The Chase Manhattan Bank is organizing a consortium to offer a 12-year US$320 million loan to the Republic of China.
Richard Chi, chief of the Monetary Department of the Ministry of Finance, said international loans usually do not exceed 10 years.
Chase Manhattan organized the consortium to provide loans of US$120 million to the China Airlines and US$200 million to the Taiwan Power Company.
Interest is the prevailing rate in London plus 0.625 per cent for the first six years and plus 0.75 per cent for the second six years.
China Airlines will use the money to buy two Boeing 747s and the Taiwan Power Company to procure equipment.
TPC also signed an agreement with an international consortium for a loan of US$50 million. The consortium of six foreign banks includes the Toronto Dominion Bank and the Chemical Bank of the United States.
Committee to speed exports and imports
Ministries of Economic Affairs and Communications have organized a joint committee to resolve transportation problems slowing exports and imports.
The committee is headed by Economic Affairs Minister Chang Kwang-shih and Communications Minister Lin Chin-sheng.
Direct Taiwan-Latin American shipping service is planned as soon as possible in response to Costa Rican requests.
In recent months, delays in the delivery of bulk commodities have resulted in shortages. Delays in grain shipments were attributed to poor coordination between shippers and shipping companies.
The committee also decided to simplify cargo handling at the Chiang Kai-shek International Airport.
Inland transportation and storage facilities at Taichung Harbor will be improved.
Survey to ascertain textile difficulties
The China Textile Technology Research Center is planning a comprehensive survey of the textile industry to ascertain its problems.
An official said the survey will cover equipment, silk production, dyeing techniques and fabric manufacture.
Teachers from textile departments of colleges and universities will make the study.
Sun Chen-shu, president of CTTRC, said manufacturers place emphasis on equipment and neglect the importance of technicians. "As a result, Taiwan's textile machines are as good as those of more advanced countries, but the quality lags behind," he said.
Most textile producers import machinery that can be produced in Taiwan.
Premier salutes leading exporters
Premier Sun Yun-suan encouraged exporters to strengthen management, introduce new techniques, solidify their organizations and continue to enlarge export trade.
He was speaking at an awards ceremony for outstanding exporters.
"Last year's exports were valued at US$12.7 billion to set a record," Premier Sun said.
Special awards went to RCA Taiwan, Far East Textiles Corporation and Nanya Plastic Company for exporting more than US$100 million each.
Eighteen companies exported between US$30 million and US $100 million worth of products, 24 exported between US$20 million and US$30 million worth, 410 between US$4 million and US$20 million worth and 1,828 between US$1 million and US$4 million worth.
GE to cooperate in making generators
Progress toward heavy industry took a big step with signing of a joint agreement among the Taiwan Power Company, General Electric of the U.S. and the Central Investment Holding Company Ltd. to produce large steam turbine generators in Taiwan.
The US$100 million accord was signed by David S.L. Chu, president of Taipower; W.D. Dance, vice chairman and chief executive officer of GE; and S.Y. Wang, chairman of Central Investment'.
Taipower and General Electric will have shares of 45 per cent each and the remaining 10 per cent will be shared by Central Investment and the new manufacturing company, United Asia Electric.
Economic Minister K.S. Chang said General Electric's investment "indicates not only the confidence American businessmen have placed on the prospects of our economic development, but that the economic climate in Taiwan is conducive to development of technology-intensive heavy industries.
"As important as the investment is the emphasis on techno logical transfer," he said.
David Chu of Taipower said the project calls for import of advanced technology from General Electric.
Measures backed to increase trade
The government should expand foreign trade and strengthen trade organizations at home and abroad, said an economic report to the Research, Development and Evaluation Commission of the Executive Yuan.
The report deals with the energy crisis, economic recession in industrialized countries; rapid export growth of this country, South Korea, Japan, Hongkong and Singapore; trade protectionism; and the imposition of anti-dumping measures by importing countries.
These proposals are made: - Empowering of the Council for Economic Planning and Development to make final decisions regarding trade policy.
- Augmentation of trade analysis, planning, control and coordination.
- Board of Foreign Trade establishment of separate trade agencies based on commodities and areas.
- BOFT actions to promote trade, collect market information, assist small and medium business to increase exports and encourage international investment and co operation.
Shipyards operate well under capacity
China Shipbuilding Corporation built 34 ships aggregating 840,000 deadweight tons in fiscal 1979, well under capacity.
Twenty-four were built at Kaohsiung and 10 at Keelung.
The two yards repaired 174 ships aggregating 4,389,000 deadweight tons, including the conversion of freighters into bulk carriers and container ships.
To diversify operation, CSBC is seeking orders for facilities at refineries, nuclear power plants and container terminals.
Operating revenue was lower than projected because of the continuing shipbuilding recession.
Orders on hand include seven container ships for the China Merchants Steam Navigation Company, a 200,000-ton tanker for the Chinese Petroleum Corporation and a 58,000-ton bulk carrier for a Hongkong-based Chinese shipping group.
The Kaohsiung shipyard has a heavy debt burden with loans amounting NT$3,900 million (about US$108 million) at annual interest of NT$420 million (about US$12 million).
CSBC has requested increased capital investment to repay the loans and establish a revolving fund of NT$1,000 million (about US$28 million).
Bills financing gets new agency
The Bills Finance Association was inaugurated by three bills finance corporations.
The association will promote the money market and serve the three corporations in buying and selling of short-term government securities, banker's acceptances, banks' negotiable certificates of deposit, commercial papers and other certificates of short-term indebtedness approved by the Ministry of Finance. It will act as underwriter or broker for commercial papers and as guarantor, endorser or certifier for commercial papers.
Inter-bank loans will be encouraged along with improved coordination among the Chung Hsing Bills Finance Corporation, International Bills Finance Corporation and Chung Hua Bills Finance Corporation.
T.K. Chang, former economic minister and former board chair man of Chung Hsing, was elected chairman of the association.
The secretary general is K.C.Chang, deputy manager of Chung Hsing.
Steel production shows increase
China Steel Corporation is expected to produce 1.5 million metric tons of steel products this year, an increase of 400,000 tons over 1978.
In the first seven months of 1979, the company had revenues of NT$11,206.6 million (about US$311.3 million), an increase of more than NT$5,963 million (about US$166 million) or 113.7 per cent over the same period of 1978.
In July, revenues were NT$1,606.3 million (about US$44.6 million), up NT$539.7 million over July of last year.
Upon completion of an expansion project, annual steel production will reach 3.2 million metric tons.
A further expansion will boost capacity to 6 million metric tons.
Saudi Arabia trade climbing steadily
Trade volume with Saudi Arabia has been rising steadily. This year's volume is expected to surpass US$1 billion.
In the four years from 1975 through 1978, the annual in crease exceeded 30 per cent.
Volume was US$345 million in 1975, US$536 million in 1976, US$715 million in 1977 and US$970 million in 1978. The ROC deficit was US$330 million last year because of the soaring price of oil.
Saudi Arabia supplies about 40 per cent of Taiwan's crude - about 120 million barrels in 1978.
Exports to the Middle Eastern Kingdom include cement, clinker, sugar, building materials and plastic products.
According to surveys, Saudi Arabia is a potential market for many Taiwan products.
Cooperation projects between Saudi Arabia and the ROC have been undertaken in power, agriculture, fertilizer, highway construction and finance.
A report from Jeddah said Saudi Arabia is a good market for light bulbs.
Saudi Arabia is now carrying out a rural electrification project. The demand for bulbs is 20 million annually.
Bulbs now come from Taiwan, the United States, Japan, Holland and other European countries
$150 million buys a lot of umbrellas
The Republic of China is expected to export US$150 million worth of umbrellas this year, 'retaining its world lead, the Taiwan Umbrella Manufacturers Association said.
Taiwan umbrellas are of good quality and competitively priced.
Exports amounted to US$83.3 million in the first half of this year, up 45 per cent over the corresponding period of last year.
If exports reach US$150 million this year, that will be an increase of 36 per cent over 1978.
Japan, formerly the world's No.1 supplier of umbrellas, has begun importing Taiwan umbrellas.
Tatung stepping up overseas sales
Exports of Tatung Company totaled US$69.84 million in 1978, an increase of 60 per cent over 1977.
Tatung ranked first in electrical appliance exports among Chinese owned companies.
In 1954, Tatung exported its first electric fans to the Philippines. The company expects to sell 1 million fans this year.
Tatung's color TV plant in Los Angeles has already begun production and will make 60,000 color sets this year.
The company has set up subsidiaries in Singapore, Hongkong, Tokyo and Osaka as well as several service centers.
Offices are open in South Korea, West Germany, the Philippines and the Middle East, and a company is planned in Europe.
Tatung sells more than 300 products in over 100 countries.
CPC builds fourth naphtha cracker
The Chinese Petroleum Corporation will spend US$200 million to build a fourth naphtha cracking plant.
T.H. Lee, president, said work has begun and will be completed in 1982. CPC is seeking US$150 million in loans from foreign banks.
Lee said the fourth naphtha cracker will produce 350,000 metric tons of ethylene, 180,000 metric tons of propylene, 53,000 metric tons of butadiene and an undetermined quantity of benezene.
Twenty-two privately owned plants seek to operate chemical plants using products from the fourth naphtha plant.
Trade conference set for Pretoria
A ministerial conference on economic cooperation with South Africa will be' held at Pretoria in November, the Ministry of Economic Affairs said.
Trade between the countries exceeded US$247 million last year with exports of US$66 million and imports of US$181 million. This year's volume is expected to exceed US$300 million.
H.K. Yang, newly appointed ambassador to South Africa, called on local entrepreneurs to step up contacts with their South African counterparts.
South Africa has abundant resources. Its gold, industrial diamonds, coal, uranium and maize are needed in the Republic of China.
Taiwan electrical products and other manufactures are well received in the South African market, Yang said.
Taiwan machinery of high quality can be sold to South Africa, he added.
Department stores have problems
"The department store is still a profitable business here," said Yin Ho-min, manager of the Far Eastern Department Store.
Several department stores and affiliates have gone bankrupt in the last few months.
Yin attributed this to poor management. He said leased counters occupy 50 to 60 per cent of the space in most
Taiwan department stores. The store has little control over these lessees.
Discount policies are common in the slack season and have led to cut throat competition.
Interest rates adjusted upward
The Central Bank of China adjusted its discount rates and approved new loan and deposit interest rates for all banks.
Yu Kuo-hua, governor of the Central Bank, announced the Central Bank also was lowering reserves against deposits.
The changes were made to ease the tight money situation and encourage savings.
Central Bank interest rates were adjusted as follows on an annual basis:
- Rediscounts: 11 per cent (new rate) from 9.5 per cent.
- Secured loan accommodations: 12.5 per cent from 11 per cent.
- Short-term accommodations: 14.75 from 13.25 per cent.
- Long-term accommodations: 11 from 10 per cent.
- Foreign currency accommodation in ad hoc cases: 10.5 from 9.5 per cent.
- Export loan accommodations: 8.50 from 9.50 per cent.
Deposit rates were changed as follows:
- Time deposits: One month, up to 9 from 7 per cent; three months, 9.5 from 7.75 per cent; six months, 10.25 from 8.5 per cent; nine months, 11.25 from 9.5 per cent: and one year, 12.5 from 11 per cent.
- Savings deposits: One month, up to 9 from 7 per cent; three months, 9.5 from 7.5 per cent; six months, 10.25 to 8.5 percent: nine months, 11.25 from 9.5 per cent; one year, 12.5 from 11 percent.
Rates of other banks for loans:
- Short-term: Less than three months, 13 per cent (maximum) to 12.5 per cent (minimum); between three months and one year (discount), 15.5-12 per cent: secured loans, 14-13.5 per cent; credit loans. 14.75-14.25 per cent: and export loans, 10.5 per cent.
- Medium and long term loans: Secured loans, 14.5-14 per cent; credit loans, 15.25-14.75 per cent.
Reserve rates against deposits were adjusted to 11 per cent for time deposits, down from 13 per cent; 15 per cent for demand deposits, down from 17 per cent; and 9 per cent for time savings deposits, down from 11 per cent.
The reserve rate f or trust companies was cut to 15 per cent from 16.5 per cent.
The Central Bank said banks can expect an increase of NT$7.6 billion (about US$211 million) in loan funds and trust companies can expect NT$800 million (about US$22 million).