The Republic of China will limit the export of non-rubber footwear to 140.17 million pairs between July 1 this year and June 30, 1982, the Board of Foreign Trade reported.
The move is designed to show restraint after President Ronald Reagan ended the four-year quota agreement on imports of Taiwan-made footwear.
H.K. Shao, director general of the BOFT, said 20 percent of the export total was being allocated to new factories (but set up before June 30) and those with export records between July 1, 1980, and June 30,1981.
Forty percent goes to old factories with export records for the last year.
Twenty percent goes to factories selling high quality shoes at prices ranging from US$3 to some US$9 per pair.
The remaining 20 percent is for open tender.
Exports of rubber shoes will not be restricted.
The new export volume of 140.17 million pairs is up from the 1980-81 fiscal year's 131 million pairs.
There are nearly 700 shoe factories in Taiwan, which is the world's No.1 shoe supplier. Shoes are exported to more than 80 countries. This year's export volume will reach US$1.5 billion, an official of the Taiwan Footwear Manufacturers Association said.
Another trade surplus recorded
The nation scored a trade surplus (US$22.8 million) in June for the second month in a row, according to statistics of the Directorate General of Budget, Accounting and Statistics. May's surplus was US$132.7 million.
The June volume was US$3,896.2 million. Exports were US$1,959.5 million and imports US$1,936.7 million.
The 1981 six-month total was US$22,080.2 million, up US$3,148.3 million or 16.6 percent over the same period last year.
Exports in the January-June period were US$10,801.1 million, up US$1,445.2 million or 15.4 percent. Imports were US$11,279.1 million, up US$1,703.1 million or 17.8 percent. The deficit was US$478 million for the first half of the year.
On the export side, industrial products headed the list at US$9,878.9 million, 91.5 percent of the total. Processed agricultural products ranked second at US$618.9 million (5.7 percent) and agricultural goods last at US$303.3 million (2.8 percent).
On the import side, raw materials led the list with imports of US$7,686.5 million or 68.1 percent. Capital goods ranked second at US$2,935.6 million (26 percent) and consumer products third at US$657 million (5.9 percent).
U.S. trade totaled US$6,334.9 million with exports of US$3,661.1 million and imports of US$2,673.8 million.
Trade with Japan was US$4,226.8 million with a deficit of US$1,899.8 million, up from US$1,576.5 million a year ago.
Atlanta to be site of economic meeting
The fifth joint conference of the ROC-USA Economic Council and USA-ROC Economic Council will open at Atlanta, Georgia, November 9.
The three-day annual meeting will be attended by more than 800 government officials and businessmen from the two countries. Presiding will be C.F. Koo, chairman of the ROC-USA Economic Council, and David Kennedy, chairman of the USA-ROC Economic Council.
Participants will be divided into eight panels: agricultural products and foodstuffs, banking and finance, engineering, electronics and telecommunications, machinery and metal products, chemicals and petrochemicals, electricity and energy, and transportation.
ROC ranks 20th in world trade
Free China was the world's 20th biggest trading nation last year, according to the Council for Economic Planning and Development.
Reviewing foreign trade for the last 28 years, officials of the council said volume increased 130 times.
In 1952, trade totaled only US$300 million compared with US$39.5 billion last year. In 1953 Taiwan's world trade rank was 61st.
Officials attributed the outstanding performance to the unceasing efforts of businessmen and good guidance from government.
To combat the growing wave of protectionism, the government will help industrialists obtain raw materials.
Premier Sun gives economic guidance
Premier Sun Yun-suan instructed the Council for Economic Planning and Development to raise the competitiveness of ROC products in international markets.
Premier Sun gave the following instructions to CEPD:
—On promoting investment: Stimulate public interest, exchange views with entrepreneurs, help solve the problems of manufacturers and find opportunities.
—On raising competitiveness of exports: Take timely and effective measures to cope with changing situations in world markets, increase productivity to counter the pressure of higher costs and help manufacturers develop more export markets and improve the quality of products.
—On promoting basic reconstruction: Study ways and work out plans to improve the infrastructure.
—On manpower planning: Enhance long-term human resources planning to train more experts and specialists, especially in electrical engineering and mechanical engineering, for the development of technology-intensive industry.
The Premier also instructed CEPD to do more in-depth research on the following subjects:
—Investments abroad.
—Feasibility of making Taichung and Kaohsiung Harbors transshipment centers.
—Taichung Harbor free trade area as part of a world trade center.
Latin American commerce up
Trade with Central and South American countries has increased rapidly in recent years.
Volume was US$1,130 million in 1980 with exports of US$917 million and imports of US$221 million
Eleven countries will establish the Latin American Integration Association to replace the present organization—the Latin American Free Trade Association.
The 11 are Argentina, Brazil, Mexico, Chile, Colombia, Venezuela, Peru, Uruguay, Bolivia, Ecuador and Paraguay.
Agricultural trade shows deficit
Two-way trade in farm products was US$5.122 billion in 1980: US$2.032 billion for exports and US$3.090 billion for imports.
The Department of Agriculture and Forestry of the Taiwan Provincial Government said the deficit was in line with the policy of developing industrial markets while buying farm products.
Imports were mainly agricultural and industrial raw materials. Exports were mostly consumer products.
According to customs statistics, export value of farm products was US$1.876 billion in 1980, an increase of 16.54 percent. Primary farm products totaled US$695.3 million, and processed products US$1.181, an increase of 25.69 percent.
Economic growth in the first half of this year reached 5.42 percent in real terms, compared with last year's 7.17 percent in the same period.
Government officials attributed the sluggish exports resulting from slow recovery of the world economy.
Banks expected to earn less
Faced with increased operating costs, local banks will find it difficult to repeat their 1980 performance.
Statistics from the Central Bank of China showed that the 24 banks had combined pretax earnings of NT$21.3 billion (about US$591 million) last year, representing a 57.9 percent increase over the NT$13.52 billion (about US$376 million) earned in 1979.
"I think the large profit gains were mostly registered during the latter half of last year, when interest rates on domestic and foreign money markets suddenly soared," said F.L. Ke, senior vice president and general manager of the First Commercial Bank's research and investment department.
Until the Central Bank relaxed interest rates early this year, fixed rate deposits accounted for a substantial portion of bank funds. The cost of funding was low compared with the yield on loans.
The Bank of Taiwan had the highest earnings in 1980: NT$4,579 million (about US$127 million). BOT also had the highest rate of earnings growth for the year: 133.6 percent.
Foreign debt ceiling to rise
The Ministry of Finance is working on a proposal to raise the ceiling of its foreign borrowing guaranty from US$6.5 billion to US$10 billion.
The increase is necessary to finance development projects.
As of the end of April, foreign debt amounted to about US$4.963 billion, more than 90 percent of it incurred by public enterprises.
In the next two years, the nation is expected to need about US$5 billion in foreign credits.
The ministry increased the ceiling of its foreign borrowing guaranty from US$4.5 billion to US$6.5 billion in December, 1979. In 1980, the debt service ratio was a low 4.55 percent. South Korea's debt ratio was about 20 percent last year.
The Central Bank of China announced a raise in the overall ceiling of pre-export loans handled by 23 foreign banks to US$900 million from the previous US$650 million.
General Motors' Roger Smith and Taiwan Machinery president Lay Ying. (File photo)
Big investments in sight this year
Foreign and overseas Chinese investments between 1952 and 1981 will aggregate more than US$3.2 billion, according to Lawrence Lu, director of the Industrial Development and Investment Center.
Lu said the volume from 1952 to June 30 of this year was US$2.857 billion. Foreign and overseas Chinese investments totaled US$138.62 million during the first half of this year.
Foreign investors poured in US$l.869 billion and overseas Chinese US$988 million between 1952 and June 30, 1981.
Lu projected that foreign and overseas Chinese investments will reach US$550 million in 1981 compared with US$466 million in 1980.
Investment applications now being screened amount to about US$260 million. Projects in view total another US$150 million.
Projects include video discs, electronic sewing machines, high quality foodstuffs, electronic parts and auto parts and components.
Science industries coming to Hsinchu
The government has approved 21 investments for the Hsinchu Science Industrial Park, the National Science Council reported.
Chairman Chang Ming-che told Premier Sun Yun-suan that the number of projects is expected to reach 30 by the end of the year.
Opened last year, the park is for technology-intensive industries. Several factories, including that of Wang Laboratories (Taiwan) Ltd., have begun operations.
Taiwan Automation Company plans to set up a plant for the production of Chinese computer terminals and microcomputers.
Local investment down sharply
Investments and expansion projects by Taiwan companies totaled 53.3 billion (about US$1,480 million) in the first half of the year. Newly established companies numbered 11,097, according to C.C. Peng, director of the Department of Statistics of the Ministry of Economic Affairs.
Compared with the same period a year ago, investments fell by 30.4 percent and the number of new firms declined by 8.1 percent.
Farming, forestry and livestock investments recorded growth of 69.7 percent, mining 34.4 percent and business 31.3 percent. Utilities were down 95.4 percent and services 82.1 percent.
Recovery began in June, indicating an investment upturn in the second half of the year.
General Motors to help Hua Tung
Hua Tung Automotive Corporation, a joint venture of General Motors and the Taiwan Machinery Manufacturing Corporation, will begin making diesel trucks in Taiwan with 32 percent locally made parts. This will be increased to 60 percent within five years.
Roger H. Smith, chairman of the General Motors board of directors, said that although engines will be almost 100 percent from the United States in the beginning, he did not anticipate any difficulties in fulfilling the 60 percent local content requirement.
When full production is reached, Hua Tung will have a capacity of 10,000 diesel trucks annually. The trucks will be made to U.S. specifications. Aside from requiring more frequent maintenance and oil changes to compensate for Taiwan's high sulfur-content fuel, these will be ideally suited to Taiwan conditions, Smith said.
Production, use of energy cut
Energy bought from domestic producers or on the international market in the first five months of this year totaled the equivalent of 13,503,000 kiloliters of petroleum, a decrease of 6.3 percent from last year, according to the Energy Committee of the Ministry of Economic Affairs.
In the same period, energy consumption totaled an equivalent of 12,225,000 kiloliters of petroleum, a reduction of 5 percent.
Energy supplied by domestic sources made up 13.4 percent of the total, equivalent to 1,815,000 kiloliters of petroleum, a decrease of 11 percent over last year. Imported energy was reduced by 5.5 percent. Nuclear power generation was up 12.6 percent.
The breakdown of consumption was as follows: coal, 12.2 percent; petroleum, 70.8 percent; natural gas, 5.9 percent; hydropower, 2.6 percent; and nuclear power, 8.5 percent.
As for consumers, energy organizations consumed 10.7 percent of the total; transportation, 11.4 percent; industry and mining, 45.9 percent; agriculture, 3.3 percent; households, 10 percent; business offices, 2 percent; and others, 5.6 percent.
The reduction was attributed to economic recession and the government's energy-saving measures.
Sharp increase in vehicles seen
Annual demand for motor vehicles will rise to more than 455,000 units by 1991.
The projection by the Council for Economic Planning and Development includes cars, buses and trucks.
Six existing auto plants in Taiwan can still expect annual sales growth of 9 percent even if an additional 200,000-unit plant is built, CEPD said.
China Airlines buying new planes
China Airlines, flag carrier of the Republic of China, plans to use more economical planes on international flights.
Eugene Chen, director of the sales and marketing department, said CAL will take delivery of a Boeing 747SP (special performance) aircraft in mid-September. It will obtain six more planes in 1982 and two others in 1983.
To be added in 1982 will be a 747-200, 747SP, 767 and three Airbuses on lease from the Civil Aeronautics Administration.
The first Airbus will join the CAL fleet in June, 1982, the second in July and the third in December. A fourth will be added in November, 1983. A second Boeing 767 will enter service in July of 1983.
The Airbuses and Boeing 767s will replace smaller fuel-eating Boeing 727s and 707s now flying between Taiwan and Hongkong, Manila, Kuala Lumpur, Singapore and Jakarta.
CAL has four Boeing 707s, including a freighter, and four Boeing 727s in service to Southeast Asia.
As a result of high fuel costs, CAL had a US$18 million deficit last year in business volume of more than US$350 million. This was small compared with the deficits of most airlines.
Fuel accounted for about 30 percent of operating costs up from 19 percent in 1978.
Working hours are declining
Hours of work are decreasing as the result of economic development, a higher living standard and an energy saving campaign.
The Council for Economic Planning and Development said average monthly working hours decreased from 241 hours in 1975 to 209 last year.
Per capita income last year was reported as US$2,282 compared with US$880 in 1975. (The official government figure is slightly lower.) The monthly pay of white collar workers increased from NT$3,737 (about US$104) to NT$10,411 (about US$289) in the same period.
Fund will spur petrochemicals
To finance petrochemical development, the Industry Development Bureau of the Ministry of Economic Affairs will study the feasibility of establishing a fund by taxing exports and imports.
The money would be used to adjust price differences and stabilize business operations of upstream and downstream plants.
Producers were urged to raise quality and enlarge production on the following basis:
—Long-term contracts between raw material suppliers and processors.
—New products and high class plastics and special chemicals.
—Higher added value products.
—Cooperation and investment from abroad.
—New technology and more research.
False trademarks, certificates hit
The Board of Foreign Trade has drawn up regulations to combat counterfeit trademarks and false certificates of origin.
BOFT held two meetings with business associations and related government bodies to learn their points of view.
Major points:
—Companies which export products with trademarks not registered in Taiwan must accept legal responsibility.
—If an exporter says his product carries no trademark but one is found, the exporter must accept legal responsibility.
—Letters from foreign buyers authorizing use of trademark may be used to obtain export permits.
—"Buyers" are defined as foreign importers, those opening letters of credit or the Taiwan branch of a foreign importer.
Shipyard revenues surpass target
China Shipbuilding Corporation's revenues in fiscal 1981 (July 1980-June 1981) amounted to NT$13 billion (US$361 million), surpassing the target by 30 percent.
CSBC continued to suffer a deficit because of the heavy burden of interest payments. The accumulated deficit of the state corporation since 1975 amounts to NT$5.3 billion (about US$147 million). The corporation has paid NT$5.4 billion (about US$150 million) in interest on its loans in the last six years.
CSBC has orders to keep it busy for two years. In fiscal 1982, the corporation may earn NT$16,557 million (about US$459 million).
A market analysis indicates demand remains strong for bulk carriers, semi-container vessels, small tonnage oil tankers and oil exploration vessels.