Western historians believed that the wars of religion in Europe were finally over with the signing of the Treaty of Westphalia in 1648 and the basis was laid for the creation of the new international system of nation states.

In 1793, a British delegation led by George MacCartney visited Beijing with the purpose to establish a fair trade with China, but the results disappointed the British. However, over the past few decades, the capitalist system of the European nations and the United States were introduced worldwide with the development of the international political and trade network.

The western countries first adopted the Silver Standard system and then the Bi-Metallism System, and finally, the Gold Standard; thus, and international financial system was gradually formed, free competition and market mechanism had become the basic ideology of mercantilism for countries such as Europe and the United States.

Meanwhile, following the close exchange of international politics and economy, different kinds of international co-operation also emerged. More and more bi-lateral and multi-lateral treaties were signed among nations to create international organizations for regional development.

The financial co-operation among nations included banking, land tax, trade and tariff matters. In the mid-19th century, new ideas of customs, banking and tax collection were introduced into China. However, due to the defeat of China in several major wars against foreign invaders, the Ching Dynasty failed to create a modernized national system. Foreign countries used unequal treaties to compete with each other for the economic benefits from China.

The tariff was under the control of foreign administrations. The principle of ‘most favored nation status,’ ‘extra-territoriality’ and the huge amount of reparations payable under these unequal treaties made the situation even worse. The related issues had become the focal point for Chinese people to stand up against the foreign powers

After the establishment of the Republic of China, one of the most important jobs of the Minister of Finance was to borrow money from foreign countries to support national coffer because the political and financial parts of the nation were never unified.

The new customs system had always been under the control of foreign administrations since its introduction in 1854, as well as the salt tax. As Dr. Sun Yat-Sen noted, one of the most dangerous challenges China faced was the low tariff rate and high interest rate and this situation impeded China’s ability to compete internationally. The Chinese government, with mandate from the people, focused on how to win back the control of its own customs by diplomatic channel through attending international conferences and the use of media influence.

The crisis created by the Great Depression of 1929 in the United States and its impact on the global economy was believed to be the main reason that led to the emerging of autocracy.

In consequence, the United States decided to found international organizations with other Allied nations in order to confront the challenges which would arise after World War II. These organizations included the International Monetary Fund, the International Bank for Reconstruction and Development and also the General Agreement on Tariffs and Trade.

The International Monetary Fund and the International Bank for Reconstruction and Development were signed at the Bretton Woods of the United States, therefore, it is also called the Bretton Woods System. The former focused on the stability of the international financial system, while the latter focused on the rehabilitation of countries which had suffered destruction during the war. The purpose of the General Agreement on Tariffs and Trade was to reduce import tariffs and to remove trade barriers.

On January 1st, 1942, the Republic of China joined with twenty-six Allied nations and signed the ‘Declaration by the United Nations’ in Washington D. C. In January 1943, new equal treaties were signed between China, the United States and Great Britain. The allied nations all recognized China’s contribution to World War II, thus China’s international status rose considerably.

In December 1943, China, the United States, Great Britain and the Soviet Union signed the ‘Moscow Declaration’ and proposed to establish a universal international organization of the world. On 25th April, 1945, the Republic of China was one of the major nations at the United Nations Conference on International Organization in San Francisco. The representative of the Republic of China, Wellington Koo signed the ‘Charter of the United Nations’ on 26th June, 1945.

After the Republic of China became a member of the United Nations, China also joined different financial organizations such as the International Monetary Fund, the International Bank for Reconstruction and Development, the International Development Association, the International Finance Corporation, and also the General Agreement on Tariffs and Trade.

On 8th December, 1949, the Head of the Executive Yuan, Premier Yen Hsi-Shan announced in Taipei the withdrawal of the Republic of China to Taiwan. The Republic of China still remained its membership in the United Nations, and was a permanent member of the UN Security Council until 26th October, 1971.

Although Taiwan withdrew from the General Agreement on Tariffs and Trade in 1950, there were still representatives of the Republic of China in all of the other organizations including the International Monetary Fund and the International Bank for Reconstruction and Development. The Minister of Finance represented our government to attend all important international conferences during that time.

After the Republic of China withdrew its membership from the United Nations in November 1971, Taiwan was deprived of its position as an observer of the General Agreement on Tariffs and Trade; and in 1980, its positions in the International Monetary Fund and the International Bank for Reconstruction and Development was also gone. Taiwan finally rejoined the General Agreement on Tariffs and Trade in 1990, through the efforts of the government and the people with the title of ‘The Customs Territory of Taiwan, Penghu, Kinmen and Matsu’; and eventually became the 144th member of the World Trade Organization in November 2002.

In 1966, the Republic of China became one of the founding members of the Asian Development Bank and has made a significant contribution to the regional co-operation in Asia.

Other financial organizations which Taiwan still keeps membership are the Advisory Centre on WTO Law, the Technical Committee on Rules of Origin and the Technical Committee on Customs Valuation under the World Customs Organization (WCO), Asia-Pacific Economic Co-operation (APEC), the South-East Asian Central Banks (SEACEN), the Central American Bank for Economic Integration (CABEI), the Study Group on Asian Tax Administration and Research (SGATAR), the Asia/Pacific Group on Money Laundering (APG), and the Egmont Group of Financial Intelligence Units.

The Ministry of Finance also participates in other kinds of international co-operation by joining international tax organizations and the Organization for Economic Co-operation and Development (OECD) as an observer, and attending conferences related to tax treaties. Many undertakings have also been signed with different nations including Free Trade Agreements, and various training seminars for international finance cooperation personnel. With the experience of economic development in Taiwan, we are prepared for the virtual global economic and trade relations.