At least NT$2 billion (US$50 million) is available to the Economic Development Fund for its first year of operation, a spokesman for the Council for International Economic Cooperation and Development said.
EDF was set up under CIECD under an Executive Yuan (Cabinet) decision. It will provide long-term loans for financing economic development projects.
"For the time being," the spokesman said, "EDF will be able to use NT$2 billion." Of the fund NT$500 million (US$12.5 million) comes from the CIECD deposit under Special Account No. 14.
This deposit is from an interest-free loan of US$11 million CIECD received from the Agency for International Development 11 years ago.
The spokesman said the remaining NT$1.5 billion (US$37.5 million) will come from the Central Bank of China as medium or long-term loans.
He said EDF does not supersede the Sino-American Fund for Economic and Social Development (SAFESD), which has in the past extended loans totaling NT$2 billion (US$50 million) each year.
"The two funds will supplement each other," the spokesman said.
EDF has decided to extend a long-term loan to the China Steel Corporation, which is building an integrated steel mill at Kaohsiung.
The NT$360 million (US$9 million) loan will carry annual interest of 7.5 per cent. Repayment will start five years after approval.
Other public and private enterprises may apply to EDF for loans, the CIECD spokesman said. Loans will have to be used for building factories or purchasing new production equipment.
Export-Import Bank considers new loans
ROC withdrawal from the United Nations has not shaken the faith of the U.S. Export-Import Bank in Taiwan's economic future, an Eximbank representative said,
John McDonnell, Far East representative of the bank, said, "At present we have on hand applications for loans and guarantees (to Taiwan) totaling over US$40 million.
"I can assure you that Eximbank continues to welcome applications for such loans and guarantees to support the export of U.S. products to the market here.
"We now have outstanding loans and guarantees to Taiwan amounting to over US$200 million. The total of past and presently outstanding loans and guarantees to the Republic of China exceeds US$400 million.
"The bank now has under consideration requests for large new credits to the Republic of China on which a favorable decision is expected very soon.
"We have been pleased with our banking relations with Taiwan enterprises in the past and we look forward to an excellent relationship in the future.
"We have been impressed not only by the very rapid growth of this economy but by the soundness of its domestic and international financial position.
"We expect a great future for your economy and for U.S. trade and investment here which, as you know, my government is encouraging."
Loans OKd for three petrochemical plants
The Export-Import Bank and other commercial banks of the United States have approved US$40,550,000 loans to the Chinese Petroleum Corporation to build three petrochemical plants.
Another U.S. bank, the Fidelity Bank, is ready to extend a loan of several million US dollars, a CPC spokesman said.
The Export-Import Bank is loaning US$20,250,000 and commercial hanks US$20,300,000 repayable in 10 years. The Export-Import loan bears 6 per cent interest and the loans from commercial banks carry a floating interest rate.
CPC plans two petrochemical plants at Kaohsiung and one at Hsinchu. Cost will exceed US$53 million. Additional funds are sought from the Central Trust of China and the Bank of Communications. Plants are expected to be completed by the end of 1974.
World Bank loans will be sought
The government plans to apply for World Bank loans totaling US$200 million in the next year or two to finance several important projects.
Allocations will include US$22 million for telecommunications, US$20 million for the China Development Corporation, US$25 million for power development, US$45 million for Taipei Waterworks expansion, US$2 million for fishery education and unspecified amounts for railway electrification and agricultural promotion.
Agreement on three loans amounting to US$67 million is expected in the next few months. These will go to power development, the China Development Corporation and telecommunications expansion.
The World Bank extended loans exceeding US$70 million for railway and power development projects last year.
Target of 8.5% for 1972 economic growth
The Council for International Economic Cooperation and Development has set the target for economic growth in 1972 at 8.5 per cent.
The target is almost two percentage points below the 1971 record and has been set in consideration of such factors as the international situation and the state of economic development.
Individual targets are 4 per cent for agriculture, 12.2 per cent for industry, 8.5 per cent for transportation and communications and 7 per cent for services.
Under the CIECD plan, 50.3 per cent of fixed investment will go to industrial development with chemical industries getting the lion's share.
Agricultural investment will receive 8.3 per cent.
To encourage savings, measures will be taken to curb private spending. The accepted level of private spending is fixed at 53.3 per cent of the GNP. Government spending is set at 18 per cent of the GNP.
Capital formation is estimated at NT$80.4 billion (US$2.01 billion), or 28.5 per cent of the 1972 GNP.
The growth of export trade is estimated at 22.2 per cent, well below the 1971 performance. CIECD said the lower target reflects growing protectionism in industrially advanced countries, international monetary confusion, increasing competition from other developing countries and free China's diplomatic position.
However, 1972 export volume will continue to rise in terms of GNP percentage. Import volume is expected to rise by 27.5 per cent.
CIECD envisions a trade surplus of about US$5 million compared with last year's US$180 million.
Trade will reach US$13 b. in 1980
Taiwan's export trade is expected to grow at a rate of 12.1 per cent a year in the next decade, the Government Information Office said.
By 1980, two-way trade will be US$13 billion. It was US$4 billion last year.
Industrial products will account for 71.3 per cent of exports in 1980.
Of 1980 imports, 58.3 per cent will be agricultural products and raw materials for industry. Capital equipment will make up 24.7 per cent of imports.
Exports will constitute an increasingly large percentage of the gross national product, rising from 31.4 per cent in 1970 to 43.6 per cent in 1980.
Government assistance will be provided to establish a large trading firm and to streamline the overseas marketing system.
Other steps to step up exports will include diversification, exploration of new markets, tax rebates for processors, export insurance and improvement of quality.
Import controls will be further eased and efforts made to keep foreign exchange reserves sufficient to meet import needs for four months.
Loans will be sought from international banking institutions and capital from foreign investors.
Technical knowhow will be imported through technical cooperation.
Government watches Peiping trade moves
Foreign trade will reach US$5 billion in 1972, H.K. Shao, deputy director of the Board of Foreign Trade, predicted.
The senior trade official reported trade amounted to US$4,085,200,000 in 1971 with exports of US$2,135,500,000 and imports of US$1,949,700,000. The surplus was US$185,800,000.
Commenting on the recent overtures of Red China to Common Market nations, Shao said it is no secret that Peiping has long been interested in enlarging its trade with the Common Market. He said Peiping's move would not affect trade between the ROC and Common Market countries.
The Republic of China has signed a textile export agreement with the Common Market which does not discriminate against other countries.
He said the government is watching the expanding trade between Red China and Canada.
Last year was a good year for Sino-Canadian trade with the balance favorable to Taiwan.
Trade centers slated for Tokyo, Singapore
The Board of Foreign Trade has decided to help industry establish trade promotion centers in Tokyo and Singapore.
A textile marketing center will be established in Tokyo and a machinery display and service center in Singapore.
Due to improvement of quality, Taiwan-made machines have a promising market overseas, especially in Southeast Asia.
Value of machinery exports in 1971 was US$79 million, up 52 per cent.
BOFT noted that industrial exports to Japan totaled US$113 million last year, down 1.5 per cent from 1970. However, textile exports to Japan were up 21.8 per cent to US$42 million.
It is necessary to promote textile exports to Japan because quotas have been set in the United States, Canada and European Common Market.
KEPZ imports totaled US$120 m. last year
The Kaohsiung Export Processing Zone imported US$120 million worth of production equipment and raw materials last year.
A total of 64.28 per cent of the imports (US$72 million) came from Japan. Hongkong was the second biggest supplier with 12.29 per cent (US$13 million).
KEPZ factories import raw materials or components and process them for export.
Imports reaching the Taichung Export Processing Zone totaled US$6,910,000 in 1971, Japan supplied 80.8 per cent (US$5,590,000).
The Nantzu Export Processing Zone at Kaohsiung purchased US$5,730,000 worth of equipment and raw material in less than a year. Japan provided 73.49 per cent (US$4,210,000).
Sino-Japanese group to be divided
The Committee for the Promotion of Sino-Japanese Cooperation will be reorganized to meet the changing international situation.
The committee will be split. One part will retain the current name and carryon its role of promoting cooperation between the two peoples. The other will be named the Sino-Japanese Economic Committee.
The move was initiated by the Japanese side in recognition of certain realities of Japan—namely that the "political" nature of the committee has kept some Japanese business leaders from participation.
Chinese and Japanese leaders will meet in April to discuss structural reorganization.
The committee has been meeting annually and alternately in Tokyo or Taipei. Subcommittee discussions have been held on politics, economics and cultural affairs.
European countries ready to invest
A number of West European countries are interested in investing in Taiwan, Walter Fei, vice chairman of the Council for International Economic Cooperation and Development, said upon his return from an extensive trip in Europe.
West Germany will invite representatives from 10 developing countries of Asia for talks on investment problems. Fei said the Republic of China ranks high with the Germans because of its investment climate.
The Common Market has become more important now that Britain is joining.
Fei said several European countries are interested in investing in and trading with the ROC. There are plans for joint ventures with leading corporations in Taiwan.
During his visit to the United States, the CIECD vice chairman made wide contacts with industrial leaders and the press to explain long-range economic development plans. He said American industrial leaders were optimistic about the prospects of Taiwan economy. They believe the ROC will lead developing countries in the next decade and then concentrate on sophisticated industries.
They urged the government to simplify procedures in obtaining land for factories and to emphasize vocational training to supply skilled labor for advanced and precision industries.
Fei said American investors are planning to increase their capital so as to manufacture color TV sets in Taiwan. American factories are making black and white sets in Taiwan and color will be added to compete with Japanese exports to the U.S.
Guam prepared to do business
A Guam trade mission will visit the Republic of China soon, Wu Kuan-hsiung, secretary-general of the China External Trade Development Council, said.
Wu was a member of the Chinese economic goodwill mission to Guam.
He said the Guam mission would be formed by the island's trade department.
Although a small island with a population of only 90,000 Guam imports amount to more than US$110 million annually.
Exporters have a good opportunity to step up shipments to the island, which is a free port. CETDC will help interested exporters establish contacts with Guam importers.
William Wei, director of the Bureau of Industry, Ministry of Economic Affairs, and head of the Chinese mission to Guam, also stressed the importance of Guam.
The island has great potential in the development of its agriculture and light industry, Wei said.
Guam has to import 95 per cent of what it needs. The official policy is to encourage foreign investment to raise self-sufficiency to 60 per cent.
Electrical industry prospects are good
Taiwan's electrical apparatus industry produced US$370 million worth of goods in 1972, compared with US$300 million worth last year. US$300 million worth last year.
Foreign investment in the electrical industry has not been affected by international developments. A number of foreign-invested factories are to be newly established or enlarged.
Corning International Corporation, a famed U.S. electronics corporation is investing in a US$12 million plant in Kueishan, Taoyuan county, to make TV picture tubes.
Corning is putting up 60 per cent, the Iwaki Corporation of Japan 30 per cent and the China Development Corporation 10 per cent.
Of the more than 300 electrical apparatus plants in Taiwan, about 150 are owned by foreigners or overseas Chinese. They include some of the world's biggest names in electronics.
Of last year's output US$115 million was in TV sets, US$50 million in transistor radios and US$135 million in tape recorders, record players, components and parts.
European bankers back rail project
Representatives of eight European banks signed a preliminary, non-binding agreement with the Taiwan Railway Administration to provide loans of US$80 million for electrification.
The preliminary agreement followed an optimistic report on the feasibility of electrification made by Kennedy and Donkin Consultants of Great Britain last year.
The financiers represented banks of West Germany, France, Switzerland and Belgium.
Bankers agreed a final decision would be made in April. Loans would be repaid in 15 years.
TRA is bringing eight German experts to Taiwan to draw up detailed engineering and financial plans.
The entire project will require capital outlay of NT$5.8 billion (US$145 million). The rest of the funds will come from the World Bank and local sources.
Tax revenues exceed US$1 billion
Taiwan tax revenues, including indirect taxes generated from monopolies, totaled NT$40,675 million (US$1,016,875,000) last year.
Of this amount, NT$10,310 million (US$257,750,000) came from direct taxes. Indirect taxes made up the rest.
Tax revenues rose nearly two and a half times from 1966 to 1971. The level was NT$17,290 million (US$432,250,000) in 1966.
Taxes represented only 16.8 per cent of the gross national product, which totaled NT$241,476 million (US$6,036.9 million) last year.
Taxes accounted for 22.8 per cent of national income totaling NT$179,546 million (US$4,488,650,000), or twice as much as in 1966. National income was NT$96,763 million (US$2,419,075,000) in 1966.
Taiwan still ranks among the developing
The Republic of China is still a "developing" country, according to the latest survey of the Labor Force Survey and Research Institute.
The survey reported that the employment rate in October last year was 32.66 per cent of the population, still well behind the 40 per cent employment of industrially advanced countries.
However, the latest employment figure, totaling 4,793,000 persons, showed an increase of 285,000 in a year.
Unemployment was reduced from 98,000 in 1970 to 81,000 last year.
The survey showed these changes in the structure of the labor force:
— Agriculture. About 1,647,000 persons, representing 34.36 per cent of those employed.
— Industry. About 1,519,000 persons, or 31.69 per cent of the work force.
— Services. About 1,627,000 persons, representing 33.42 per cent of the total.
Ten-year plan for development
The government has decided to employ various economic resources in a 10-year plan to increase growth of the gross national product at an average of 8.5 per cent annually.
Government also will accelerate equitable allocation of wealth.
National income will be increased by an average of 6.2 per cent annually. Per capita income in 1980 will be US$514 compared with US$282 in 1970.
The Executive Yuan (Cabinet) has set goals of accelerated economic modernization, stability and growth, and a higher living standard.
These are objectives:
— Economic resources will be employed to increase production. Annual growth of the average GNP is set at 8.5 per cent.
— Education and training pro grams will be strengthened to increase the quality of labor resources and create job opportunities. The number of new jobs is set at an average of 180,000 annually.
— Construction of heavy and chemical industries will be promoted. Growth of manufacturing is set at 11.5 per cent annually.
— Production and marketing costs for farm produce will be reduced and cash crops, forestry, fishery and animal husbandry developed so as to increase productivity and increase the income of farmers. The growth of agricultural production is set at an average of 3.6 per cent each year.
— Construction of power, transportation and harbor facilities will be increased to meet the demands of industry and trade. Power growth is set at an average of 11.9 per cent annually and transportation and communication at 10.2 per cent.
— Foreign trade will grow at an annual rate of 12.1 per cent for exports and 11.9 per cent for imports.
— Research and development in science and technology will be strengthened and technical know-how imported. The number of high class scientists and technicians per 10,000 population will be increased from the 32 of 1970 to 63 in 1980. The portion of research expenditures in the GNP will be increased from 0.6 per cent in 1970 to 1 per cent in 1980.
— Per capita will rise by 6.2 per cent annually.