Foreign investment exceeds 1972 projection
Foreign and overseas Chinese investment totaled between US$120,000,000 and US$130,000,000 last year.
That is less than the record US$160,000,000 of 1971 but well over the US$97,000,000 projection.
In 1971, Austrian investment in an integrated steel mill amounted to US$60,000,000. In 1972, the Ford Motor Company set the pace at US$36,000,000.
Investment prospects for 1973 are bright. A shipyard project at Kaoshiung is expected to attract US$100,000,000 in investment and loans.
Oil tankers of over 130,000 tons would be built at Kaohsiung. European investors and especially British shipping men have shown interest in entering into a joint venture with the Chinese government.
The International Telephone and Telegraph Corporation of the United States, one of the largest such companies in the world, is about to conclude negotiations for a Taiwan investment project for US$9,000,000 in capital and US$4,000,000 in loans.
The ITT plant would produce electronic switching equipment for the domestic telephone system. Taiwan is still using the outmoded closed bar switching. When the output of the ITT plant satisfies local needs, it will begin to export.
More incentives slated for investors
The government is planning further liberalization of investment regulations to attract foreign investment.
These changes are contemplated:
- No requisition or purchase of an enterprise in which the investor holds a minimum of 51 per cent of the stock during the first 50 years.
- If an investor cannot complete the approved project due to practical difficulties, he may ask to transfer the capital to another investment or request withdrawal of the funds.
- Two years after a project's completion, the investor may ask a foreign exchange settlement for 15 per cent of the capital annually.
- Annual remittance of earnings.
Minister K. T. Li bids for U.S. investment
Finance Minister K.T. Li has called on American industrialists to avail themselves of good investment opportunities in Taiwan.
American manufacturers can cooperate with local enterprises in mutually profitable endeavors, he said.
"You can offer your technologies and equipment and we, on our part, can provide low-cost labor of good quality for the development of joint business ventures," Li said, adding that "such joint ventures, while benefiting our own economy, will equally benefit your country in your efforts to redress your trade imbalance and stimulate your industrial growth by expanding your existing overseas markets and opening up new overseas outlets."
Minister Li expressed the belief that the investment climate in Taiwan will become even more attractive in the seventies.
"As far as U.S. investors are concerned, they not only can continue to look to big profits, but also may find us better partners to cooperate with in manufacturing for exports to Southeast Asia and other parts of the world as our own level of technology and quality of manpower improve," he said.
Taiwan is the best place for the United States to open a third trade center in Asia, an American Embassy official believes.
William N. Morell, economic counselor of the American Embassy, said the United States is planning to set up a third trade center in Asia. Existing centers are in Tokyo and Bangkok.
Authoritative sources said negotiations were already under way between Chinese and American officials.
Sino-American trade is expected to reach US$5 billion in 1976.
The Republic of China will become the sixth ranking trade partner of the United States by 1976, Morell added.
Trade of US$6.5 b. expected this year
The Board of Foreign Trade predicts two-way trade will reach US$6.5 billion in 1973.
The projection is that the ROC will export US$3,471,000,000 and import US$3,082,000,000 for a favorable balance of US$389,000,000.
The BOFT broke down 1973 exports to: agricultural and fishery products, US$190,000,000; canned food, US$294,000,000; textiles, leather, timber and rubber goods, US$1,415,000,000; non-metal mineral products, US$84,000,000; chemicals, US$100,000,000; iron, steel and metals, US$106,000,000; machinery, transportation and electrical equipment US$814,000,000; and others, US$446,000,000.
Imports were broken down to: wheat and corn, US$470,000,000; mineral products, US$211,000,000; textiles, leather, timber, paper and rubber, US$335,000,000; chemical products, US$355,000,000; iron and steel, US$300,000,000; electrical, transportation and machinery equipment, US$1,135,000,000; and others, US$276,000,000.
By 1976, when the sixth four-year plan ends, Taiwan trade will reach US$9 billion in terms of 1972 prices.
Living standards show dramatic rise
Living conditions in the Republic of China have improved markedly in the last 20 years.
The calorie intake rose from 2,078 calories in 1952 to 2,714 calories in 1971. The consumption of protein rose from 49 to 73 grams in the same period.
Consumption of synthetic fibers and woolen textiles was virtually zero in 1952. As of 1971, synthetic consumption was 7.9 lbs and that of wool 1.2 lbs.
The annual consumption of cement per person has jumped from 51 to 274 kilograms; steel bars from 3 to 32 kilograms; red bricks from 52 to 103 pieces and electricity per family from 33 to 212 kwh.
There were 0.2 motorcycles per 1,000 persons in 1952 and 56 in 1971.
Cars increased from 1 to 9 per 1,000 persons and bicycles from 63 to 139 in the same period.
Schools increased from 1,739 to 4,036.
The average life span rose from 58 to 68.
Radios increased from 18 to 117 per 1,000 persons.
There was no television in 1952. In 1971 there were 48 sets per 1,000 persons.
Cabinet takes action to curb price rises
The Cabinet moved to curb creeping inflation stimulated by the rapid rise in foreign exchange reserves.
Premier Chiang Ching-kuo instructed the Ministry of Finance and the Central Bank to maintain monetary and economic stability. The money supply increased by some 30 per cent in 1972.
The Premier told the Finance Ministry and the Central Bank to slow the issuance of currency. He also showed concern over higher consumer prices, especially for foods.
According to the Ministry of Economic Affairs, the wholesale price index rose by 4.37 per cent during the January-October period. The retail price index in urban areas climbed by 5.16 per cent. Food and leather goods led the advance.
The Cabinet expressed fear of ballooning prices during the lunar new year season in late January and early February.
Income tax exemption levels are increased
The Legislative Yuan raised exemption rates for the 1973 individual income tax.
This would cost the treasury more than NT$200 million (US$5 million). However, the lawmakers suggested that tax loopholes be plugged to increase collections from the rich.
The new law increases the individual exemption 20 per cent to NT$10,000 (US$250) or NT$20,000 for a couple.
The exemption for each dependent will be NT$7,000 (US$175) compared with the present NT$6,000 (US$150).
The increases were recommended by the Legislative Yuan's finance committee because of rising commodity prices.
Stock market index reaches record of 203
The Taipei stock market has never had it so good, the Securities and Exchange Commission reported.
Hu Hsiang-lin, chairman of the commission, said the index reached a record 203 at the end of November.
There was a slight decline in stock prices in August and September when Tokyo was edging toward detente with Red China.
Paradoxically, the market bounced back with vigor in October when the Japanese government established diplomatic ties with Peiping.
Hu attributed the bullish market to these factors:
- Listed companies have registered sizable business expansion.
- Idle capital is seeking profitable outlets.
- Taiwan has a fast growing economy and political stability.
- There is a psychological spillover from booming markets in Hongkong and Japan.
Hu reported 57 listed stocks had a combined value of NT$11,126 million (US$278.15 million). At the end of October, trading volume had reached NT$46,770 million (US$1,169.25 million), representing growth of 14.08 per cent over the corresponding period in 1971.
Also in circulation were 11 debentures totaling NT$584 million (US$14.6 million) and 18 government bond issues worth NT$8,400 million (US$210 million).
Rail electrification will start in 1973
The government plans to implement the long-heralded railway electrification project in 1973.
The first phase calls for electrification of the line between Keelung and Changhua, including the coastal line from Chunan to Changhua. This will take three years.
In the second phase, electrification will be carried out from Changhua to Kaohsiung. This will take another three years. After completion of the project, travel time from Keelung to Kaohsiung will be reduced from six to four hours. Expresses will travel at 150 kilometers (93 miles) per hour.
Financing of electrification has not been completed. The government has decided to keep the cost under US$132,000,000. An international tender will be held to find foreign support.
Communications Minister Henry Kao said the supplier of the equipment will be asked to help obtain loans.
Tracks from Taipei to Wanhua will be placed underground at a cost of US$125 million. The subway project will be financed in part with international loans. The Taipei City Government and Taiwan Provincial Government will make contributions.
The Taiwan Railway Administration is also planning a computerized ticket vending system.
Design of airport nearing completion
Designing of the Taoyuan International Airport will be completed by the end of June, Mao Ying-tsu, director of the Civil Aeronautics Administration, reported.
Taipei International Airport will not be able to accommodate swelling air traffic after 1976.
The new airport will be completed in three stages. With 1990 completion, the airport will have an area of more than 1,000 hectares, three run ways and six parallel taxiways.
Sixty-four aircraft will be handled at a time. There will be three terminal buildings for international flights and one for domestic service.
First-stage construction will take three and a half years and meet traffic requirements until 1980.
This phase will cost an estimated NT$3,400 million (US$85 million) with this breakdown: NT$500 million (US$12.5 million) for land requisition, NT$800 million (US$20 million) for procurement of equipment and facilities, NT$1,810 million (US$45.25 million) for building materials and construction, NT$120 million (US$3 million) for designing and NT$170 million (US$4.25 million) for administrative and miscellaneous costs.
Mao said the Civil Aeronautics Administration will raise NT$1,000 million (US$25 million) for the project. The rest of the money will come from the treasury (US$12.5 million), foreign loans (US$20 million) and loans from domestic banks and financing groups (US$27.5 million).
If the airport is completed on schedule, Mao added, it will help attract 1,730,000 more international tourists to Taiwan between 1976 and 1980. National income would be increased by NT$839 million (US$20.975 million) during the same period.
He estimated the airport would earn more than NT$500 million (US$15 million) a year after completion. The earnings for the first decade are estimated at NT$8,300 million (US$207.5 million).
Development program mapped by government
Government authorities have announced policies for implementation of the fiscal 1974 economic reconstruction program beginning July 1.
The program calls for:
- Strengthening of international economic and technical cooperation and addition of foreign capital.
- Improvement of the productive structure of agriculture.
- Acceleration of the exploitation of natural gas and petroleum.
- Development of industries for steel, shipbuilding, basic metals and heavy machinery.
- Improvement of the management of state enterprises.
- Revision of the patent rights system.
- Assistance to export processing industries.
- Planning of water resources.
- Integration of the transportation system, including the South-North Expressway, rail electrification and improvement of traffic conditions in Taipei.
- Merchant ship replacement.
- Expansion of postal and telecommunication facilities.
Regional development plans completed
The government has completed the planning for regional development during the next 20 years to further economic growth.
C.C. Chang, vice chairman of the Council for International Economic Cooperation and Development, said the island will be divided into seven regions: Taipei and Keelung, Hsinchu and Miaoli, Taichung, Chiayi and Yunlin, Kaohsiung and Tainan, Ilan and eastern Taiwan.
The government will build rapid transit and communication systems connecting the centers of the seven regions. Systems will include a freeway from north to south in western Taiwan, highway networks with the regional centers as starting points, electrification of railways and the expansion of airports and seaports.
Chang said a highway network will connect all towns and cities with the rapid transit system. After completion of the network, no one will be more than two hours from rapid transit.
Domestic and international telecommunications systems will be expanded and improved.
Capital and labor helping each other
Harmonious relations between capital and labor have played a significant role in the economic development of the Republic of China, Vice President C.K. Yen said.
Quoting the Confucian saying "Not to do to others what you would not wish done to yourself," the Vice President said this philosophy and the government's labor policies have helped free China make satisfactory economic progress during the last two decades.
Yen addressed the Asian Seminar on Trade Union, Democracy and Freedom.
Labor policies of the government aim at improving the livelihood of workers and their productive skills, promoting harmony and cooperation between capital and labor and establishing a social insurance system.
These goals, the Vice President said, are stipulated in the Chinese Constitution and "are in complete agreement with the objectives of ICFTU."
The labor movement and labor administration in free China are striving for the same goals as ICFTU, he said.
Vice President Yen pointed to the labor insurance program, which covers more than a million workers. "If their dependents are included, about one third of the population in the Taiwan area benefits from this system," he said.
The Vice President pointed out that the 10 Chinese delegates attending the seminar were members of the parliament.
He called attention of the delegates to the hundreds of millions of Chinese workers who are suffering under the yoke of Chinese Communist tyranny.
"It is urgent to expose the evil nature of the Chinese Communists and to give a chance to the suffering millions on the Chinese mainland to regain their birthright as free workers in a democratic society," he said.
Chou Hsueh-hsing, chairman of the Chinese Federation of Labor and director of the seminar, welcomed the delegates and urged them to express their opinions on how trade union democracy and freedom should be protected.
Chase Manhattan opens Taipei branch
With good wishes and congratulations from government officials and leading businessmen, Chase Manhattan Bank, N.A., opened its doors for business at 72 Nanking East Road, Section 2, Taipei.
Minister of Finance K.T. Li said the Chase opening was another "landmark for the future of this country's sixth four-year plan."
He said it was obvious that the international banking community had confidence in the "staying power" of the Republic of China and confidence in its future.
U.S. Ambassador Walter P. McConaughy, who cut the ribbon to open the branch, said Chase "was coming home to the Republic of China." He pointed out the bank's active role in China before 1949.
The ambassador said he believed Chase would expedite financing and foreign trade and contribute to the "unparalleled industrial growth" of the country.
Several senior Chase executives from New York and other Asian capitals were on hand for the opening.
Among them was A.R. Wentworth, senior vice president of the bank's International Department. He said the bank would develop means of innovative financing in this market.
The manager of the branch is Arie Buitelaar. More than 40 local employees were given intensive training.
CPC will construct refinery at Taoyuan
The Chinese Petroleum Corporation is planning a refinery of 100,000 barrels daily capacity in Taoyuan and will develop Shenao, a fishing port in northern Taiwan, as an oil port.
Economic Affairs Vice Minister Chang Kwang-shih told the budget committee of the Legislative Yuan that construction of the refinery would be completed in 1976.
The vice minister, a former CPC vice president, said Shenao will accommodate tankers of up to 30,000 tons by the end of next year.
Chang said work is under way to expand the capacity of the Kaohsiung refinery from 200,000 to 300,000 barrels daily.
CPC is cooperating with foreign oil companies in prospecting for oil and gas in and around Taiwan. The company is doing its own prospecting in the Miaoli area, Chang said.
Liu Keh-shu, CPC board chairman, said a cracking plant using ethane as a raw material is under construction at Kaohsiung.
US$180 m. contracts go to U.S. companies
Two U.S. companies won three contracts worth US$180 million for construction of the Republic of China's second nuclear power plant.
Westinghouse won a US$60 million contract for the supply of two turbine generators with a combined capacity of 900,000 kilowatts. General Motors received a US$70 million contract for two reactors and a US$50 million contract for atomic fuel.
There were five bidders, including West German and Japanese companies.
Total investment in nuclear power plants will amount to US$500 million. The Taiwan Power Company has signed with an American engineering consultant firm to obtain a contractor through open tender.
Installation of the two reactors is scheduled for completion in 1978 and 1979.