WT/TPR/S/232 Trade Policy Review 
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IV. TRADE POLICIES BY SECTOR 
(1) INTRODUCTION  
1. During the review period, Chinese Taipei ma intained its outward-oriented development 
strategy, gradually liberalizing trade and investment, mainly in the services sector, which shows 
increasing shares in GDP and employment, and higher labour productivity than other economic 
sectors.  On the other hand, the contribution to GDP  of the manufacturing sector has declined slightly, 
while that of agriculture has stagnated. 
2. The agriculture sector plays only a minor role in the economy.  It contributes 1.6% to GDP 
and 5.3% to employment (2009), and its labour productiv ity is only one quarter of that of the rest of 
the economy.  Chinese Taipei is heavily dependent on  imports of cereals and other foodstuffs to meet 
domestic needs.  Despite its low contribution to GDP , agriculture is a major recipient of government 
assistance, including border protection and domestic support.  Import protection is granted through 
some of the highest tariffs in the economy, tariff-rate quotas, and the use of special safeguard measures.  Domestic assistance includes price suppor t and price stabilization measures, subsidized 
loans and inputs, and direct income support for sen ior farmers.  Government intervention remains 
focused on rice. 
3. Chinese Taipei continues to depend almost entir ely on imports to meet its energy needs.  
Although the oil and gas sectors have been libera lized gradually, the government-owned Chinese 
Petroleum Corporation remains a dominant player , whose regulated prices strongly influence the 
market.  The electricity sector is dominated by  another government-run enterprise, which holds a 
statutory monopoly in virtually all segments of the market.  The privatization of these two companies, 
along with regulatory and price refo rm, could help increase competition, and thus efficiency, in both 
sectors.  
4. Manufacturing continues to play a key role in Chinese Taipei's economic development;  
although the sector has seen slight declines in its co ntribution to GDP (24.9% in 2009) and in labour 
productivity, it still accounts for 87.5% of merchandi se exports.  Chinese Taipei is a major world 
manufacturer and exporter of high-tech electronic products.  On the other hand, other industries, 
including textiles and clothing and motor vehicles have become less competitive.  During the review period, tax incentives and other support measures were  offered to selected industries under the Statute 
for Upgrading Industries (SUI).  The SUI was s eemingly phased-out at th e end of 2009 and was 
expected to be replaced by a new, ostensibly non- industry-specific incentive scheme, but this had not 
been approved by the legislature as of February 2010. 
5. The services sector is by far the largest contri butor to GDP (66.3%) and employment (58.8%).  
Chinese Taipei has continued to gradually reform  and open its services sector so as to improve 
competitiveness and market access.  Commercial presen ce has been liberali zed in some areas, 
including in financial, environmental, health, a nd tourism services, and re gulatory improvements have 
been made in professional services and telecommunications.  Nevertheless, some informal barriers 
remain in certain subsectors, and limits on non-Chine se-Taipei investment and other restrictions apply 
in basic telecommunications, audiovisual services, a nd air, road, and maritime transport.  Despite 
recent privatization measures in banking and teleco mmunications, the Government retains a strategic 
position in these sectors, while postal services remain closed to private investment.   
6. Since Chinese Taipei's last Review, a gradual removal of long-standing obstacles to 
cross-strait trade in services has been under way.  The conclusion of air transport and shipping 
agreements with China since 2008 has allowe d direct air and sea links, thereby reducing Separate Customs Territory of Taiwan, WT/TPR/S/232 
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transportation times and costs, and enhancing e fficiency.  These improvements are expected to 
promote bilateral trade and could also benefit th ird-country trade and tourism.  Likewise, the 
progressive easing of restrictions on cross-strait capita l flows and financial operations has helped to 
increase bilateral economic ties and boost Ch inese Taipei business activities in China. 
(2) AGRICULTURE , LIVESTOCK , AND FISHERIES  
(i) Overview 
7. The share of agriculture in GDP declined from 1.7% in 2005 to 1.6% in 2009, and its 
contribution to total employment dropped from 5.9%  to 5.3% during the same period (Table I.2). 
Despite some increase between 2005 and 2007, labour productivity in the agriculture sector is only 
about one quarter of the level in other sectors of the economy. 
8. Chinese Taipei's agriculture is still characterized  by small and fragmented land holdings.  The 
small average size of farms prevents the achie vement of economies of scale and mechanization, 
therefore resulting in high production costs.  Income per capita in agriculture is roughly 68% to 80% of the per capita income in other economic sectors.
1  The cultivated land area has declined 
progressively during the review period due to the implementation of a set-aside programme.2  Crops 
accounted for 43% of total output value in 2007, followed by livestock production and fisheries.  The 
main crops were fruit (39%), vegeta bles (28%), and rice (15.5%).  Rice is Chinese Taipei's staple food 
and also the most important crop in terms of  cultivated area and the number of farmers. 
9. In 2008, exports of agricultural and fish pr oducts accounted for 2% of total merchandise 
exports, down from 2.3% in 2005, wh ile imports of agricultural prod ucts represented 5.1% of total 
imports, the same share as in 2005 (Tables AI.1 and AI.2).  The main export products were frozen and 
chilled fish, food preparations, molluscs and non-al coholic beverages.  Corn, soybeans, food 
preparations, and wheat were among the major agricultural imports.   
10. Chinese Taipei relies heavily on imported cereal s and other foodstuffs to meet domestic 
needs.  Imports of cereals amounted to about 81% of domestic consumption in 2008.3  In the same 
year, the self-sufficiency index (weighted by prices)  was 95.9% for rice, 1.7% for corn, and zero for 
wheat.  Since 2006, the agriculture authority has set  the annual rice self-sufficiency target at 85%, on 
a quantity basis.4 
(ii) Policy objectives  
11. Chinese Taipei considers domestic agriculture production as a centrepiece in rural 
development, food security, and environmental pres ervation, and believes that policies should focus 
on enhancing its productivity, and thus competitiv eness, rather than just increasing output.  The 
Guidelines of the New Agricultural Policies (2008-12 ) establish six pillars for the development of 
agriculture:  to ensure the sustai nability of the sector;  to develop a competitive, market-oriented 
agricultural industry based on advanced technologies;   to improve farmers' welfare;  to pursue 
                                                      
1 COA (2008b). 
2 In 2007, the cultivated area am ounted to some 826,000 hectares, more than half of which was 
dedicated to paddy fields.  COA online information.  Viewed at:  http://emg.coa.gov.tw/htmlarea_file/web_ 
articles/coa/10049/179.pdf [20 July 2009]. 
3 COA (2008a). 
4 Information provided by the Chinese Taipei authorities. WT/TPR/S/232 Trade Policy Review 
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farmland reform and embellish the rural landscape;  to  promote agricultural exports;  and to improve 
the agricultural sector's administration system.5   
12. Plans to ensure sustainability in clude reforestation and improving food safety.  In order to 
achieve a market-oriented and technology-intensi ve agriculture sector, the authorities promote the 
production of high-value products (e.g. flowers and premier rice) for the international market, and 
have established five Agricultural Biotechnology Parks devoted to R&D.6  The guidelines also seek to 
improve farmers' welfare by increasing the guaranteed price for rice and eventually replacing it by direct income subsidies.  Land reform will continue  in order to expand the average size of farms.  
Export promotion plans aim to establish internati onal marketing networks and increase agricultural 
trade with China.  With the aim of strengthening the administration, the current agriculture authority 
is to be reshuffled to become the Mi nistry of Agriculture in January 2012  
13. The Council of Agriculture (COA) is the main  authority responsible for Chinese Taipei's 
agricultural policies.  The main legal instrument governing the sector is the Agricultural Development 
Act of 1973.
7  No fundamental changes have been made  to the Act since the last Review of 
Chinese Taipei.8   
(iii) Border measures 
14. Agriculture continues to enjoy high levels of protection.  In 2009, the average applied MFN 
tariff for agricultural products (WTO definition), including ad valorem  equivalents (AVEs), was 
22.1%, compared with 22.3% in 200 5 (Table III.1).  Some 7.5% of the tariff lines for agricultural 
products were subject to non- ad valorem  rates, with a simple average AVE of 131.1%.  The highest 
MFN tariffs apply to rice and rice products, vegetables , fruits, and oil seeds;  several of these are also 
subject to tariff-rate quotas (Chapter III).   
15. Rice remains the most protected crop, with imports subject to TRQs and some of the highest 
applied tariffs.  In 2009, the in-quota tariffs for rice and rice products were 0% and 0%-25%, 
respectively, while the out-of-quota rates were NT$45/kg for rice and NT$45/kg or NT$49/kg for rice products.  The AVE for the out-of-quota rate for rolled  or flaked rice was 1,069.9% (the same as in 
2005).  The TRQ for rice is divided into two parts:  the government quota (65%) and the 
private-sector quota (35%).  In 2007, after consulta tions with some WTO Members, Chinese Taipei 
agreed to allocate the government import quota on a country-specific basis.
9  The private-sector quota 
is allocated through a bidding process.10  By mid-December 2009, some 97.4% of the annual TRQ for 
rice had been awarded (Table AIII.1).11 
16. During 2005-08, special safeguard measures (SSGs)  were adopted to reduce imports of rice, 
peanuts, chicken products, milk, poultry offal, red b eans, pears, garlic bulbs, shaddock, pork belly, 
                                                      
5 COA (2008b). 
6 The parks are:  Pingtung Agricultural Biotechnology Park;  the Orchid Biotechnology Park;  the 
Flower Biotechnology Park;  the Culinary and Medicinal Herb Biotechnology Park;  and the Ocean 
Biotechnology Park (COA, undated). 
7 For further details on the Act, see WTO (2006). 
8 In 2007, some procedural changes were made to Articles 27, 31 and 39 relating to land use. 
9 According to the new system, quotas were assign ed as follows:  United States, 64,634 tonnes;  
Australia, 18,634 tonnes;  Thailand, 8,300 tonnes;  and Egypt, 2,500 tonnes (WTO document 
G/MA/TAR/RS/88/Corr.2, 16 March 2007). 
10 Quotas are allocated according to the premium o ffered by each bidder (i.e. the amount the bidder is 
willing to pay for each unit of the allocation).  For further details, see WTO document WT/ACC/TPKM/18, 
5 October 2001. 
11 Information provided by the Chinese Taipei authorities. Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 79 
 
 
betel nuts, dried shiitake, pe rsimmons, and dried day lilies.12  On certain products SSGs have been 
triggered several times;  imports of affected pr oducts have usually continued notwithstanding the 
application of SSGs tariffs. 
17. The state-trading regime for sugar was abolis hed during the period under review.  According 
to Chinese Taipei's 2008 WTO notification, rice is the only agricultural product subject to state-
trading.13  Through the Agricultural and Food Agency (AFA), the Government regulates the 
production, purchase, warehousing, export, and import of rice with the aim of ensuring food security, 
market stability, and income security for farmers.   The AFA purchases rice from farmers and has 
exclusive rights to import the government portion of the TRQ on rice (Chapter III).   
18. The Agricultural Import Monitoring and Warni ng System, introduced in 2002 to monitor the 
import volume and prices of major agricultural produc ts, remains in place.  Under this system, the 
COA undertakes relief measures using the Agricu ltural Product Import Damage Relief Fund 
(section (iv)(b) below) to assist farmers once a Review Committee has determined that serious 
damage has been caused or is likely to be  caused by a surge of agricultural imports.14  T h i s  
mechanism has been instrumental  in the implementation of price stabilization measures.   
(iv) Domestic support measures 
19. Chinese Taipei continues to provide support to  agriculture through price stabilization and 
price support measures, subsidized interest loans, adjustment assistance, direct income support for 
senior farmers, and subsidized inputs.  After decr easing in 2004 and 2005, Chinese Taipei's Aggregate 
Measurement of Support (AMS) rose again in 2006 to NT$4.18 billion, of which market price support 
accounted for 76.5%.15  The increase was due mainly to great er quantities of rice purchased by the 
Government in 2006.  Total domestic support fo r agriculture, including AMS and measures exempt 
from the reduction commitment (Green Box), amount ed to NT$35.6 billion in 2006, equivalent to 
0.30% of GDP and 1.49% of total govern ment expenditure (Table IV.1).   
(a) Price support and other product-specific measures 
20. During the review period, the COA applied price stabilization measures for a number of 
agricultural products (Table IV.1).  The AFA a nd/or government-owned enterprises buy these 
products at guaranteed prices (determined on the basis of production costs);  the difference between the guaranteed prices and the actual market prices re presents a government subsidy.  According to the 
latest WTO notifications submitted by Chinese Taip ei, total market price support amounted to 
NT$3.23 billion in fiscal year 2006/07 (NT$2.91 billion in 2005/06), of which rice received almost 
90%, tobacco leaves 6.4%, and sugar 4.5%.
16  The authorities have indicated that they will submit 
domestic support notifications for 2007 and 200 8 as soon as all data have been collected. 
                                                      
12 WTO documents G/AG/N/TPKM/36, 10 March 2006;  G/AG/N/TPKM/46, 21 February 2007;  
G/AG/N/TPKM/58, 10 March 2008;  G/AG/N/TPKM/65, 26 March 2009;  and G/AG/N/TPKM/69, 
9 September 2009. 
13 WTO document G/STR/N/12/TPKM, 5 June 2008. 
14 The determination of serious damage to domestic agricultural industries caused by imports of like 
products is based on the absolute increase in the impor t quantity of the product in question within a specific 
period, compared with the relative quantity of the domestic production or consumption of the same product;  other relevant factors, such  as production, inventory, and price at place of origin are also considered.   
15 WTO document G/AG/N/TPKM/68, 4 September 2009. 
16 WTO documents G/AG/N/TPKM/61, 15 September 2008;  G/AG/N/TPKM/61/Corr.1, 
24 November 2008;  and G/AG/N/TPKM/68, 4 September 2009. WT/TPR/S/232 Trade Policy Review 
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Table IV.1 
Developments in domestic support to agriculture and livestock, 2002-06 
(NT$ million, unless otherwise indicated) 
    2002 2003 2004 2005 2006 
Total domestic support (I+II) 34,240.15 35,017.69 38,149.61 40,539.83 35,655.61 
Share of total domestic support to GDP (%) 0.33 0.33 0.34 0.35 0.30  
Share of total domestic support to total tax 
revenue (%) 2.79 2.80 2.75 2.59 2.23  
Share of total domestic support to total government 
expenditure (%) 1.60 1.59 1.62 1.67 1.49  
I.  Aggregate Measurement of Support (AMS) 
(a) Product-specific AMSa: 7,057.45 7,534.01 4,757.99 4,043.32 4,180.47 
 Rice (paddy) 4,539.32 5,332.31 2,977.90 2,417.93 2,882.70 
 Corn 468.63 386.36 384.08 324.80 202.53 
 Sorghum 171.03 134.00 102.94 84.43 60.42 
 Peanuts 234.73 227.80 198.00 203.25 226.05 
 Sugar 555.00 444.96 416.46 326.07 186.46 
 Tobacco leaves 480. 19 501.37 250.47 250.47 206.85 
 Forage crops 150.97 140.29 123.54 126.99 107.89 
 Other crops 457.58 366.92 304.60 309.38 307.57 
(b) Non-product-specific AMS: 1,173.29 510.05 625.03 1,219.88 2,511.64 
 Agricultural machinery price subsidy 49.21 63.82 70.53 77.68 49.25 
 Agricultural urea price difference subsidy 0.00 0.00 0.00 40.46 46.41 
 Fertilizer price subsid y 123.72 0.00 75. 92 296.00 508.37 
 Home delivery subsidy 349.56 0.00 0.00 0.00 0.00 
 Input subsidy:  waiver or reduction of fees for 
electricity used for agricultural production 237.40 194.10 207.28 208.42 214.09 
 Interest subsidy 312.02 233.57 250.60 578.45 1,624.78 
 Input subsidy:  agricultural salt price difference 
subsidy 61.81 0.00 0.00 0.00 0.00 
 Insurance subsidy:  livestock insurance 
programme 39.57 18.56 20.70 18.87 68.74 
II. Measures exempt from the reduction commitment – "Green Box" 
General services: 17,966.78 16,933.40 19,581.55 19,923.98 18,084.13 
 (i) Research:  general, in relation to 
environmental programmes and product-
specific programmes 2,475.24 2,431.24 2,724.24 2,709.08 2,978.91 
 (ii) Pest and disease prevention 532.69 773.10 1,115.84 984.39 985.55 
 (iii) Training services  251.69 297.55 310. 64 183.71 111.00 
 (iv) Extension and advisory serv ices 2,771.53 2,339.92 3,494.14 2,159.34 2,463.56 
 (v) Inspection services 72.44 370.20 443.72 433.10 431.64 
 (vi) Marketing and promotion services 1,113.66 1,585.06 2,637.63 1,945.42 1,494.17 
 (vii) Infrastructure services 10,749.53 9,136.33 8,855.34 11,508.94 9,619.30 
Payments for relief from natural disaster: 226.81 1,108.18 1,766.31 4,867.72 409.54 
 (i) Aid for natural disaster:  government 
payments for relief of incomes damaged by 
natural disaster 137.98 1,039.41 1,689.74 4,795.22 336.87 
 (ii) Interest subsidy:  special loans granted to 
farmers for the relief of farms damaged due 
to natural disaster 88.83 68.77 76.57 72.50 72.67 
Table IV.1 (cont'd) Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 81 
 
 
    2002 2003 2004 2005 2006 
Structural adjustment assistance provided through 
producer retirement programmes: 85.00 0.00 0.00 0.00 0.00 
 (i) Living allowance for farmers participating 
in training for moving to non-agricultural 
occupations 85.00 0.00 0.00 0.00 0.00 
Structural adjustment assistance provided through 
resource retirement programmes: 305.10 474.42 331.38 348.64 342.47 
 (i) Land retirement programmes 245.10 474.42 331.38 348.64 342.47 
 (ii) Livestock retirement programmes 60.00 0.00 0.00 0.00 0.00 
Environment programmes: 7,080.22 8,249.30 10,853.42 9,878.49 10,061.21 
 (i) Interest subsidy for pollution reduction 7.31 5.60 4.62 3.58 4.41 
 (ii) Programmes for preventing pollution 
reduction, managing agricultural waste, and 
monitoring the pollution of water and soil, for promoting the sustainable use of farm land 157.80 157.50 234.71 288.53 167.28 
 (iii) Interest subsidy:  lo an granted to farmers for 
water and soil conservation 29.11 26.66 23.53 15.68 14.07 
 (iv) Land conservation subsidy 6,886.00 8,059.54 10,590.56 9,570.70 9,875.45 
Regional assistance programmes: 345.50 208.33 233.93 257.80 66.15 
 (i) Integrated agricultural construction and 
environmental improvement programmes for disadvantaged farms 345.50 208.33 233.93 257.80 66.15 
.. Not available. 
a Product-specific AMS after de minimis.  
Source: WTO notifications G/AG/N/TPKM/ 32, G/AG/N/TPKM/48, G/AG/N/TP KM/61, and G/AG/N/TPKM/68. 
21. Since 2004, short-term price stabilization me asures have been implemented for several 
products deemed to be particularly sensitive to imports.  Depending on the type of product, these 
measures may include sales promotion, purchasing, pr ocessing, and refrigeration of products, plowing 
to bury crops, and abandonment of orchards, when ever product prices fall below certain triggering 
thresholds.  Price stabilization measures were implem ented for citrus, garlic, chicken, duck, and goose 
in 2004, and for citrus and garlic in 2005.  No such measures have been triggered since 2006. 
22. Additionally, COA operates a monitoring mech anism to balance supply and demand for some 
30 agricultural and fish products.  When overproducti on of a particular product is expected, the COA 
adopts early preventive measures, for example sales promotion, provision of advisory and extension 
services, and reduction in planting or production.  Du ring the review period, such measures have been 
adopted with respect to several fruits, milkfish, ho g, onions, and staple ve getables.  The annual budget 
assigned to the monitoring mechanism fluctuat ed between NT$100 million and NT$200 million 
during 2005-08. 
23. Under the Adjustment Programme for Paddy Up land Field Utilization, introduced in 2001, 
rice producers are encouraged to switch to other crop s in order to prevent excess of supply.  Farmers 
who convert their rice paddies to production of pea nuts, vegetables, ornamental plants, forage, or 
other crops receive NT$22,000 pe r hectare of land converted.17  Total budgetary outlays under this 
programme amounted to NT$3.1 billion between 2005 and 2008.18  In addition, in order to increase 
the self-sufficiency rate in f eed corn, since 2008 the COA has granted direct payments of 
NT$45,000 per hectare per crop to farmers who produce corn in the fallowed rice paddies.19  In 2009, 
                                                      
17 WTO document G/AG/N/TPKM/61, 15 September 2008. 
18 Information provided by the Chinese Taipei authorities. 
19 COA (2007). WT/TPR/S/232 Trade Policy Review 
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3,300 hectares of feed corn were planted, representing a budgetary outlay of NT$147 million;  for 
2010 the budget is NT$225 million for a planted area of 5,000 hectares.20 
(b) Loans 
24. The Agricultural Bank, established in 2005, gran ts policy-oriented agricultural loans at 
subsidized interest rates to help farmers to fina nce projects such as technological upgrading, farmland 
acquisition, farmhouse renovation, and marketing and management improvement, among others.  In 
2008, the annual interest rates on these loans were be tween 1.5% and 2% (1 or 1.5 percentage points 
lower than the market rate).  During 2004-08, the number of farmers that benefited from this 
programme increased from around 20,000 to 190,000, while outstanding loans rose from 
NT$16.1 billion to NT$108 billion.  The total cost of this programme was NT$4.7 billion from 2004 
to 2008.21 
25. The Agricultural Product Import Damage Relie f Fund provides financing to facilitate 
adjustment in agricultural industries affected by in creased imports.  Eligible products are rice, fruit, 
peanuts, tea, poultry, pig raising, dairy cattle, and aquaculture.  Projects financed under the Fund 
include support for structural adjustment, training of agricultural labour, plant disease control, animal 
health inspection and sanitation, marketing, and management.  Total disbursements from this fund 
amounted to NT$4.18 billion between 2005 and 2008.22 
(c) Income support and other types of assistance 
26. Under the Provisional Statute for Senior Farm ers' Welfare, enacted on 31 May 1995, the 
Government grants a monthly allowance to farmers and fishermen aged 65 years or older in order to 
protect their basic living.  Since July 2007, th e allowance has been in creased from NT$5,000 to 
NT$6,000.23 The total amount allocated to elderly farm ers and fishermen under this Statute amounted 
to NT$217.6 billion between 2005 and 2009.24  The authorities envisage transforming the guarantee 
price system for rice growers to a direct paymen t system, but this is still under assessment and no 
legislation to this effect has been submitted. 
27. Farmers also benefit from several subsidies fo r production inputs, including for the purchase 
of agricultural machinery, reduced fees for electri city, subsidized premiums for livestock insurance, 
and subsidized prices for urea and fertilizers.25  As noted in Chapter III, domestic fertilizer prices are 
significantly lower than prices in other Asian countri es owing to government subsidies.  In addition, 
several types of farm support are granted for environmental programmes (Table IV.1). 
28. In line with its accession commitments, Chinese Taipei has notified the WTO that it did not 
apply any export subsidy programme subject to  reduction commitments in the period 2005-08.26 
                                                      
20 Information provided by the Chinese Taipei authorities. 
21 Information provided by the Chinese Taipei authorities. 
22 Disbursements by product were:  rice (NT$564 million);  fruit (NT$1,248 million);  tea 
(NT$236 million);  poultry (NT$365 million);  pig (NT$564 million);  cattle (NT$305 million);  and aquaculture 
(NT$897 million). 
23 COA (2007). 
24 Information provided by the Chinese Taipei authorities. 
25 WTO document G/AG/N/TPKM/61, 15 September 2008. 
26 WTO documents G/AG/N/TPKM/33, 9 March 2006;  G/AG/N/TPKM/44, 21 February 2007;  
G/AG/N/TPKM/54, 18 January 2008;  and G/AG/N/TPKM/64, 6 March 2009. Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 83 
 
 
(3) ENERGY  
(i) Overview 
29. With very limited domestic energy resources, Chinese Taipei is heavily dependent on imports 
to satisfy domestic consumption.  In 2008, it imported 99.4% of its en ergy requirements;  most energy 
supply came from crude oil and petroleum products ( 49.9%), followed by coal (32.7%), liquefied 
natural gas (8.4%), and nuclear energy (8.4%).27  As a result of strong economic growth and 
improving living standards, overall energy demand h as increased steadily over  the past few decades, 
making Chinese Taipei a relatively large consumer of energy by international standards.  The 
industrial sector remains the major energy cons umer, accounting for 52.9% of total domestic 
consumption in 2008, followed by the transpor t sector (12.8%), the services sector (11.6%), the 
residential sector (11.4%), and others (11.2%).28   
30. The Bureau of Energy, under the MOEA, is responsible for formulating energy policy and 
implementing the Energy Management Act, the Elec tricity Act, the Petroleum Administration Act, 
and other energy-related regulations.  The Bureau re gulates the natural gas utilities, the petroleum and 
LPG filling stations, and the impor tation, exportation, production, and sale of petroleum products.29  
(ii) Policy objectives  
31. A top priority of Chinese Taipei's energy polic y is to promote energy security based on secure 
imports of oil, natural gas, and coal, and the development of domestic energy resources including 
nuclear, fossil fuels, and renewable energies.  At the same time, energy policy aims to establish a 
more liberal, efficient, and clean energy supply and demand system.30  In July 2009, the Energy 
Management Act was amended with the aim of impr oving energy efficiency and management.  The 
main changes included guiding principles on energy development, an evaluation system for energy 
utilization, regulations on energy conservation,  and mandatory labelling on energy efficiency.31   
32. The Framework of Chinese Taipei's Sustaina ble Energy policy, approved in June 2008, 
establishes the following targets:  improve ener gy efficiency by 20% in 2015;  reduce CO 2 emissions 
to their 2000-level in 2025;  and increase the share of low-carbon energy in the electricity system to 
55% in 2025.  Chinese Taipei is encouraging the deve lopment of bio-diesel fuel in order to decrease 
the use of fossil fuel and thus reduce CO 2 and other green house emissions.32  
(iii) Hydrocarbons and natural gas 
33. Chinese Taipei has increasingly liberalized the oil and gas sect ors over the last two decades, 
but the government-owned Chinese Petroleum Corpora tion (CPC) remains the dominant player in all 
sectors of the oil industry (e.g. ex ploration, production, importati on, refining, transportation and 
marketing).  CPC operates three oil refineries, which account for 60% of the domestic refining 
                                                      
27 Bureau of Energy online data.  Viewed at:  http://www.moeaboe.gov.tw/English/statistics/files/ 
EnergySupply(Indig enousImported) .pdf [15 December 2009]. 
28 Bureau of Energy online information.  Viewed  at:  http://www.moeaboe.gov.tw/opengovinfo/Plan/ 
all/energy-year/main_en/files/01/ch art-03.pdf [15 December 2009]. 
29 Bureau of Energy online information.  Vi ewed at:  http://web2.moeaboe.gov.tw/ecw/about/ 
energy%20situation/main/en_01.html [3 August 2009]. 
30 Asia Pacific Energy Research Centre (2007). 
31 For further details, see APEC Energy Working Group (2007). 
32 APEC Energy Working Group (2007). WT/TPR/S/232 Trade Policy Review 
Page 84 
 
 
capacity;  the rest is operated by the priv ate firm, Formosa Petrochemical Corporation.33  Plans to 
privatize the CPC have been delayed since 2003.  Th e authorities indicated that the delay was due to 
lengthy consultations with the relevant labour union and the fact that the CPC ran at a loss in 2009;  
the CPC is not expected to sell any shares in 2010. 
34. Notwithstanding the CPC losses, the authorities ma intain that prices of petroleum products 
are set by the CPC and other suppliers based on the full-cost-recovery principle.34  In practice, by 
regulating the prices charged by the CPC, the economy's major supplier of petroleum goods, the government strongly influences the market price.  During the review period, efforts have been made to gradually move to a system allowing domestic reta il fuel prices to follow more closely international 
prices.
35  Accordingly, the authorities modified the oil pricing system twice in 2007 so as to better 
reflect world prices and improve transparency.36  In May 2008, they lifted a five-month cap on petrol 
prices imposed on the CPC, whose cost amounted to NT$31 billion.  The long-awaited privatization 
of CPC, together with price and regulatory reform to ensure a level playing field for new entrants, 
could help increase competition, and thus  efficiency, in the oil industry.   
35. Imports of petroleum products have been lib eralized since 2001.  In 2008, oil imports 
amounted to 13.7% of the merchandise import bill.37  Since the last Review of Chinese Taipei, the 
applied MFN tariff for several pe troleum products (gasoline, gasolin e type jet fuel, kerosene, and 
some diesel fuels) has been reduced from 10% or 5% to zero;  crude oil and natural gas imports are duty free.  As refining capacity exceeds domestic  demand, Chinese Taipei is a net exporter of 
petroleum products.   
36. To ensure security of supply, since 2001 the Government has operated a Petroleum Fund to 
finance a stockpile of petroleum equivalent to 30 days  of supply.  Oil refinery operators and importers 
are also required to maintain an oil security stockpile of at least 60 days of supply.
38  An amendment 
to the Petroleum Administration Act, promulgated in January 2008, included the reduction of the 
threshold of the oil security stockpile for petrol eum importers;  the limitation of oil exports in 
unexpected situations in which they might threaten  domestic supply security;  and the extension of the 
scope of the Petroleum Fund in order to enhance energy safety and security and promote effective 
energy use.39   
37. The CPC is also a key player in the gas sect or:  it is the sole supplier of wholesale and 
transportation services.  Until recently, CPC opera ted Chinese Taipei's only LNG terminal, which 
handles natural gas imports mostly from Indonesia and Malaysia.  However, to meet increasing 
demand, CPC completed a new liquified natural gas (LNG) terminal at the end of 2009, and signed a 
25-year contract with RasGas II of Qatar for 3 m illion tonnes of LNG per year, starting in 2008.  The 
CPC sets wholesale prices in accordance with the Natural Gas Pricing formula based on the full-cost-recovery principle;  these prices are subject  to approval by the MOEA.  Retail gas prices are 
regulated both by MOEA and local governments, and ar e based on the principle of full-cost recovery.   
                                                     
 
33 Asia Pacific Energy Research Centre (2007). 
34 Under the Petroleum Administration Act the Government retains the right to control petroleum prices 
in the event of a state of emergency.   
35 Domestic retail prices of gasoline and diesel ar e generally between 12% and 35% lower than prices 
in Japan, Korea (Rep. of), Singapore, and Hong Kong, China. 
36 For further details, see Asia Pacifi c Energy Research Centre (2007). 
37 Data from UN Comtrade Database, SITC Rev.3. 
38 The 60 days of supply are based on average domestic sales and private consumption of the preceding 
12 months (Article 24 of the Petroleum Administration Act). 
39 Asia Pacific Energy Research Centre (2007). Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 85 
 
 
(iv) Electricity 
38. The government-owned electricity company, Ta ipower (TPC), dominates Chinese Taipei's 
electric power sector.  TPC is entrusted by law with  the development, generation, transmission, and 
distribution of electricity in the territory.  With a view to developing co-generation systems, the 
MOEA has encouraged the establishment of i ndependent power producers (IPPs), and since 2002 
non-Chinese-Taipei firms have been permitted to own up to 100% of an IPP.  About 18% of 
electricity supply is provided by IPPs, which are required to sign purchase agreements with TPC.   
39. TPC's electricity rates are subject to control by the MOEA;  they were reduced 11 times 
between 1983 and 2005 due to  falling fuel prices, the appreciation of the NT dollar, and TPC's 
improved efficiency.  According to the authorities, TPC's nominal rate of return on investment was 
about 3.5% during the same period.  Since 2006, how ever, increasing oil prices in combination with 
price controls have affected TPC's profitability.  In  order to reflect higher oil and gas costs, TPC was 
allowed to raise its tariffs in July 2006, and agai n in 2007 and 2008.  Nevertheless, it ran net losses in 
2007 (NT$23.1 billion) an d 2008 (NT$75.5 billion).40  The authorities confirmed that the costs of 
energy generation and purchase exceeded the revenue from sales in 2008. 
40. A shift to fully market-determined prices and privatization of TPC could help attract new 
investments in power-generation and increase co mpetition in the sector.  The authorities have 
indicated their intention to further liberalize the electricity industry and privatize the TPC.  In 2008, the MOEA submitted to the legislature a revised draft of the Electricity Act, under which power 
generation, transmission, and distribution would be opened to the private sector, and power generators 
would be free to sell electricity to the integrated and distribution utilities, or directly to their own 
customers through the grid or their own power lines.
41  However, both liberalization and privatization 
plans have been stalled for several years.  In 2001 , the legislature decided that the privatization of 
TPC would take place only after the passage of the re vised Electricity Act, but this is still awaiting 
approval (February 2010).   
(v) Renewable energies 
41. Chinese Taipei plans to increase the share of new and renewable energy to 10% in 2010 and 
to 15% in 2025.42  The Renewable Energy Development Act,  passed in mid-June 2009, encourages 
private investment in the production of renewabl e energies (solar, biomass, geothermal, ocean and 
wind energy).  It allows the conn ection of renewable energy generation facilities to the electricity grid 
and permits the TPC to buy electricity generated by  private investors at a guaranteed price to be 
determined by the MOEA.  Tariff re ductions or exemptions for impor ted renewable energy generating 
equipment are also envisaged.43 
(4) MANUFACTURING  
(i) Overview 
42. Manufacturing maintains its key role in the Chinese Taipei economy.  Although the sector's 
contribution to GDP declined during the review period to 24.9% in 2009 (26.6% in 2005), it still 
                                                      
40 TPC's statements of income.  Viewed at:  http://www.taipower.com.tw/TaipowerWeb/upload/ 
files/4/statements_of_income.pdf [19 February 2010]. 
41 Information provided by the Chinese Taipei authorities. 
42 MOEA (2009). 
43 Government online information. Viewed at  http://eyvisit.ey.gov.tw/ct.asp?xItem=56485&ctNode 
=1335&mp=11 [3 August 2009]. WT/TPR/S/232 Trade Policy Review 
Page 86 
 
 
accounts for as much as 87.5% of merchandise exports.  Manufacturing accounted for 27.2% of total 
employment in 2009, down from 27.5% in 2005 (Table I.2).  In terms of output value, the main subsectors are electronics, basic metal industries, ch emicals, and computer products (Table IV.2).   
Table IV.2 
GDP in manufacturing, 2005-08 
(NT$ million and %) 
  2005 2006 2007 2008 
Total manufacturing (NT$ million) 3,120,118 3,239,070 3,396,858 3,162,151 
 (% of total) 
Food manufacturing 2.4 2.4 2.2 2.3 
Beverages and tobacco manuf acturing 2.1 2.1 2.0 2.1 
Textiles mills 2.7 2.5 2.4 2.2 
Wearing apparel and clothing accessories 0.8 0.7 0.7 0.7 
Leather, fur and related products 0.5 0.4 0.3 0.3 
Wood and bamboo products 0.3 0.3 0.3 0.3 
Pulp, paper and paper products 1.5 1.3 1.2 1.5 
Printing and reproduction of recorded media 1.2 1.2 1.1 1.1 
Petroleum and coal products 7.3 5.0 6.5 3.9 
Chemical materials 8.7 5.8 6.9 5.0 
Chemical products 1.3 1.4 1.3 1.4 
Medical goods 0.7 0.8 0.8 0.8 
Rubber products 1.0 0.9 0.8 0.7 
Plastic products 2.6 2.1 1.8 1.9 
Non-metallic mineral pr oducts 2.3 2.3 2.1 1.9 
Basic metal industries 5.3 6.4 6.7 7.2 
Fabricated metal products 6.0 6.0 5.9 6.1 
Electronic parts and components manufacturing 28.1 32.4 31.0 34.6 
Computers, electronic and optical products 8.8 10.0 10.1 10.0 
Electrical equipment 2.8 3.2 3.4 3.5 
Machinery and equipment 4.6 5.1 5.0 4.5 
Motor vehicles and parts 3.8 3.0 2.7 2.6 
Other transport equipment 2.0 1.6 2.0 2.6 
Furniture and fixtures 0.5 0.5 0.5 0.5 
Other manufacturinga  2.5 2.5 2.3 2.4 
a Including repair and installation of industrial machinery and equipment. 
Source :  Online statistical informa tion.  Viewed at:  http://e ng.stat.gov.tw [04 January 2010]. 
43. During the review period, Chinese Taipei's indus try has continued to experience structural 
change as rising wages have led manufacturers to relocate offshore labour-intensive activities 
(principally to China and other Asian countries) and move into higher value-added sectors, notably 
high-end electronics.  Chinese Taipei is today a ma jor producer and exporter of high-tech products.  
In 2008, its main manufactured exports were elec tronic integrated circuits and micro-assemblies, 
liquid crystal devices and electrical  machinery and equipment.   
44. Responsibility for industrial policy formulation and implementation rests with the Industrial 
Development Bureau (IDB), within the MOEA.  Throughout the review period, the main legal 
instrument for the industrial sector was the Statute for Upgrading Industries (SUI)44, under which a 
range of support measures, including tax incentives a nd grants for R&D, were offered to promote the 
                                                      
44 The SUI was promulgated on 29 December 19 90, and last amended in February 2003. Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 87 
 
 
development of selected industries, including th e "newly-emerging, important and strategic 
industries" (Chapters II and III).45 
45. The SUI was phased-out at the end of 2009, in accordance with its own sunset clause.  The 
special tax incentives under the SUI have seemingly been removed, while the general business income 
tax rate has been reduced as part of a broader tax reform (Chapter I).  It was not clear to the WTO 
Secretariat whether the SUI was generally considered  to have reached its objectives in a cost-effective 
manner.  In any case, the Government deems it nece ssary to maintain an industrial development tool 
and has therefore drafted a new Statute for Industr ial Innovation (SII).  The SII will ostensibly not 
target specific industries, but provide four typ es of "functional tax incentiv es" to encourage R&D, 
personnel training, and the establishment of companie s' headquarters and international logistics and 
distribution centres in Chinese Taipei.  The SII h as not yet been approved by the legislature 
(February 2010). 
46. SMEs continue to play an important role  in the development of Chinese Taipei's 
manufacturing sector.46  According to the latest available data, in 2008 there were 1.23 million SMEs, 
accounting for 97.7% of all enterprises (including non-manufacturing sectors) and 76.5% of total 
employment.47  In response to the global financial crisis (2008-09), the Government has adopted 
measures to increase financial support and provide credit guarantees for SMEs. 
(ii) Policy objectives and measures 
47. Within the broad framework of the Economic Development Vision for 2015 (2007-15), the 
Government aims to transform Chinese Taipei in to a world centre for innovation, and an economic 
and trade hub for the Asia Pacific region.  Acco rdingly, Chinese Taipei's industrial development 
strategies are to:  strengthen indus trial development;  improve cross-st rait relations;  revitalize SMEs;  
promote innovation;  enhance the investment climat e;  offer tax incentives;  develop international 
economic and trade relations;  and establish a low-carbon economy.   
48. During the period under review, the Government  continued its comprehensive development 
plan (2002-08), "Challenge 2008" .  Among other objectives, the plan was aimed at increasing 
investment in innovation and R&D, and targeted the development of the so-called "two-trillion" 
industries (semiconductors and flat panel displays) and the "twin-star" industries (digital content and 
biotechnology).48 
49. In 2009, the average applied MFN tariff on industrial products (HS25-97), including AVEs, 
was 4.3% (4.4% in 2005).  Based on the WTO defi nition for non-agricultural products, the average 
applied MFN tariff was 5% in 2009.  Excluding fi sh products, the highest tariff rates were on 
transport equipment (30%  and 25%).  TRQs apply to small passenger cars and chassis (see below). 
                                                      
45 These industries are:  3C (computer, communicati ons, consumer electronics);   precision electronic 
components;  precision machinery equipment;  aerospace;  biomedical and fine chemicals;  green technology;  
advanced materials;  nanotechnology;  technical services ;  other products or technology service items designated 
by the executive;  international logistics;  and agriculture. 
46 According to the SME Development Act and the SME Standards Regulation, SMEs are defined as 
registered enterprises with paid-in capital of NT$80 million or less, or with less than 200 employees in 
manufacturing, mining, construction, and quarrying, and sales revenues of NT$100 million or less, or with less 
than 100 employees in agriculture, fisher ies, water, electricity and gas, finance, and other service industries.   
47 MOEA, Small and Medium Enterprise Administration online information.  Viewed at:  
http://www.moeasmea.gov.tw/ct.asp?xItem=77 0&CtNode=331&mp=2 [2 December 2009]. 
48 For further details, see IDB online informati on.  Viewed at:  http://www.moeaidb.gov.tw/ 
external/ctlr?lang=1&PRO= english.2007About13 [ 27 July 2009]. WT/TPR/S/232 Trade Policy Review 
Page 88 
 
 
50. According to a Chinese Taipei 2009 notifica tion to the WTO Committee on Subsidies and 
Countervailing Measures49, support measures for industry include tax holidays for "newly-emerging, 
important and strategic industries"  (NT$19.5 billion in forgone taxes in fiscal year 2007);  exemption 
from customs duties, business tax, and commodity tax on imported machinery and inputs for firms 
established in science-based indust rial parks (NT$34 billion in 2008) and in export processing zones 
(NT$23 million in 2008);  grants for the develo pment of new products of "leading industries" 
(NT$626.6 million in 2008);  and funds for adva nced R&D (NT$6.5 billion in 2008).  The 
Government also grants subsidized loans fo r qualified SMEs, product marketing, overseas 
investments and construction projects (Chapter III).  The authorities have indicated that government 
support allocated to the industrial sector in 2008 totalled NT$446.6 billion.  Some of the incentives 
discussed were provided under the SUI and have now been removed.   
(iii) Selected subsectors  
(a) Electronics industry 
51. The electronics industry accounted for 44.6% of the value added in the manufacturing sector 
(Table IV.2) and for over 42% of total exports in 2008.50  Benefiting from a supply chain for 
integrated circuit (IC) production and large investment  projects in the past few years, Chinese Taipei's 
semiconductor industry has consolidated its position as a global leader;  it ranked first in the world for 
wafer foundry and packaging, second for IC desi gn, and fourth for IC  manufacturing in 2007.51  It is 
one of the "two-trillion" industries selected under the Challenge 2008 development plan with the aim 
of driving production value to NT$1 trillion;  a go al that was achieved in 2004.  In 2008, the 
production value of the semiconductor industry  reached NT$1.34 trillion.  Semiconductor 
manufacturers received the incentives granted under the SUI until end 2009. 
52. Chinese Taipei's image display industry, anot her successful "trillion" industry, has grown 
rapidly in the past few years thanks to increasing global demand for flat-panel displays and significant capital investments in the production of key compone nts.  Chinese Taipei is the world's largest 
producer of flat panel displays with a total output of NT$1.63 trillion and a 42% share of the world 
market in 2008.
52 
(b) Machinery and equipment 
53. The machinery and equipment industry grew at an annual average rate of 7.4% between 2005 
and 2008 and accounted for 7.8% of manufactured exports in 2008.53  In order to promote its upgrade 
to a high precision equipment industry, in March 2007 the Government announced that the machinery 
and equipment industry would beco me one of the new "trillion" industries under its development 
programme.54  Until end 2009, this industry received support under the SUI.  It has also benefited 
from funding for R&D and assistance to recruit manpower.  
                                                      
49 WTO document G/SCM/N/186/TPKM, 7 July 2009. 
50 Calculated by the WTO Secretariat on the basis of UNSD, Comtrade database (SITC Rev.3). 
51 Chinese Taipei Electrical and Elect ronic Manufacturers' Association on line information.  Viewed at:  
http://www.teema.org.tw/English/moreinfo.asp?autono=1141 [29 July 2009]. 
52 DOIS online information.  Viewed at:  http://investtaiwan.nat.gov.tw/en/opp/inds/display_ 
optoelect.html [18 December 2009]. 
53 Association of Machinery Industry online info rmation.  Viewed at:  http://www.tami.org/st/ 
week1_2008.htm [31 July 2009]. 
54 Major products in this industry include:  precision machinery tools and key machinery components;  
optoelectronic and semiconductor manufacturing equipment;  micro/nanotechnology applications;  environmental protection equipment;  energy resour ce equipment;  and medical devices and equipment. Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 89 
 
 
(c) Automotive industry 
54. Chinese Taipei's automotive industry comprises some 15 companies, producing mostly for the 
domestic market;  exports accounted for only 3.8% of total sales in 2008, which suggests the sector 
lacks international competitiveness.  Over the p ast few years, both production and sales of passenger 
cars have declined steadily.55   
55. Imports of small passenger cars and chassis remain subject to TRQs, which are to be 
phased-out by 2011 and replaced by a tariff rate of  17.5% (Chapter III).  During the review period, 
Chinese Taipei made tariff cuts and increased TR Q amounts.  In 2008, the in-quota tariff rate for 
small passenger cars and chassis was 26.1% and the out-of-quota rate was 30%, down from 60%.  The 
in-quota fill rate for small passenger cars was only 3.4% in 2008, which may indicate that in-quota 
tariffs were high enough to discour age more imports.  In January 2008, the import duty on large cars 
dropped from 27.4% to 25%.   
56. Chinese Taipei is becoming an important produ cer of automotive components, as local firms 
become more integrated into the supp ly-chain of international carmakers.56  The Government has 
provided tax incentives under the SUI (until end 2009 ) as well as R&D grants to encourage domestic 
manufacturers to increase production of electronic car components.  
(d) Textiles and clothing 
57. Chinese Taipei's textiles and clothing industr y has undergone major structural adjustment 
over the last decade, as increased labour costs have  made it less competitive, particularly in the 
apparel sector.  At the same time, the liberalizati on of global textile trade resulting from the expiry of 
the WTO Agreement on Textiles and Clothing in 2005, has led to stronger competition in export 
markets.  In order to develop new competitive advantages, Chinese Taipei's textile industry is 
gradually shifting to higher value-added and dive rsified products, focusing on R&D, innovation, and 
design.  The Government has facilitated this move  by promoting product differentiation in functional 
and industrial textiles, developing inspection a nd certification systems, and encouraging the 
establishment of R&D centres.57  The textile industry received incentives granted under the SUI. 
58. During the review period, Chinese Taipei's expor ts of textiles and cl othing continued to 
decline, accounting for only 4.0% of total mercha ndise exports in 2008 (5.6% in 2005).  Imports of 
textiles and clothing showed a similar downward tr end.  The average applied MFN duty on textiles 
and clothing was 8.8% in 2009, twice the average for industrial goods (4.3%). 
(5) SERVICES  
(i) Features and multilateral commitments  
59. In 2009, the contribution of the services sector  to GDP was 66.3% (64.2% in 2005) and its 
share in total employment was 58.8% (57.7% in 20 05) (Table I.2).  These figures indicate that labour 
productivity (in terms of output per employed person) in the service sector is some 40% higher than in 
other economic sectors.  In 2009, the most im portant subsectors were wholesale and retail trade 
(18.6% of GDP), real estate, rental and leasi ng (9.1%), government administration and defence 
(7.6%), transport and communications (6.8%), and fi nance and insurance (6.4 %).  Chinese Taipei has 
                                                      
55 For further details, see Transportation Vehicle Manufacturers' Association (TTVMA) of Chinese 
Taipei online information.  Viewed at:  http://www.ttvma.org/information.php. 
56 Economist Intelligence Unit (2008d). 
57 MOEA (2007). WT/TPR/S/232 Trade Policy Review 
Page 90 
 
 
traditionally been a net importer of services, but in 2009 its service balance registered a surplus 
(Chapter I).   
60. Chinese Taipei has made GATS commitments covering 120 of the 160 services subsectors 
(11 of the 12 broad areas defined in the Services Sectoral Classification List).58  It scheduled market 
access limitations in telecommunications (satellite communications, land-based mobile 
communications, radio, and TV), financial services (banking, insurance, and asset management), professional services (legal, accounting, taxation, arch itectural, and engineering services), and in the 
health and tourism sectors.
59  Market access was left unbound fo r cross-border supply (mode 1) across 
several sectors, including financial and transport services. 
61. Unless otherwise provided, Chinese Taipei grants  "national treatment" to the services and 
services providers of any other WTO Member.  Restrictions on "national treatment" include limitations on commercial presence (mode 3) in telecommunications and on the presence of natural persons (mode 4) in human health services.  Ho rizontal commitments as regards mode 4 refer to 
conditions for the entry and temporary stay of natu ral persons (business visitors and intra-corporate 
transferees).  There is also a horizontal limitati on on "national treatment" in mode 3 concerning the 
acquisition of land for certain uses.  Chinese Taip ei's schedule includes additional commitments on 
financial services (insurance and banking) and legal services. 
62. Chinese Taipei listed exceptions to MFN treat ment under the GATS regarding the acquisition 
of land and support and auxiliary air transport services,  which are regulated on the basis of reciprocity 
and/or bilateral agreements.
60  Chinese Taipei has accepted the Reference Paper on the regulatory 
framework for basic telecommunications services.   Under the DDA negotiations, Chinese Taipei's 
revised conditional offer in services includes new a nd improved commitments on maritime transport, 
telecommunications, environmental services, and financial services.61 
63. Over the past five years, Chinese Taipei has c ontinued to liberalize its services market;  for 
example, commercial presence has been liberalized in  some sectors (e.g. financial, environmental, 
health, tourism, and express delivery services)62, and regulatory improvements have been made in 
others (professional services, telecommunications, energy, insurance, and securities).63  However, 
limits on non-Chinese-Taipei investment and other restrictions remain in various areas, including basic telecommunications, audiovisual services, and air, road, and maritime transport;  while postal services have remained entirely closed  to non-Chinese-Taipei participation.
64 
64. Chinese Taipei aims to increase the productivity  and international competitiveness of its 
services sector.  Until end 2009, a number of ser vices sectors were thus promoted as "emerging 
industries" and received incentives under the SUI.65  In the first half of 2009, new development 
strategies were approved for tourism, medicine a nd healthcare, and cultural and creative industries, 
with the aim of building the services sector into an engine for upgr ading value added, creating jobs, 
                                                      
58 GATT document MTN.GNS/W/120, 10 July 1991. 
59 WTO document GATS/SC/136/Rev.1, 2 July 2002. 
60 WTO document GATS/SC/136/Rev.1, 2 July 2002. 
61 WTO document TN/S/O/TPKM/Rev.1, 8 June 2005. 
62 APEC (2007b). 
63 APEC (2008a);  and information provided by the Chinese Taipei authorities. 
64 APEC (2007b). 
65 These services included finance, distribution, telecommunications and media, healthcare, training, 
tourism, cultural and creative services, design, information, R&D, environmental protection, and engineering consulting services. Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 91 
 
 
and stimulating economic growth.  In light of these objectives, the Government might usefully review 
the formal and informal entry barriers that  are still in place in some services sectors. 
(ii) Financial services 
(a) Overview 
65. Financial and insurance services accounted for 6.4% of GDP and 4% of total employment in 
2009 (Table I.2).  The assets held by all fina ncial institutions tota lled NT$40.8 trillion in 2009.66  
Chinese Taipei's financial industry is large and o ffers increasingly sophisticated products, but it 
remains quite fragmented and the Government retains control over several major financial institutions.  
It also lacks an integrated legal instrument, a lthough efforts to address this problem are ongoing.  
66. The main laws governing the financial sector ar e:  the Financial Holding Company Law, the 
Banking Act, the Securities and Exch ange Act, the Futures Trading Act, and the Insurance Act.  
During the review period, the authorities revised this legal framework in order to further liberalize and 
restructure the financial market;  the main thrust of reforms is to transform Chinese Taipei into a 
financial centre for the Asia Pacific region.  Among other changes, the authorities have lifted 
constraints on offshore banking ope rations, expanded the business scope of insurance companies, 
liberalized capital markets for non-Chinese-Taipei i nvestors and increased the liquidity of financial 
capital in the stock market.  In addition, restric tions on capital flows and financial operations with 
China have been progressively removed (Chapter II). 
67. The Financial Supervisory Commission (FSC), established in 2004 under the executive, is 
responsible for the supervision of the banking, insu rance, and securities institutions as well as the 
financial holding companies.  The Central Ba nk manages money supply and credit, regulates 
foreign-exchange operations, contro ls banks' required reserves ratios , and is involved in monitoring 
the operation of banks and other fina ncial institutions (Chapter I).   
68. At the end of 2009, the FSC completed a draft Financial Services Act intended to provide a 
single legal instrument for the financial services industries.  The draft Act addresses four main objectives:  spurring financial innovation and market  development;  strengthening supervision of 
financial services enterprises;  establishing fair and reasonable financial services marketing practices;  
and providing a mechanism for the resolution of di sputes between consumers and financial firms.  
Comments from the industry and other government ag encies have been solicited and discussed.  The 
draft Act was submitted to the executive authority for review by end-January 2010 and was expected 
to be forwarded to the legislature by mid 2010. 
69. On 16 November 2009, Chinese Taipei and Chin a signed three memoranda of understanding 
(MOUs) on closer cooperation in banking, insurance,  and securities, to take effect within 60 days 
from their signature.  The deals cover, inter alia , information exchange, fi nancial supervision and 
coordination, and crisis management, paving the wa y for improved financial market access between 
the two signatories.  The MOUs are expected to he lp Chinese Taipei's financial industries establish a 
foothold in China's booming market.  
(b) Banking 
70. The Banking Bureau under the FSC regulates and supervises commercial banks, industrial 
banks, specialized banks, local branches of non-Ch inese-Taipei banks, bills fi nance companies, credit 
                                                     
 
66 Financial Supervisory Commission online informati on.  Viewed at:  http://www.ib.gov.tw/public/ 
data/986953171.pdf [6 August 2009]. WT/TPR/S/232 Trade Policy Review 
Page 92 
 
 
cooperatives, and financial holding companies.67  The Bureau issues bank licences, reviews 
applications for new branches and banking activities,  sets regulations for bank lending, investments 
and other activities, and takes disciplinary action agains t banks that fail to comply with relevant laws. 
71. Commercial banks are allowed to conduct all the usual banking activities, for example 
lending, accepting deposits, managing trust funds a nd public property, a nd handling domestic and 
foreign remittances.  They may invest in government bonds, short-term notes, corporate bonds, and financial bonds.  Banks may also  conduct trust or securities business, but they may not engage 
directly in insurance businesses.  However, a bank may seek approval from the competent authority to 
establish a cooperative or co-marketing agreement with an insurance company in order to sell 
insurance products;  under such an agreement, the bank may introduce and recommend the insurance 
company's products through its own banking network.
68  
72. In May 2009, there were a tota l of 395 financial institutions in  Chinese Taipei, of which 37 
were domestic banks, 32 local branches of no n-Chinese-Taipei banks, 27 credit cooperatives, 
289 credit departments of farmers' and fishermen' s associations, and 10 bills finance companies.69  At 
the end of 2009, total bank depos its were NT$28.7 trillion, of whic h domestic banks held 75.7%, the 
postal savings system 15.4%, the local branches of  non-Chinese-Taipei banks 2%, and other financial 
institutions 6.9%.  Total loans were NT$18.6 trill ion by the end of 2009, with domestic banks 
accounting for almost 92% and local branches of non- Chinese-Taipei banks for 2.7%;  other financial 
institutions accounted for the rest.70 
73. Despite recent sell-offs of shares in large ba nks, the Government retain s ownership of several 
major financial institutions.  Two of the largest banks, accounting fo r 18% of total bank assets, are 
fully government-owned.  The Government also hol ds minority stakes in other important commercial 
banks.  Overall, the Government held 52. 2% of total bank assets as of January 2010.71 
74. The postal savings system, which belongs to th e government-owned Post (section (iii) below), 
had the single largest share of deposits among fina ncial institutions (15.6% ) in 2008.  The postal 
savings authorities may place the deposits they r eceive in the Central Bank, government-owned 
banks, or non-government-owned banks.  According to the relevant regulation, postal savings may be 
used as mid- and long-term capital for major gove rnment projects and government-approved private 
projects via deposits in other financial institutions.72  Furthermore, the postal savings deposited in the 
Central Bank (about 71% of the total) may be used as an instrument of monetary policy to maintain 
price and financial stability.  With the aim of en couraging the public to place money in the postal 
saving system and promote economic developmen t, the interest earned from a postal passbook 
savings account is tax exempt.  This measure coul d put banks and other financial institutions at a 
disadvantage.  The authorities have indicated, howev er, that in order not to affect the competitive 
environment for banks, deposits in a postal savings  account are limited to NT$1 million.  Postal 
savings are subject to the FSC supervision. 
                                                      
67 From December 2008, trust and investment  companies are no longer in operation. 
68 When a bank sells insurance products, it must make clear to the customer that the products are 
provided by an insurance company and that if any disputes should arise in  connection with these products, the 
bank and the insurance company have different liabilities depending on the nature of the dispute. 
69 Bills finance companies help enterprises raise fu nds in the primary market by issuing short-term 
bills, and further enhance the liquidity of short-term bills in the secondary market. 
70 FSC online data.  Viewed at:  http://www.bankin g.gov.tw/public/data/boma/stat/index/index-2.xls 
and .../index-3.xls [7 August 2009]. 
71 Data provided by the FSC. 
72 Article 18 of the Postal Savings and Remittances Act. Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 93 
 
 
75. During the review period, the interest rate sp read between deposits and loans continued to 
decrease in virtually all financial institutions, and differences of interest rate spreads among them 
have also tended to narrow;  this might be th e outcome of increased competition in the market 
(Table IV.3). 
76. In 2007 and 2008, the Regulations Governing th e Capital Adequacy Ratio of Banks were 
revised in order to strengthen risk management a nd bring the banking supervision system into line 
with international standards.  Chinese Taipei h as implemented the Basel II rules since 2007.  At the 
end of September 2008, the overall capital ade quacy ratio of dom estic banks was 11.92%73, while the 
legal requirement was 8%.  A partial amendm ent to the Banking Act was promulgated on 
30 December 2008, aimed at, inter alia , strengthening the early warni ng system, improving financial 
supervision, and providing a sound legal basis for market exit of distressed banks. 
Table IV.3 
Weighted average interest rates on deposits and loans and spreads, 2005-08 
Year 2005 2006 2007 2008 
Domestic banks     
Deposits 1.22 1.40 1.53 1.71 
Loans 3.67 3.49 3.36 3.47 
Spread 2.45 2.09 1.83 1.76 
Local branches of non-Chinese-
Taipei banks     
Deposits 0.69 0.85 0.94 1.07 
Loans 2.88 2.88 2.98 3.21 
Spread 2.19 2.03 2.04 2.14 
Credit cooperatives     
Deposits 1.19 1.37 1.53 1.75 
Loans 3.35 3.35 3.39 3.58 
Spread 2.16 1.98 1.86 1.83 
Credit department of farmers' and 
fishermen's association     
Deposit 1.14 1.30 1.38 1.54 
Loans 3.51 3.29 3.30 3.42 
Spread 2.37 1.99 1.92 1.88 
Investment and trust companies     
Deposits 1.99 2.20 2.27 2.53 
Loans 3.69 3.50 3.70 3.82 
Spread 1.70 1.30 1.43 1.29 
Source: Information provided by the authorities of Chinese Taipei. 
77. The authorities consider that the domestic market  has too many financial institutions relative 
to the size of the economy and that fragmenta tion has caused fierce competition among them and 
insufficient profitability.74  Encouraging the consolidation of the financial market has, therefore, been 
one of the authorities' top priorities since the earl y 2000s.  Under the Financ ial Institution Merger Law 
(2000), local banks, insurance companies, securities bus iness, investment-trust firms, and brokers may 
expand their businesses through mergers and acquisitions  (M&A) in order to increase efficiency and 
                                                      
73 FSC (2008). 
74 FSC online information.  Viewed at:  http://www.banking.gov.tw/fp.asp?xItem=31493&ctNode=714 
[7 August 2009].  Since the Government announced the liberalization of the banking industry in 1991, the 
number of domestic banks has increased rapidly.  Bran ches of financial institutions grew at a rate of 
204 branches per year from 1994 to 2001.   WT/TPR/S/232 Trade Policy Review 
Page 94 
 
 
competitiveness.  The new or merged companies recei ve preferential tax treatment, including deed 
and contract tax exemptions, a reduction in income ta x and a credit on the land-value incremental tax.   
78. Under the Financial Holding Company Law (2001)  domestic financial institutions can form 
financial holding companies and non-Chinese-Taipei fi nancial institutions can invest up to 100% in 
local financial holding companies.  As of end 2008, there were 15 financial holding companies.  The 
Law was amended in Decemb er 2008 with the aim of, inter alia , strengthening supervision of 
financial holding companies and their shareholders ;  maintaining a firewall between the financial 
industry and other industries;  and enhancing the sy nergies of universal banking.  Financial holding 
companies are subject to FSC supervision. 
79. There has been some progress towards consolidation of the banking sector.  Between 
September 2004 and September 2009,  37 M&A deals were concluded and the number of domestic 
banks was reduced from 49 to 37.  Following approval by the FSC, in 2007 two government-owned banks merged to form the largest commercial bank in Chinese Taipei.  In 2008, six major mergers and 
acquisitions were completed, three of which i nvolved non-Chinese-Taipei ba nks;  take-overs of 
smaller banks have continued.  In January 2008, the largest financial holding company was formed 
through the merger of several major govern ment-owned banks, with combined assets of 
NT$5.46 trillion at the moment of the merger.
75 
80. The cross-border provision of financial services is not permitted.  Non-Chinese-Taipei banks 
are required to establish a commercial presence in order to provide services in the territory.  They may set up subsidiaries, branches or representative offices subject to approval by the FSC.  There are no 
limits on equity ownership by non-Chinese-Taipei fina ncial institutions in local banks.  Through an 
amendment to the Banking Act, the cap of 25% of total shares with voting rights for each investor was 
removed at the end of 2008.
76  Under the new provision, a single party or group of related parties 
acquiring more than 5% of a bank's outstanding shares with voting rights is required to file with the 
competent authority;  any party or group of related parties must also obtain prior approval from the competent authority whenever it seeks to further incr ease its equity stake past the thresholds of 10%, 
25%, and 50% of a bank's outstanding shares with voting rights. 
81. A subsidiary of a non-Chinese-Taipei bank must comply with the same minimum capital 
adequacy ratios and paid-in capita l requirements as a domestic bank.
77  These requirements do not 
apply to branches of non-Chinese-Taipei banks, since they are not separate legal entities.  However, a 
non-Chinese-Taipei bank must allocate mi nimum operating capital of NT$250 million (or 
NT$200 million if no retail deposits are accepted)  for each branch set up in Chinese Taipei.78  
Additionally, in order to establish a branch, a non-Chinese-Taipei bank must rank among the world's 
top 500 banks in terms of capital or assets, or ha ve conducted over US$1 billion in transactions with 
domestic banks or enterprises in the three years prior to the application.79  Non-Chinese-Taipei banks 
are allowed to engage in the same  type of operations as domestic ba nks.  To establish a representative 
office, a non-Chinese-Taipei bank must rank among th e world's top 1,000 bank s, or have conducted 
more than US$300 million in transactions with local banks or enterprises over the previous 
three years.  Representative offices may not engage in revenue-generating activity. 
                                                      
75 Economist Intelligence Unit (2008c).   
76 Amendment to the Banking Act, promulgated on 30 December 2008. 
77 The minimum paid-up capital requirements are NT$10 billion for a commercial bank and 
NT$20 billion for an industrial bank. 
78 Regulations Governing Foreign Bank Branches and Representative Offices, as amended on 
11 December 2009. 
79 The latter requirements are waived if the bank's home country has signed a relevant agreement with 
Chinese Taipei.  This is the case of the FT A signed with Panama, effective 1 January 2004. Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 95 
 
 
82. As of May 2009, local branches of non-Chinese- Taipei banks held 7. 8% of total banking 
assets.80  They are engaged mainly in corporate lending,  trade finance, and private banking.  Although 
market penetration of non-Chinese-Taipei banks rema ins relatively small, there is a growing tendency 
for them to take over domestic banks, as shown by th e several acquisitions that have taken place in the 
past few years.  In addition to the branches of  non-Chinese-Taipei banks, as of end November 2008, 
13 domestic financial institutions had non-Chinese-Taip ei equity participation;  in six of them 
non-Chinese-Taipei equity was 100%.81  
83. Under the Offshore Banking Act, offshore ba nking units (OBUs) handle foreign exchange 
deposits for individuals and companies outside the territory of Chinese Taipei, and provide foreign 
exchange loans to individuals and companies, within or outside th e territory.  OBUs are exempted 
from income tax, business tax, stamp duties, with holding tax for interest income, and loan loss 
reserves requirements.  Non-Chinese-Taipei banks with local branches or representative offices are 
allowed to establish OBUs.  As  of end-September 2008, there were 63 OBUs (36 operated by 
domestic banks and 27 by non-Chinese-Taipei ba nks) with total assets of US$96 billion.   
84. During the review period, Chinese Taipei progr essively eased restrictions on the scope of 
business and improved financial opera tions with China.  As of March 2008, overseas subsidiaries of 
financial institutions are allowed to invest in ba nks in China, and OBUs and overseas affiliates of 
financial institutions are permitted to extend cred it to China-based non-Chinese-Taipei firms.  In 
addition, secured and unsecured credit offered by  OBUs and overseas affiliates of financial 
institutions to Chinese Taipei firms based in  China are now subject to the same limit.82  T h e  
above-mentioned measures have he lped boost Chinese Taipei's cross- strait business activities.  More 
importantly, the MOU on financial cooperation sign ed in November 2009 between Chinese Taipei 
and China will pave the way for a substantial openi ng of their financial ins titutions to each other's 
companies.  
85. A deposit insurance programme, operated by the government-run Deposit Insurance 
Corporation (CDIC), offers protection up to a maximum of NT$1.5 million per depositor in case of 
bank insolvency.  Only deposits at financial institu tions that have joined the CDIC's programme are 
eligible for protection;  foreign currency deposits are not covered.  In October 2008, faced with the 
international financial crisis, the FSC decided to guarantee all deposits placed with financial 
institutions until 31 December 2009;  the deposit guaran tee has now been extended to the end of 2010.  
The protection covers inter-bank funding and depo sits from individuals and government agencies.83   
(c) Insurance 
86. At the end of 2008 (latest year for which data are available), the insurance industry accounted 
for 21.5% of the total assets of fi nancial institutions;  most of wh ich were held by life insurance 
companies (97%).  As of November 2009, there were 54 insurance compani es.  The life insurance 
sector included 22 domestic companies and 9 local branches of non-Chinese-Taipei companies, while 
the non-life insurance industry comprised 17 local fi rms and 6 non-Chinese-Taipei affiliates.  There 
were also four reinsurance companies.84 
                                                      
80 FSC online data.  Viewed at:  http://www.bankin g.gov.tw/public/data/boma/stat/index/index-8.xls 
[7 August 2009]. 
81 Information provided by the Chinese Taipei authorities. 
82 FSC (2008). 
83 FSC (2008). 
84 FSC (2009). WT/TPR/S/232 Trade Policy Review 
Page 96 
 
 
87. In accordance with the Insura nce Law, life insurance comp anies may not offer non-life 
insurance services and vice versa, except where a non- life insurance enterprise is authorized by the 
competent authority to engage in personal injury or  health insurance.  Insurance firms may not engage 
directly in banking.  However,  any domestic or overseas insurance company registered in 
Chinese Taipei may sell insurance products through  banking channels, provided that it has obtained 
approval from the competent authority to jointly promote insurance products or provide relevant 
services with a bank.  Qualified insurers have been allowed to engage in pension business since 2005.   
88. In 2007 and 2008, the Insurance Law and relate d regulations were amended to respond to 
changing market conditions and to strengthen supervision of the industry.  Major changes included the 
expansion of the scope of insurers business opera tions;  for example, non-life insurers are now 
allowed to conduct health insurance business, life in surers may now offer investment-linked insurance 
policies and policies denominated in foreign currenc ies, and all insurers may participate in the 
domestic stocks and securities markets and invest in a wide range of financial instruments.  The limit 
on investment abroad by insurers  was raised from 35% to 45%.  Other amendments were aimed at 
strengthening consumer protection and increasing accountability and transparency.85  In addition, 
under the liberalization programme for non-life insu rance premiums, as of 2009 insurance companies 
are free to set the prices and contents of insurance products.  
89. The establishment of a commercial presence is necessary to access the Chinese Taipei 
insurance market, except for rein surance, maritime shipping, and commercial aviation insurance.86  
Subject to approval by the FSC, non-Chinese-Taipei firms may establish subsidiaries, branches, and 
representative offices, and merge with or acquire loca l insurance companies.  There are no restrictions 
on non-Chinese-Taipei ownership.  A NT$2 billion minimum paid-in capital requirement applies for 
the establishment of domestic insurance companies and subsidiaries of non-Chinese-Taipei insurance 
firms.87  There is no additional working capital require ment for a domestic insurance company to set 
up a branch office.  Requirements for the establishm ent of a branch of a non-Chinese-Taipei insurance 
company are minimum capital of NT$50 million, a r ecord of sound performance in the firm's home 
market in the previous three years, and no major violations in the previous three years.88  
Non-Chinese-Taipei insurance firms may conduct,  separately, life, non-life, and reinsurance 
businesses. There is no difference in income tax trea tment on insurance premiums paid or payments 
received under life insurance policies issued by  domestic and overseas insurance companies 
established in Chinese Taipei.  
90. Participation of non-Chinese-Taipei companies in the local insurance mark et remains limited:  
four international insurance firms were operating at end 2008.  One possible explanation for this 
limited participation is that non-Chinese-Taipei insu rance firms must report to their parent companies 
under stringent standards (e.g. the International Financial Reporting Standards and Solvency II 
accounting standards), whereas domestic insurers are subject to less stringent local regulatory 
requirements.  This situation may put non-Chinese-Ta ipei insurers at a disadvantage and, reportedly, 
it has led to two leading international life insuran ce companies leaving the local market over the past 
two years.89  In the authorities' view, however, the fact that subsidiaries and branches of 
                                                      
85 An insurance firm organized as a company limited by shares is now required to issue its stock 
publicly, unless another act provides otherwise or the Government has granted an exemption. 
86 WTO document GATS/SCI/136/Rev.1, 2 July 2002. 
87 Regulations for Establishment and Administration of Insurance Enterprises, promulgated on 
9 January 2008. 
88 Article 6 of the Regulations for the Establishment and Administration of Foreign Insurance 
Enterprises, last amended on 23 February 2009.  View ed at:  http://law.tii.org.tw/ Eng/ FLAWDAT01.asp? lsid= 
FL006769 [10 August 2009]. 
89 American Chamber of Commerce (2009);  an d European Chamber of Commerce (2009).   Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 97 
 
 
non-Chinese-Taipei life insurance firms accounted for 17.6% of first-year premium income for the 
first 11 months of 2009, demonstrates that there are no obstacles to their growth in the local market.  
They have also indicated their plans to adopt  international reporting/ accounting standards by 2012. 
91. In order to keep pace with increasing economic re lations with China and to meet the needs of 
domestic insurance firms, since 2004 the FSC has a llowed insurers to establish representative offices, 
branches, and subsidiaries in China, and to offer rein surance there.  As of January 2009, local insurers 
had received approval to set up 38 representative offi ces and 4 subsidiaries in China.  In addition, 
Chinese Taipei is considering the possibility of allowi ng its companies to invest in insurance funds in 
China's real estate and financial markets.90 
(d) Securities 
92. The main legal instrument governing the sector is the Securities and Exchange Act, which 
sets out regulations on the public offeri ng, issuing, and trading of securities.91  Non-Chinese-Taipei 
securities firms may establish subsidiaries, branches, and representative offices.  They are not subject 
to restrictions on non-Chinese-Taipei owners hip, but must comply with minimum capital 
requirements, which are the same as those applied to domestic securities firms.92  In addition, a branch 
of a non-Chinese-Taipei security firm is required to deposit a business bond and a 
settlement/clearance fund depending on its proposed business scope.  
93. Restrictions on non-Chinese-Taipei investment in the local securities market have been eased 
in recent years.  In 2008, the FSC abolished the US$5 million cap on investment in domestic securities by individual non-Chinese-Taipei investors.  It also eased restrictions on the transfer of 
non-Chinese-Taipei assets and streamlined registrati on procedures.  In addition, non-Chinese-Taipei 
investors may now engage in trade of structured in struments and equity derivatives with local security 
firms and banks (Chapter II).  According to the FSC, at end 2008, non-Chinese-Taipei investors held 
almost 29% of total market capitalization.
93 
94. The FSC has also eased some of the restrictions  on the use of funds raised in Chinese Taipei 
to invest in China.  On 14 July 2008, the FSC ra ised the percentage that domestic investment trust 
funds may invest in securities listed in China from 0. 4% to 10% of a fund's net worth.  It also 
removed the previous 10% cap on investment in H-shares and red-chip shares in Hong Kong, China 
and Macao, China, so that there are no longer an y limits.  Likewise, domestic securities firms may 
now invest in securities companies, futures compan ies, and securities investment fund management 
companies in China.94  On the other hand, the FSC maintain s limits on investment in Chinese Taipei 
securities by China investors. 
95. An amendment to the Secur ities and Exchange Act in January 2010 introduced clearer 
provisions on insider trading.  Additionally, in  order to increase transparency and strengthen 
governance in the financial sector at large, the FSC promotes the adoption of corporate governance 
best practices by public companies, such as enha ncing the functions of their board of directors, 
introducing an independent audit system, reinforci ng the independence of directors and supervisors, 
and increasing transparency of information.  
                                                      
90 FSC (2008). 
91 The Securities and Exchange Law was last amended on 11 January 2006. 
92 Minimum paid-in capital requirements for domestic and non-Chinese-Taipei securities firms are 
NT$400 million for underwriting, NT$400 million for trad ing, NT$200 million for brokerage, and an additional 
NT$30 million for establishing a branch office.   
93 FSC (2008). 
94 FSC (2008). WT/TPR/S/232 Trade Policy Review 
Page 98 
 
 
(iii) Telecommunications and postal services 
(a) Telecommunications 
96. In 2008, total revenue from telecommunica tion services amounted to 2.97% of GDP, of 
which mobile services represented 59.2%, fixed tele phone services 19.3 %, Internet and value-added 
services 13.1%, and leased circuit services 8.4%.95  Chinese Taipei's telecommunication sector is 
modern, totally digitalized, and offers a wide range of services.  While the industry has been 
progressively liberalized, the partially governme nt-owned telecom company retains a dominant 
position in several segments of the market, and there are still limits on non-Chinese-Taipei investment in certain types of telecommunication companies. 
97. Chinese Taipei's penetration rates for telecom services – high by international standards – 
continued to increase during the review period, with  the exception of fixed telephony (Table IV.4).  
Number portability has been required for mobile services since 2005.  By 2008, four 2G and five 3G mobile service providers had been licen sed and the services had 12.7 million and 11.3 million 
subscribers, respectively.
96  The Government has invested in infrastructure for worldwide 
interoperability for microwave access (WiMAX) ser vices and, in July 2007 , issued six regional 
licences to WiMAX operators, five of which began servi ces in 2009.  This is expected to help increase 
competition in the broadband market.  The Governme nt has also promoted the development of the 
Internet Protocol Version 6 (IPv6) to provide in tegrated telecommunication services to the public. 
Table IV.4 
Telecommunications market, 2005-08 
Market 2005 2006 2007 2008 
Penetration ratea (%) 97.4 101.6 105.8 110.3 Mobile phone 
Subscribers (million)  22.2 23.2 24.3 25.4 
Penetration rate (%) 59.8 58.9 57.9 56.8 Fixed telephone 
Subscribers (million)  13.6 13.5 13.3 13.1 
Penetration rate (%) 58.0 63.8 64.4 65.8 Internetb 
Users (million) 13. 2 14.5 14.8 15.1 
Penetration rate (%) 19.1 22.1 26.1 30.9 Broadbandc 
Subscribers (million)  4.3 5.1 6.0 7.1 
a Market penetration refers to serv ice subscribers per 100 inhabitants. 
b Internet users refers to individuals who accessed the internet during the year. 
c Broadband subscribers are the subscribers of ADSL, Cable M odem, Leased Line and PWLAN.   Since September 2006, the 
figures of broadband subscribers include the 3G subscribers that can  access the Internet. 
Source:  Data provided by the NCC. 
98. The Ministry of Transport and Communications (MOTC) is responsible for establishing the 
overall policies for the sector and promoting the tel ecommunications industry.  The regulatory agency 
for the telecommunications and broadcasti ng sectors is the NCC, established in 2006.97  The NCC is 
an independent body;  it does not report to the executive authority or any other administrative authority, and its resolutions are made available to the public.  Its main objectives are to develop a 
                                                     
 
95 NCC online data.  Viewed at:  http://www.ncc.go v.tw/english/files/09041/ 1 [12 August 2009]. 
96 Data provided by the NCC. 
97 The NCC was created from the merger of the Directorate Gene ral of Telecommunications (DGT) 
and the Department of Broadcasting Affairs of the Gove rnment Information Office.  The NCC is administered 
by seven Commissioners, who serve for four years with th e possibility of consecutive terms.  They come from 
the industry, academia, and governmental sector s, but are not part of the Cabinet.   Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 99 
 
 
transparent and reasonable regulatory framework for the development of the communications and 
broadcasting industries, to promote fair competition,  and to protect the interests of consumers.   
99. The Telecommunications Act establishes two types of telecom operators:  Type I operators 
who own and operate network facilities, require licen sing from the NCC, and are subject to price-cap 
regulations (see below) and other restrictions.  Non- Chinese-Taipei investment in a Type I enterprise 
is limited to a maximum of 49% of total shares98, and the sum of direct and indirect shareholding may 
not exceed 60%.  Type I operators are also subject to minimum capital requirements;  these were reduced by the NCC in January 2008 in or der to foster investment and competition.
99  Type II 
operators do not own network facilities;  they re quire a licence from the NCC and must follow the 
relevant administrative regulations, but they can set their prices freely and are not subject to 
investment and other limitations.  
100. According to the Telecommunications Act, th e NCC may designate Type I operators as 
responsible for providing universal telecommuni cations services to specific areas.  Under the 
Universal Telecommunication Services Regulations (2001), the incumbent operator must, and other 
Type I telecom operators may, apply to provi de universal services by submitting an annual 
implementation plan;  once a Committee has review ed the applications, the NCC designates the 
universal service providers on the basis of the merits of their respective plans.   
101. The MOTC's participation in Chunghwa Tel ecom (CHT), the former government-owned 
monopoly, was reduced from 53% to 35% in late  2008.  Nevertheless, CHT remains a dominant 
player in the market, receiving more than 50% of  total telecom services revenue in 2008, including 
97.3% of the fixed-line local telephone market, 76%  of the domestic long-distance market, and 70% 
of the fixed-line broadband market.  On the other hand, CHT faces some competition from other 
fixed-network operators in international call servi ces, where its accounts for 58% of the market, and 
in mobile services, where it holds a 35% market share.100  At end 2009, there were 75 fixed-line 
providers and 25 mobile service providers.101 
102. In order to facilitate a competitive environment,  the NCC has adopted price caps on some of 
the services provided by dominant Type I telecom operators (fixed-line local calls, mobile calls, and 
leased lines), and requires them to submit detailed information for fixing or adjusting tariffs.102  
Non-dominant Type I operators and Type II operators  are required to notify the NCC whenever their 
tariffs are fixed or adjusted.  With the aim of protecting consumers' right s and the sound development 
of the telecommunications industry, in January 20 10 the NCC announced new adjustment coefficients 
for tariff rates of fixed network and mobile tel ecom services to be implemented from 1 April 2010 to 
31 March 2013.  In the future, the NCC intends to pus h for further rationalization of telecom tariffs.  
ITU has ranked Chinese Taipei's telecom services as the world's seventh cheapest, with average prices 
                                                      
98 Chinese Taipei's GATS Schedule sets this limit at 20%.   
99 The capital requirements were reduced from NT$1 6 billion to NT$6.4 billion for integrated network 
operators;  from NT$1.2 billion to NT$500 million for local call service providers in Taipei;  and from NT$2 billion to NT$800 million for both long distance and international call operators. 
100 NCC online data.  Viewed at:  http://www .ncc.gov.tw/english/files/08032/108_13.pdf 
[13 August 2009]. 
101 NCC online data.  Viewed at:  http://www.ncc. gov.tw/english/files/07050/ 273_523_091106_1.xls. 
[18 December 2009]. 
102 Under the price-cap mechanism, tariffs charged by Type I telecom operators must not exceed the 
Consumer Price Index minus the Production Efficiency Index (PEI).   WT/TPR/S/232 Trade Policy Review 
Page 100 
 
 
accounting for only 0.5 % of monthly GNI per cap ita in 2008 (Singapore and Hong Kong, China 
ranked first and fifth, respectively).103   
103. The relevant regulations forbid dominant carri ers from rejecting interconnection requests and 
mandates guiding principles for bilateral nego tiations between telecom companies to set 
interconnection rates and terms.104  The regulations require interconn ection rates to be cost-oriented, 
fair, reasonable, and non-discriminatory.  If no agr eement is reached between the telecom enterprises 
within three months, either party may file a written application to the NCC for arbitration.105 
104. Some other pro-competitive regulations adopted by the NCC require practices such as number 
portability, equal access, wholesale pricing, and acc ounting separation (i.e. se parate calculation of 
profits and losses according to the item of service provi ded).  Cross-subsidization is not allowed.   
105. Limits on non-Chinese-Taipei investment in the radio and television industries remain in 
place.  Under the Cable Radio and Television Ac t, direct non-Chinese-Taipei ownership may not 
exceed 20% of the shares of a relevant company;  total direct and indirect ownership may not exceed 
60%;  and two thirds of directors and two thirds of supervisors must be Chinese Taipei persons.106  In 
the satellite broadcasting business, direct sharehol ding by non-Chinese-Taipei persons is limited to 
50% of total shares.  Non-Chinese-Taipei satellite broadcasting companies may broadcast 
programmes in Chinese Taipei subject to approval by the regulatory agency and provided they 
establish a branch office in the territory.107  Non-Chinese-Taipei investment is currently not allowed in 
the operation of radio and television stations.108 
(b) Postal services 
106. Postal services are managed by the governme nt-owned Chunghwa Post Co. Ltd, which is 
regulated by the Postal Law.  In addition to prov iding postal savings (section (ii) above) and simple 
life insurance, the Post holds a monopoly in Chine se Taipei's postal services.  It has post offices 
throughout the territory and offers all usual ma iling services.  Non-Chinese-Taipei ownership is 
allowed in courier services, but their activities ar e limited to the delivery of business documents, 
goods, and parcels.  In 2004, the MOTC submitted a pl an to the executive for the privatization of the 
Post.  The authorities are still assessing the potential imp act of privatization, in particular as regards 
the provision of universal postal services.  No time schedule for privatization has been set. 
107. Under the cross-strait postal services agreemen t signed by Chinese Taipei with China on 
4 November 2008, direct mail services, including lett er and parcel deliveries, express mail, and postal 
                                                      
103 The ITU's ICT Price Basket measures ICT pri ces as a percentage of GNI per capita across 
150 countries.  It combines the average cost of fixed telephone, mobile cellular, and Internet broadband 
(ITU, 2009). 
104 Regulations Governing Network Interconnection among Telecommunication Enterprises. 
105 An arbitration procedure took  place in 2005 between CHT and three other telecom operators 
concerning the collocation of equipment.  Under the arb itral award, CHT was requir ed to provide suitable space 
for collocation and rental plans based on cost-oriented, fair and reasonable principles;  the construction and material costs for interconnection were to be borne by the other operators.  Information provided by the NCC. 
106 Articles 19-20 of the Cable Radio and Television Act. 
107 Articles 10 and 15 of the Satellite Broadcasting Act. 
108 Article 5 of the Radio and Television Act. Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 101 
 
 
remittances, are now available across the Strait, a nd cargo charter flights have been authorized to 
carry postal material.109 
(iv) Transport 
108. One of the Government's priorities, as define d in its 8-year plan for 12 major public 
construction projects, is to develop transport infrast ructure as a way to boost the economy (Chapter I).  
The projects include turning Kaohsiung harbour into  an Asia-Pacific shipping hub, transforming the 
Taichung port into a regional maritime and air logis tics centre, and turning the Taoyuan International 
Airport into an airport city, including an Air Ca rgo Park.  In addition, the authorities expect the 
opening of cross-strait direct sea and air links w ith China in 2008 to boost Chinese Taipei's position as 
a transport hub between north- east Asia and south-east Asia.110 
(a) Maritime transport 
109. Some 99.2% of Chinese Taipei's international trad e in volume terms is carried by ship.  At the 
end of 2008, the domestic shipping fleet totalled 267 vessels of over 100 gross tonnes (270 vessels in 
2005), with a total gross tonnage of 2.87 million tonnes.111  Chinese Taipei has 139 shipping carriers 
(148 in 2005), which include three major compani es providing container transport services (Evergreen 
Marine Corporation, Yangming Marine Transpor t Corporation, and Wan Hai Lines, Ltd.) and 
three offering bulk transport services (China Steel Express, U-ming, and Ta-Ho Maritime Corporation).  Chinese Taipei's fleet is the world's 11
th largest.112 
110. The MOTC is responsible for regulating the mar itime transport sector, including ports.  The 
main legislation governing the sector is the Shipping  Law and Law of Ships;  no major changes to the 
law have been introduced during the review period.113  Anyone wishing to engage in sea 
transportation as a vessel carrier must obtain MOTC approval114, and at least 50% of the carrier's 
capital must be of domestic origin in order to obtain registration.115  Vessel carriers engaging in liner 
service must submit cargo and passenger tariffs to  the authorities for examination.  Likewise, 
agreements between local and overseas operators on fre ight rates and charges must be filed with the 
MOTC;  if the authorities consider that an agre ement impedes the "order of shipping or economic 
development", they may order a revision of  the agreement within a specific period.116  The authorities 
stated that this has not occurred in practice.  Th ey also indicated that Chinese Taipei's shipping 
companies have participated in some major world liner conferences. 
111. Vessels registered overseas are not perm itted to undertake cabotage services, unless a 
franchise is granted.117  Non-Chinese-Taipei vessel carriers are required to establish a branch in order 
to provide international transport services to passenge rs and cargo in the territory.  They must also 
                                                      
109 Kuomintang News Network , "Four Agreements Signed at Cross-strait Talks", 11 November 2008.  
Viewed at:  http://www.kmtnews.net/client/eng/Ne wsArticl.php?REFDOCID=00 ay31w6sahqzs9f&TYPID 
Jump=00air17gdq155u7h [12 December 2008]. 
110 Kaohsiung Port Newsletter  N° 36, July 2008.  Viewed at:  http://www.khb.gov.tw/english/ 
upload/Newsletter/20086279107.pdf [15 December 2009]. 
111 MOTC online information, "Statistical Abstract of Transportation and Communications".  Viewed 
at:  http://www.motc.gov.tw/mocwebGIP/wSite/ct?xIte m=11745&ctNode=214&mp=2 [16 September 2009]. 
112 UNCTAD (2008). 
113 The Shipping Law was promulgated on 3 June 1981, and amended in 1995, 1999, and 2002. 
114 Article 9 of the Shipping Law. 
115 Article 2 of the Law of Ships. 
116 Article 25 and Article 40 of the Shipping Law. 
117 Article 4 of the Shipping Law. WT/TPR/S/232 Trade Policy Review 
Page 102 
 
 
keep a minimum operating fund of NT$12 million.118  At end 2009, there were about 400 shipping 
agencies and 735 freight forwarders in Chinese Taipei.  Shipping agencies and freight forwarders with 
100% non-Chinese-Taipei capital are permitted.  Chin ese Taipei did not include maritime transport 
services in its GATS commitments, but it did so in its revised services offer.119 
112. There are seven international ports in Chinese Taipei.120  Kaohsiung Harbour is by far the 
most important, handling over 75% of Chinese Taipei's  container traffic and more than 67% of its 
international trade volume.121  All Chinese Taipei ports are ope rated by harbour bureaux under the 
MOTC.  Domestic and non-Chinese-Taipei companies may participate in public tendering procedures 
to operate port terminals.  During the review peri od, the Government implemented major investment 
projects in port infrastructure with the aim of transforming Chinese Taipei into a regional hub for 
container transhipment.  Port dues are collected in  order to finance the development of commercial 
ports (Chapter III).  Domestic and non-Chinese-Taipei  vessels are subject to the same port dues for 
the same shipping routes.  However, port dues are 60% higher for international routes than for 
domestic routes.  The authorities explained that this  difference is due to higher infrastructure and 
services costs required for international routes. 
113. In November 2004, Chinese Taipei and China si gned a maritime transportation agreement, 
which put an end to the ban on direct cross-strait tr affic.  Direct shipping routes have been opened, 
allowing Chinese Taipei and Chinese vessels to sail directly across the Strait, without having to pass through Hong Kong or the Ishigaki Island in Japan.  Twelve sea ports have b een opened to cross-strait 
traffic in Chinese Taipei and 63 in China.  Furtherm ore, both parties agreed to exempt vessel carriers 
from business and income taxes on a reciprocal basis
122, and to enable direct navigation of ships 
registered in third countries acro ss the Strait, under certain conditions.123  Direct shipping effectively 
started on 15 December 2008.  Aside from shorteni ng navigation times, it is expected to reduce 
warehousing needs and overall transportation costs,  thus enhancing efficiency and making Chinese 
Taipei's ports more competitive in the region.  
(b) Air transport 
114. High international oil prices, the global economic slowdown and competition from other 
transport modes have had an adverse impact on Chinese Taipei's aviation industry, causing domestic 
and international air passenger tra ffic and cargo volume to drop in 2008.124  About 0.8% of Chinese 
Taipei's international trade in volu me terms was carried by air in 2008.125  Air transport is governed 
by the Civil Aviation Act.  The Civil Aeronau tics Administration (CAA), under the MOTC, is the 
sector regulator;  among other functions, it is in charge of negotiating international cooperation 
agreements. 
                                                      
118 Article 34 and Article 36 of the Ship ping Law.  See also APEC (2007b). 
119 WTO document TN/S/O/TPKM/Rev.1, 8 June 2005. 
120 These are:  Kaohsiung, Keelung, Hualien, Taichung, Su-ao, Anping, and Taipei. 
121 MOTC (2008). 
122 At end 2009, the reciprocal exemption had no t entered into effect, pending amendment to the 
relevant Chinese Taipei law.  Chinese Taipei grants similar exemptions to other trading partners under comprehensive income tax agreements and international tr ansportation income tax agreements (Chapter II).   
123 Regulations Governing the Approval and Administration of Direct Cross-strait Transportation, 
MOTC.  Viewed at:  http://www.motc.gov.zw/m ocwebGIP/wSite/ct?xItem=14703&ctNode=207&mp=2 
[16 September 2009]. 
124 In 2008, air passenger traffic and cargo volume fell by 11.4% and 7.1%, respectively over 2007 
(Civil Aeronautics Administration, 2009). 
125 Information provided by the authorities. Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 103 
 
 
115. At end 2008, 38 airlines provided flight services in Chinese Taipei:  32 were 
non-Chinese-Taipei airlines operating to and from the territory, and 6 were domestic air carriers 
providing both international and domestic air services.126  In 2008, domestic airlines accounted for 
59% of total passenger and cargo volumes.  The l eading carrier was China Airlines, with a 32% 
market share in passenger volume and 34% in car go volume;  followed by EVA Airways, which 
accounted for 21% and 24%, respectively.127  The government-owned China Aviation Development 
Foundation holds 70% of China Airlines shares.128  Airlines may freely establish their prices for 
international flights.   
116. In July 2007, the aggregate limit on non-Chinese- Taipei investment in domestic airlines was 
increased from 33% to 49% of total equity;  and the cap on individual overseas investors was set at  
24%.129  The measure that requires Chinese Taipei's  civil servants travelling overseas on official 
business to fly with Chinese Taipei carriers remains in place;  this amounts to an implicit subsidy to 
domestic carriers. 
117. There are two international airports and 16 domestic  airports.  All airports are operated by the 
Government.  The Toayuan International Airport (TTI A), near Taipei, is by far the busiest, followed 
by the Kaoshiung airport.130  In response to the tourism industry needs, some domestic airports were 
opened to international charter flight services in 2008.   In order to boost the air transport industry, the 
CAA is working on several major construction projec ts, including the renovation and improvement of 
the TTIA with the aim of transforming it into an "airport city".   
118. At end 2008, Chinese Taipei had bilateral air ser vices agreements based on reciprocity with 
50 countries or areas, and international scheduled services provided by domestic and 
non-Chinese-Taipei carriers covered 181 routes connec ting 78 cities worldwide.  Non-Chinese-Taipei 
carriers are not permitted to engage in cabotage services in the territory.   
119. Since Chinese Taipei's last Review, the prohibitio n on direct cross-strait air traffic has been 
removed.  Direct weekend charter flights started in July 2008 and, under the Air Transport Agreement 
signed in November 2008, daily direct charter flight s (up to 108 per week) were allowed to operate as 
well as the first cargo charters.  Moreover, under an  agreement signed in April 2009, scheduled flights 
(270 passenger and 28 cargo per week) commen ced on 31 August 2009, between 8 cities in 
Chinese Taipei and 27 in China.  Chinese Taipei e xpects this agreement to improve efficiency in 
cross-strait direct air links and give a boost to th e domestic airline industry.  From 31 August 2009 to 
31 January 2010, there were 5,601 cross-strait flights, carrying over 1.8 million passengers.131 
(v) Tourism 
120. In 2009, 4.4 million internationa l travellers visited Chinese Taipei, an increase of about 30% 
compared with 2005.  The largest source of arri vals was Japan, followed by China;  Hong Kong, 
                                                      
126 Another domestic airline provided non-scheduled local helicopter transport services only. 
127 Civil Aeronautics Administration (2009). 
128 The Government also holds 63.4% of the shares in Mandarin Airlines.  International Civil Aviation 
(ICAO) online information.  Viewed at:  http://www.i cao.int/icao/en/atb/epm/ecp/PrivatizedAirlines.pdf 
[14 August 2009]. 
129 Amendment to the Civil Aviation Act (Article 49), promulgated on 18 July 2007. 
130 The TTIA, previously known as CKS, served 21.9 million passengers and 1.4 million tonnes of 
cargo in 2008 (Civil Aeronautics Administration, 2009). 
131 Since the cross-strait direct air links opened in 2008, the number of flights and passengers has 
increased rapidly:  859 flights and 336,000 passenger s crossed the Strait from July to December 2008, and 
4,091 flights and 1.7 million passengers from December 2008 to August 2009 (Information provided by the CAA). WT/TPR/S/232 Trade Policy Review 
Page 104 
 
 
China;  the United States;  and Singapore.  To tal tourism receipts amounted to US$7 billion in 2009 
(1.8% of GDP).132   
121. The Tourism Bureau of the MOTC is responsib le for policy formulation and implementation 
in the sector.  The regulatory framework includes th e Statute for the Development of Tourism (last 
amended in 2007) and regula tions governing the activities of travel agents, hotels, and tour guides.  
There are no market access restrictions or "na tional treatment" limitations on non-Chinese-Taipei 
providers to engage in t ourism businesses, except that tour guide services must be provided only by a 
travel agency or a tour operator.  The six- month residence requirement for non-Chinese-Taipei 
persons applying for the tour-guide  examination was removed in 2007.133   
122. Within the framework of the Development Vision for 2015, between 2007 and 2009 tourism 
policy focused on building a friendly and high-quality tourism environment, improving the industry standards, and developing Chinese Taipei's major tourist attractions with a view to increase the 
number of visitors.
134   
123. In June 2008, Chinese Taipei and China si gned an agreement on cross-strait weekend 
passenger charter flights, allowing each party to op erate 18 two-way direct flights per weekend and 
the daily arrival of 3,000 Chinese tourists in Ch inese Taipei.  In November 2008, daily passenger 
charter flights and cargo charter flights across the St rait were permitted, and di rect scheduled flights 
started in August 2009.   
124. Since 2005, Chinese Taipei has promoted inbound charter flights by overseas carriers.  
Subsidies in the form of cash payments are grante d to both domestic and overseas travel agents for the 
use of charter flights and for their advertisement.135   
(vi) Professional services 
125. Access to the local professional services market is relatively liberal by international standards.  
Nevertheless, participation of  non-Chinese-Taipei professional service providers remains quite 
limited, which may be partly explained by the language obstacle and othe r informal barriers.  
Generally, in order to obtain a licence to prac tice a profession, a non-Chinese-Taipei natural person 
must pass an examination with the competent aut hority and be a member of the relevant professional 
organization.  Some professional associations (e.g. architects, accountants, and lawyers) set standard 
fees, which might have the effect of preventi ng price competition in their respective markets.136  To 
address this issue, the Fair Trade Commission passed  a resolution in November 2008 stating that it 
would hold negotiations with the competent authoritie s of professional associations in order to remove 
the provisions that stipulate standard service fees.  As a result, some associations have deleted such 
provisions from their regulations (accountants) or pl an to delete them soon (engineers and lawyers). 
                                                      
132 MOTC, Tourism Bureau online information.  Vi ewed at:  http://admin.taiwan.net.tw/english/ 
statistics/release.asp?relno=6 [11 March 2010]. 
133 Regulation for the Junior Professional and Technical Examination for Tour Guide, amended and 
promulgated on 17 October 2007. 
134 Fot further details on tourism policy, see MOTC, Tourism Bureau online information.  Viewed at:  
http://admin.taiwan.net.tw/english/public/public.asp?selno=73&relno=73 [10 March 2010]. 
135 Information provided by the Chinese Taipei authorities. 
136 For further details, see OECD (2009). Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 105 
 
 
(a) Legal services 
126. Under the relevant regulations, non-Chinese-Ta ipei attorneys are allowed to practice host 
jurisdiction law in Chinese Taipei and employ or ente r into partnership with local attorneys, provided 
they are properly qualified.137  For this purpose, they must take the Attorney Qualification 
Examination;  if successful they will be granted a licence by the Ministry of Justice and admitted to 
the Bar Association.  In addition, as scheduled in its GATS commitments, Chinese Taipei recognizes 
non-Chinese-Taipei qualified lawyers as "attorneys of foreign legal affairs" (AFLAs) and allows them 
to practice the law of their home jurisdiction a nd international law.  An AFLA, working in 
conjunction with a local attorney or receiving the latter's written opinions, can provide legal services 
relating to marriage, parentage or inheritance, when a Chinese Taipei person is involved or the 
inheritance property is located in Chinese Taipei.  An AFLA must establish a law office or enter into 
partnership in a law office in Chinese Taipei, and re gister with the local Bar association after having 
been recognized as an AFLA by th e authorities.  From 2002 to 2009, some 60 AFLAs were practicing 
in Chinese Taipei. 
(b) Accounting services 
127. Under the Certified Public Accountant Law, a non-Chinese-Taipei person must pass the CPA 
Senior examination, receive the relevant certif icate, and obtain permission from the Financial 
Supervisory Commission in order to practice accountan cy in Chinese Taipei.  He/she must also be a 
member of the Certified Public A ccountants Association and register with the relevant provincial or 
municipal authority before commencing practice.  There appear to be no limitations on market access 
or "national treatment" for non-Chinese-Taipei acco untants, except for services related to Chinese 
Taipei's income tax certifications and accountant a ttestation practice, which may only be provided by 
the tax attorneys of Chinese Taipei.  At end 2009, there were no overseas CPAs practicing in Chinese Taipei.  As regards commercial presence,  access is limited to natural persons having 
established an office other than in the form of a company.
138 
(c) Architectural and engineering services 
128. According to the Architects Act, a non-Chin ese-Taipei person who has passed the architect 
examination in Chinese Taipei and received an architect licence, is required to obtain approval from the Ministry of the Interior and be a member of the Architects Association in order to practice in Chinese Taipei.  Alternatively, he or she must pass  a qualification evaluation, in which the level of 
education, training, and experien ce can substitute for the examination requirement, and subsequently 
obtain an Architect Practicing Certificate after two years of construction experience.  There are no 
restrictions based on nationality.
139  At the end of 2009, there was only one practicing 
non-Chinese-Taipei architect. 
129. A non-Chinese-Taipei person must obtain a Professional Engineers (PE) licence issued by the 
Public Construction Commission (PCC) and join the local PE association in order to provide 
engineering services in Chinese Taipei.  No natio nality restrictions apply for a PE but domestic 
residency is required.  A non-Chinese-Taipei pe rson in possession of a PE licence must establish a 
personal PE office to provide engineering services.  Subject to reciprocity, a non-Chinese-Taipei 
                                                      
137 Regulations Governing the Management of and Permit for Foreign Attorneys-at-Law Employing or 
Entering into Partnership with Republic of Ch ina Attorneys and the Attorney Regulation Act. 
138 For further information, see Ministry of Finance, Taxation Agency online information.  Viewed at:  
http://www.dot.gov.tw [14 August 2009]. 
139 For further information, see Construction and Planning Agency online information.  Viewed at:  
http://www.cpami.gov.tw [14 August 2009]. WT/TPR/S/232 Trade Policy Review 
Page 106 
 
 
engineering consulting firm may set up a branch or  a subsidiary to offer services in the territory, 
provided it meets certain requirements, including th e condition that the chairperson or representative 
of the company is a PE with a Chinese Taipei licence.  This requirement does not apply if the firm has 
been registered in its home country for more than  five years and has accumu lated contracts worth at 
least NT$2 billion over the past five years.140  At the end of 2009, there were 4 non-Chinese-Taipei 
PE and 11 overseas engineering firms in Chinese Taipei. 
                                                      
140 For more information, see Public Construction Commission online information.  Viewed at:  
http://www.pcc.gov.tw [14 August 2009]. Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 107 
 
 
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