Hi, I live in Taiwan, so can help out here.
Compared to most modern countries (which Taiwan definately is) the cost of living is quite cheap here. The previous answer mentioned starting salaries. In fact, the Japanese salary is a little higher, but a person can save MUCH more in Taiwan.
A pack of cigarettes is about $1.50 U.S.
I make a about 2,500 US a month, yet my apartment is only $300, and that's for a furnished 2 bedroom with gate security, plus a swimming pool and gym in the building.
Of course, much can depend on where you live on the island. Taipei is much more expensive than the smaller cities and towns, but still affordable by western standards.
Let me know if you need any help.