Taiwan (traditional Chinese: 臺灣 or 台灣; simplified Chinese: 台湾; Tongyong Pinyin: Táiwan; Hanyu Pinyin: Táiwān; Wade-Giles: T'ai²-wan¹; Taiwanese (Hokkien): Tâi-oân/Tāi-oân (historically 大灣/台員/大員/台圓/大圓/台窩灣)) is an island in East Asia. "Taiwan" is also commonly used to refer to the territories governed by the Republic of China (ROC) and to ROC itself, which governs the island of Taiwan, Orchid Island and Green Island in the Pacific off the Taiwan coast, the Pescadores in the Taiwan Strait, and Kinmen and the Matsu Islands off the coast of mainland Fujian. The island groups of Taiwan and Penghu (except the municipalities of Taipei and Kaohsiung) are officially administered as Taiwan Province of the ROC. However, in practice, almost all government power is exercised at the national and local (city/county) levels.
Taiwan is mostly mountainous in the east and gently sloping plains in the west. The Penghu Islands (the Pescadores) are west of Taiwan (Satellite photo by NASA).
Taiwan is also currently claimed by the People's Republic of China (PRC) although the PRC has never controlled Taiwan or any of the current ROC territory commonly referred to as "Taiwan". The PRC justifies its claim by arguing that the PRC succeeded the ROC in 1949, and pointing out that the ROC had ruled Taiwan for four years from 1945 to 1949.
The main island of Taiwan, also known as Formosa (from Portuguese (Ilha) Formosa, meaning "beautiful (island)"), is located in East Asia off the coast of mainland China, southwest of the main islands of Japan but directly west of the end of Japan's Ryukyu Islands, and north-northwest of the Philippines. It is bound to the east by the Pacific Ocean, to the south by the South China Sea and the Luzon Strait, to the west by the Taiwan Strait and to the north by the East China Sea. The island is 394 kilometers (245 miles) long and 144 kilometers (89 miles) wide and consists of steep mountains covered by tropical and subtropical vegetation.
Today the Republic of China has a dynamic capitalist, export-driven economy with gradually decreasing state involvement in investment and foreign trade. In keeping with this trend, some large government-owned banks and industrial firms are being privatized. Real growth in GDP has averaged about eight percent during the past three decades. Exports have provided the primary impetus for industrialization. The trade surplus is substantial, and foreign reserves are the world's fifth largest as of 31 December 2007.The Republic of China's current GDP (PPP) per capita is equal to the average of EU Countries.
The Republic of China has its own currency, the New Taiwan dollar.
Agriculture constitutes only two percent of the GDP, down from 35 percent in 1952. Traditional labor-intensive industries are steadily being moved offshore and with more capital and technology-intensive industries replacing them. The ROC has become a major foreign investor in the PRC, Thailand, Indonesia, the Philippines, Malaysia, and Vietnam. It is estimated that some 50,000 Taiwanese businesses and 1,000,000 businesspeople and their dependents are established in the PRC.
Because of its conservative financial approach and its entrepreneurial strengths, the ROC suffered little compared with many of its neighbors from the 1997 Asian Financial Crisis. Unlike its neighbors South Korea and Japan, the Taiwanese economy is dominated by small and medium sized businesses, rather than the large business groups. The global economic downturn, however, combined with poor policy coordination by the new administration and increasing bad debts in the banking system, pushed Taiwan into recession in 2001, the first whole year of negative growth since 1947. Due to the relocation of many manufacturing and labor intensive industries to the PRC, unemployment also reached a level not seen since the 1970s oil crisis. This became a major issue in the 2004 presidential election. Growth averaged more than 4% in the 2002-2006 period and the unemployment rate fell below 4%.
The ROC often joins international organizations under a politically neutral name. The ROC is a member of governmental trade organizations such as the World Trade Organization under the name Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu since 2002.
The island of Taiwan lies some 120 kilometers off the southeastern coast of mainland China, across the Taiwan Strait, and has an area of 35,801 km2 (13,822.8 sq mi). The East China Sea lies to the north, the Philippine Sea to the east, the Luzon Strait directly to the south and the South China Sea to the southwest. The island is characterized by the contrast between the eastern two-thirds, consisting mostly of rugged mountains running in five ranges from the northern to the southern tip of the island, and the flat to gently rolling plains in the west that are also home to most of Taiwan's population. Taiwan's highest point is the Yu Shan at 3,952 meters, and there are five other peaks over 3,500 meters. This makes it the world's seventh-highest island. Taroko National Park, located on the mountainous eastern side of the island, has good examples of mountainous terrain, gorges and erosion caused by a swiftly flowing river.
The shape of the main island of Taiwan is similar to a sweet potato seen in a south-to-north direction, and therefore, Taiwanese people, especially the Min-nan division, often call themselves "children of the Sweet Potato."There are also other interpretations of the island shape, one of which is a whale in the ocean (the Pacific Ocean) if viewed in a west-to-east direction, which is a common orientation in ancient maps, plotted either by Western explorers or the Qing Dynasty.
The island of Taiwan lies in a complex tectonic area between the Eurasian Plate and the Philippine Plate. The upper part of the crust on the island is primarily made up of a series of terranes, mostly old island arcs which have been forced together by the collision of the Eurasian and Philippine plates. These have been further uplifted as a result of the detachment of a portion of the Eurasian Plate as it subducted beneath the Philippine Plate, a process which left the crust under Taiwan more buoyant.
The major seismic faults in Taiwan correspond to the various suture zones between the various terranes. These have produced major quakes throughout the history of the island. On September 21, 1999, a 7.3 quake known as the "Chi-Chi earthquake" occurred.