President Chiang Ching-kuo has directed economic and finance ministries to plan petroleum purchases for next year and to sponsor technology improvements to promote exports.
The President's directives included instructions to:
- Explore new markets and promote ROC products.
- Produce more export products, improve the quality and encourage invention.
- Allocate another NT$5 billion (about US$139 million) from the Central Bank of China to finance small and medium-size businesses.
- Step up petroleum exploration.
- Strengthen government services to benefit the people.
The President cited the Central Bank of China for its effectiveness in financing small and medium-size businesses.
The bank offered loans of NT$5 billion to such businesses in July of last year. Some 4,000 companies benefited.
Growth expected to surpass target
Economic growth is expected to exceed the goal of 8.5 percent set for this year.
A senior economic official said the economy grew by 8.7 percent in the first nine months of 1979.
'This shows the country can maintain economic development despite the changed world situation and the energy crisis," he said, and credited the hard work of the people and good guidance from the government.
ROC-U.S. trade continues to grow rapidly despite Washington's switch of diplomatic recognition from Taipei to Peiping. "Economic, technical and science cooperation is being strengthened," he said.
The government will adopt the following measures to ensure sustained economic growth:
- Import raw materials to maintain stable commodity prices.
- Boost agricultural production and increase the income of farmers.
- Develop heavy, chemical and defense industries.
- Uphold free commerce and seek balanced trade.
- Improve the investment climate.
Investment sets all-time record
Foreign and overseas Chinese investment reached an all-time high of US$251,881,000 in the first nine months of 1979. This was an increase of US$113,618,000 or 82.17 percent over the same period in 1978. The volume also broke the year's record of US$248 million recorded in 1973. The 1978 total was US$220 million.
Foreign investors contributed US$157,975,000 and overseas Chinese US$93,906,000.
Overseas Chinese businessmen from Hong Kong supplied US$9.256 million and those in Japan US$5 million.
Investments from the United States totaled US$70.97 million. Japan provided US$45.23 million and Europe US$19.8 million.
Electronics received US$96.56 million or 38.35 percent of the total. Services got US$65 million and the chemical industry US$21 million.
One hundred technical cooperation agreements were signed, 64 of them with Japanese and 20 with Americans.
Twenty-nine technical cooperation accords were in chemicals, 24 in electronics, 17 in machinery and instruments, 11 in basic metals and metal products, and 5 in rubber and plastic industries.
Exports show growth of 37.4 percent
Exports registered 37.4 percent growth to reach US$1,507.6 million in September.
The Directorate General of Budget, Accounting and Statistics said the September increase was the second largest this year, trailing February's 63.7 percent. In terms of value, it was slightly lower than July's US$1,514 million.
Imports advanced 38.4 percent to US$1,254.2 million and the surplus was US$253.4 million compared with US$31.9 million in August.
Trade was up 31.9 percent to US$22,448.4 million for the nine months. Exports climbed 28.6 percent to US$11,747.5 million and imports 35.7 percent to US$10,700.9 million. The favorable balance was US$1,046.6 million, down from the US$1,248.7 million in the same period of 1978.
Five major export industries registered healthy growth in September: textiles 22.1 percent to US$342.5 million; electrical machinery, 54.2 percent to US$288.5 million; plywood, 36.8 percent to US$98.6 million; machinery and metal products, 49.5 percent to US$135.6 million; and plastics, 33.1 percent to US$101 million.
Of imports, crude petroleum registered growth of 87.2 percent to US$232.9 million, followed by machine tools, 38.5 percent to US$145.3 million; basic metals, 29.5 percent to US$135.3 million; chemicals, 27.8 percent to US$106.3 million; and electrical machinery, 18.4 percent to US$140.6 million.
For the first nine months, the nation's bill for crude oil was US$1,538.4 million to top the import list.
Exports to the United States rose 22.8 percent to US$544.2 million in September. Imports were up 31.2 percent to US$265.6 million. Exports to Japan jumped 53.6 percent to US$203.7 million, while imports from that country advanced 21.5 percent to US$372.3 million.
The first three quarters of the year saw exports to the United States rise 12.4 percent to US$4,165.6 million. Imports rose 40.2 percent to US$2,437.3 million. The trade surplus with the U.S. was US$1,728.3 million compared with US$1,967.1 million in the same period of 1978.
Textiles do better than Asian rivals
Export growth of Taiwan textiles is expected to exceed that of its Asian rivals in 1979, industry sources said.
Taiwan's exports are expected to hit an all-time high of US$4.2 billion for a gain of more than US$1.1 billion over 1978.
Japan's textile exports are estimated at US$4.5 billion and Korea's at US$5 billion.
Last year Japan exported US$4.79 billion worth of textiles, Korea US$3.98 billion and Hong Kong US$3.88 billion.
The sources attributed Taiwan growth to a bid for new markets and price competitiveness. Japan and Korea were hit by higher wages and inflation.
2 million TV sets to U.S. in 6 months
Taiwan exported more than 2 million television sets to the United States in the first half of this year, the Industrial Development Bureau said.
This represented a decline resulting from U.S. import controls.
Exports of Taiwan color sets to the U.S. market totaled 480,000, down 22 percent compared with the first six months of 1978. Exports of black and white sets to the United States totaled 1,530,000.
The United States imported 3.42 million TVs during the six months, including 750,000 color sets.
South Korea sold 980,000 sets to the United States in the first half of 1979, an increase of 88 percent.
Singapore and Mexico are increasing their exports of TV sets to the United States, IDB said.
General Motors chosen for venture
General Motors came from behind the Ford Motor Company to enter into a joint venture with the Taiwan Machinery Manufacturing Corporation to make heavy duty trucks and buses in Taiwan.
The decision was made by the Ministry of Economic Affairs and the Ministry of National Defense following competition among General Motors, Ford, International Harvester and Chrysler U.K.
General Motors was preferred because of its diesel engine production plan, its rank as the biggest U.S. automaker and suitability of its products to the Taiwan market.
General Motors has proposed capital investment from US$50 million to US$80 million with 40 percent each from GM and TMMC and 20 percent from Central Investment.
Incentives sought for coal mining
The Taiwan Provincial Bureau of Mines is urging the government to provide incentives for coal mining. Production has continued to drop because of inadequate investment and the declining number of miners.
Provincial business volume up sharply
Thirty-four provincial enterprises chalked up whopping increases in business volume in the five fiscal years from 1975 through 1979.
In fiscal 1975, the combined business volume of 34 enterprises (excluding the Taiwan Tobacco & Wine Monopoly Bureau) stood at NT$65.1 billion (about US$1,808 million). In fiscal 1979, the figure was NT$115.6 billion (about US$3,211 million), up 77.69 percent.
Combined earnings totaled NT$4.9 billion (about US$136 million) in 1975 and NT$9.5 billion (about US$264 million) in 1979, up 95 percent.
The Provincial Government has been plowing most of the profits back into expansion.
In fiscal 1979, only NT$1.73 billion (about US$48 million) of profits went to the government.
Monopoly sales for fiscal 1979 brought a profit of NT$3.9 billion (about US$109 million).
The demand for cigarettes and alcoholic beverages has exceeded the supply. Beer and cigarettes have been imported from the United States.
An official of the bureau suggested the government appropriate funds to recruit and train miners.
Coal production in July totaled 226,738 metric tons, 33,262 tons short of the target.
Output from January through July was 1.5 million tons, 8.5 percent under target. The 1978 figure was 2.88 million tons compared with the target of 3 million tons.
At least 2,000 coal miners change their occupation each year.
Oil exploration shows promise
The Chinese Petroleum Corporation has drilled 12 wells on land in the last year. Three struck crude oil and natural gas.
CPC can supply 5 million cubic meters of gas daily. In fiscal 1979, which ended June 30, it produced 242,187 kiloliters of crude and 1,951,155,000 cubic meters of gas.
Of the eight wells drilled offshore in the last year, two struck oil and gas. Output is small but gives hope of better finds in offshore prospecting.
CPC is cooperating with two Philippine companies, Radico Resources and Sulu Sea, in exploring waters near the Philippines. It is prospecting in Indonesia with seven other companies, and in Colombia with City Service of the U.S. Joint prospecting arrangements are sought in Australia and South America.
CPC's refining capacity has reached 480,000 barrels daily. In fiscal 1979, the company refined 19,527,146 kiloliters. More facilities will be added in the next four years.
To provide the petrochemical industry with basic materials, CPC completed its third naphtha cracking plant at the end of last year and is planning a fourth naphtha cracker with annual capacity of 350,000 metric tons of ethylene and 180,000 tons of propylene.
Upon completion of the fourth cracker in July of 1983, the petrochemical industry will be self-sufficient in raw materials.
European footwear quotas avoided
Western European countries won't impose quotas on footwear imports from the Republic of China within the foreseeable future, according to an official of the Taiwan Footwear Manufacturers' Association.
A 22-member footwear mission returned from a month's tour of Europe.
ECC officials were made aware that Taiwan will not dump footwear in Europe and said quotas will not be necessary.
Taiwan footwear is inferior to that of Europe. Productivity lags, too. A London plant employing 500 turns out 11,000 pairs of high quality shoes daily, three to four times the Taiwan production rate.
Exports to Europe account for less than 15 percent of the footwear total, which is dominated by plastic shoes. Europeans prefer leather shoes.
Rice available for Southeast Asia
The Taiwan Provincial Food Bureau is taking steps to export surplus rice to Southeast Asia.
Taiwan's stockpile totals 920,000 metric tons compared with the reserve requirement of 500,000 tons.
The world rice price exceeds US$340 per ton. "This is the right time to export our surplus rice," a food official said.
The bureau will try to export 420,000 tons in the next few months. Indonesia is expected to be the major customer.
Rice production has exceeded demand in recent years and the local rice price is low.
The government exported some rice last year but suspended sales because of the low price.
Bankers of Europe like Taiwan's looks
European bankers have started showing a keen interest in the Taiwan market and are expressing willingness to take part in the economic development of Free China, Finance Minister Philip C.C. Chang said.
Chang visited several countries after attending the World Bank Conference and International Monetary Fund Conference in Belgrade. He said bankers in West Germany, France and Switzerland will send representatives to Taiwan to explore business opportunities.
European banks formerly concentrated their Asian operations in South Korea. Some were mesmerized by the possibility of getting rich on the Chinese mainland.
Now they have discovered that the mainland market is an illusion and that the Taiwan potential is large, Chang said.
Processing zones attracting capital
The three export processing zones in Taiwan have attracted investments totaling US$270 million.
Some 300 foreign and Chinese companies have supplied the capital.
The zones are at Kaohsiung (KEPZ), nearby Nantze (NEPZ) and Taichung (TEPZ).
Exports from the zones totaled US$906 million in 1978 and may reach US$1.5 billion this year.
Because of the improved quality of local products, the zones are buying more raw materials and capital goods from domestic suppliers. Up to the end of September, US$699.6 million worth of products had been purchased at home.
The zones employed 80,394 workers at the end of September.
State enterprises will be expanded
The government will invest NT$600 billion (about US$16.7 billion) in the state enterprises from 1981 through 1986.
The lion's share will go to such energy-related industries as the Chinese Petroleum Corporation, Taiwan Power Company and petrochemical plants.
These investments will amount to NT$545.5 billion (about US$15.2 billion). The money will be used for construction of the second, third and fourth nuclear power plants, oil exploration on land and at sea, construction of a fourth naphtha cracking unit and the building of oil storage tanks.
By 1986, Taiwan will be generating 78.5 billion kilowatt hours of electricity. The annual supply of petroleum products will total 26.82 million kiloliters and that of natural gas 4.3 billion cubic meters.
The metal industry will get NT$36.1 billion (about US$1 billion). Investments will be made in aluminum, copper, lead, pig iron and steel production.
Investment in such heavy industry as machinery, repair docks and boilers will total NT$15.4 billion (about US$428 million).
The chemical industry will receive NT$14.9 billion (about US$414 million).
Investment in agriculture will amount to NT$9.9 billion (about US$275 million) with emphasis on hog raising, and the production of sugar and fertilizer.