Economic leaders of both countries described the 1981 ROC-U.S. Trade and Investment Forum as highly successful.
At a farewell dinner hosted by Chinese Board of Foreign Trade Director H.K. Shao and David M. Kennedy, former U.S. secretary of the treasury, Economic Affairs Minister Chang Kwang-shih said the Forum had the blessings of both presidents.
Chang said economic relations between the two countries are basically complementary. Ninety-five percent of Taiwan imports are industrial materials, agricultural products, sophisticated capital goods and sources of energy, including coal and uranium largely supplied by the United States.
He said the ROC is in transition from developing to developed status and more imports will be needed. "I don't see why any state in the United States cannot increase their export to us," Chang said.
The minister said U.S.-ROC trade is expected to reach US$200 to $250 billion in the next 10 years.
Kennedy extended an invitation to local delegates to attend the third forum at Atlanta, Georgia, in November of next year.
Kennedy headed a 250 member U.S. delegation that included Arkansas Governor Frank White, Virgin Islands Governor Juan Luis and officials and trade leaders from all 50 U.S. states.
Saudi cooperation will be expanded
Chinese Communications Minister Lin Chin-sheng reached agreement with Saudi Communications Minister Hussein Mansouri in Riyadh on expanded cooperation.
They agreed to strengthen functions of the Chinese mission with the Saudi Communications Ministry. Minister Lin promised to send more senior personnel and to recruit Chinese skilled labor to work on the kingdom's rural road projects.
Sheikh Mansouri expressed satisfaction with the work of the Retser Engineering Agency and the BES Engineering Corporation.
Lin paid a courtesy call on Hisham Nazer, minister of planning.
Europeans hope to reduce barriers
The Taipei Conference on EEC and Asia concluded with European participants agreeing unanimously that EEC should strengthen its ties with the Republic of China.
Dr. Han Lih-wu, president of the sponsoring Asia and World Institute, urged the EEC to work with the Republic of China to remove trade barriers.
Calling attention to Free China's trade diversification policy, he said relations between EEC countries and the ROC can be further improved.
Dr. Han praised The Hague for its decision to sell two submarines to the Republic of China. He said The Netherlands had the courage to face reality.
Jacqueline L. Lafon, deputy dean of the faculty of law, University of South-Paris, suggested EEC nations should recognize the reality of Free China's existence and sign bilateral trade agreements.
Jan Van Lith, vice president of the Kennedy Institute in Holland, said the trade relationship between his country and the Republic of China should serve as a model for other EEC countries.
Ernst Heyning, former director general of the secretariat of the European Community Council of Ministers, acknowledged that Taiwan exports to EEC nations are subject to tariff and quota restrictions. He favored improving the situation.
Second nuclear plant operating
The first unit of the Taiwan Power Company's second nuclear power plant has begun operation Bids have been submitted on the fourth plant.
Taipower Chairman L.K. Chen told a press conference that the new unit has capacity of 985,000 kilowatts.
When the new unit is producing at capacity, electricity from nuclear power will account for 27 to 28 percent of the Taipower total, up from 20 percent.
The second unit with the same capacity is expected to be in operation next January.
Chen said Taipower has taken measures to prevent any leakage of waste.
Bidding on the fourth plant are the General Electric Company, Westinghouse Electric Corporation and Combustion Engineering Corporation of the U.S., Framatome of France and Kraftwerk Union of West Germany.
This is the first time European firms have joined in the bidding.
The fourth plant will have two generating units with capacity of 1 million kilowatts each. Output will be 32 percent of Taipower output in 1989. Investment will be around US$1.2 billion.
Yenliao on the northern tip of the island near Fulung beach is to be the site.
The first nuclear power company will be established within two years to conduct nuclear power technology transfer and develop production techniques for nuclear fuel.
A task force composed of K.T. Li, minister without portfolio; General Kao Kuei-yuan, minister of national defense; and Chang Kwang-shih, minister of economic affairs, will make plans for the private company. Foreign investment will be allowed during the preliminary stage and then withdrawn. Fifty-five percent of investment will come from local sources.
General Electric Company and Westinghouse Electric Corporation of the U.S. and Kraftwerk Union of West Germany have expressed interest in the joint venture.
Taipower to buy much equipment
Taipower has budgeted US$14.4 billion to purchase generation and transmission equipment during the next 12 years, said S.L. Chu, president of the company.
Chu said Taipower will require 6 million pounds uranium annually from 1990 to 2000. Contracts for 2.5 million pounds annually until 1987 have already been negotiated with the U.S. and South Africa. Taipower is trying to diversify these sources to include Canada and Australia.
Chu estimated the demand for coal will total 21 million metric tons per year until 1990.
Taipower will invest US$35.7 billion to develop energy resources from 1981 to 1989. Nearly half of the funds will be borrowed abroad.
Energy resources to be enlarged
The Energy Research and Development Fund will enlarge energy resources by 23 percent in the next 10 years.
The Ministry of Economic Affairs said alternate energy sources will make up 2 percent of total energy. Research is continuing in solar power (photo voltaic cells), wind power, ocean thermal gradients and geothermal power.
Under the Energy Management Law, the energy fund is to be used (1) for the development of energy exploration technology and alternate energy sources, (2) to promote the efficient use of energy, (3) to analyze the economics of energy, (4) to devise energy policy and offer conservation training and (5) to undertake research products.
The budget to date is US$55 million.
Taiwan recorded its first decrease in energy consumption during the first quarter of 1981. The decline was 5.7 percent compared with the same period in 1980.
The gross national product increased 5.4 percent in the same period so the saving is credited to fuel-saving efforts.
Use of energy triples in 20 years
An individual in the Republic of China consumes three times as much energy as 20 years ago.
In 1961, an individual consumed the equivalent of 425 liters of gasoline annually. The 1981 amount was 1776 liters.
The increase in energy consumption has been faster than growth of the GNP.
Production of raw materials for the petrochemical industry was responsible for only 2 percent of energy consumption in 1961. It rose to 11 percent in 1980. Transportation consumption rose from 6 percent in 1961 to 11 percent in 1980.
Nobel economic laureate Milton Friedman and his wife visit Taipei. (File photo)
Money control key to deflation
There is one and only one way ultimately to cure inflation. That is to slow the rate of monetary growth, said Dr. Milton Friedman in Taipei.
The 1976 Nobel Prize winner in economics said that if the rate of monetary growth is brought down to the neighborhood of the rate of output growth, roughly stable prices will result.
He said inflation is a dangerous and sometimes fatal disease.
"Hyperinflation m Russia and Germany after World War I when prices sometimes doubled and more than doubled from one day to the next — prepared the ground for Communism in the one country and Nazism in the other. The hyperinflation in China after World War II eased the Chinese Communists' conquest of mainland China," he said.
Tatung acquires plant in Britain
Tatung Company, the largest manufacturer of electric appliances in Taiwan, has taken over a British TV manufacturing plant and a laboratory from Decca Radio and TV Ltd.
Decca Radio, a subsidiary of the Racal Electronics Ltd. Group of Britain, signed the agreement with Tatung for about 1.3 million pounds sterling.
Tatung set up Tatung U.K. Ltd. to take over the TV plant at Bridgnorth, Salop, and the laboratory at Bradford, Yorkshire.
During the first year of operations Tatung will invest some US$10 million as working capital. It will employ between 800 and 1,000 workers in producing more than 1,100 color TV sets monthly.
At the outset, about 70 percent of the products will be marketed in Britain and the remaining 30 percent will go to other European countries.
Tatung U.K. is the first Chinese venture in Europe and the fourth wholly owned subsidiary of the company. The other three are in Singapore, Hongkong and the United States.
Plants are contemplated in Atlanta, Georgia and South Africa.
Tatung was the ninth biggest exporter in Taiwan in 1979 with its overseas sales totaling US$62 million, about 25 percent of its total sales. Last year Tatung was the fourth biggest company in Taiwan with sales of NT$14,280 million (about US$397 million).
Nan Ya paces private companies
Nan Ya Plastics Corporation headed the list of Big Ten private enterprises in 1980, a survey con ducted by the Economic Daily News showed.
Nan Ya had sales of NT$20,722,770,000 (about US$575,632,500)
It was followed by Formosa Plastics Corporation, NT$17,120 million (about US$475.6 million), Yue Loong Motor Company, NT$14,988 million (about US$416.3 million); Tatung Company, NT$14,280 million (about US$396.7 million); Formosa Chemicals and Fiber Corporation, NT$12,711 million (about US$353 million); Taiwan Cement Corporation, NT$11,499 million (about US$319.4 million); Cathay Life Insurance Company, NT$10,947 million (about US$304 million); Far Eastern Textile, NT$10,645 million (about US$295.7 million); Matsushita Electric (Taiwan) Company, NT $8,150 million (about US$226.3 million); and Ford Lio Ho Motor Company, NT$7,561 million (about US$210 million).
Three of them belong to the Formosa Plastics Groups: Nan Ya, Formosa Plastics and Formosa Chemicals and Fiber Corporation, all under Wang Yung-ching, Taiwan's plastics king.
Pay gap only 4.81 in manufacturing
The range of highest and lowest paid employees in the manufacturing industry in the Taiwan area was 4.81 as of June, 1980, according to a survey by the Directorate General of Budget, Accounting and Statistics.
Highest pay goes to managers and the lowest to newcomers on the assembly line. The larger the company, the wider the gap.
Enterprises with work forces of more than 500 had a wage spread of 10.16. Basic metals had a gap of 25.92.
Average pay in manufacturing included: managers, NT$23,499 (about US$652.75); assistants, NT$10,970 (about US$304.7); engineers, NT$16,872 (about US$468.7); technicians, NT$9,821 (about US$272.8); assembly line workers, NT$7,203 (about US$200); and office boys, NT$8,136 (about US$226).
State enterprises plan for future
Tasks of state enterprises in the years ahead will center on development of national defense industry, shipbuilding and aute making, and cooperation win friendly countries in building power, fertilizer and oil refining plants. Economic Minister Chang Kwang-shih said management of the 14 government enterprises will emphasize:
— Foreign contracts.
— Installation of safety facilities and anti-pollution equipment.
— Research and personnel training.
— Improved management.
— Interchanges with other state enterprises.
— Effective use of energy.
— Procurement of material resources.
— Supplying of energy, metals and basic and intermediate chemical materials.
The 14 state enterprises are:
Energy: Taiwan Power Company and Chinese Petroleum Corporation.
Agriculture and fertilizer:
Taiwan Sugar Corporation and Taiwan Fertilizer Company.
Metals: China Steel Corporation, Taiwan Aluminum Corporation and Taiwan Metals Corporation.
Heavy machinery: BES Engineering Corporation, China Shipbuilding Corporation and Taiwan Machinery Manufacturing Corporation.
Chemicals: China Phosphate Industries Corporation, Chung-Tai Chemical Industries Corporation, Taiwan Alkali Company and China Petrochemical Development Corporation.
Forged trademarks to be eliminated
To combat forged trademarks, the Ministry of Economic Affairs enforced a series of regulations from June 1.
Products using trademarks must obtain export permission from the Board of Foreign Trade.
Essential documents must include evidence of trademark ownership or permission to use the mark.
Materials science experts meet
The Second Materials Science Meeting was held in Taipei with scores of scientists and industrialists participating. Three foreign scientists attended as advisers.
Coming from abroad were Professor Gareth Thomas of the Department of Materials Science and Engineering, University of California at Berkeley; Professor Hiroshige Suzuki of the Tokyo Institute of Technology; and Dr. Robert I. Jaffee, technical manager of the Electric Power Research Institute at Palo Alto, California.
Panel sessions were held on Education and Manpower Development, Pertinent Approaches for Development of Titanium Technology in the ROC, Metal Processing (Forging, Welding and Machining), Ceramic Materials, Metal Processing (Heat Treatment and Surface Treatment) and Electronic Materials.
Minister K T. Li presides at meeting of material science experts. (File photo)
K.T. Li, minister without portfolio, presided over the opening session.
"In order to promote foreign trade and sustain our economic growth," he said, "we must address ourselves to the tasks of upgrading our industry by increasing the added value of products.
"It is in this respect that we must correlate and interface technologies in materials, information and energy."
Minister Li asked these questions: "How can we establish and maintain comprehensive data based on the characteristics, costs and applications of new and existing materials, and disseminate this information to interested individuals and enterprises?
"How can we apply science and technology in improving the quality of materials and in obtaining higher added value for products and cost effective applications for new and existing products and processes?
"Can we identify specific materials and applications upon which to base important new industries during the decade of 80s and beyond?"
David Dean sees good times ahead
David Dean, chairman of the American Institute in Taiwan, told American congressmen he is optimistic about the Republic of China's economic development in the 1980s even though the rate of expansion may be slower than previously.
Mr. Dean spoke before the U.S. House Subcommittee on Asian and Pacific Affairs.
He said the Republic of China is in a strong international financial position and has been able to obtain loans at favorable rates and long maturities.
Further evidence of the way foreign banks view the ROC's long-term financial prospects is indicated by the large number of branches established in Taipei, he said, and also cited the 1980 foreign investment record of US$466 million.
Plans and projects to expand industrial, agricultural and service sectors under the 10-year economic plan will offer numerous opportunities for sales of U.S. goods and services, Mr. Dean said, but called attention to increasing European competition for the Republic of China's business.
The United States has established a strong foothold in the ROC but will need to work harder to keep it, he said.
Seven industrial zones planned
The government's BES Engineering Corporation will be in charge of helping the Industrial Development Bureau develop these seven industrial zones:
— Changhua Seashore. It will consist of Yu Pu, Lung Wei, Sheng Kang and Chuang Hsing districts covering an area of 2,591 hectares. The 10-year development will cost NT$2 billion (about US$56 million).
— Changhua Fengyuan. Area of 110 hectares. Development started in October and is expected to be completed in 1982. Capital required is NT$330 million (about US$9 million).
— Hukou. Area of 257 hectares with completion set for August of 1982. Cost will be NT$ 600 million (about US$17 million).
— Nantou Nankang. Area of 178 hectares with completion set for May, 1982. Cost will be NT$400 million (about US$11 million).
— Ilan Liche. Area of 420 hectares with completion set for July, 1983.
— Pingtung Pingnan. Area of 271 hectares with completion set for December, 1982.
— Kaohsiung, Linhai, Taliao, Linyuan. Industrial water treatment will cost NT$2 billion (about US$56 million).
Pollution threat to health, crops
Exhaust and smoke discharged by some 3.85 million motor vehicles and 58,000 factories are polluting the air, damaging crops and corroding buildings, Wei Wei-hsin, director of the Provincial Environmental Sanitation Experimentation Center, reported.
If plants using coal have inadequate treatment equipment, pollution is considerable. Heavy oil also pollutes, Wei said.
Dust from road work, ditch digging, building construction and cement, stone and chalk mills also pollute.
Iron and steel, copper and aluminum plants produce poisonous gases during the smelting process.
Wei warned of contributions to bronchitis, asthma, pulmonary emphysema and pulmonary cancer.
Pollution also cuts agricultural output by blocking the pores of leaves. A glass company at Taoyuan had to pay compensation to farmers.