Exhibition tells one of the most dramatic success stories in the history of and shows what could be accomplished on the mainland
Prosperity in the Republic of China's model of is following the pattern set in West and after World War II. Agriculture has given' way to industry, light industry to medium industry, and medium industry to sophisticated and heavier industry. The results of this economic miracle are to be seen this fall at an economic achievements exhibition which opened in to mark the 60th year of the Republic of China. Two decades of economic development are shown in slides, movies, photos, models and demonstrations.
The two-story exhibition hall is itself a testimonial to 's industrial progress and modernization. Aluminum plates - Taiwan-made, of course - frame the building and give it the appearance of a huge rectangular diamond. Interior walls are made of mirrors to echo the aluminum motif of the outside. Large photos call attention to the progress of the ROC on the mainland before the Sino-Japanese War of 1937-45. Many of the industries now thriving on came into existence on the Chinese mainland in the years just after the 1926-28 unification. Chinese Communist insurrection interfered with but did not prevent mainland industrialization in the decade after the March Northward.
Eight years of war with the Japanese was brutally exhausting, however, and the Communist usurpation followed. The free Chinese government picked up in where it had left off on the mainland in 1937. A circular exhibition room and eight wide screens show results of ROC determination to industrialize a Taiwan economy which had been agricultural under Ch'ing China as well as during me Japanese period of half a century. The future is shown, too, and its promise dramatized in these gains chalked up between 1952 and 1970:
- Consumption of synthetic fibers from nothing to 7.4 pounds per capita.
- Protein consumption from 49 to 68.6 grams.
- Household and business power consumption up six times.
- Cement consumption from 53 to 238 kilograms.
- Glass consumption from 1.2 to 43 square feet.
- Steel from 3 to 30 kilograms.
- Television sets from none to 41.4 per 1,000 persons.
- Life span from 56.5 to 65 years for men and 60.7 to 71 years for women.
- Death rate from 9.9 to 4.9 per cent.
Life is longer and better than ever before in the history of . Beginnings were slow, however. Financial, material and human resources were in short supply as was returned to the Republic of China by in 1945.
is not exactly blessed by resources. Two-thirds of the terrain is covered by high mountains. Only about a quarter of the land (900,000 hectares) is arable. Climate is subtropical and rainfall abundant but unevenly distributed. Typhoons bring heavy flooding and severe wind damage to crops. Rivers are short and turbulent, sometimes useful for power generation but not for navigation. Soil is not particularly fertile. Intensive farming and leaching have reduced potential productivity.
Endowments of coal, limestone and silica are moderate. Such other minerals as sulfur, copper, gold, silver and salt are not of outstanding economic importance. Natural gas has been developed and put to industrial use only in the last few years. However, gas deposits will not last long at the present rate of consumption. Coal is no longer plentiful, the quality is poor and seams must be deepened or pushed offshore. Only a few hydroelectric possibilities remain to be exploited and the vagaries of rainfall make hydro power a reed of weak reliance for industry.
was interested in exploiting agriculture rather than the island's industrial promise. By 1938, rice and sugar production levels had been raised to a level of importance for export. was preoccupied with war after that and the string of progress ran out. As the Sino-Chinese war turned into the Pacific conflict, the fertilizer supply from was cut off and irrigation was neglected. Bombing damaged the infrastructure. Labor was scarce as drafted men into the armed forces. When retrocession came in 1945, agricultural production had fallen to 45 per cent of the 1938 record.
Prewar industrial activity was largely limited to the processing of farm products for Japanese consumption. Output was confined to sugar, canned pineapple, edible oils and tea. Small scale manufacturing was begun in the late 1930s to serve the needs of wartime . However, these plants were on the edge of collapse by 1945 and production amounted to less than a third of the prewar peak. Power stations and the transportation system were crippled by bombings. Railways and highways were 60 per cent knocked out.
Such was the starting point for reconstruction. At the time, foreign assistance was nonexistent and the threat of Communist invasion was ceaseless.
The first big step was land reform. In 1947, the population was overwhelmingly rural. First, a ceiling was placed on farm rents so that the tenant farmer might receive a larger share of the fruits of his labor. Second, in 1951, public lands were sold to tenants. The third step, beginning in 1953, was the land-to-the-tiller program in which excess privately held lands were sold to those who farmed them. Landlords were permitted to keep limited holdings for their own use. The rest went to tenants with payments made in installments over a period of 10 years. Original owners were compensated by the government. Part of the payment was in the stock of four state enterprises, which then became private enterprises. Former landlords became industrialists.
aid was resumed in 1951. Infrastructure was rebuilt and production gradually brought back to normal. Agriculture and industry had regained prewar peaks by 1952 and inflationary pressures contained. Conditions were ripe for a shift from short-term measures of stabilization to long-range development.
The first four-year economic development plan was undertaken in 1953 and stressed the growth of agriculture to provide the base for subsequent industrialization. The food supply reached self-sufficiency. Farm products began to earn foreign exchange with which to buy machinery and raw materials to serve industry. Surplus agricultural population provided the labor supply for new factories.
Labor remaining on the farm was channeled into rural reconstruction. Agricultural output was raised with increased use of fertilizer, new plant varieties, control of plant pests and diseases, and expansion of irrigation facilities. Farm credit was enlarged and farm organizations strengthened.
Power output was raised to supply factories, businesses and households. Roads were built and railways improved. Such import-substituting industries as fertilizers and textiles were encouraged. Foreign exchange and trade reforms facilitated needed imports and stimulated exports.
The second four-year plan extended from 1957 through 1960. By the close of the 1950s, a substantial measure of social and economic stability had been achieved. The easier reconstruction projects were completed. More capital and more know-how were demanded. The small domestic market for import substitutes reached saturation. With limited land and resources, the population continued to grow at a rate of well over 3 per cent annually. The slightly more than 8 million in 1952 had become 10.4 million in 1959. Density rose from 226 to 290 per square kilometer.
From 1953 to 1960, the real gross domestic product grew by 7.2 per cent annually. As of 1952. industry accounted for 17.9 per cent and agriculture for 35.7 per cent of the net domestic product. These figures had been reversed to 32 per cent and 19.2 per cent by 1970. The growth of the gross national product growth accelerated to nearly 10 per cent. Per capita income passed the US$300 mark this year.
Agriculture was not being neglected, as reflected in substantial unit yield increases. Rice production rose from 1,998 kilograms per hectare in 1952 to 1970. Sweet potatoes nearly doubled in the same period. Soybeans went from 602 to . and peanuts from 741 to . Tea output was almost tripled and pineapple productivity raised by 2½ times. The sugar cane increase was from 49,000 to . per hectare.
Light consumer goods were turned out in large volume to serve the needs of the people. Textiles, cement and other construction industries began to export as well as to satisfy domestic requirements. The infrastructure was further expanded to move goods go ing to both foreign and local markets. Now the trend is toward petrochemicals, machinery and other sophis ticated and heavy industries.
At the economic exhibition, a darkened hall simulates the tunnel of a mine and introduces visitors to industry and mining. One moves through the darkness into the brightness of a showroom of the electrical apparatus industry, which although started only 10 years ago will export more than US$150 million worth of 'products this year and US$300 million worth by the mid-1970s or before. Additional1y, is making most of its own electrical appliances, including refrigerators and air-conditioners. Home entertainment units are manufactured, too, including television sets, although many components must still be imported.
Petrochemicals began with fertilizer, which was essential to the expansion of agricultural output. Plants now have a capacity of nearly 1:2 million metric tons and imports of the principal fertilizers are no longer necessary. Caustic soda production has been raised to /t, chlorine gas to /t and alkali to /t. The southern petrochemical complex developed around the refinery, which uses imported crude, produces 120 million pounds of ethylene and 60 million pounds of propylene annually. Further expansion is under way. A northern petrochemical center at Miaoli uses natural gas to make ethylene, a principal intermediate of plastics making. Methanol production has exceeded the target. Polyethylene production was started in 1968.
Polyethylene production from three plants totals 70,000 metric tons. Polystyrene has been made since 1968. Urea formaldehyde is used in making plywood, one of 's biggest exports. Bakelite powder provides the coating for plywood. The list of plastic products and possibilities is literally endless. With the growth of petrochemicals, the Republic of China is in a position to start with barrels of crude and go through beginning, intermediary and finishing steps to a bright and shining product which is durable, attractive and in demand the world over.
Synthetic fibers have advanced from nothing to sizable production in a few years. Products include rayon (the first), nylon, orlon, dacron and a number of others. Cotton-and-synthetic blends have become big exports which even quotas are not likely to inhibit too much. Southeast Asian, African and European countries like the durability and freedom-from-ironing advantages of the blends. Nimble fingers of attractive girls put many of these fabrics into garments which are worn around the world.
The government has resisted the temptation to rush into prestige-building through establishment of costly heavy industry. The important exception of the late 1960s was shipbuilding. Plans are under study for a US$320 million integrated steel mill to be built by Voest of Austria. Foreign loans of US$180 million are sought for the plant, which would have initial capacity of 1.3 million metric tons annually and 4 million m/t after five years. Ninety-five per cent of production would be for domestic consumption.
Textiles continues to be the leader of the manufacturing sector and first in exports. Production was valued at US$574.7 million in 1970 and US$374.8 million in the first half of this year. Figures include yarn, piecegoods, garments and knitwear made of cotton, synthetics, blends and wools.
Mills have been modernized and automated during the last few years. As a result, has surpassed Hongkong to rank as the second largest exporter of textiles to the .
Production of electrical machinery and apparatus reached value of US$418 million in 1970 and US$223 million in the first half of 1971 despite the recession and international monetary and trade problems. The 1970 exports of US$130 million included 600,000 television sets.
As of June, had 263 electrical plants with external investment. Owners were 170 Chinese, 55 Japanese, 35 Americans and 3 Dutch. Americans put up the largest share of the investment, US$95 million, compared with US$40 million for the Chinese, US$26 million for the Dutch and US$13 million for the Japanese. The last figure reveals an interesting truth about Japanese investment in ; it is marked by a large number of cases and a small amount of money.
The electrical industry has employment of about 50,000. Leading companies include RCA, Philco, Philips. Admiral, TRW, General Instruments, Zenith and IBM. American manufacturers have predicted resumption of the export boom after the temporary slump caused by President Nixon's new trade and monetary policies.
has moved from nothing to 18th place in world shipbuilding. The Taiwan Shipbuilding Corporation at on the island's northeastern tip has constructed two 100,000-ton tankers and has a third under construction. Vessels of 125,000 tons will be built next year and of 132,000 tons in 1972. That is the largest harbor can accommodate. A projected new yard at on the southwestern coast would be able to turn out 300,000-tonners.
Tonnage built last year topped 200,000 tons and will exceed 250,000 this year. TSBC has also been building bulk carriers of 25,200 tons and is ready to start constructing those of 54,000 tons. The yard of 200,000 meters at has drydocks of 100,000 and 30,000 tons capacity.
The Yue Loong Motor Company has plans to invest US$92.5 million in a southern plant with capacity of 300,000 cars a year. About 30 percent would be exported to . Expansion would be carried out in three stages over a period of 11 years with 70 per cent of the investment to be raised through sale of stock at home and 30 per cent to be solicited among overseas Chinese. Yue Loong estimates that the automobile population will rise from the present 1 car to 200 persons to 1 for every 45. Output would be 100,000 units in the third year, the sixth and the ninth.
Cement has boomed along with construction. The 12 plants have capacity of 5.2 million tons but production in 1970 was just over 4.5 million tons. Eight new plants were in the planning stage a year ago. Only one is likely to be built within the next year or so. Cement consumption per capita is close to 250 kilograms, but this is less than half that of and the . Exports were nearly 1 million tons last year but other Asian countries are building their own plants and prospects for sales arc declining.
Overproduction has beset the paper industry. Pulp output reached 110,000 tons last year but only 85 per cent could be sold domestically and abroad. Paper and paper board also showed an excess of about 15 per cent. The overproduction figure for paper bags was 13 per cent.
imports crude from the Middle East and and refines a variety of fuels, lubricants and basic materials for petrochemicals. In 1970, the Chinese Petroleum Corporation sold more than 6.5 million kiloliters of' petroleum products, an increase of 26 per cent over 1969. Construction of a second naphtha cracking plant and a hydrocarbon cracking plant will begin next year at . The cost will be US$50 million and the products will go to the petrochemical industry.
Plywood, which had export volume of US$84 million last year, is troubled by inadequate sources of log supply. The and have been the big suppliers but costs have risen sharply and mills complain of low quality. Forests of are providing a larger share of the raw material for processing and sale to the and . has large forest reserves but these are relatively inaccessible and much of the timber is not commercially usable.
's first export processing zone was established at late in 1966. Such zones combine the advantages of an industrial park and free port. Components and raw materials move in with a minimum of red tape and are processed or assembled solely for export. Except under the unusual circumstance of no competition, domestic sales are verboten.
The zone will have sales of more than US$200 million this year, an increase of nearly 100 per cent over 1970. The zone has 41,000 workers in more than 160 plants. Investment is US$41 million compared with the target of US$18 million. Every goal has been surpassed by a substantial margin and the zone, built on land reclaimed from the harbor, is a sell-out.
The KEPZ success led the government to establish a second and bigger zone at and another for light, sophisticated industry at in central . As of mid-1971, the new zone had attracted 17 plants and investment of nearly US$10 million. Taiehung had drawn 13 enterprises and close to US$8 million.
Nevertheless, investment in the processing zones and in the economy generally has slowed down. The reasons are complex. Government has begun to have some doubts about foreign and overseas Chinese investment, especially that in competitive industries which are already well established. Some segments of industry think that foreign-invested plants impinge on their markets or potential markets. Also are involved are the American recession, worldwide monetary and trade uncertainties, and international political developments.
Industrial progress has been accomplished in a mixed economy but with a steadily increasing share of private ownership. In 1952, 56.6 per cent of industrial production came from the public sector and 43.4 per cent from privately owned companies. The figures in 1970 were 70.5 per cent from private enterprise, and 29.5 per cent from public corporations. In manufacturing, the dominance of private business was 77.6 to 22.4 per cent.
On the Chinese mainland, where everything is publicly owned and operated, the growth record is not known with any certainty. But the most favorable estimates are that the economy has just gotten back to and started to move ahead of 1958 levels. On , the GNP index was 1958 (with 1952 as 100). The figure for 1970 was 1,261.9.
Sugar was king of exports only a few years ago. The cane crop earned US$135 million in 1964 and production exceeded 1 million metric tons in 1965. Earnings are down by roughly two-thirds and output by nearly a half from those figures.
Textiles and products (including garments and knitwear) earned US$500 million last year and should top US$600 million this year even with the imposition of quotas on sales to the United S!ate5. Metal products ranked second among last year's exports with volume of US$281 million. Electrical apparatus (mostly television sets, radios, phonographs and tape recorders) was the metals pacesetter at US$130 million. Canned and other processed foods earned more than US$200 million.
Imports are led by raw materials (grains, cotton, metals and chemicals) and products of heavy industry (vehicles, rolling stock, ships and generators). The is the principal trading partner. Exports to totaled US$578.8 million last year and imports were US$463.4 million. is second and the commerce with this neighbor to the northeast is far out of balance: US$235 million. in exports and US$582 million in imports for 1970.
Total trade was favorable last year by US$34 million. Growth continued at a rate of 36.2 per cent in the first six months of 1971. Exports were US$993 million, up 39.8 per cent, and imports US$938 million, a gain of 32.5 per cent, for a favorable balance of US$55 million. On September 18, the figures were US$ exports and US$1,365 million in imports to raise the amount of black ink to US$111 million.
Infrastructure expansion has had to be rapid to keep up with the demands of the explosive economy. Electric energy is an example. Generation was 1,420 million kilowatt hours in 1952. This had risen to 13,213 kwh in 1970 and 7,261 million in the first half of 1971, a gain of 16.8 per cent. Installed capacity has reached 2.32 million kilowatts. Two decades ago, two-thirds of generation was hydroelectric and the other third thermal. The ratio has been reversed to assure a steady supply of power without regard to seasonal rainfall. Installed capacity will be nearly 9 million kilowatts by 1980. One nuclear plant will be completed in 1975 and a second in 1976. Two others are scheduled to join the grid by the end of the decade.
Electrification of the west coast mainline railroad has been approved by the Executive Yuan (Cabinet). Work on the US$145 million project will begin next year and be completed in 1977. Completion of the around-the-island railroad is under study. This will require a north-bend link between Suao and Hualien on the rugged northeast coast, a south-bend link between Taitung and , and widening of the narrow gauge line between Hualien and Taitung.
Construction began this year on the US$500 million, 235-mile expressway from ('s port city on the northeast tip of the island) to , the biggest port and second largest city, on the southwest coast. Width will vary from four to eight lanes. Completion is scheduled for 1977.
A second harbor entrance will be completed at in 1975 and a fourth international port is projected near on the west coast before the end of the decade. More than 25 million tons of cargo was handled at and , which is also in the process of expansion, in 1970. The third international port is at Hualien on the east coast. Volume there is miniscule.
Ships flying the Nationalist flag exceed 1.1 million tons. If Chinese-owned vessels under flags of convenience were counted, the total would rise to 7 million tons to place among the world's top 10.
China Airlines carries the Nationalist flag throughout Asia and to and both nonstop from and by way of . started as a military charter operation flying a couple of World War II flying boats in 1959. The company's capital has grown to more than US$50 million and aircraft including three Boeing 707s, three Boeing 727s, two Caravelles and some 25 others in domestic service.
Other evidences of the success story include foreign and overseas Chinese investment of about US$700 million and foreign exchange reserves which have surpassed US$800 million.
All this has meant a better life for the people of . Probably 110 other country in the world has presided over such a high rate of economic growth with so little inflation. With the 1963-65 average as 100, the wholesale price index stood at 104.66 at the end of December, 1970. This same index declined 0.54 per cent in the first half of 1971. The retail price index showed a gain of only 2.06 per cent from August of 1970 to August of 1971.
The economic achievements exhibition in covers all aspects of growth in the model during the last two decades and longer. Stress is rightly placed on the fact that this is the culmination of the Three Principles of the People of Founding Father Dr. Sun Yat-sen, who taught that Nationalism, Democracy and the People's Welfare were to go hand in hand. Dr. Sun's philosophy of politics and social improvement has been realized on for the first time. There is awareness of this on the Communist-occupied mainland.
's prosperity is a showcase of what the Chinese can do. People on the mainland look toward to a future when the Mao Tse-tung's tyranny is no more and principles of freedom obtain throughout . The achievements to be shown in some future exhibition will be those of as a whole and no less impressive than the showing of province in the 60th year of the Republic of China.