Economic policy will continue to emphasize the elimination of exploitation by middlemen and oppose the monopoly of a few, Premier Chiang Ching-kuo told 600 business, industrial and government leaders.
"The ultimate goal of this policy," the premier said, "is the upgrading of the living standard of all the people."
Premier Chiang said the "economy is the foundation of political stability at home." If development benefits only the rich, the economy would be a sick one based on shaky grounds, he said.
Citing teachings of both Dr. Sun Yat-sen, founding father of the Republic of China, and President Chiang Kai-shek, the Premier said the sole function of his administration "is to serve the people."
He urged civil servants "to understand and sympathize with" the needs of the public.
"Officials from the top down to the lowest echelon are servants of, by and for the people. We must do our utmost to meet the requirements of the people we serve," he said.
The Premier stressed that officials should not ask what they could get from the people but what they could do for the people.
Discussing defense, the Premier said the administration has been spending more on the armed forces than on other national endeavors.
"But this is necessary because the urgent task facing us now is survival for national reconstruction," he said.
Premier Chiang said defense spending is centered on strengthening combat capability to safe guard the people's well-being.
The Premier paid tribute to the natives of Taiwan province. They "will write one of the most brilliant chapters in the history of the Republic of China," he said, citing their contributions in making Taiwan a mighty fortress for national recovery and a model for national reconstruction.
Trade continues slow but deficit is down
Trade continued to show a deficit, but it was narrowing down in the first two months of this year.
Customs statistics showed January-February trade of US$l,559,100,000-US$714,700,000 in exports and US$844,400,000 in imports for a deficit of US$129,700,000.
The two-way total was down 9.5 percent from the comparable period in 1974. Exports declined 22.9 percent and imports rose 6.2 percent.
For the same two months, the Central Bank of China reported foreign exchange settlements for trade as US$1,526,000,000, a decline of 29 percent. Exports were US$846,100,000, down 6.6 percent, and imports US$680,500,000, a decline of 45.3 percent. The favorable balance was US$165,600,000.
Customs statistics showed industrial exports of US$568.2 million, 82 percent of the total. Agricultural goods amounted to US$23 million and processed agricultural products to US$105 million.
On the import side, industrial and agricultural raw materials totaled US$505.7 million, or 59.9 percent. Capital goods amounted to US$266.1 million and consumer goods to US$72.6 million.
The United States took US$223.2 million or 31.2 percent of exports. Then came Japan at US$93.7 million or 13.1 percent and West Germany at US$56.1 million or 7.8 percent.
Taiwan imported US$274.1 million worth of goods from the United States, US$245.9 million from Japan and US$45 million from West Germany.
Peiping can't hurt U.S.-Taiwan business
Detente between Washington and Peiping will not affect the interest of the U.S. business community in the Republic of China, David M. Kennedy, former U.S. secretary of the treasury, said in Taipei.
He also said the U.S. government will not restrict foreign investment by American companies. The question is not the government's but rests with individual companies.
Kennedy arrived at the head of a 32-member trade and investment mission which came for a six-day visit at the invitation of the government.
Kennedy said he expected a trade increase, although the amount might be modest. He said the U.S. economy should take a turn for the better in mid-1975 or early 1976.
Members of the Kennedy mission were Robert A. Pitner, coordinator; Richard A. Anderson, president of Gulf Oil Corp.; Everitt A. Carter, chairman of Oak Industnes Inc.; Paul Parker, senior vice president of General Mills Inc.; Ho Il Yoon, attorney representing Baker and MacKenzie; Y.C. Shin, president of General Mercantile Corp.; Jack Wolf, managing director of Caltex Oil (Hong Kong) Ltd.; Peter J. Fass, executive vice president of Reichold Chemicals Inc.; Jerry F. Brennan, vice president of Sears Roebuck Overseas Inc.; J .E. Vankirk, Southeast Asia regional director of the 3M Co.; Edwin W. Beeby, vice president for the Far East of Westinghouse Electrics A.S.; Olof Lindstadt; vice president and Tokyo general manager of Chemical Bank; Charles F. Davis Jr., vice president of Continental Illinois National Bank and Trust Co. of Chicago; Robert Strother, vice president of Husky Oil Co.; L.W. Beck, vice president for the Far East of Ingersoll-Rand Co.; Miss Betsey Hart, international trade consultant; Wallace E. Car roll, chairman of Katy Industries Inc.; Merlyn E. Doleman, vice president of the Bank of America; Y.H. Chung, president of International Automated Machine; E.H. Eakland, president of Mineral Exploration Co.; Karl Bakke, general counsel of the U.S. Department of Commerce; Blaine Huntsman, chairman of Huntsman Chemical; and R.L. Davidson, vice president of the First National City Bank.
Investment climate continues favorable
The investment climate in the Republic of China continues to be favorable, according to a report of the American Embassy in Taipei.
The report said the Republic of China has made strenuous efforts to induce capital and technology-intensive foreign investment in petrochemical, metal working, automotive, precision instrument, machine tool and sophisticated electronic industries.
The cost of labor is still competitive with that of South Korea, Hong Kong and Singapore.
The report said the economic recession had a delayed but substantial impact on the ROC economy.
U.S. equipment and services have had and will continue to enjoy excellent sales prospects in connection with Taiwan development, the report said.
There are also good prospects for U.S. oil service companies and suppliers to support offshore drilling and exploration for petroleum and natural gas.
Minister Sun sees improving prospects
The economic outlook is bright, even though a number of unforeseen adverse factors may arise, Economic Affairs Minister Y.S. Sun said.
Foreign trade has begun to pick up and prices show signs of stability.
The most urgent and serious problem is how to overcome ex port barriers, Sun said.
"The government will provide more financing and other help. Industries must try to cut production cost and improve quality of products to sharpen their competitive edge," he added.
The minister took note of changing trade patterns. Capital goods accounted for 32.4 percent of imports in 1972, 34 percent in 1973 and 31.9 percent in 1974. Raw materials accounted for 61.1 percent in 1972, 60.4 percent in 1973 and 61.3 percent in 1974. Consumer goods accounted for 6.5 percent in 1972, 5.1 percent in 1973 and 6.8 percent in 1974.
Among exports, agricultural products accounted for 6.8 percent in 1972, 7.5 percent in 1973 and 4.8 percent in 1974.
Processed agricultural products accounted for 9.9 percent of exports in 1972, 7.9 percent in 1973 and 10.6 percent in 1974. Industrial products accounted for 83.3 percent of exports in 1972 and 84.6 percent in both 1973 and 1974.
Industry may grow by 5.2 percent
Industry may grow by 5.2 percent this year, nearly three times the earlier projection of 1.5 percent, said William Wei, director of the Industrial Development Bureau.
The projection was revised after a seven-day meeting of industrialists. Wei said factories have begun to receive new foreign orders. Industrial growth was 0.1 percent in 1974.
Wei said manufacturing is expected to grow by 5.8 percent, with heavy and chemical industries leading the list at 7.4 percent and light industry at 3.5 percent.
He listed growth rates of 10.1 percent for housing, 5.8 percent for manufacturing, 4.5 percent for public utilities and 1.2 percent for mining.
Production of electrical machinery apparatus is expected to register a sizable increase.
Estimates call for overseas sales of 450,000 calculators this year. Domestic sales will be 70,000 for a total gain of 30 percent.
Sales of radios will be 1,155,000 in the domestic market and 16,400,000 for export, up 9 percent.
Sales of TV sets will be 3,900,000 for export and 500,000 at home, a gain of 1.4 percent.
These are other estimates:
- Refrigerators, 420,000 domestic and 12,000 for export, up 4.6 percent.
- Washing machines, 163,000 for export and 21,000 domestic, up 5.1 percent.
- Air conditioners, 37,000 domestic and 1,000 for export, up 5.7 percent.
- Electric motors, 400,000 domestic and 70,000 for export, up 5.6 percent.
- Electric cables, 32,000 metric tons domestic and 24,000 metric tons for export, down 10.7 percent.
Self-reliance urged on top industrialists
The industrial structure should be readjusted to reduce reliance on other countries, Ku Chen-fu, chairman of the National Association of Industry and Commerce, told a meeting of government officials and business leaders.
Ku said the international payments situation should be improved and raw materials industries established.
Hosts were Interior Minister Lin Chin-sheng, Finance Minister K. T. Li, Economic Affairs Minister Y.S. Sun (represented by Economic Affairs Vice Minister Chang Kuang-shih), Communications Minister Kao Yu-shu, Central Bank Governor Yu Kuo-hwa, Economic Planning Council Chairman Chang Chi-cheng and Chiu Chuang-huan, director of the Kuomintang Department of Social Affairs.
Nearly 300 business leaders, mostly the presidents of associations, participated.
Hu Chi-tai, president of a frozen food association, said more refrigerator ships should be built to promote exports.
Sun Hai, president of a ply wood manufacturers' association, expressed hope the government would simplify visa procedures for foreign buyers.
Chen Chi-ching, president of the National Chamber of Commerce, urged the government to supply more international commercial information to manufacturers and exporters.
The meeting resolved to follow Premier Chiang Ching-kuo's instruction to safeguard the interests of the public, improve technical know-how, expand exports and support the ten basic construction projects.
These were other recommendations:
- Imports of luxury goods should be reduced.
- Establishment of raw material industries should be increased.
- An industrial data library should be established to assist research.
Government revenues set another record
Government revenues hit a record high of NT$107,215 million (US$2,821.4 million) last year, Finance Minister K.T. Li reported.
Addressing the Central Committee of the ruling Kuomintang, Li said the figure represented a twofold increase since 1970.
Government expenditures were NT$49,153 million in 1970 and NT$92,031 million in 1974.
Defense spending used to take the lion's share of spending. In recent years, emphasis has gradually shifted to projects of economic development, transportation, science and culture.
The government had an ac cumulated surplus of NT$36,600 million in 1974. This might be depleted by 1976 to repay loans and fund the major construction projects.
The development projects call for outlay of NT$241,900 million, of which NT$226,800 million will be disbursed between 1975 and 1979. NT$248,200 million (65 percent) will be raised domestically and NT$79,600 million (US$2,064 million) will be financed from foreign loans. US$1,597 million in loans has been committed, Li said.
From May, 1967, to December, 1974, government-guaranteed loans from abroad totaled US$1,469 million. Of this amount, US$1,086 million (74 percent) was used to finance the ten basic construction projects.
Third increase in interest rates
To help export industries reduce production costs, the Central Bank of China cut interest rates by from 0.25 percent to 0.75 percent.
Details of the reduction are as follows:
1. Rates on Central Bank accommodations to banks:
- Rediscounts, from 12 percent to 11.5 percent.
- Accommodations against secured loans and government bonds, from 13.5 percent to 12.75 percent.
- Temporary accommodations, from 15.5 percent to 14.75 percent.
- Accommodations for export financing, from 8 percent to 7.25 percent.
2. Rates of banks:
- Unsecured loans, from 15.5 percent to 14.75 percent.
- Secured loans, from 14.75 percent to 14 percent.
- Discounts, from 13.25 percent to 12.75 percent.
- Loans for exports, from 9 percent to 8.25 percent.
3. Deposit rates of banks:
- Time deposits, from 8.5 percent to 8.25 percent for one month, from 10 percent to 9.25 percent for three months, from 11 percent to 10.25 percent for six months and from 11.5 percent to 10.75 percent for nine months.
- Savings, from 8 percent to 7.75 percent for passbook savings, from 13.5 percent to 12.75 percent for one, two, and three years.
This is the third decrease in interest rates in five months.
Pan Am begins flights to Taipei
Pan American World Airways Inc. began service to Taipei in March.
William S. Wang, director of Pan American in Taiwan, said the airline will help bring more foreign tourists to Taiwan and boost export trade.
Wang predicted Pan American jetliners will bring 33,600 tourists from March to December this year. "They will come from the United States, Guam, Okinawa and Europe," he said.
He said he believes Pan American will enjoy "good business" in Taiwan. He based his prediction on steady economic development.
"Taiwan will recover from the economic slowdown faster than many other Asian countries, though future growth will not be as fast as that of 1973," he said.
Pan American swapped routes with Trans World Airlines, which previously served Taipei.
Pan American Boeing 707 flights are on Monday, Tuesday, Thursday and Saturday.
Toronto Dominion opens Taipei branch
The Toronto Dominion Bank opened its Taipei branch in the Tai Tze Building, 20 Pateh Road, Sec. 3.
Toronto Dominion is one of Canada's leading commercial banks with over 870 branches in Canada and offices and affiliates in 14 countries abroad.
As of January 31, the bank's total assets exceeded Canadian $13,000 million.
Overall operations of the Taipei branch are under the direction of James F. Hudson, superintendent and manager, assisted by W.K. Kee, senior assistant manager for administration.
Other officers are C.T. Chen, assistant manager for credit; George Chiu, assistant manager for operations; Michael Lee, assistant manager for foreign department; and Peter Yuan, assistant manager for general affairs.
Toronto Dominion will promote development of trade between the two countries, which exceeded US$300 million in 1974. Canada is the ROC's fifth largest market.