Foreign trade totaled US$986.8 million in January, an increase of 13.3 per cent over the same month a year ago, according to customs statistics.
Exports in January amounted to US$523.1 million against imports of US$463.7 million, leaving a favorable balance of US$59,4 million.
A breakdown of the trade structure showed:
A. Exports
- Agricultural products: US$19.6 million, 3.7 per cent.
- Processed agricultural products: US$29,4 million, 5.6 per cent.
B. Imports
- Capital goods: US$141.3 million, 30.5 per cent.
- Raw materials: US$298.7 million, 64,4 per cent.
- Consumer goods: US$23.7 million, 5.1 per cent.
The United States, Japan, West Germany and Hongkong were the top trading partners.
Sino-American trade amounted to US$294.2 million with exports of US$187.2 million and imports of US$107 million.
Trade with Japan totaled US$218,4 million (exports of US$52.7 million and imports of US$165.7 million).
German trade was US$52.7 million (US$32.5 million in exports and US$20.2 million in imports).
Hongkong volume was US$51.8 million with a favorable balance of US$39.8 million.
Central Bank figures based a foreign exchange settlements showed January trade of US$1,021.9 million, an increase of 31.6 per cent over January, 1975. Exports of US$595 million exceeded imports of US$426.9 million by US$168.1 million.
Foreign exchange settlements run about three months ahead of arrivals and shipment of commodities.
January investment shows increase
Foreign and overseas Chinese investment amounted to US$5,536,000 in January, an increase of 5.71 per cent over January of 1974.
US$2,707,000 was invested by overseas Chinese and US$2,829, 000 by foreigners.
US$2,214,000 (39.89 per cent) went to the electrical machinery apparatus industry.
Textiles received US$1,654, 000 (19.04 per cent) and construction US$591,000 (10.68 per cent).
A breakdown showed:
A. Foreign investments
- US$1,259,000 from the United States.
- US$1,478,000.from Japan.
- US$45,000 from Europe.
- US$47,000 from other areas.
B. Overseas Chinese investments
- US$1,997,000 from Overseas Chinese in Hongkong.
- US$260,000 from Japan.
- US$450,000 from other areas.
The Ministry of Economic Affairs approved five technical cooperation projects, four with Japanese companies and one with an American company.
Foreign and overseas Chinese industrialists have invested US$1,405,247,000 in Taiwan in the last 23 years.
US$994,916,000 was invested by foreigners and US$411,331,000 by overseas Chinese.
US$444,145,000 was invested in electrical apparatus industries, representing 31.61 per cent.
The chemical industry received US$168,810,000 (12.01 per cent) followed by machinery at US$114,967,000 (8.18 per cent).
A breakdown for the 23 years showed:
A. Foreign investments
- United States US$470,043,000.
- Japan US$215,872,000
- Europe US$161,641,000.
- Other areas, more than US$140 million.
B. Overseas Chinese investments
- Hongkong, US$177 ,798,000.
- Japan, US$26,531 ,000.
- Other areas, US$206,002,000.
Economic minister counsels capitalists
Economic Minister Y.S. Sun told local investors to steer away from investment in industries that consume huge amounts of energy and those whose products are subject to import controls.
Other less welcome investments are those that contribute to air and water pollution and those in labor-intensive industries.
Sun told the Chinese National Association of Industry and Commerce that favored investments are those which will:
- Upgrade the quality of existing products or cut production costs.
- Make maximum use of modern production techniques.
He cited midstream and downstream petrochemical projects, heavy machinery, heavy electrical machinery, precision instruments, whole plants, auto parts, farm machinery and transportation equipment for local use.
The minister cited these 10 favorable factors for development and investment:
- Sound economic system and wise policy.
- Political and social stability.
- Work discipline and high education standards.
- Price stability.
- Expanding infrastructure.
- Abundant low-cost energy.
- Development of heavy and petrochemical industry.
- Liberal investment policy.
- Well-developed machinery and electrical apparatus industries.
- Close cooperation between the government and the business community.
Exporters briefed on new U.S. tariffs
Trade authorities will go all-out to help manufacturers gain benefits from the newly enforced U.S. preferential tariffs.
Exporters were briefed by officials of the Board of Foreign Trade, Industrial Development Bureau, Bureau of Commodity Inspection and Quarantine and China Productivity Center.
Y.T. Wong, director general of BOFT, said government agencies will take the following steps to help industries:
- BOFT will help manufacturers gain U.S. customs privileges and monitor U.S.-bound shipments in conjunction with BCIQ.
- IDB will help with raw material supplies and production efficiency.
- BCIQ will simplify procedures for certificates of origin.
- The China Productivity Center will indicate products which stand the best chance of entering the U.S. market duty free or at reduced tariffs.
The U.S. GSP system became effective January 1 and will remain in force for 10 years.
Taiwan products entitled to preferential number 835 out of a possible total of 2,724.
Investment climate remains positive
The investment climate in the Republic of China is unusually positive and there is "no reason to believe that this situation will run for the worse," a leading American business executive said.
Marinus van Gessel, president of the American Chamber of Commerce, also suggested that this year will be much better than 1975 in terms of sales and profits.
Van Gessel said the host government is always ready to consider the problems of investors.
Van Gessel noted that eight American banks have opened branches in Taiwan.
The president of the Pacific Glass Corp. said American industries in Taiwan operated far below capacity in 1975. Recovery has been slow, he added, but "1976 will definitely be a better year."
The American Chamber of Commerce will prepare several position papers of importance to foreign investors in 1976. These will go to the host government.
Recovery expected to develop slowly
The Taiwan business community has been counseled against overoptimism regarding economic recovery.
Yu Kuo-hua, governor of the Central Bank, said: "It's true that we have pretty good economic prospects this year, but don't let yourself be mesmerized by the illusion that everything will be all right."
Yu pledged to continue support of export industries, provided stability is not undermined.
"The primary goal of our fiscal policy is to create an environment under which steady economic growth is possible," Yu said.
Prof. Sun Chen, vice chairman of the Economic Planning Council, cautioned against expecting a high rate of trade growth in the next six years.
"This is the time to look in ward and readjust our own economic structure to cope with the external changes," he said.
Prof. Sun said free China needs to develop capital - and technology - intensive industries.
Flexible money mart possible for Taiwan
Taiwan can develop a flexible exchange rate because its economy is large and stable, Dr. Peter Kenen, a Princeton University economist, said.
The consultant to the U.S. Treasury Department and U.S. President's Council of Economic Advisers, told Taiwan economists and experts that the New Taiwan dollar could be pegged to "some average of the Japanese yen and the U.S. dollar."
"Those people who say business could not stand a flexible exchange rate don't seem to notice that a good many Taiwan businesses are already dealing with a flexible exchange rate, mainly the exchange of the yen," he said.
"It makes more sense for you to be completely stable in terms of the U.S. dollar and completely flexible vis-a-vis the yen than to be completely stable vis-a-vis the yen and completely flexible vis-a-vis U.S. dollar.
"If a small economy is also a stable economy internally and if it is lucky or very wise in economic management, then a flexible exchange rate is probably manageable. There is little danger that foreign money will be substituted for domestic money in domestic transactions.
"But if the economy is small and unstable, people may prefer to conduct transactions in a more stable foreign money.
"A flexible exchange rate is good insulation for the economy. I think a continued export-oriented growth is terribly important for an economy like Taiwan."
ROC economy gets attention in NYT
"President Yen and Premier Chiang share the conviction that the success of the Taiwan economy is the key to the return of freedom and constitutional government to the Chinese mainland," according to the New York Times.
The Times published its annual "International Economic Survey" in its "Business and Finance" section. The comprehensive and extensive survey occupying 63 pages devoted 1½ pages to reporting economic developments in the Republic of China.
Headlined "Free China Achieves Continued Economic Growth With Stability" and illustrated with a portrait of Premier Chiang, the 5,000-word report first gave a sketch of Taiwan economic strength as reflected by its gross national product and per capita income in 1975, as well as by its ability to battle against inflation.
Then it introduced the "six-year development plan," the "ten basic construction projects," the "good climate for investment" and the "export processing zones."
Finally, it asserted that "Free China's economic prospect is further enhanced by the strength of its government team." It said in this connection:
"The constitution of the Republic of China assured a smooth transition of leadership after the death of President Chiang Kai-shek on April 5 last year. Yen Chia-kan, who served as Vice President for nearly a decade and before that had held economic and finance portfolios and governed Taiwan, stepped into the chief executive's shoes.
"Premier Chiang Ching-kuo, the elder son of President Chiang, remained as Premier and succeeded his father as changes were made in the cabinet. The able K.T. Li remained as Finance Minister and Y.S. Sun as Economic Minister. Both are well known to American industrialists and businessmen."
Growth of 6.4 per cent expected this year
The Executive Yuan has approved an Economic Planning Council plan which sets the nation's economic growth rate at 6.4 per cent this year.
The industrial growth rate is set at 8 per cent and that for agriculture at 3 per cent.
The government will push the Ten Basic Construction Projects and promote rural reconstruction. It will also:
- Support industrial and agricultural exports.
- Increase food production and improve food transportation and storage systems.
- Encourage the establishment of capital and technology-intensive industries.
- Establish a money market. Lower import duties for important commodities and
raise them for nonessential products.
- Urge factories to buy machinery and raw materials on the domestic market
whenever possible.