- Business Relationships
- Foreign direct investment
- FTAs and Treaties
- Development Cooperation
- Prospective fields of study (MOP)
Trade relations with the EU
Trade between the EU and Taiwan has recently been on the rise. Taiwan’s export-oriented economy and lower exports from EU countries (e.g. in agriculture) leave a chronic trade deficit. The EU is Taiwan’s 4th largest trading partner after China, the USA and Japan. Within the EU, Germany ranks first in bilateral trade at USD 20.67 billion, followed by the Netherlands, Italy, France and Belgium. In 2021, 9 EU countries had a positive trade balance with Taiwan – Germany, the Netherlands, Italy, France, Austria, Ireland, Sweden, Finland and Denmark. Taiwan is the EU’s 14th largest trading partner, the trade balance is EUR 6billion.
|Exports from the EU (million EUR)
|Imports into the EU (million EUR)
|Balance with the EU (million EUR)
Source: European Commission
Trade relations with the Czech Republic
According to Taiwanese statistics, the Czech Republic ranks 13th among EU countries in 2021 (46th overall) with a total trade value of USD 954 million. Czech exports to Taiwan have a steadily increasing tendency, in 2020 goods worth CZK billion were exported. The Taiwanese side dominates the Czech-Taiwanese trade exchange, which is primarily due to investments in the electrical engineering industry and the related import of these goods to the Czech Republic. In the Czech Republic’s imports from Taiwan, the import of components for assembly and subsequent re-export of products of Taiwanese investments in the Czech Republic is reflected. It is not just a matter of direct import of goods for the final consumer.
|Exports from the Czech Republic (billion CZK)
|Imports to the Czech Republic (billion CZK)
|Balance with the Czech Republic (billion CZK)
Trade relations with countries outside the EU
China (208.3 billion USD), 2nd USA (10billion USD), and 3rd Japan (8billion USD) remain Taiwan’s key trading partners in 2021. In general, China has a large influence on the performance of Taiwan’s economy. Taiwan’s economic dependence on the Chinese economy is one of the largest in Asia. On the other hand, Taiwan is one of the few countries in the world with a positive trade balance with China.
|Exports from countries outside the EU (million EUR)
|Imports to countries outside the EU (million EUR)
|Balance with non-EU countries (million EUR)
Source: EIU, Eurostat
Foreign direct investment
For foreign investors, Taiwan is a relatively attractive destination. Taiwan is geographically located in the Asia-Pacific region connecting the transportation hub of East and Southeast Asia. The advantage is a stable economy driven by industrial clusters (electronics and technology), which is represented by a low rate of inflation and unemployment, a high level of education of the workforce, a transparent and functioning legal system, strong protection of intellectual property rights, advanced transport infrastructure, stable trade surpluses or high foreign reserves. In order to attract foreign investment to Taiwan, a number of commercial, industrial and other specially targeted zones have been established, where various preferential incentives are offered to investors. Currently, Taiwan has 174 industrial parks, 10 export zones, 3 science parks, 2 agricultural parks, 4 environmental science and technology parks and 7 free trade zones. All these zones and parks offer foreign investors a low-cost operating environment. The EU is the largest foreign investor in Taiwan. Investments from EU countries make up more than 25% of the total amount.
In Taiwan, there are opportunities for Czech companies, among others, in seven innovative industrial areas (or “5 + 2”), which are based on the priorities and goals of the Taiwanese administration. The following sectors are to contribute overall to the modernization and transformation of the economy while increasing Taiwan’s competitiveness in the international global chain – green technology, biotechnology, smart engineering, national defense, the emergence of the “Silicone Valley of Asia”, innovative agriculture and circular economy.
FTAs and treaties
Treaties with the EU
The European Commission is aware of the growing importance of the Asian continent, which is why it focuses on it in its trade and investment strategy Trade for All (from 2015). The EU is working closely with Taiwan to address some of the persistent trade barriers faced by European exporters. In addition, the EU’s mutual trade and investment relations with Taiwan are significant and strong, given the synergies and complementarities in the EU’s economic sectors. The EU and Taiwan hold regular dialogues on economic, trade and investment matters. However, the Commission has not yet taken a decision to open negotiations on an investment agreement with Taiwan.
Contracts with the Czech Republic
In 2015, a memorandum on working leave for youth was signed, followed by a declaration on education (2016). In 2020, after several years of negotiations, the law on the prevention of double taxation between the Czech Republic and Taiwan was approved. There are 80 bilateral memoranda of understanding between universities in the Czech Republic and Taiwan, on the basis of which there is a mutual exchange of students and teachers.
The Czech Republic does not provide development aid to Taiwan, nor does it receive it from Taiwan. In the years 2011 – 2013, a joint development project of the Czech Republic and Taiwan took place in Burkina Faso on the construction of an ICT center powered by solar energy. Taiwan’s domestic economic success has transformed it from a net recipient to a net provider of foreign development assistance. In 1996, the Taiwan ICDF was established to coordinate the provision of this aid from various government sources. In recent years, the private sector has also been involved in development aid, and the resources of individual government organizations are better integrated. The TaiwanICDF Fund uses its own capital to implement technical assistance projects in areas such as industry, institution building, and specialized research. In addition, it also administers the Overseas Volunteers Program and the Mobile Medical Missions Program (MMMs). However, in light of its specific diplomatic situation, Taiwan faces difficulties in participating in both bilateral and multilateral programs at the official development assistance (ODA) level. This situation defines the formal channels through which Taiwan can provide development assistance to other countries. TaiwanICDF updated the strategic goals in the context of sustainable development, i.e. supporting food security, environmental sustainability, helping countries affected by the financial crisis, supporting the search for new opportunities, helping developing countries to cooperate with emerging economies, and strengthening bilateral partnerships to consolidate multilateral relations.
Prospective fields of study (MOP)
Transport industry and infrastructure
The Taiwanese administration is responding to new trends, and in the second stage of the program for the development of smart transport, CZK billion will be released in the years 2021-2024. The aim is to modernize services, develop and connect digital technology with the transport network. Innovative technologies will be applied in new projects to build new metro lines, expand the high-speed railway network or modernize traditional railways in Taiwan. Given that local suppliers are not yet able to independently complete all aspects of these projects (in mass transport, energy or water works), there are opportunities for Czech suppliers.
Taiwan plans to create an innovation ecosystem in the field of green energy by connecting relevant industries such as precision engineering, the Internet of Things, the production of composite materials and ICT. In the long term, the Taiwanese administration expects massive investments in this sector worth at least CZK 800 billion. However, local suppliers will not be able to complete the projects without the help of foreign companies, which creates opportunities for Czech system developers, material manufacturers or electromechanical companies.
Civil aviation industry
In the aviation industry, Taiwan currently has several goals that it wants to achieve in the near future: integration of the supply chain, promotion of smart engineering in the aviation industry as well, or becoming part of the international supply chain in the aviation sector. Another prospective area may be the market for UAVs, e.g. the use of UAVs in the energy sector, in the protection of borders, coasts, civil airports or fire monitoring or search and rescue, etc.
Taiwan is striving to develop and shift from an industrial to a knowledge-based economy. In its support programs, the Taiwanese administration aims to promote entrepreneurship and develop innovation, focusing on the service sector, with the aim of becoming an innovation hub in Asia. An example can be the DIGI+ strategic plan, which aims to create a market worth over CZK 4,000 billion by 2025. Opportunities for Czech companies can be found in the area of software solutions, through biotechnology, nanotechnology and cultural and creative industries.
As part of the innovative strategy, emphasis is placed on smart engineering, and Taiwan wants to become a world base for R&D in this area. As part of the so-called “5+2 industrial development plan”, almost CZK billion was allocated in conversion for the transition from traditional production to production using advanced technologies, which creates space primarily in the emerging areas of system integration solutions, automation, integrated machine tools, industrial robots and new production technologies.