Taiwan Today

Mr. president and distinguished members of the Legislative Yuan:

The 67th meeting of your esteemed Yuan opens today just a short time after the Spring Fes­tival. This is also the beginning of the 70th year since the establish­ment of our Republic. Both in­ternal and external factors are developing along lines favorable to our national resurgence. Optimism and vigor are to be seen everywhere, at home and abroad, demonstrating the strong con­fidence of our people in the fu­ture of their country. Before be­ginning my report on administra­tive activities, I should like to take this opportunity to extend my sincere greetings to all of you and my special congratulations to the newly elected members.

The Executive Yuan has in the last year sent your esteemed Yuan more legislative proposals than ever before as a consequence of the need to cope with internal and external situations and to accelerate the pace of national development. You have given your support in the deliberation and approval of these proposals, perfecting them with the addition of your views. I must again express my appreciation. The close cooperation between the legislative and executive branches provides con­clusive evidence of our political harmony, progress and augmented national strength.

Looking backward and ahead in the seventies of our country

The seventies of the Republic of China is a crucial decade. Politi­cally, it is the decisive period for the benevolent government based on Dr. Sun Yat-sen's Three Principles of the People (Nationalism, Democracy and Social Welfare) to defeat the tyrannical rule of the Communists. Economically, it is the historic moment for us to further advance our industry and develop our science and technology so as to enter the ranks of the developed countries. While we are marching forward into this era of the seventies, let us look back into the sixties. During the decade just past, our country was beset with adversities that included the waning of international justice, the betrayal of our country by many other nations in order to appease the Chinese Communist regime, the successive energy crises and the passing of our great leader, President Chiang Kai-shek. For­tunately, we Chinese people can pass tests and stand up to trials. Our people at home and abroad, soldiers and civilians alike, have joined hands and hearts, gritted their teeth in determination and planted their feet on firm ground, thus overcoming all difficulties and adversities under the able leadership of President Chiang Ching-kuo. We have speeded up national development and added to national strength. The administrative achievements recorded under the Three Principles of the People in this bastion of national recovery have become the brilliant goal sought by our compatriots on the mainland.

Last year was one of self­-reliance in which we called on the people of the whole nation to work hard for self-improvement. Compatriots at home and abroad — male and female, young and old — showed their support of the government and their united patriotism through varied, con­crete and enthusiastic deeds. The universal spirit was active and vigorous. All of the people worked hard and contributed their minds and physical strength to national development and national re­covery in the struggle against Communism. This spirit was made especially manifest in the flag-raising ceremony in front of the Presidential Building the morning of New Year's Day. Some 200,000 people, including the old helped by the young and children guided by their parents, turned out of their own free will. Wave after wave of the people shared the warmth of their blood and cast their lots together, even as the passengers on a ship in distress. Tears welling up in the eyes of many, they exemplified their patriotism. This moving occasion filled our hearts with hope and provided augury of our final suc­cess.

In this last decade, overseas Chinese have persevered in up­holding freedom and democracy and supporting the national policy of anti-Communism in the face of international turbulence. This was made manifest when the United States severed diplomatic relations with our country two years ago. Although this constituted a heavy shock in our communities across the world, the overseas Chinese rose to the occasion to demon­strate their great moral courage and patriotism and reinforce anti-Communism. They have broken through adversity on the external battlefield and tided us over in a time of great difficulty. Last year the Chinese Communists engaged in a number of deceptions and conspiracies. The overseas Chinese were not taken in by these. Seeing the prosperity and progress of the free motherland, they expressed renewed confidence in our cause. The overseas Chinese also have recognized the ugly face of the Chinese Communist regime during the trial of the "ten evildoers" and the power struggle on the mainland. The solidarity of over­ seas Chinese communities has been hardened and the Commu­nists have been unable to carry out their united front conspiracies. These judgments are borne out by the results of overseas Chinese organization elections last year. A total victory was won by those who stand for freedom and justice. In reviewing the situation abroad, we may say that our fortunes have been reversed and that we are moving from the ebb to high tide. On the anti-Communist battle-front everywhere, our defense will become an offense.

The consistent principle of our government's administration is to remain in the democratic camp and adhere to our anti-Com­munist policy. Guided by the Three Principles of the People, the government will strive to further the nation's development, try hard to strike a balance between internal and external endeavors, link national defense activities to the livelihood of the people, gear the pursuit of democracy to enforcement of the rule of law, give equal emphasis to agriculture and industry and seek the balanced advance of cities and villages. The living standard and the quality of life will be continuously advanced, while at the same time we augment the tangible and intangible strength of the government. All of our accomplishments are a fruition of the joint efforts of govern­ment and people, who have con­tributed their intelligence and physical strength as well as their sweat and blood. In fact, however, the development of Taiwan, Peng­-hu, Kinmen and Matsu is only a part of our great undertaking of national recovery. We must go even farther so as to advance our success in developing this bastion of national resurgence and there­by provide an example for the re-establishment of a democratic China once we have carried out the sacred task of recovering the mainland. This is the ultimate goal of national development and the common responsibility of all the Chinese.

Only half of our task is finished after traversing 90 miles on our journey of 100 miles. In the next 10 years, we can expect to encounter many more adversi­ties. We must carefully watch for world political and economic storms and also for new united front conspiracies by the Chinese Communists. In so doing we can detect problems before they take shape, solve them as they arise and beat the enemy to the punch. To sum up, we must study all pos­sible changes that may arise in the seventies of the Republic of China, establish an overall, consistent and long-range policy for the decade, and prepare careful measures for any contingency. In the short run, we need to create favorable conditions for carrying out our long-range objectives, place ourselves in a commanding position in this changing world and facilitate the unification and revival of the Republic of China.

We have already sent adminis­trative policy guidelines for fiscal 1982 to your esteemed Yuan. These are the highlights:

- Politically, we shall imple­ment democratic and constitutional government and supervise and guide local elections. We shall improve land administration and enlarge the scope of land consoli­dation. We shall carry out voca­tional training and develop human resources. We shall ensure political morality and improve services to the people.

Diplomatically, we shall remain steadfastly in the demo­cratic camp, enhance our friendship and cooperation with friend­ly countries, and strengthen our substantive relations with the United States and European coun­tries. We shall unite our forces at home and abroad, reinforce the functions of total diplomacy, smash the enemy's conspiracies and open up a new diplomatic horizon.

- In national defense, we shall expand defense industry, accelerate the development and production of sophisticated weap­ons, vigorously renew our armaments, improve the training of the armed forces, step up preparations for mobilization and establish an independent national defense system.

Economically, we shall alleviate the pressures of inflation, carry out plans for energy explo­ration and conservation, strength­ en scientific and technological development, upgrade industry, carry out the second phase of farmland reform, speed village construction projects, improve the investment climate, expand foreign trade, implement various eco­nomic plans and strive for sustained economic growth.

In culture and education, we shall seek improvement of teachers and teaching facilities, aug­ment teaching research, sponsor a basic education conference, raise the level of college education, cultivate more personnel for national development, advance Chinese culture, give vigorous impetus to cultural and creative activities, and heighten the spiritual quality of the people's lives.

In social development, we shall continue construction at the grass roots, augment social security and welfare measures, build more public housing, develop residential communities in a balanced way, improve medical care and public health, work harder to control public hazards, improve police administration and assure social peace.

As we carry out these high priority tasks, I feel deeply that all of us must attach more importance to renovating our concepts, spirit, lives and habits. We should promote the spirit of developing our country through frugality and diligence, thus establishing a life of simplicity based on our traditional virtues. President Chiang Ching-kuo has called on us to make a maximum effort to be diligent and frugal and to go forward with confidence and enthusiasm. Recently your esteemed Yuan has approved revision of organic laws for several government agencies. I appreciate your warm support in this respect. Organization and the size of staffs are being adjusted to meet the requirements of increas­ing activities and to improve administrative efficiency. Our practice will be to use the budget to control administrative outlays and thus see that every position fulfills its prescribed functions. We shall not permit the employment of additional people and the inflation of organizations in an ex­travagant manner. We shall make meticulous calculations regarding budget allocations. We shall save every cent that can be saved. At the same time, we shall set the ex­ample for a simple way of life and refrain totally from extravagance. We shall set ourselves up as examples to assure the progress and the renovation of our society.

Grasping the situation of the world and the enemy

Looking around the world, we can see that the basic confrontation between the democratic na­tions and the Communist bloc is unchanged. But the power structure of international politics has advanced from bipolarism to one of several centers. The Communist bloc is exploiting the contradic­tions of the free world and the inner tunnoil of various countries to expand its influence. The democracies are eager to seek protection but have failed to develop the unity to assure it. They often con­fuse right with wrong and fail to distinguish allies from adversaries.

Two locales are beset with tensions of hot war and another is in the grip of a serious crisis.

One of the hot war areas is Afghanistan. At the close of 1979, Russia bellicosely invaded this country, bringing Southwest Asia and the Middle East under the direct threat of Soviet expansionism. We can expect that the Soviet forces In Afghanistan will remain bogged down and that the Afghan guerrillas will continue to resist. The Soviet Union is having dif­ficulties in trying to transform Afghanistan into one of its satellites. The second area of hot war involves Iran and Iraq. We may say that both of these countries have been crippled. The balance of the world's oil supply has been upset since the start of this conflict and a grave threat posed to the security and peace of the Middle East. The crisis is in Poland. The threat of a nation­wide strike has led to drastic reorganization of the Polish government. The Soviets have intensified their pressure by massing troops along the Polish border. Soviet intervention would have far-reaching consequences in the East­-West confrontation.

In the world of today, the in­fluence of the United States is still inescapable. No matter where a disturbance may be, the United States cannot avoid involvement. The Soviet Union's invasion of Afghanistan and threat to Poland are cases in point. Other examples are the all-out insurgency of the Salvadoran guerrillas and much publicized case of the hostages in Iran. A way out of the hostage crisis was found on the eve of President Reagan's inauguration and was directly related to his determined stand. The release of the U.S. hostages was gratifying to the people of all the world; tension was reduced and war averted. The people of the world want stability and peace, and I am sure that the United States is prepared to playa more positive role in the free world's pursuit of freedom and justice. I respect President Reagan for the strong will and moral courage exemplified in his inaugural address. His statement that the United States would deal loyally with nations that are loyal to it is in accord with the Chinese saying that "One must be faithful in words and respectable in actions." We hope the new U.S. administration will reassert its traditional spirit of safeguarding freedom and democracy, draw a distinct line between friend and foe and strengthen the time-honored and reciprocal coopera­tion between the United States and the Republic of China.

In reviewing the world situation, I must emphasize that geographically our bastion of national revival is located at the pivotal point between Northeast Asia and Southeast Asia and on the route of Korean and Japanese shipping to the Persian Gulf. The Republic of China therefore is a maritime bulwark against Communist expansion into the Pacific. Our posi­tion is crucial. From now on, we shall seek not only to sustain our development with stability but will also make greater contribu­tions to the happiness of free peo­ples. Moreover, we shall strength­en our ability to fight an indepen­dent war in order to assume greater responsibility for the security of the free world and especially for the Western Pacific.

Now let us turn to the changes on the Chinese mainland. The major developments are de­terioration of the economy and the worsening chaos of society. I shall analyze these developments in the following three points:

First, the internal developments of the Chinese Communist regime. The recent trial of the Lin Piao and Chiang Ching cliques and the denigration of Mao Tse-tung thought have exposed the capri­cious power struggle within the Chinese Communist party and demonstrated the failure of Marxist-Leninist Communism on the Chinese mainland. This strug­gle shows that all the crimes and evils of the Chinese Communist regime stem from perverse Marxism-Leninism and Mao Tse­-tung thought and the resulting system. The Communist thought and system are not suitable for China. Chinese Communist rule on the mainland during the past year is an embodiment of criminal acts against the nation and people and characterized by power struggles among the Communist chieftains. We can also see that power strug­gle has not come to a stop with the end of the trial. It can be ex­pected that struggle will be intensified and result in further persecution of the people and more violent mainland disturbances. Although the Chinese Communists will continue attempting to reduce internal tension and deceive the world with the "four modernizations," they cannot carry out this program because of their shortage of money and talented people, their technological backwardness and their ideological confusion. The so-called "four modernizations" is merely a hollow slogan.

Second, the Chinese Com­munists' external policy and conspiracy. On the one hand, the Chinese Communists are developing their anti-hegemonic united front against the Soviet Union. Their strategy is to cover up their political, ideological and economic divergence from the democratic nations in order to deceive the United States, Japan and the democratic countries of Western Europe and persuade them to join hands against the USSR and to supply Communist China with the military, economic, scientific and technological support required to carry out the pipe dream of the "four modernizations." On the other hand, they raise a strident clamor over the so-called "Tai­wan issue." In recent years, they have again and again circulated rumors of peace talks and sought trade, transportation and postal links with us in order to damage our international position and undermine our military and civil­ian morale. These united front undertakings are intended to win time for their armed invasion preparations. We have steadfastly maintained our vigilance against these conspiracies. We have the determination and the confidence to repulse their armed invasion regardless of the timing.

Third, the sharp contrast between this bastion of national recovery and the Chinese mainland. Our experience and achievements in developing this bastion of national revival in accordance with the Three Principles of the People have laid the foundation for our democracy, the rule of law and constitutional government, and provided the blueprint for our prosperous and equalitarian eco­nomic system and happy, peaceful society. These advances are in keeping with the cultural thought of the Chinese people and appropriate to the Chinese way of life. The requirements of Chinese social development also have been met, and we have set an example for the establishment of a free, peaceful and unified China. Our bastion of national recovery provides a point-by-point contrast with the Chinese mainland. This is a contrast between benevolence and tyranny, order and chaos, right and wrong, humanity and bestiality, and morality and wickedness. Another contrast is between one place of freedom, prosperity and progress and another of slavery, poverty and backwardness. As a result of our efforts of the last 31 years, our compatriots on the Chinese mainland have come to understand that only the Republic of China's approach to development and only the fruition of development based on the Three Principles of the People can improve their lives. Now waxing stronger on the main­land are the political movements of "opposing the socialist system," "opposing proletarian dictatorship," "opposing the leadership of the Communist party" and "opposing Marxism-Leninism and Mao Tse-tung thought." It is increasingly clear that the common denominator of these four move­ments is the longing for and support of the government of the Re­public of China.

The Republic of China has become the lighthouse of hope for our compatriots at home and abroad and on the Chinese main­land. The developments in the world and on the Chinese main­land give indication that in this new decade we can be confident of continuing to widen the gap between our waxing strength and the enemy's waning strength and of continuing to ensure a future of greater security, augmented progress and expanded influence while the Chinese Communist regime is becoming more chaotic and increasingly backward and im­poverished. This impressive contrast shows that we have success­ fully laid the foundation for na­tional resurgence and that we shall assuredly win the struggle for na­tional recovery.

Opening up a new vista on the diplomatic front

External relations give us op­portunity to change the situation and create new opportunities for our country.

In our Republic's sixties, we lost some diplomatic friends be­cause of international arrogance and shortsightedness and faced difficulties with our membership in international organizations. As a result of our calm coping with the situation, people-to-people relations have been strengthened despite the termination of some government-to-government rela­tionships; substantial relations have been furthered despite the conclusion of nominal relations. The increase in our economic and trade, scientific and technological, academic, cultural and athletic contacts with free countries have yielded mutual benefits, augmented friendly and cooperative relationships, and increased in­ternational understanding of our country's progress and prosperity.

In the last year, we have ad­hered to our basic spirit of national independence and to principles of equality and reciprocity as we followed a course of honesty and dignity in developing friendly relations with all demo­cratic countries. We shall continue these efforts in the future. Strate­gically, we promote active diplomacy. Relying on our strength, we promote total diplomacy. Seeking openings on the diplomatic front, we promote diversified diplomacy.

In keeping with these guide­lines, we have every confidence in our ability to expand our external activities. This is a breakdown of what we are doing:

- Relations with the United States. Since the establishment of formal relations between the United States and the Chinese Communist regime, we have adjusted our U.S. relations in accordance with requirements. Our government has made improvement of the U.S. relationship its consistent policy. In the last year, agreements have been signed in­volving air transportation, science and technology, textiles and im­munities of representatives of the two sides. The United States has agreed to sell us some weapons, but we have to work harder to obtain more sophisticated weapons for strengthening our defense capability. With reorganization of the U.S. administration, it is to be hoped that our relationship will be further improved.

- Relations with European countries. We have made out­standing progress in promoting substantial relations with Europe during the last year: Such countries as Britain, France, West Germany, Spain, Holland, Greece, Austria and Belgium have established trade, financial and cul­tural organizations in the Repub­lic of China. We have been able to set up corresponding establish­ments in many European countries. Following our purchase of Airbuses from France, the West­ern European countries have been paying more attention to the ROC trade potential. Relations with the Common Market have been improved. To diversify our markets and cope with international economic changes, the government approved direct trade with five Eastern European countries as of the end of 1979. The volume of this trade is being gradually devel­oped.

- Relations with African countries. We are prepared to expand our technological cooperation programs from agriculture into industry, including development of small and medium enterprises, to move from bilateral to multilateral diplomacy and to include countries with which we have no diplomatic relations as well as those with which we do in order to help develop economies that will be resistant to Commu­nist pressures. African nations that severed diplomatic relations with us have been watching our economic growth and our social stability and have come to miss the achievements made in the course of agricultural and other technological cooperation with us. They have indicated they would like to establish substantive eco­nomic, trade and technological relations with us either directly or indirectly. We are examining the situation and setting priorities.

- Relations with Latin American countries. This is the area in which most of our diplomatic relationships are concentrated. Eleven countries still have formal diplomatic relations with us, and we have maintained representative offices in important countries with which we do not have formal relations. In this last year, we have augmented the number of official exchange visits with the countries in which we have embassies and enlarged the scope of cooperative activities. Where we have no diplomatic relations, we are continuing to seek or create favorable opportunities for elevating the status of our repre­sentation.

- Relations with Middle Eastern countries. Saudi Arabia has remained our firm friend with whom we have continued to enlarge and strengthen cooperation. At the end of last year, we held the ROC-Saudi Economic and Technical Cooperation Conference in Taipei and the ROC-Saudi Cultural Cooperation Conference in Riyadh. Relations were drawn closer when the first resident ambassador — of Saudi Arabia assumed his post.

- Exchange visits at higher levels. Last March I accepted the invitations of the Republic of South Africa, Malawi, Swaziland and Lesotho and visited these countries. In May and June, For­eign Minister Chu Fu-sung visited six Central American and Caribbean countries. In September I visited the Central American states of Costa Rica, Panama and Dominca for a sincere exchange of views on the international situa­tion and other matters of com­mon interest with their chiefs of state and other high officials. In October, South African Prime Minister Pieter W. Botha and foreign ministers from some of the Latin American countries visited the Republic of China. These dignitaries were greatly interested in our progress in various fields during recent years and decided to enlarge and augment the scope of their countries' cooperation with us. We believe that closer and more amicable relationships will result from these activities.

Looking back over the past year, we can see that although we encountered difficulties on the diplomatic front, we also made some progress and established a new image internationally. Inter­ national relationships are com­plex, however, and Chinese Communist conspiracies have no end. We must watch for changes and be ready to meet new challenges. As the sayings go, "People help those who help themselves" and "Righteous people can expect support." We are convinced that if we firmly adhere to our position and never cease to work hard, we shall be able to open up a new vista on the diplomatic front.

Overseas Chinese activities are increasing by the day. These were three of our most important tasks in 1980:

Rallying new overseas Chi­nese strength and augmenting the unity of overseas Chinese organi­zations. Since World War II, more and more talented young people have emerged in overseas Chinese communities. To promote unity and cooperation at various overseas Chinese levels, we have strengthened our services and promoted activities in keeping with our principle of "old overseas Chi­nese supporting and leading new overseas Chinese" and "new over­ seas Chinese respecting old over­seas Chinese," This has been our priority task. We have cultivated young cadres in overseas Chinese communities and organized study tours for overseas Chinese youths and for Chinese youths in Hongkong. We have kept in touch with and offered guidance to overseas Chinese who were graduated from schools in Taiwan and have held out helping hands to overseas Chinese young people who are still here.

- Strengthening overseas Chinese education and perpetuating Chinese culture. We have devel­oped a "plan for strengthening overseas Chinese education" under which we are compiling textbooks, improving facilities, supporting schools in financial difficulty, expanding social educa­tion and correspondence courses and continuing to encourage over­seas Chinese students to study in Taiwan.

- Opening up a worldwide anti-Communist vista and consolidating leading overseas Chinese as­sociations. Overseas Chinese around the world have united for self-protection and have expanded their organizations on every continent in recent years. They have played an important role in re­ pulsing the Chinese Communist united front offensive abroad and have indirectly promoted people­-to-people diplomacy.

Forging ahead in democratic constitutional government

As a result of the joint ef­forts of government and people, we have been leading a free, democratic, peaceful and stable life under a political system envied by the people on the main­ land. Regardless of any changes in the world situation, we are determined to march forward along this broad thoroughfare and reach the destination of democracy. In the last year, we have worked hard to accomplish our goal of having more people in politics, thus fulfilling the goal of choosing the best and most capable for public office. We have separated prosecutors from the courts so as to assure the proper functioning of the rule of law. We have augmented the system of local self-government to provide impetus for grass roots construction. We have insisted on political discipline and promoted administrative renovation to make the Republic of China a successful democratic country.

1. Encouraging political parti­cipation and the election of the best and most capable people.

The supplementary parliamentary elections held December 6, 1980, were the first since the coming into effect of the Public Officials Election and Recall Law for the Period of Mobilization to Suppress the Chinese Communist Rebellion. This was an historic occasion for the Republic of China and demonstrated the government's determination to enlarge participation in politics. All elec­tion processes were carried out in a peaceful and harmonious atmos­phere, marking a long step forward in our country's democratic progress, as a result of the respect for law shown by most of the candidates and the equality of competition, the impartial and responsible fulfillment of duties by the election officials and the respect for democracy and rule of law and love of country demon­strated by the voters. These im­portant lessons have been learned from the elections:

Democracy marks a glorious milestone in the constitutional history of the Republic of China, and elections constitute the best yardstick for measuring the progress of democracy and the rule of law. The election purpose of ex­panding political participation and electing the best and most capable people to serve the country assured that the people would be tested in both democracy and respect for the rule of law. The election has shown us that under constitutional rule, anyone pos­sessing the legal qualifications and committing himself to fair competition can participate in the free electoral process.

Promulgation and implemen­tation of the election law has shown that democracy and the rule of law are inseparable. The elections were impartial, open and fair. The election experience we have gained will serve us well in the future. We can keep the good and correct the weaknesses.

Newly elected public officials will strengthen representative bodies at the central level and thus contribute to the functioning of democratic and constitutional rule.

2. Separating the court and the procurators so as to reinforce the rule of law.

Separation of courts and pro­ curators became effective July 1, 1980. The Ministry of Justice under the Executive Yuan was reorganized. The new system seeks to perfect our judicial sys­tem and enhance the functions of both trial courts and prosecution. The laws of the Republic of China have been safeguarded and the rule of law is being strengthened. The Ministry of Justice will con­tinue to ensure public security and prevent crime, thus protect­ing the lives, properties and legal rights of citizens. The ministry is drafting rules for enforcement of the Law on Compensation to become effective on July 1 of this year.

The Ministry of Justice is also cooperating with appropriate or­ganizations to strengthen the "Program to Prevent Juvenile Delinquency." Regular meetings are being held to solve problems arising out of the program's imple­mentation.

3. Strengthening of local self­-government and grass roots construction.

Offices of hsiang and chen mark the basic administrative level and have the most contacts with the people. We can say that the success or failure of national de­velopment will be decided at the grass roots level, and that the pivotal point of the grass roots level is found in the hsiang and chen. The Executive Yuan has held six meetings with hsiang and chen chiefs to seek their opinions about how to strengthen local self-government. The National Ad­ministrative Conference held last July discussed and approved a plan to fortify grass roots organizations of hsiang and chen and county-level cities. This plan, which was approved and imple­mented by the Executive Yuan, calls for readjustment of the or­ganization and personnel of grass roots offices in order to make them more flexible. The power of hsiang and chen chiefs has been increased to spur the operation of grass roots offices. In December of last year, the Executive Yuan approved a Taiwan Provincial Government plan for readjusting the organization and personnel of county and city governments of Taiwan Province.

The population and housing census was successfully conducted on December 28 of last year. The data provided valuable policy making information for the government and data for academic re­search.

Great progress has been made in implementing the "plan for grass roots construction." The Na­tional Administrative Conference held last July recommended an increase in the budget and the addition of contemplated construc­tions. The budget has now reached NT$35.8 billion and 40,000 of the 50,000 projects had been completed by the end of last year. Remaining projects are under way. This plan covers all remote areas in Taiwan as well as Kinmen and Matsu. Projects ate directly concerned with the lives and well-being of the people and thus brings the citizenry's heart into a united effort for their home places and the country. Many people have gone to great lengths to support this government plan, giving their land and other proper­ties and taking part in the work. This is a contribution to the spirit of unification and self-reliance and a moving expression of great harmony.

4. Rectifying administrative mistakes and carrying out administrative renovation.

The government has devoted a good deal of effort to the renovation of political shortcomings. The National Administrative Con­ference formulated the "plan to enhance administrative efficiency and eliminate corruption," which received the approval of the Ex­ecutive Yuan. Meetings on the rectification of political morality have been separately established in the Executive Yuan and by provincial and city governments with responsibility for planning, co­ordinating and supervising. The Central Personnel Administration of the Executive Yuan publishes a monthly report on rewards and punishments that points up helpful contributions to political morality and holds up as notorious examples those who have violated administrative discipline.

The Executive Yuan pays special attention to the discipline of police, land and tax officials, procurators and prison administra­tors. The Ministries of Interior, Finance and Justice have laid down guidelines for improving administrative discipline in keeping with the functional character of such posts.

Further to enhance adminis­trative efficiency and rectify corruption, the Ministry of Justice makes sure that the Investigation Bureau and procurator's offices investigate and prosecute corrup­tion cases strictly and also en­courages the people to report corruption and supply evidence of such crimes. The "center for prevention of corruption and economic crimes" has exposed 102 corruption cases involving 370 persons. Procurators' offices of district courts have handled 215 corruption cases with 392 of­ fenders and 414 cases of mal­feasance with 779 offenders.

Administrative renovation is the motive force of national modernization. In the last year, the Republic of China has placed em­phasis on advancing medium­-range and long-range plans for the improvement of administrative measures; strengthening coordination of research, development and policy; employing systematic be­havioral science to serve the peo­ple; further simplifying the work of grass roots organizations; and on the training of public officials. The government has given special attention to the delegation of responsibility and has checked on implementation in various organizations during the second half of last year.

Government faces new chal­lenges growing out of economic development, changes in the social structure and the people's attainment of a higher educational level. Administrative organizations must continuously absorb new knowl­edge, accept new ideas and employ scientific methods of examining and solving various problems. We are augmenting cooperation and consultation between the administrative and academic fields so as to create a new look in ad­ministrative renovation.

Looking toward the central tasks in national defense development.

In the current stage, national defense is stressing preparations for war and the development of national defense industry.

Our policy of building up the armed forces is intended to en­sure the security of Taiwan, Penghu, Kinmen and Matsu and then to create opportunities for carrying out our task of mainland recovery. This means that our cur­ rent defense and strategic policy must adhere to the principles of "integrating offense with defense" and "fighting independently." We shall stress both ideological warfare and offensive strategy. In the last year, these measures have been adopted in furtherance of our defense tasks:

- Improvement of air de­fenses. We have established an automated air defense system and prescribed joint combat areas where fighters, missiles and antiaircraft guns can be combined for effective integrated defense. Additionally, the government has decided to equip the Air Force with high-performance jet fighters and antiaircraft guns. The number of missiles and combat planes is being increased and the training of air defense personnel stepped up. Air defense deployments over Taiwan, Kinmen, Matsu and Penghu are formidable and we control the air over the Taiwan Straits.

- Strengthening superiority on the sea. Our goals include the use of missiles as standard weap­ons, effective command control and vertical antisubmarine warfare. In this last year the government has carried out various measures to augment our supremacy on the sea, including the renova­tion of major weapons and equipment, improvement of air and sea spotting, improvement of anti­ submarine warfare equipment and the development of new types of ships. The Self-Reliance Squadron of F5E jet fighters and Navy missile boats purchased with public donations have joined the combat forces, thereby contributing to public morale as well as to the strength of the armed forces.

- Augmenting strength for ground warfare. The Armed Forces seek increased firepower and mobility for effective deployments in Taiwan, Penghu, Kinmen and Matsu. Besides drawing up long-range plans for the construction of military fortifications and adjusting the deployment of fight­ing units, the Armed Forces are accelerating the renewal of weapons and equipment, setting up stronger attack units and enhancing our ability to fight on the ground.

- Establishing a flawless sys­tem of garrison security. To guard against Chinese Communist infil­tration and subversion, we have rallied the people to contribute their strength in opposing the united front, infiltrators, surprise attacks and terrorism, thus ensuring the security and prosperity of our bastion of national revival.

I reported to the last two meetings of your esteemed Yuan that the government has established a special fund to accelerate development of national defense industry. The government has set up a special group to study and expedite this plan, relying on experts from at home and abroad. We hope that public and private cooperation will promote research on new weapons. As a result of joint efforts, we are engaged in 14 projects to develop armaments and have made progress. This suggests that we have the capability to build a national defense indus­try, are improving our technical skills and are moving toward the manufacture of our own weapons.

The government has also moved to promote the cooperation between Armed Forces and people; improve the training of of­ficers; augment military training in the schools; provide incentives for enlisted men and thereby strengthen grass roots leadership; and implement the "five-year plan for improving the life of officers and enlisted men" so as to elevate their morale. All of these programs have made good progress. The Vocational Assistance Commis­sion for Retired Servicemen has recorded outstanding achievements in resettling retired service­ men, helping them find jobs, assuring them of medical care, send­ing them to school and providing employment overseas.

Ensuring moderate economic stability and sustained growth

The world economy was in the doldrums last year as a result of sharp increases in the price of oil. Many countries followed a policy of contraction in trying to counter inflation. They adopted protectionist trade measures, thus reducing the real value of our exports. The estimated 6.8 per cent growth rate of our economy was slightly below the projection. The per capita gross national product was NT$82,146 at current prices, the equivalent of US$2,282.

The year brought a sizable in­ crease incommodity prices as a result higher oil prices, the cost of imported materials and wage increases. Compared with 1979, the average wholesale price index was up by 21.54 per cent and the urban consumer price index rose by 19.02 per cent. The main causes of higher commodity prices were oil price increases and re­peated wage boosts. From now on, we must go all out to conserve energy and thus reduce the effect of higher priced oil on the cost of producing our goods. We also need to raise the productivity of labor and improve the quality of our products so as to reduce the pressure of price increases and maintain the competitive edge of our goods in the world marketplace.

Now let me report briefly on the major economic indicators of last year and the major measures the government is taking to cope with the economic situation at home and abroad.

Because of the serious sum­mer drought, our agricultural pro­duction last year was down 1 per cent from 1979. Fortunately, we had a bumper first crop harvest of rice and annual production still reached 2,325,000 metric tons to pass the target of 2,300,000 and allow a surplus.

The government has always been deeply concerned about the lives of farmers. During the drought, the government did its utmost to regulate the supply of irrigation water and helped farmers in the stricken area to grow crops other than rice. Additionally, the government suspended the tax in kind for the second crop, de­ferred the levying of benefit fees for engineering projects, canceled the membership fees of irrigation associations and the wasteland tax on farmland idled by drought, and subsidized irrigation associations in combatting the drought, thus reducing the burden of fanners. On two occasions the government increased the purchase price for rice and helped farmers' associa­tions of all levels buy surplus rice from farmers, thus boosting the price at the place of production and increasing the fanner's in­ come.

To eliminate boom-or-bust fluctuations in hog prices, the Executive Yuan last May adopted the "plan for regulating the production and marketing of hogs" and established an NT$1 billion fund for implementation. The government seeks a balance between hog production and sales to ensure a reasonable price.

Fisheries encountered great difficulties as the result of rising production costs. To alleviate the hardships of fishermen, the gov­ernment subsidized the oil bills of fishing boats in 1980 and aug­mented controls on the import of marine products. The amount of fishery loans was increased and the period for payment extended by a year. Other measures in­cluded the denial of licenses for new fishing boats above 20 tons except for those built to replace obsolete craft and those built under the oceanic fishery development plan or with government en­couragement. The price of fish has increased slightly and the hard­ships of fishing have been assuaged.

The government is continuing to promote the three-year "plan for increasing farmers' income and strengthening the development of villages." In 1980 and 1981, the government appropriated or earmarked NT$3.4 billion annually for improving farm manage­ment and increasing farm produc­tivity. The "land consolidation statute" was enacted, recently and the "farmers' association law" amended. I appreciate your support in both instances. I am sure these laws will spur moderniza­tion of the agricultural structure.

Domestic industrial produc­tion increased only 8 per cent last year owing to the slowdown of real export figure. The figure was down from 8.8 per cent in 1979.

Economic development in the next 10 years will be concentrated on the machinery and electronics industries. The main emphasis in the machinery industry will be on the production of cars and trucks. In electronics, the dominant place will be held by the information industry. To attract private investment in the technology-intensive industries, the Executive Yuan amended the "statute for encouraging investment" last fall. I again express my thanks to you for prompt and painstaking efforts to amend the law by the end of the year.

As a result of dislocation of the energy supply and the soaring price, development and conservation of energy are now regarded worldwide as the crux of success or failure in economic development. The Ministry of Economic Affairs set up an energy commission and an energy research labora­tory last year under the "law governing energy control" with the purpose of improving energy management, development and re­search. To reduce reliance on oil imports, the Executive Yuan has decided to suspend the construc­tion of power plants using oil for fuel. Other fuels will be used. The products of heavy and chemical industries requiring large amounts of energy will in principle be limited to those required domes­tically. Investment overseas in heavy and chemical industries consuming large amounts of energy has been considered.

The ratio between overseas Chinese and foreign investments has changed in recent years. But despite international economic fluctuations, both overseas Chinese and foreign investment is in­creasing. This results from our so­cial stability, continuing economic prosperity and good investment climate. Last year, 471 applications from overseas Chinese and foreign investors were approved for a record amount of US$465 million and an increase of 41.7 per cent over the amount for 1979. The amended statute for encouraging investment became effective January 1 and I am confident that this year's investment will be stimulated.

Foreign trade continued to grow last year Customs statistics show volume of US$39,480 mil­lion, an increase of 28 per cent over the amount in 1979. Exports totaled US$19,770 million and imports US$19,720 million for a favorable balance of US$50 mil­lion. All of these figures exceeded expectations. Most oil-importing countries had deficits. Only the strenuous efforts of everyone concerned produced our small favorable balance. Except for the last quarter, which showed an increase, exports gradually declined. The fact that exports encountered dif­ficulties during the first three quarters should command our at­tention.

Financial and economic policies of the government cannot be separated. Priority financial tasks last year were the acquisition of resources, the strengthening of national financial management, im­provement of the tax system and administration, perfection of the tax structure, certification of fiscal controls, improved management of loans to small and medium businesses and timely adjustment of the price of rice to assure stability in the lives of our people. These measures were carried out under the six-year economic plan. The government also has prepared a "plan for improving local financial administration" and revised the "statute for allocating finan­cial revenues and expenditures." Both laws have been enacted and will be faithfully implemented.

Communications development is essential to economic prosperity and closely related to social welfare and the lives of the people. So the government has al­ways given close attention to this sector. Highlights of communica­tions activities in 1980 included planning of railway improvement in Taipei City, planning for a Taipei mass transit system, improve­ment of highway facilities and traffic order, continuation of five projects among the 12 New Development Projects, implementation of the second phase of the ship­-building plan envisaged in the six­ year economic development plan, expansion of civil aviation facilities, improvement of aviation con­trol and management, postal mechanization and augmentation of facilities, advancement of telecommunications technology and completion of a satellite receiving station to improve weather fore­casting. The preparatory office for Taipei's underground railway pro­ject has stepped up the tempo of its work and construction is scheduled to begin next August. As for the mass transit system in the Taipei area, the Ministry of Communications has asked experienced firms of consulting engineers to submit plans and evalua­tion is already underway.

Strengthening of cultural, educational, scientific and technological development

Cultural and educational development is the key to increasing our national strength and augment­ing our national spirit, whereas scientific and technological development is the main force in assur­ing economic progress and carry­ing out national development. Although the materialistic life has been improved and the social structure altered, the people are still hungry for a better cultural life and the country feels an increasing need for outstanding specialists. This is to say that cultural and educational development calls for both quantitative and qualitative improvement. We must catch up with the advanced nations in scientific and technolo­gical development in order to meet the needs of national moder­nization.

In the last year, we have adopted these cultural and educational measures:

To improve basic education, the government began in 1975 a five-year plan for its development and improvement. We have now reached the last stage of implementation. In fiscal 1980, the gov­ernment budgeted NT$615 mil­lion to subsidize city and county governments in Taiwan, Kinmen and Matsu in undertaking or augmenting major projects and facili­ties for improving basic education. The plan will be completed by next June. The great progress made in basic education will help raise teaching standards.

In the last year, the government has set aside a budget to improve teaching and practice facili­ties at public and private industrial vocational schools. Up to this time, bidding has been held for the procurement of seven kinds of equipment. Efforts also have been made to promote domestic and foreign study for teachers at industrial vocational schools.

Seeking to improve higher education, the government has continued to invite overseas schol­ars to lecture in Taiwan. The newly established Chungshan University at Kaohsiung began enrol­ling students in the 1980 school year. To raise the standard of art education, the government has decided to establish an art college in northern Taiwan. Vigorous pre­parations are under way and the school is expected to open in the 1982 school year. The government has decided to transform provincial colleges into national colleges. In the 1980' school year, the change was effected for the Taiwan Provincial College of Edu­cation and the Kaohsiung Teachers College. National status will be given the Taiwan Provincial Junior College of Technology in Taipei, the Taiwan Provincial Yunlin Junior College of Technology, the Taiwan Provincial Junior College of Agriculture at Chiayi, the Tai­wan Provincial Junior College of Nursing and the Kaohsiung Muni­cipal Junior College of Technology after the 1981 school year. The government has strengthened its assistance to private universities and colleges in the hope that the standards of teachers, teaching and equipment will be steadily raised.

In culture development, these were principal accomplishments last year: (1) Carrying out the "plan to strengthen cultural and recreational activities" in order to cultivate talented artists and literary workers, and the pro­motion of various cultural, art and sports activities to coordinate with activities marking the 70th year of the Republic of China. (2) Accelerating establishment of city and county cultural centers. Since launching of the program in 1979, statutes have been prepared and various construction projects vigorously carried out. We are determined to overcome all difficulties and reach our goal. Some of the cultural centers and li­braries are expected to open in April of this year. Organization of these centers is being planned and their personnel recruited and trained. (3) The Executive Yuan is prepared to establish a cultural development commission to engage in centralized planning for na­tional cultural development to propagate Chinese culture and raise the level of the people's cultural life. The organic plan is ready and will be sent to your es­teemed Yuan for deliberation. (4) Already dispatched to your es­teemed Yuan for consideration is the draft of the "law for preserving cultural assets," including his­toric relics and sites, natural and cultural places, folk arts and customs. (5) To encourage international cultural and educational cooperation, the government has sent missions abroad for visits and performances and in 1980 con­ducted a conference for interna­tional sinologists and professors. These activities encouraged cultural interflow.

These were major measures involving scientific and technological development:

On May 17 of 1979 the Ex­ecutive Yuan completed a "plan for scientific and technological development" intended to accelerate national development, coordinate the strength and resources of the country, promote scientific and technological research and the augmentation of national security with economic growth and the people's welfare as the overall goal. The organizations concerned have cooperated closely for the last year and a half with these exceptional results:

Accelerated cultivation of scientists and technicians. In December of 1980, an estimate of the requirements for talented people for national development dur­ing the next 10 years was com­pleted. Science and technical education has been improved on a basis of this estimate. Measures include the revision or opening of research institutes and departments, enlargement of the coope­ration between colleges and industrial plants 'and improvement of industrial and vocational measures. The result will be the creation of manpower for national develop­ment.

Import of high-level tech­nology. The science industrial park at Hsinchu was opened December 15, 1980. The government has approved 15 high-technology industries with exceptional potential for development to establish plants in the park. Four plants have become operational and another two are under construction. Cooperating with the plants to promote the interflow of per­sonnel and technology are the National Tsinghua University, Na­tional Chiaotung University and the Industrial Technology Research Institute. The Executive Yuan has instructed the National Science Council to coordinate ac­tivities of the various organiza­tions and to determine what technologies should be imported for the development of national de­fense, industry, agriculture, communications and transportation, and medicine and public health. Imports are to be arranged in order of priority. If the technology is crucial, the government and state-operated enterprises will be responsible for the importation. Other technologies will be introduced by academic organizations or industries with government help.

In developing applied science and technology, the government has decided to follow these three courses:

1. Energy. In accordance with provisions of the "statute for energy management," the Ministry of Economic Affairs used the energy development fund to establish on January 6 of this year the Energy Research Laboratories to plan energy conservation and seek alternative sources of energy.

2. Materials. As most of the raw materials used in this country are imported, we must make ef­fective use of them and increase their value with multi-level processing in coordination with en­deavors of industrial upgrading. We need to make a systematic study for the development of material science. Experts from at home and abroad have been invited to participate in the planning. On one hand, we have been promoting material science educa­tion through the improvement of college curricula and industrial study of materials and their relationship to energy. On the other hand, we are preparing to set up a materials research institute, to orchestrate the activities of material research organizations and to increase research capability regarding metallic, ceramic, high-molecular and electronic materials to keep pace with the develop­ment of technology-intensive and national defense industries.

3. Computers and informa­tion. The 1980s is a period of information. Computers and micro-processors are widely used in management, production and communications. Our country must develop an information industry so as to increase our productivity and improve our produc­tion techniques. The Ministry of Economic Affairs sponsored an Information Week in December, 1980, to introduce this field to the general public. Information education has been augmented in colleges and universities, and the Industrial Technology Research Institute has been placed in charge of developing and manufacturing integrated circuits and microprocessors. The institute has now transferred integrated circuit manufacturing technology to private plants established at the Hsinchu industrial park. The insti­tute also has developed the use of computers in teaching and the production of such computers has begun. Besides this, the government has instructed the council to promote the information indus­try, create a computer and micro­ processing market and train information personnel at all levels through the cooperation of gov­ernment, academic and industrial circles.

4. Scientific and technological survey. To provide a compre­hensive assessment of scientific and technological plans for policy­ making purposes, the Executive Yuan has invited outstanding ex­perts from abroad to come to Tai­wan to carry out field inspections and undertake Joint researches with domestic personnel before making definitive proposals. One plan was to conduct a nationwide scientific and technological survey to determine the manpower and financial means at the disposal of government and private enter­prises for scientific and technological development. This measure­ment of national ability in science and technology should provide a good reference point in the making of scientific and technological development policy. This survey was carried out in August of 1980 by the National Science Council in cooperation with other organizations and will be repeated annually. A report has been submitted.

Since the plan for scientific and technological development was announced, the concerned agencies of the Executive Yuan have planned 194 projects. In the last year and a half, 43 projects have been completed, 145 are being implemented and 6 are under study. Results of some of the major projects are included in this report. Generally speaking, progress is satisfactory. All of the projects are under control and subject to reassessment based on regular meetings. All have been executed earnestly.

Promoting the people's welfare through social development

Peace, harmony, happiness and welfare' are the objectives of our social development. When people pay attention to their own society and seek to safeguard a stable environment, the atmosphere should be harmonious. As the saying has it, "All roads lead to Rome." People from all walks of life will be worthy of their keep.

So that people may share the blessings of social prosperity, we feel the need to promote the cen­tral core of a reasonable distribution of social wealth, to continuously improve social welfare and to foster austerity. The quali­ty of the people's lives will then be elevated both materially and spiritually. The government's measures of social development are aimed in this direction.

The government's major measures to promote social devel­opment last year included the fol­lowing:

- Development of new town­ ships and construction of public housing. New townships are at Linkou, Taichung Harbor and Tapingting. The Taiwan Provincial Government and Kaohsiung City Government have pursued this plan with vigor. In keeping with the six-year economic development plan, some 106,900 units of public housing are scheduled for completion between 1976 and 1981. Of these, 24,660 units or 23.1 per cent have been com­pleted and 24,704 units or 23.2 per cent are under construction. Lands will be acquired for the remaining units.

- Reinforcement of social welfare measures. The government is continuously seeking to im­prove the worker's welfare, ex­pand vocational training, pro­vide job placement services and improve the living conditions of people in remote areas. Social welfare regulations have been pro­mulgated to contribute to community development and the care of children, the aged and the handicapped. Substantive measures include the encouragement of local governments and private groups to set up nurseries, professional training for health and child care workers, abetting of the farm system of child care by neighbors, construction of housing for aged males, provision of physical ex­aminations for the handicapped, encouragement of rehabilitation center construction by private groups, instructions to provincial and city governments to draw up long-term community develop­ment plans and support of the three-pronged program of basic community projects, workers' welfare and a system of spiritual ethics. Social welfare services and measures have been carried out to raise the people's standard of living, elevate the social mores and improve the quality of life.

- Improvement of social ethos. In 1979, the Executive Yuan approved "important meas­ures for improving the social ethos." The main points involve the advocacy of a diligent and simple life, the elimination of gambling, eroticism and narcotics, and the promotion of healthy recreational activities. Since then, we have implemented such measures as the ten new requirements for government employees (82 have been punished for violations), increased luxury taxes, higher license fees for businesses concerned with pleasure-seeking and prohibition of less