is titled “Challenge 2008”
industries, basic services, energy
development, industries contributing
to agricultural growth and
development of the island’s limited
natural resources.
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LEADING INDUSTRIES
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SEMICONDUCTOR INDUSTRY

Taiwan is the largest supplier

of contract computer chip
manufacturing (foundry
services) and is a leading LCD
panel manufacturer. DRAM
computer memory,
networking equipment and
consumer electronics
designer and manufacturer.
 DISPLAY AND OPTOELECTRICS
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MATERIALS AND FINE CHEMICALS

Taiwan has seen significant growth in its
color imaging (CI) industry in recent years.

A growing number of leading

companies, such as Chi-Mei, Nan Ya
Plastics and Formosa Plastics in the
material industry, and UPC, Dahin,
Lee Chang Yung Chemical in the
fine chemical industry, are emerging
more visibly in the international
markets.
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BIOTECHNOLOGY AND PHARMACEUTICALS

Biotech research at Taiwan’s

top academic institutions is
gaining international attention,
while development
capabilities, fostered through
joint industry and government
support, are turning these
research achievements into
commercially viable products.
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AGRICULTURE

 Served as a strong foundation for

Taiwan’s “economic miracle”
 It contributes to the food
security, rural
development and conservation of
Taiwan. Around 24% of Taiwan's
land is used for farming.
 The government seeks to
promote the products by
employing a “Team Taiwan”
concept amid stiff competition in
the global market
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Central Bank of The Republic of China

Central Bank of the Republic of China
▸ 1923, Dr. Sun Yat-sen, National Father of the Republic of China,
promoted the establishment of the Central Bank of China (the
Bank) with the primary goal of financing national
developments
▸ 1924, The Bank was inaugurated in Canton
▸ December 1949, the Bank relocated with the government from
Mainland China to Taipei
▸ 1961, resumed its operations there
▸ November 8, 1979, the newly revised Central Bank of China
Act was promulgated.
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OPERATIONS OF THE BANKS
▸ Main objective:
According to the Central Bank of
the Republic of China (Taiwan)
Act, the Bank's operational
objectives include
• promoting financial stability
• guiding sound banking
operations
• maintaining the stability of the
internal
• external value of the currency
▸ The Central Banks conducts the
following operations:
1. Monetary Management
2. Foreign Exchange Management
3. Financial Inspection
4. Payment and Settlement Systems
5. Currency Issuance
6. Fiscal Agency Functions
7. Participation in International
Activities
8. Statistics and Research
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ORGANIZATION

▸ The Board of Directors - the highest decision making body of the

Bank

▸ The Board of Supervisors - authorized to examine the Bank's

assets and liabilities and to audit its accounts.
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ORGANIZATION

▸ The Governor and Deputy

Governors - The Governor is
the Chairman of the Board of
Tzung-Ta Yen
Directors. The Governor is
appointed for a term of 5
years and may be
reappointed when the term
expires. 2 Deputy Governors
assist the Governor in
handling the Bank’s affairs.
Chin-Long Yang
Nan-Kuang
Chen
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BANK SUPERVISION and SUPERVISORY STRUCTURE

▸ Supervisory Process
The Bank conducts targeted examinations to ensure the compliance of the Bank's
regulations
1. On-site targeted examination
2. Off-site targeted monitoring
▸ The Financial Supervisory Commission (FSC) is inaugurated to be the sole
statutory financial supervisor and is conferred upon the authority of supervision
of all financial institutions including banks, securities and insurance companies
on 1st July 2004.
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MONETARY POLICY

Open-Market Discount Window

Operations Policy
 Discounts
 Short-term
Accommodations
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MONETARY POLICY

Reserve
Requirement

Re-deposits of
Financial Institution
.
 Currency in Circulation
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 Foreign Exchange
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Taiwan Dollar TW Dollar Philippine Peso PH Peso

NT$ 1 Php 1.7
NT$ 3 Php 5.09
Taiwan Dollar to Philippine NT$ 5 Php 8.48
Peso Exchange Rate NT$ 10 Php 16.96
Date Taiwan Dollar to NT$ 50 Php 84.82
NT$ 100 Php 170
Philippine Peso NT$ 200 Php 339
Friday 29 March 2019 NT$ 500 Php 848
NT$ 1000 Php 1696
1 TWD = 1.707 PHP NT$ 3000 Php 5089
NT$ 5000 Php 8482
Php1.6963 per TW Dollar
Thu, 4 April, 2019
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MONETARY POLICY

TAIWAN PHILIPPINES
1. Open Market Operations 1. Open Market Operations
2. Discount Window Policy under 2. Acceptance of term-
this we have the discounts deposits
and short-term
accommodations
3. Standing Liquidity Facilities

3. Reserve Requirement
4. Rediscounting
5. Reserve Requirement
4. Re-deposits of Financial
Institution 6. Reserve Repurchase Facility

5. Selective Credit Control

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ORGANIZATION

TAIWAN PHILIPPINES

Decision Making Body 1. Monetary Board

1. Board of Directors 2. Governor
2. Board of Supervisors (4 Sectors)
3. Governor and Deputy • Financial Supervision
Governor • Monetary and Economics
• Currency Management
• Corporate Services
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OBJECTIVES

TAIWAN PHILIPPINES

 Financial Stability
 Promoting low and stable
 Guiding sound banking inflation
operations

both of the central bank aims

to maintain the stability of
both internal and external
value of the currency