Economic growth in 1979 was about 8.03 per cent in real terms and per capita income NT$61,929 or US$1,720 at current prices, according to the Directorate General of Budget, Accounting and Statistics.
The gross national product was estimated at NT$1,164.1 billion (about US$32.3 billion) at current prices, an increase of 20.27 per cent at current prices, and NT$940.6 billion (about US$26.1 billion) or 8.03 per cent at the constant prices of 1976.
Per capita income of US$1,720 represented an increase of 17.99 per cent. At current prices, the amount was US$1,869.
Agriculture registered an upturn of a 2.14 per cent compared with the 1.54 per cent decline of the preceding year. The growth rate for industrial production dipped to 7.47 per cent from 1978's 18.02 per cent. Services grew by 10.77 per cent compared with 12.37 per cent in 1978.
Pushed by the three international oil price hikes and the rising costs of basic metals and wages, wholesale prices were up 13.88 per cent and retail prices 10.26 per cent. The GNP deflator, broadest measure of price changes, advanced by 11.32 per cent.
US$39 billion trade goal set
Foreign trade is expected to top US$39 billion this year.
H.K. Shao, director general of the Board of Foreign Trade, said exports are expected to reach US$19,555 million and imports US$19,521 million, leaving a surplus of only US$34 million.
Trade totaled US$30,874 million last year for a gain of US$7,160 million (30.2 per cent) over 1978.
Industrial products remained the top foreign exchange earner with sales of US$14,565.9 million. Exports of processed agricultural products earned US$837.1 million and unprocessed agricultural products US$703 million.
Exports were US$16,106.5 million for an increase of US$3,419.4 million (27 per cent) and imports were US$14,767.5 million for a rise of US$3,740.6 million (33 per cent). The favorable balance totaled US$1,339 million.
Taiwan imported US$10,194.9 million worth of raw materials, US$3,627.3 million worth of capital goods and US$945.3 million worth of consumer goods.
Trade with the United States totaled US$9,028.9 million, including exports of US$5,647.1 million and imports of US$3,381.8 million. The favorable balance of US$2,265.3 million was nearly US$400 million less than in 1978.
Trade with Japan amounted to US$6,808.1 million with exports of US$2,246.1 million and imports of US$4,562 million. The deficit was US$2,315.9 million.
Taiwan exported US$1,158.3 million worth of goods to Hongkong and imported US$1,155 million worth of crude oil from Kuwait.
U.S. asks lowering of trade barriers
The Republic of China should remove trade barriers to balance trade with the United States, a U.S. congressional study group said.
Senator Lloyd M. Bentsen, Jr. (D-Tex.), chairman of the Joint Economic Committee of the U.S. Congress and leader of the 17-member delegation, and Representative Clarence J. Brown (R-Ohio), vice chairman of the committee, urged the government to continue reducing duties on American products.
Senator Bentsen said the Chinese government reduced tariffs on 309 U.S. products last year. The U.S. government responded in kind.
The U.S. government appreciates the dispatch of "buy American" missions to increase procurements of U.S. equipment and grains, the senator added.
Garment exports top US$2 billion
Taiwan exported a record US$2 billion worth of garments last year.
Garments made up 53 per cent of the total. These were major categories:
—Woven fabric apparel: US$750 million, up 20 per cent.
—Knitwear. US$906 million, up 10 per cent.
—Wool knitwear. US$410 million, a slight reduction.
Taiwan exported about US$1,000 million worth of footwear last year.
Manufacturers said their shoes are enjoying brisk sales because of high quality and competitive prices.
Exports showed an increase of 28 per cent compared with the volume of US$780 million in 1978.
Investments set US$328 m. record
Foreign and overseas Chinese investments set a record of US$328,835,000 last year. The previous high of US$248 million was in 1973, the Investment Commission said.
Foreign investors poured in US$181,483,000 for a gain of 32.74 per cent. Overseas Chinese businessmen supplied US$115.906 million, up 93.35 per cent.
The leading category was electrical machinery apparatus, followed by services and non-metal products.
Technical cooperation agreements numbered 133, an increase of 23 over 1978. Most were in the electrical machinery apparatus field. Technical agreements in chemical and machinery industries showed gains.
An official of the commission attributed the sharp increase to the improved investment climate, the stable political and social environment and, above all, to government incentives and encouragement.
The government revised the encouragement statute to make investment more attractive.
The increase was also significant politically in the aftermath of the diplomatic break between the Republic of China and the United States.
American businessmen still had confidence in the future of the Republic of China.
Foreign and overseas Chinese investments in Taiwan since 1952 have reached US$2,252,439,000, the Ministry of Economic Affairs said.
Of the 2,627 investment applications, 1,436 for US$742,103,000 were from overseas Chinese. The remaining 1,191 for US$1,510,336,000, came from foreigners.
10-year growth of 7.9% expected
A revised 10-year economic development plan calls for the annual growth of 7.9 per cent in real terms and annual average inflation of 6 per cent.
The plan was approved by the Council for Economic Planning and Development.
Per capita income is expected to reach US$6,107 with annual growth of 8 per cent during the first five years and 7.8 per cent during the second five years.
Other highlights of the plan:
—Increase in productivity and more efficient use of energy.
—Improvement of transportation.
—Import of sufficient oil (380,000 barrels a day this year at a cost of US$2.4 billion). The volume will be 650,000 barrels a day by 1989.
—Export growth of 12.5 per cent in real terms with volume of US$200 billion in 1989.
—Unemployment of 1.3 per cent.
Duties will be cut over 4-year period
The Finance Ministry plans to reduce import duties from the present average of 39 per cent to 13 per cent in four years.
Customs revenue is a major sources of government funds, so the cuts will be gradual.
The average will be cut from 1979's 39 per cent to 32 per cent this year, 25 per cent in 1981, 18 per cent in 1982 and 13 per cent in 1983.
Reduction priority will be given to raw materials which are unavailable in Taiwan and to production facilities which cannot be produced locally.
Steel expansion to cost US$1.31 b.
The state-owned China Steel Corporation has obtained financing for expansion of annual production capacity from 1.5 million metric tons to 3.25 million tons by June of 1982.
China Steel will invest NT$50 billion (more than US$1.31 billion). US$600 million will come from foreign loans.
CSC is raising prices in April to pay high fuel costs.
In the last two years, the company has exported half of its products, including steel plates, bars and billet to some 20 countries.
Oil sufficient for early 1980
Oil supplies will be sufficient in the first half of this year.
M.L. Chang, vice president of the Chinese Petroleum Corporation, said Abu Dhabi in the Middle East will sell oil to the Republic of China.
Abu Dhabi produces about 1.6 million barrels of crude daily.
Kuwait, which accounts for more than two-fifths of the oil imported by CPC, will increase sales to Taiwan from last year's 72,000 barrels daily to 80,000 barrels.
Chang said Saudi Arabia, which supplies two-fifths of Taiwan's oil, will raise daily exports to CPC from 20,000 to 50,000 barrels.
Free China imported between 320,000 and 330,000 barrels of oil daily last year. Because of conservation programs adopted by the government, no large increase in oil imports should be needed to sustain economic growth this year.
NT$ not in need of devaluation
The Republic of China should not follow the example of South Korea in devaluing its currency, an American economist said.
Dr. Raymond Jallow, senior vice president and chief economist of the United California Bank, addressed a meeting of the American Chamber of Commerce.
Jallow said the devaluation of the Korean currency will only "benefit Korea's exports in the short run," as was the case with the 20 per cent devaluation of 1974.
Usually, the American economist said, currency devaluations take place only when there is a large balance of payments deficit. "Korea needs such a move," he added. Taiwan has a sizable trade surplus and its inflation rate is still quite low. There is no reason to devalue, Jallow said. He also approved the Taiwan decision not to subsidize petroleum prices.
"The U.S. recession in 1980 will adversely affect exports from the ROC, especially in such areas as textiles and consumer electronics," Jallow said. "In contrast, exporters of electrical machinery should have a relatively good year, and demand for all products will be stronger than in the 1974-75 recession."
Exports of whole industrial plants are showing a rapid increase. (File photo)
Eastern European trade explored
Some exploratory steps have been taken since the government announced establishment of trade relations with five Communist countries in Eastern Europe, the China External Trade Development Council director said.
Wu Kuan-hsiung said CETDC has collected 120 publications with information on East Germany, Czechoslovakia, Poland, Hungary and Yugoslavia. The materials are available at the CETDC data office.
CETDC made inquiries about entry visas for Chinese businessmen through its representative in Vienna.
Czechoslovakia and Poland have expressed willingness to issue visas for three months.
Some obstacles remain, Wu indicated. He said trade with Communist countries is different from that with the free world.
Industrial output falls short of goal
Industrial production in 1979 grew only 8.1 per cent, falling short of the goal of 11.3 per cent.
A breakdown showed:
—Mining: Down 1.3 per cent.
—Manufacturing: Up 7.1 per cent.
—Light industry: Up 6.5 per cent.
—Heavy industry: Up 7.5 per cent.
—Public utilities: Up 8.7 per cent.
—Construction: Up 25.4 per cent.
Construction was up as consumers bought buildings as a hedge against inflation.
Automobiles registered the highest industrial growth with production of 116,000 units for a gain of 50.5 per cert.
Output of electronic watches dropped 24.2 per cent to 6.1 million pieces.
Free economy wins confidence
Development of the free economy will enable the Republic of China to break through expected worldwide economic stagflation in the 1980s, an economist said.
Addressing a Sun Yat-sen memorial meeting of the Kuomintang, Professor Wang Tso-jung called on the government to revamp its educational and science development policy to meet the technological needs of sophisticated industries.
Professor Wang attributed economic growth and stability in the world during the 1950s and 60s to sound money, technical advances and abundant energy and raw materials.
"Unless a miracle occurs, there will be more of the same in the 1980s," he said.
Shipbreaking still leads the world
The shipbreaking industry faces a difficult year as more countries seek old ships, said C.L. Kao, secretary general of the Taiwan Regional Association of the Old Ship Demolition Engineering Industry .
Kao said Japan, South Korea, Spain, Portugal and other countries are buying old ships in increasing numbers.
The price has nearly doubled since early 1979.
In January, Taiwan bought only two ships of 5,000 to 6,000 tons at a price of US$220 per LDT.
Kao predicted a price of US$250 in 1980.
In 1979, Taiwan bought 340 old ships totaling 2.2 million LTD, down some 300,000 LDT from 1978.
Taiwan has been the No. 1 importer of old ships for more than a decade.
Auto industry will slow down
The automobile industry is expected to grow slowly but steadily for the next five years despite the energy crisis.
Economic Vice Minister William Wei, concurrently the convener of the ad hoc Committee for Development of the Automotive Industry, made the forecast after visiting the plants of the Ford Lio Ho Motor Company at Chungli and the China Motor Company at Yangmei, Taoyuan.
He expects growth between 1980 and 1984 to average more than 11 per cent annually compared with gains of about 50 per cent in 1977,1978 and 1979.
Night shifts to cut power bills
Factories are urged to make full use of their night shifts to minimize increases in their power bills.
A Taiwan Power Company official said a plant with installed capacity of 500 kilowatts and up can save NT$400 million (US$11.1 million) annually if part of its working hours are shifted to night.
In August of last year, Taipower adopted a dual rate system offering special industrial rates between 10:30 p.m. and 7:30 a.m. and on Sundays and holidays.
Taipower statistics indicate that annual consumption of electricity by large users averages 10,000 million kilowatt-hours. Peak-hour consumption accounts for 60 per cent.
Full use of off-peak electricity would avert the usual power shortage in the summer.
Funds allocated for construction
The Taiwan Provincial Government has decided to spend NT$99,900 million (about US$2,770 million) for construction projects in 1980.
NT$53,750 million (about US$1,493 million) will be used for the general plans and the rest for special plans.
A breakdown shows:
(1) For general plans.
—Social reconstruction: NT$20,400 million (about US$567 million).
—Infrastructure: NT$17,400 million (about US$483 million).
—Agriculture: NT$10,200 million (about US$283 million).
—Industry: NT$5,500 million (about US$153 million).
(2) For special projects:
—Widening the gauge of the Eastern Trunk Railway: NT$2,220 million (about US$61 million).
—South link railway: NT$700 million (about US$20 million).
—New east-west cross-island highway: NT$680 million (about US$ 19 million).
—Improving transportation in the Kaohsiung and Pingtung areas: NT$580 million (about US$16 million).
—Third-phase construction of Taichung harbor: NT$1,800 million (about US$50 million).
—Developing communities in the Taichung harbor area: NT$130 million (about US$3.6 million)
—Development of Linkou township: NT$740 million (about US$20 million).
—Public housing projects: NT$17,100 million (about US$478 million).
—Farm irrigation system: NT$420 million (about US$12 million).
—Embankments along the west coastal line and major rivers: NT$2,800 million (about US$78 million).
—Widening the Pingtung-Oluanpi highway into four lanes: NT$50 million (about US$21 million).
—Farm mechanization: NT$6,100 million (about US$170 million).
—Cultural centers for cities and counties: NT$280 million (about US$8 million).
Machinery exports growing rapidly
The machinery industry is progressing rapidly and increasing its share of exports.
The government classifies the industry as qualifying for special incentives.
Emphasis has been placed on export of machinery sets and whole plants.
Sale of whole plants has been expanding rapidly since 1977 as a result of high quality, low cost, punctual delivery and after sales service.
The Industrial Development Bureau of the Ministry of Economic Affairs said 79 whole plants worth US$22.5 million were exported in 1977. In 1978 plants totaled 117 and value US$28.1 million. The 1979 value was about US$60 million.
Indonesia ordered a synthetic fiber plant worth US$23 million in 1979.
Exports of machinery in 1979 were valued at about US$600 million compared with US$347 million in 1976, US$400 million in 1977 and US$541 million in 1978.
Larger whole plants sold abroad are for making paper, plastic and cans. Smaller plants are for cement, textiles, rolled steel, marble, wood, sugar and foodstuffs.