Economic growth will be set at 8 percent for the four years starting in 1982, according to a plan drafted by the Council for Economic Planning and Development.
For 1982-1985, level of wholesale price increases is set at 7.5 percent annually. Export growth is targeted at 10.9 percent and that of imports at 9.2 percent.
CEPD will urge the government to stress economic activities in the private sector and gradually reduce the role of public enterprises.
The nation's 12 New Construction Projects will be continued on schedule.
These are highlights of the four-year economic plan:
- Agriculture. Farm mechanization and expansion programs will be continued to raise productivity and income. Life and health insurance will be initiated for farmers.
- Industry. Development of electrical machinery, other machinery, chemical, automobile and information industries will be speeded. Government will encourage merger of labor-intensive industries to improve their facilities.
- Services. Emphasis will be placed on modernization and efficiency.
- Medical care. New facilities will be provided and priority given to the improvement of social welfare and health insurance.
- Economic growth. Annual growth of the money supply will be limited to 15 percent. For the four years, the world economic growth rate is estimated at 4.5 percent and increase in the price of oil at 3 percent annually.
- Foreign trade. Two-way trade is expected to reach US$77.1 billion by 1985 with a favorable balance of US$120 million.
- Fixed investment by the private sector. The government will encourage private industries to increase their investment by helping them develop technologically intensive products. The projected annual private investment increase is 10 percent to raise the total to 52.5 percent.
GNP for 1979 38th in the world
The gross national product for 1979 was US$31.7 billion, 38th highest in the world, the Directorate General of Budget, Accounting and Statistics reported on a basis of World Bank statistics.
The World Bank takes comparative inflation into account in arriving at its estimates.
Kuwait's 1979 per capita GNP reached US$17,270, highest in the world, said the World Bank, followed by Switzerland, US$14,240, Sweden, US$11,920; Denmark, US$11,900; and West Germany, US$11,730.
The U.S. with US$9,770 was in sixth place. South Korea with per capita GNP of US$1,500 occupied 49th place. There were 27 nations with per capita exceeding US$4,000. Except for the U.S., Canada, Japan, Australia, New Zealand, Israel, Hongkong and the oil-producing countries of Kuwait, Libya and Saudi Arabia, all were European countries.
In 1979, the gross national product of the U.S. reached US$2,337.1 billion, highest in the world, followed by the Soviet Union, US$1,082.3 billion; Japan, US$1,019.5 billion; West Germany, US$717.7 billion; France, US$531.3 billion; Great Britain, US$353.6 billion; and Italy, US$298.2 billion.
During the 1970-78 period, the average annual economic growth of the ROC was 9.94 percent in real terms. Only six nations did better: North Yemen, Lesotho, Iraq, Romania, Jordan and South Korea.
The 1979 figures for Red China were not available. The 1978 per capita GNP was US$230, 104th in the world, and the GNP was US$219 billion for eighth place.
Exporters urged to spur diversification
Vice Premier Hsu Ching-chung called on major exporters to step up promotion in the Middle East, Eastern Europe, Latin America and Africa to diversify export trade.
The Vice Premier made his call at the presentation of awards to outstanding 1980 exporters. Hsu said the export performance lagged behind Singapore and Hongkong.
Export growth slowed in the first part of this year. Hsu attributed the decline to growing competition from other developing countries, weakening purchasing power in industrialized countries due to global economic recession, the skyrocketing of oil prices and the increased trade imbalance.
To overcome these difficulties and the growing wave of protectionism, Hsu proposed that manufacturers modernize their production facilities, import new technologies and develop value-added products.
Trade still relies on two major partners, the United States and Japan, Vice Premier Hsu noted, urging further diversification.
Speaking on the same occasion, Economic Affairs Minister Chang Kwang-shih urged manufacturers to upgrade the quality of their products, increase research and development and lower production costs.
Chang urged them to redouble their efforts to help the government attain the foreign trade target of US$48.5 billion. Nearly 600 exporters were honored.
Receiving awards from Premier Sun Yun-suan were RCA Taiwan Ltd., Nan Ya Plastics Corporation, Far Eastern Textile Ltd., Tai Yuen Textile Company Ltd., Formosa Chemicals and Fiber Corporation and Chung Hsing Textile Company Ltd. All exceeded US$100 million worth of exports in 1980.
RCA Taiwan retained its lead at US$183.3 million, up from 1979's US$163.4 million.
Over 2,300 other companies received awards for sales ranging from US$1 million to less than US$100 million.
More incentives for energy savers
The Ministry of Economic Affairs will coordinate with the Ministry of Finance to revise the Statute of Encouragement of Investment and offer more incentives to factories that save energy by improving production facilities.
Twenty-three percent of leading power-consuming factories have failed to meet government requirements for the conservation of power.
The Ministry of Economic Affairs is urging owners to modernize facilities. If they fail to do so, they will be penalized under the Energy Management Law.
The ministry will help train personnel in ways to save energy and offer other guidance to factories.
1985 completion set for 3rd nuclear plant
The third nuclear power plant of the Taiwan Power Company will be in full operation by 1985. The plant will generate up to 10.32 billion KWH of electricity annually, equivalent to the energy produced by 2.49 million kiloliters of oil.
Chou Kao-ming, director of the construction committee, said work is on schedule.
The first system is expected to be completed in November, 1983, and will go into operation in May of 1984. The second system will go on line a year later.
Chou said many plant materials have been produced locally. Steel reinforcements and other parts were made by the China Steel Corporation, Taiwan Machinery Corporation and Tang Eng Iron Works Company. Engineering is provided by Tang Eng and BES Engineering Corporation. Construction provides employment for 5,000 engineers and workers.
Power investment of US$2.6 b. slated
Taiwan Power Company will invest NT$97.5 billion (about US$2.7 billion) for power development during the 1982 fiscal year that began July 1, board chairman L.K. Chen told the Legislative Yuan.
Expected power generation for the year will be 48 billion kilowatt-hours, 10 percent higher than in fiscal 1981.
Taipower will expedite construction of nuclear and coal-fired plants to reduce reliance on imported oil, Chen said.
Generating capacity of 10,042,000 kilowatts is made up of hydropower, 14 percent; oil-fired generation, 54 percent; coal-fired generation, 10 percent; and nuclear generation, 22 percent.
By fiscal 1994, the breakdown will be hydropower, 15 percent; oil-fired power, 14 percent; coal-fired power, 34 percent; and nuclear power, 37 percent. Output will be 31,468,000 kilowatts.
Demand for coal will rise sharply
Demand for coal will reach 45.6 million metric tons in 1994, the Energy Council of the Economic Ministry has estimated.
This year's demand is estimated at 8,599,000 tons.
Taiwan produces only 2.2 million tons annually. The rest will come mainly from the United States, Canada, Australia and South Africa.
The biggest coal consumers are the Taiwan Power Company and the China Steel Corporation.
Chinese Petroleum won't reduce price
"Chinese Petroleum will not consider lowering its domestic oil prices despite the fact that Kuwait has reduced its surcharge on oil purchased by Taiwan from US$3.93 to US$2.75 per barrel," T.H. Lee, president of the company, said.
He said the new contract does not give CPC as much profit as some people imagine.
The company has paid Kuwait an additional US$3.93 per barrel only on 100,000 barrels of the daily purchase of 140,000 barrels.
Under CPC's new contract, an additional charge of US$2.75 will be paid on all 140,000 barrels.
Taiwan imported more than 15 million kiloliters of crude from the Middle East, Indonesia and other oil producing countries in the first three quarters of fiscal 1981 (from July 1, 1980 to March 31, 1981), Lee reported.
In the same period, CPC completed drilling of eight wells on land. Four of them yield about 13 kiloliters of oil and 100,000 cubic meters of natural gas daily.
CPC also drilled four wells at sea. One can produce about 30,000 cubic meters of natural gas daily.
In fiscal 1982, CPC plans to reduce imports of oil by 12.19 percent.
Revenue will reach NT$261.854 billion (about US$7.274 billion) and expenditures will total NT$249.459 billion (about US$6.929 billion), leaving a surplus of NT$12.395 billion (about US$344 million).
Lee told legislators CPC plans to drill 16 new wells and 6 geothermal wells on land and 7 wells at sea.
The company will continue its oil exploration projects with counterparts in the Philippines and Latin America. It will also seek oil exploration agreements with companies in Indonesia, Colombia, the Middle East and Australia.
Construction of a fourth naphtha cracking unit and other plants, oil storage tanks and pipelines will continue.
Labor productivity second in the world
Singapore, the Republic of China and Switzerland are the top three on a 60-nation world list of high labor productivity countries, standing much higher than such industrial giants as Japan, West Germany and the United States.
The list was compiled by the Deri Institute for a West German conference of international business leaders, scholars and other decision-makers.
Professor F.T. Haner, director of the Deri Institute, listed the top 10 as Singapore, the ROC, Switzerland, Holland, South Korea, France, Japan, the Philippines, West Germany and the United States.
Labor productivity criteria include social and labor policies, cost of production and wage levels involving output.
Professor Haner also directs attention to political stability and the investment climate.
More purchasing teams to visit U.S.
The government will increase the number of "Buy American" missions, said C.C. Lu, deputy director general of the Board of Foreign Trade.
"Our government is planning to reduce the trade imbalance with the United States to US$1.8 billion or less this year," Lu said.
Lu led the sixth mission to the United States earlier this year. It purchased US$l.708 billion worth of goods.
In 1978, the ROC had a favorable balance of US$2.6 billion in U.S. trade. The amount dropped to US$2.2 billion in 1979 and US$2.08 billion last year.
Koo Chen-fu, chairman of the Chinese National Association of Industry and Commerce, has been elected chairman of the Re public of China-United States Economic Council, a private organization devoted to promoting economic relations between the two countries.
Koo, who was vice chairman of the council, succeeds T.K. Chang, 81, who retired for health reasons. K.H. Wu, secretary general of the council, was elected vice chairman.
Reagan's daughter seeks ROC trade
"We know that trade restrictions are not the answer. We know that the U.S. is not buying too much but is not selling enough," said Maureen Reagan, the U.S. president's elder daughter, regarding the protectionist trends and solutions to America's worldwide trade deficit.
On behalf of the private Sell Overseas American Association (SOS America), Maureen came to Taipei to promote U.S. exports.
"We are teaching, helping and working with our people, encouraging them to come here to sell their products, so that you don't have to go there to buy," she said.
SOS America was started three years ago to help American businessmen sell their goods abroad.
Trademark piracy under the gun
Beginning in August, the Bureau of Commodity Inspection and Quarantine of the Ministry of Economic Affairs will crack down on trademark piracy and false indication of the place of manufacture.
The bureau has revised several regulations and will enforce quality control rules and commodity inspections.
Manufacturers applying for export permits must prove trade marks are authorized.
The bureau has initiated inspection of woolen textiles made for the domestic market.
Asian region hurt by protectionism
The Asian business sector strongly decries "protectionism" and other restrictive measures of developed countries, Jeffrey L.S. Koo, president of the Confederation of Asian Chambers of Commerce and Industry, said in Tokyo.
Koo, who is president of the China Investment and Trust Company, pointed to the quota system or market-sharing agreements, so-called "voluntary cutbacks" and a wide spectrum of non-tariff barriers as damaging to Asian exports.
"Asia cannot fully understand the justification of unemployment as a reason for protectionism considering that Asia has more unemployment than any other region," he said. According to ILO estimate, Asia needed more than 180 million new jobs in 1980 and has 800 million people living in poverty.
Protectionism is no longer just threat. It is affecting the exports of developing countries in the region, Koo said.
Taiwan still bullish on 1981 investment
Despite the sluggish world economy, Taiwan investments by foreigners will exceed last year's level, an official of the Ministry of Economic Affairs reported.
Investments declined by 26.6 percent in the first five months of 1981. However, applications are pending in chemicals, auto parts, metal and electronic products and consumer goods.
Rockwell International of the United States will invest US$7 million to set up a plant for the production of heavy-duty truck axles. The application was approved by the Investment Commission.
Rockwell decided on the venture to supply parts for trucks made by the Hua Tung Automotive Corporation.
Eaton Corporation of the U.S. has decided to invest US$6 million to build a Taoyuan plant to make axles and steering and braking systems for trucks. Eaton also will supply Hua Tung.
Auto industry far behind Japan
The auto industry of the Republic of China is a quarter of a century behind that of Japan, according to the Economic Research Center of the Ministry of Economic Affairs.
Experts at the Ministry of Economic Affairs do not believe the industry is making 70 percent of their parts as claimed. Japanese automakers familiar with the local industry say only 30 percent of parts are made in Taiwan.
Officials of the Industrial Development Bureau put the figure at 40 percent and Professor Chen Cheng-cheng of the National Taiwan University's Economics Institute at 50 percent.
The Research Center says it took the Nissan Motor Company, No. 2 automaker in Japan, 28 years to export half of its output and Toyota Motor Company, No. 1 in Japan, 30 years.
In 1980, the Chinese industry turned out 130,000 vehicles, a level reached by the Japanese in 1956.
In parts production, the local industry is at the 1950 Japanese level.
The Chinese government has been negotiating with Toyota and Nissan for a joint venture that would eventually turn out 200,000 compact sedans annually, half for export.
The signing of a technical cooperation agreement between the San Fu Motors Industrial Company and France's Regie Nationale des Usines Renault was held in Taipei.
Marcel Peyre, executive vice president of overseas operations of Renault, said Renault is the biggest car maker in Europe and the fifth biggest in the world.
Renault will help San Fu produce a newly designed "in between" model, which will average 17 to 18 miles per liter. Production in the first year is set at 1,500.
State enterprises not easy to sell
There are practical problems to consider in selling public enterprises to private interests, said Economic Vice Minister Y.T. Wong.
Wong told legislators that if the enterprise is profitable, it would come under control of big business groups.
If the enterprise is losing money, it would have to be sold cheap.
The government would also have to consider the future of employees.
During the land reform program of the 1950s, seven state enterprises went to former landlords as payment for land. No such transfers have been made since.
Wong told legislators that the 15 public enterprises under the Ministry of Economic Affairs are expected to show profit of NT$33,277 million (about US$924 million) in the 1982 fiscal year. The figure represents an increase of NT$20,313 million (about US$564 million) over the 1981 fiscal year.
Interest changes will combat inflation
Governor Yu Kuo-hwa of the Central Bank of China defended increases in interest rates as helpful in arresting inflation.
Yu told members of the Control Yuan that the Central Bank of China and the Bankers Association of Taipei had to increase interest rates on savings by from 1 to 1.5 percent to attract deposits.
Interest on savings now varies according to the time, ranging from three months to three years. Interest on a three-year account is 15 percent as of June 15.
The top loan rate is 18 percent, up from 16.8 percent.
15 minimum age for workers
The Executive Yuan has approved the draft of a new labor law setting 15 as the minimum age for workers. Exceptions may be made if employment does not interfere with studies and psychological development.
Maximum monthly overtime was set at 46 hours for men and 24 hours for women.
More women to join job force
More women are expected to join the work force as the labor shortage grows, a Directorate General of Budget, Accounting & Statistics report said.
The labor force is smaller in terms of population percentage than in the United States and Japan because fewer women work.
In 1980 the employed percentage was 58.3, higher than in South Korea, the Philippines, West Germany and France.
In March of this year, 6,620,000 people were working, up by 2.23 percent from March of 1980.
The labor force structure has undergone tremendous change. In 1952, the farm population made up 56.8 percent of the force. The figure was 19.53 percent in March, 1981. In the same period, the industrial labor force rose from 15.94 percent to 41.34 percent and that of services from 27.26 percent to 39.13 percent.
Aluminum ingot price reduced
Local processors have agreed to buy the same amount of aluminum ingots from the Taiwan Aluminum Corporation as they import.
The agreement was reached at a meeting convened by Economic Vice Minister Y.T. Wong and attended by executives of TAC and such leading processors as China Rebar Corporation, Pacific Electric Wire and Cable Company Ltd. and Walsin Lihwa Electric Wire and Cable Corporation.
Imports were temporarily halted in early June as processors stopped buying from TAC be cause of high prices.
TAC was forced to shut down one of its two smelters, reducing annual production from 88,000 tons to 50,000 tons.
Before the agreement, the price of TAC ingot was NT$86,950 (about US$2,415) per ton, much higher than the US$1,400 (NT$50,400) per ton quoted in the U.S. and Europe.
TAC agreed to lower the price to NT$64,000 (about US$1,778) per ton.
TAC attributes higher prices to production costs. "We have to spend about US$640 more than our rivals on power for every ton of ingot we produce," an official said.
TAC officials predicted that 1981 consumption of ingots will decline from last year's 120,000 tons to about 100,000 tons.