Taiwan Today

Economic Programs Premier C. K. Yen has said that in carrying out government programs, eco­nomic development and social progress will be the two priority tasks as the Republic of China enters the third year of its fourth four-year plan. He made the remarks in an interview with David Bonavia of the Far Eastern Economic Review of Hongkong. "Ever since the beginning of the first four-year plan," he said, "Taiwan has been paying attention to both goals in order to attain a balanced development of the entire economy." Premier Yen declared that priorities will be given to the following: -Agriculture: To supply the domestic food requirement; develop export of agricul­tural products; promote processing industries for agricultural products. -Industry: To modernize and rationalize existing industries; promote export industries; develop more sophisticated indus­tries; move toward the establishment of heavy industries. -Transportation and communications: To modernize transport equipment; maximize support to the development of maritime transportation; promote tourism. -Emphasis will be placed on develop­ment and utilization of human resources, so­cial welfare and city and suburban develop­ment. Human resource projects include edu­cation, training in skills and crafts, scientific research and development, and employment services. Asked what serious problem Taiwan still has the Premier said the first is popula­tion: "While our population growth has been on the decline in recent years, the present rate of about 3 per cent a year is still one of the highest in the world. This is a heavy burden on the economy and places a drag on the rise of living standards. Fortunately, with spread of education and industrialization, an increasing number of our people have come to realize that it is an advantage to have a smaller family, and the birth rate has begun to drop. "Secondly, land and natural resources are limited. The total area of cultivated land has remained substantially the same over the past decade. While this handicap has been somewhat offset by very intensive farming—yields per unit area of land per year are among the highest in the world—the increase in population and the need for more farm output for export as well as for domestic consumption have made the problem increasingly felt." "Moreover," he added, "as our industry grows, our few natural resources have na­turally become smaller relative to the need for raw materials to feed our industrial complex. Thus, our reliance on imports is increased. This means that we have to push our exports to pay for needed imports. "Thirdly, while our exports have ex­panded very gratifyingly as a result of gov­ernment policy and private initiative, increasing difficulties are encountered in terms of competition from other developing coun­tries and in terms of import barriers set up by advanced countries. To cope with this situation, my government has put increasing emphasis not only on cost reduction and quality improvement but also on diversifi­cation." Asked how population factors affect economic and social planning and the pro­posed solution, Premier Yen said: "A fast growing population has created numerous economic and social problems: employment, education, housing and urban development, to mention only a few. In order to solve these, we have set our economic growth rate at 7 per cent per annum throughout the fourth four-year economic development plan (1965-1968) in the hope that employment will grow at a faster rate than the labor force, given the limited availability of external resources." "A program to expand junior high schools and vocational schools will be im­plemented. Social welfare (public health and medical care, child welfare, city and subur­ban development and public housing projects) will also be strengthened during the period." Display Center A comprehensive industrial exhibition of the principal manufactures and exports of Taiwan is permanently established at the Chinese Display Center in Taipei. The graphic exhibition will close in two months but the displays will be retained. The exhibition is jointly sponsored by the Foreign Exchange and Trade Commis­sion, Council for International Economic Cooperation and Development, China Productivity and Trade Center, Overseas Chinese Affairs Commission, China Development Corporation and Chinese Display Center. The products are from 111 manufacturers with export records. Display rooms are on the 4th, 6th and 7th floors and are air-conditioned. Selected items are for sale at the 6th floor service counter. Private discussions with exhibitors' representatives may be held on the premises. Multilingual trans­lation services and stenographic facilities are available. In this one exhibition place, Chinese products from the traditional to the ultramodern can be seen. The staff is ready to assist visitors in every way and there is a keen interest in comments. The graphics section shows the economy of the Republic of China has passed the take-off point and entered upon an orbit of growth at a constantly accelerating rate. Statistics show rates of production increase that are among the world's highest, and this despite the mid-1965 termination of U.S. economic aid. Industry grew by 15 per cent and agriculture by 8.7 per cent in 1965, the exhibi­tion indicated. The gross national product reached an all-time high of US$2,752,825,000 and per capita income set a record of US$173.45. China is traditionally an agricultural country. However, this is no longer the case in the province of Taiwan as a result of the three four-year economic development plans carried out since 1953. In that year, agriculture accounted for 39.4 per cent of the net domestic product and industry for 20.9 per cent. By 1965, agriculture stood at 26.7 per cent and industry bad forged into the lead at 27.3 per cent. Exports reflect a similar metamorphosis. The 1953 composition was 79.6 per cent for processed agricultural products, 13.1 per cent for agricultural products, 6.4 per cent for industry and 0.9 per cent for others. In 1965 industry stood at 41.3 per cent, agriculture at 27.4 cent, processed agricultural products at 27.2 per cent and others 4.1 per cent. Economic prosperity and social stability have brought a spurt in foreign investment. For 1965, the capital influx from abroad was US$48,154,632, raising the total since 1951 to nearly US$225 million from 709 different investors. Taiwan has many favorable con­ditions for foreign investment, including lib­eral tax benefits and other incentives, low initial and operating costs, and an abundant supply of low-wage, easily trained labor. The report said establishment of a num­ber of industrial estates has stimulated both domestic and foreign investment. One of them—at the southwest port of Kaohsiung­—is exclusively for export processing. In this zone, import duties, sales and commodity taxes are waived and business taxes are exempted for the first five years. The govern­ment provides plant structures or sites, as well as power, water, rail and port facilities. Electronic Investments Three electronics plants with foreign investment began operations in October, and construction of five others was approved by the government in the same month. This brings foreign-financed electronics enterprises in Taiwan to 11 with capitalization of more than US$34 million. The government-sponsored Industrial Development and Investment Center an­nounced last month the Taiwan United States Industrial Company, with US$115,180 invested by an American, E. J. Rehfeldt, had opened its suburban Taipei plant to produce coils. There are 50 workers. The Tatung Engineering Company, one of the largest electrical appliance manufac­turers in Taiwan, last month received a loan of US$334,672 from the IBM Corporation of the United States and began production of memory planes. The Peitou plant has 98 workers. IDIC said the Shirasuna Denki Manu­facturing Company of Japan has invested US$25,000 in the Shin-Shirasuna Denki Manufacturing Company of Taiwan for the production of transistors and transformers. The plant at the Kaohsiung Export Process­ing Zone began production on October 6. It employs 40. IDIC said the five foreign investment applications approved in October are for the manufacture of electronic components. All five plants will be established in the Kaohsiung Export Processing Zone. Among the new investors, IDIC said, the Sarkes Tarzian (Taiwan) Company, a subsidiary of U.S. Sarkes Tarzian Inc., is the biggest with capitalization of US$2,595,000. It has not yet decided how many persons the plant will employ. The product will be VHF tuners. Soon to open is the Electronic Building Elements Industries Company, a US$450,­000 investment of the Dutch Philips Corporation. The plant will make electronic memory stock and give employment of 94 persons. Other new enterprises are the Kaohsiung Electronic Company to be established by the U.S. General Micro Electronics Inc., Sune­tics (Taiwan) Ltd. to be established by Japanese Sunetics Ltd. (Forgflo Corp.) and the Mitzumi Electric Co. (Taiwan) to be established by Mitzumi Electric Company of Japan. Investment totals US$900,000, IDIC said. S. Y. Dao, secretary general of the Council for International Economic Co­operation and Development, said much for­eign investment interest was shown in electronics during 1966. He reported that in addition to the 11 enterprises already estab­lished or approved, 9 others are awaiting government consideration. Two large U.S.-financed electronics plants opened earlier in the year. One was the Philco Taiwan Corporation with a US$24 million investment from the Philco Corporation of Philadelphia and the other the TRW Electronic Components Company with a US$2.4 million investment from TRW Inc. of Chicago. Hongkong has expressed fear that rapid expansion of Taiwan's electronics industry poses a threat to growth of electronics in the British colony. Because of lower labor costs and other favorable investment condi­tions here, overseas capital is showing a preference for Taiwan. S. Y. Dao said the basic costs of con­structing and operating a plant in Taiwan are among the lowest in the world. He said these costs are average: (1) land—US$0.3 to US$0.5 per square foot, (2) construction (reinforced concrete)—US$2 to US$3 per square foot, (3) power—below one US cent per kwh, (4) water—2 to 4 US cents per cubic meter. Dao said labor costs are among the lowest anywhere, averaging no more than US$20 per month for a semi-skilled worker. This availability of disciplined, industrious and easily trained labor at low wages is an important factor in development of Taiwan's electronics industry and is a principal at­traction for overseas investors. Technical Export By the end of October, the Republic of China had sent 909 technicians to work in other countries and had given training in Taiwan to 3,575 foreign technicians under international cooperation programs. The figures were contained in a report from the Executive Yuan (Cabinet), which said that the program, begun in 1961, has extended Chinese developmental experience to developing countries. Technical assistance has been given in agriculture, industry, handicrafts and medical care. The report said at the end of October, 793 technicians were still working in 21 countries. Most were members of farm demonstration teams in Africa, Latin America, the Middle East and Southeast Asia. In Africa, the report said, 397 agron­omists were working in 16 nations. The breakdown is: Liberia (13), Libya (3), the Ivory Coast (158), Gabon (34), Rwanda (14). Cameroun (25,) Niger (25), Senegal (14), Sierra Leone (22), Upper Volta (20), Chad (20), Togo (12), Malawi (12), Gambia (12), the Congo (Kinshasa) (9) and Dahomey (4). In Latin America, farm demonstration teams of 6 members are working in the Dominican Republic and of 14 members in Brazil. The report said a 5-member farm team is in Saudi Arabia, an 80-member agricultural mission is in Vietnam and a 19-member demonstration team is in the Philippines. All are helping grow rice, vegetables and other crops. A total of 272 technicians is working in Vietnam, Rwanda, Ethiopia and Libya. There is a 22-man electric power mission and a 10-member medical team in Vietnam, a 2-man handicraft team and a 3-man brewery team in Rwanda and an 8-member veterinary team in Ethiopia. Technicians in Libya total 272, including 107 doctors, 92 nurses, 25 engineers and 3 weather specialists. In collaboration with the U.S. Aid Training Program, the Republic of China has taught 2,946 technicians from 17 countries. Most were Asians. Thailand led with 873 participants, followed by 692 participants from the Ryukyus, 629 from Vietnam, 385 from the Philippines, 256 from Korea and 111 from other countries. In addition, the Republic of China has conducted a number of industrial and agricultural seminars and in-service training for foreign groups. Since 1962, seven agricul­tural seminars, each lasting about five months, have been held for African agricultural technicians with attendance of 305 from 28 coun­tries. For Southeast Asian technicians, two agricultural seminars have been held. They were attended by 97 participants from Thai­land, Vietnam, the Philippines and Malaysia. Twenty-seven participants from Thailand, Vietnam and the Philippines took part in an industrial seminar in May, 1964. From October, 1964, to December, 1965, a series of six seminars was conducted for 200 Malay­sian farmers' association leaders. In 1963 and 1964, two land reform seminars were held for representatives of Latin American countries. Crops for Africa Five thousand hectares of land has been reclaimed and 400 farm extension workers have been trained in the Ivory Coast, West Africa, by the Chinese agricultural mission there, a report from Abidjan said last month. The Chinese demonstration group in the Ivory Coast, now totaling 158 members, is the largest sent abroad by the Republic of China. It started work in 1963 with 14 members. Because of outstanding achievements, the membership was increased at the request of the government. The reports said the team has helped grow rice with an average yield of 6,300 kilograms per hectare, more than five times the usual figure. The local practice is to grow only one crop a year. The Chinese grow two; thus the increase in annual yield is more than 10 times. The Chinese agricultural mission led by Chou Yueh-ou is working throughout the Ivory Coast. There are 23 sub-groups made up of from two to six members. The Joint Commission on Rural Re­construction reported last month that the Republic of China soon will dispatch a veterinary team to Chad. Veterinarians already are working in Ethiopia. JCRR's animal husbandry chief, Dr. Robert Lee, was in Chad last September af­ter attending meetings in Munich and Madrid and suggested dispatch of the team. In October, the Republic of China sent Li Ju-nan, director of housing in the Taiwan Provincial Bureau of Public Works, to Chad. He will help carry out an urban reconstruction project with a grant of US$1 million from the Republic of China. Antoine K. Dakoure, acting minister of information, youths and sports of Upper Volta, said in Taipei last month that the Chinese farm demonstration in his country is "fantastic and admirable". He visited Tai­wan at the invitation of the Chinese govern­ment. Vice Minister of Foreign Affairs H. K. Yang said in Freetown, the capital of Sierra Leone, last month that the Republic of China will give more technical help to that country, if requested. There has been a Chinese farm team of 22 members there. Nigeria sent three senior engineers to study the Republic of China's electric power industry in October. At the invitation of the World Bank, Sun Yuan-suan, former president of the Taiwan Power Company, has been working in Nigeria as chief of its national power company since September, 1964.