Taiwan Today

Ten basic construction programs are under way to provide the infrastructure necessary to serve a developed Taiwan during the decade of the 1980s

By the early 1970s, it had become apparent that the Republic of China's island province of Taiwan was approaching the status of a developed land.

Growth had been so fast that the infrastructure and basic industry were not able to keep up. Ports were overcrowded. The railroad was not able to carry the required load of freight. Highways on the populous west coast plain had become bottlenecks.

Inspired by the late President Chiang Kai­-shek and spurred by Premier Chiang Ching-kuo, the government began the planning of what have come to be called the Ten Basic Construction Projects.

Work on one - the North-South Freeway­ - started in 1971, even before the Ten Project concept had taken shape. All ten were under way by 1975 and all will be substantially completed by the close of the decade.

Six of the undertakings are concerned with transportation:

- North-South Freeway
- Railroad electrification
- Suao-Hualien railroad construction
- Airport for Taipei at Taoyuan
- Taichung port
- Suao port

The other four involve basic industry:

- Kaohsiung shipyard
- Integrated steel mill
- Petrochemical complex
- Nuclear power plants

Cost of the Ten Projects is currently estimated at US$6.5 billion but may run considerably higher because of inflation. Most of the financing­ - including foreign loans for the purchase of machin­ery and equipment - has already been arranged. The government's budget has been kept in balance despite the large additional outlay.

These are highlights of the projects:

North-South Freeway. The northern terminus is at Keelung, the port for Taipei, and the southern one at Kaohsiung, the island's second biggest city, largest port and principal center of heavy industry. Driving time for the 235 miles (373 kilometers) will be cut in half to about four hours. The roadway will vary from four to eight lanes, depending on traffic conditions, and there will be 37 interchanges. Rest areas and service centers will be provided. Speed limits are expected to be 120 kilometers an hour on the flat and 100 kilometers in hilly stretches. Tolls will pay for the construction cost in about 20 years. The expressway will relieve the railroad and existing narrow highways of their excessive freight and passenger load. Millions of people living in the countryside will be brought within an hour's drive of a big city.

Railroad electrification. By mid-1979, the mainline railroad stretching from Keelung in the north to Kaohsiung in the south will be able to cut running time by a third and increase carrying capacity by the same amount. Express trains will make the Taipei-Kaohsiung run in four hours or less. Tracks are being replaced and 94 electric locomotives purchased. Power supplied by II substations will be conveyed through 716 miles (1,153 kilometers) of overhead transmission lines. Underground cable for the communications and remote control systems will total 323 miles (520 kilometers). Pollution will be virtually elimi­nated and operating costs reduced.

Suao-Hualien railroad. This will link the remote, thinly populated east coast and the cities of Hualien and Taitung to the western trunk system for the first time. Although only 73 miles (117 kilometers) of track is required, the line will have 3 major bridges totaling 3.7 miles (6 kilometers) and tunnels with length of 18.6 miles (29,570 meters). The mountains being penetrated are some of the most rugged on Taiwan. The existing narrow gauge line between Hualien and Taitung will be widened. Subsequently, Taitung will be linked to Kaohsiung with construction of a "south bend railroad," giving Taiwan an around-the-island system.

Taoyuan airport. Taipei's Sungshan International Airport is handling about 12,000 passengers daily and more than 10,000 metric tons of freight monthly. These are close to maximum volumes. Construction began in 1974 on the Taoyuan International Airport about 19 miles (30 kilometers) southwest of Taipei. With two runways accommodating the world's biggest planes, Taoyuan will have initial capacity of 20,000 passengers daily and 200,000 metric tons of freight annually. Subsequent expansions will raise these totals to 20 million passengers and I million metric tons of freight annually. Scenically located close to the Taiwan Straits, the airport will have every guidance device known to aviation and all the amenities air travelers have come to expect. Taipei will be only half an hour away by expressway.

Taichung port. Taiwan has had no harbor between Keelung on the northern coast and Kaohsiung in the southwest, a distance of more than 250 miles. Taichung is approximately halfway between and in the center of an important agricultural and rapidly expanding industrial area. First phase construction is nearly complete. The harbor will open October 31, the birthday of the late President Chiang Kai-shek, with capacity of 3 million tons of cargo annually. This will be increased to 12 million tons by 1982. An industrial city planned at portside will have a population of more than half a million by the 1990s.

Suao port. On the northeastern coast, this former fishing harbor will relieve some of the congestion at Keelung. The first phase will be completed in 1979; by 1982, capacity will be nearly 6.5 million tons of cargo.

Kaohsiung shipyard. Construction of the first 445,000-ton tanker has already been started. The yard has the second biggest drydock in the world and was completed last summer. Con­struction capacity is 1.5 million tons annually plus up to 2.5 million tons of repairs.

Integrated steel mill. Also located at Kaohsiung, the plant will have capacity of 1.5 million metric tons by the end of 1977, 2.7 million tons by 1980 and 6 million tons by 1983. Facilities include coke plant, blast and oxygen furnaces, continuous casters and plate, rod and bar mills. Products will go to the shipbuilding, automobile, machinery, construction and other heavy and specialized industries.

Petrochemical complex. Three naphtha crackers and other plants are turning out basic feedstocks for industries making petrochemical intermediates and consumer products. Output of raw materials will reach 1.4 million metric tons by the end of 1978. Upon completion, the rapidly expanding plastics, synthetic rubber and man-made fiber plants of Taiwan will no longer require imports.

Nuclear power. Two plants are under construction in the north and a third is planned in the south. Installed capacity will total 5,140,000 kilowatts. The first generator of the first plant will go on line in mid-1977 with the second to follow a year later. The second plant will be completed in 1982 and the third in 1984. Other projects will expand thermal and hydroelectric generation.

Per capita income of the Republic of China will be nearly US$800 at the end of this year. That is low compared with Japan and Western Europe but high compared with the rest of Asia and three to four times the level of the Communist occupied Chinese mainland.

The Ten Projects are being undertaken in addition to routine expansion of infrastructure and industry. Existing ports must be improved, existing highways widened, existing industries ex­panded and others established. Spending on fixed investment will rise from NT$162.7 billion in 1975 to NT$278 billion in 1981. Industry will receive 32.1 per cent of the total in 1975 and will get 35 per cent in 1981.

However, mere per capita comparison cannot measure the difference between the living standard of the people of the Republic of China and that of peoples in most other developing countries of Asia.

Americans, Japanese and Europeans have more money. Yet aside from automobile ownership, there is not such a great gulf between their standard of living and that of the people of the Republic of China.

More than 90 per cent of the families have electric fans. Nearly that many have television sets - 15 per cent of them color receivers - and some 85 per cent have electric rice cookers. The percentage with refrigerators stands at about 65. One of three families has a washing machine.

Private cars have become so common that parking places are at a premium in the middle class apartment districts of cities. The motor vehicle count for a population of 16 million is climbing toward 3 million, which means that nearly everyone who wants one has a motorcycle. Taipei four-wheeled vehicles numbered nearly 237,000 at the end of 1975.

On the Chinese mainland, by contrast, there are no privately owned cars and only 0.5 motor­cycles per 1,000 persons. Bicycles, which are widely used on the mainland, are still of some importance in the ROC countryside, but in the cities they are becoming a vehicle of fun and exercise rather than of transportation.

The people of the Republic of China eat well.

The calorie count exceeds 2,800 daily and has risen by an average of 37 calories annually for the last 13 years. Daily protein consumption increased from 57.8 grams in 1962 to 74.8 grams in 1975. The Chinese mainland calorie count is 1,000 lower at 1,800. The protein consumption of 36 grams daily is less than half of the ROC level.

Housing space per person totaled 8.8 square yards in 1962 and 14 square yards in 1975. In the same 13 years, dwellings with electricity increased from 64.6 per cent to 98.4 per cent. Fifty per cent of households have running water compared with 31.2 per cent in 1962. On the mainland, electrification and piped water are rarely found outside metropolitan areas.

In 1962, there were 10.5 telephones per 1,000 persons. The count stood at 69.2 sets at the end of 1975, an increase of 5.6 times in 13 years.

Children in elementary schools rose from 97.6 per cent to 99.3 per cent of the population in the 6 to 12 age bracket between 1962 and 1975. Employment increased from 95.6 per cent to 97.6 per cent of the labor force in the same period.

In 1962, the life expectancy of men was 62.6 years. It had reached 67.1 years at the end of 1975. The expectancy for women rose from 67.9 years to 72.5 years.

The gap between rich and poor has been steadily narrowed. In 1952, the income of the top bracket was IS times that of the lowest bracket. This had been narrowed to only a little over 4 times by 1974.

Although the poor are getting richer, the rich are not necessarily getting poorer. In 1970, Taiwan had 263 millionaires - those with incomes of over NT$1 million (US$26,315). The count of millionaires was 1,629 in 1974. The equalizing effect of taxation is shown in the fact that 1970 mil­lionaires paid NT$193 million in income taxes, while those of 1974 had to cough up NT$1,869 million.

Taiwan does not have a cradle-to-grave system of social security - partly because the family is still sufficiently strong to take care of its own. Cities and counties provide relief for the indigent but the case load is small. With jobs available in an expanding economy, the able-bodied are expected to work. Most of them do.

Nearly 2 million government employees, workers, sugar cane farmers and some others are covered by insurance providing benefits for illness, disability, childbirth, retirement and death. Pen­sions are not of such great importance in a society which welcomes older people as guardians and tutors of the young and provides for their needs. Extension of prepaid medicine and inauguration of unemployment insurance are under study.

Retired servicemen take care of themselves through their own unique organization. Even the disabled do not need pensions. More than 100 profitable enterprises, including the island's biggest construction company, are operated by the veter­ans' organization. Profits support hospitals for the sick and retirement homes for the disabled and elderly.

Public housing is one of the government's principal welfare undertakings. Apartments are being built for government workers and others with low incomes. Down payments and interest are reasonable.

Banks and other financial institutions are be­ginning to provide loans to build houses for the middle class. Only a few years ago the purchase of an apartment required all cash. Loans may now be obtained for as much as 50 per cent of the cost.

About 25 per cent of the population is self­-employed. The supermarket has not driven the neighborhood grocery store out of business. Food stalls and small restaurants are found everywhere. Within a stone's throw of de luxe restaurants where a sumptuous repast will cost US$10 or more per person are noodle stands where a nourishing and tasty bowl of pasta and a pork chop can still be had for as little as US$0.50.

Education is free through nine years. Enrollment of junior high schools (seventh through ninth grades) is approaching 90 per cent of elemen­tary school graduates.

After junior high, competitive and incorruptible examinations decide eligibility for college, university and advanced technical education. Tuition is free at public universities and other costs are modest. Charges at private universities are no more than a few hundred US dollars per school year.

Until recently, girls eschewed higher education. Their place was considered in the home. Today nearly half of those attending 101 colleges and universities are women. They outnumber men in such fields as the arts, literature and foreign lan­guages. Nor do they lack for job opportunities after graduation. Today's household in Taiwan has an average of nearly two employed persons; one of them is often the wife.

Once having graduated from college, young people may go abroad for graduate study at their own expense. For men, military obligations must be fulfilled first. Departing students are required only to pass an examination in language proficien­cy. Competitive examinations are held for those who are supported by government scholarships.

The ROC good life is also a free one. Martial law is in effect because of the Communist insurrection but it tends to be invisible. There is no interference ill the daily lives of the people. Travel within the country requires no permit. Anyone with a sufficient reason may travel abroad.

Choices of employment and life style are completely free, provided only that the individual obey the ethics and law of the land.

Economic planning has been the way of business, industrial and governmental life in the Republic of China since 1953. That year marked the start of a series of four-year economic develop­ment plans which helped provide growth of 8 to 9 per cent annually.

Finally, in 1976, the last scheduled year of the sixth plan, the four-year series was found to have outlived its usefulness. The fault was not intrinsic. Economic requirements had been changed by the worldwide recession and undertaking of the Ten Basic Construction Projects.

Four-year planning was replaced by that for six years with the first plan extending from 1976 through 1981. This period will see the completion of mos. phases of the Ten Projects and provide opportunity to get ready for the 1980s.

Goals are modest. In announcing the first Six-Year Economic Development Plan, Premier Chiang Ching-kuo said that rapid growth would not be sought at the expense of stability. Infla­tion of 1973 and 1974 taught the government that a stable economy is as important as one that is booming. In terms of the people's livelihood, stability comes first.

For the six years, the gross domestic product is expected to increase at a rate of 7.5 per cent annually, well under the figures achieved during the Taiwan boom period of the 1950s, 1960s and early 1970s. Per capita income is expected to advance by 5.8 per cent annually, which would mean a figure of US$1,334 by 1981.

Population will be nearly 18 million at the end of the six-year period. The growth rate of 1.8 per cent annually is higher than family planners would like. But a sharp increase in the population of women in their twenties makes it difficult to attain a lower figure. Agricultural em­ployment will decline but this will be made up by the increase in industrial and service jobs. The unemployment rate will decline from the modest 3.7 per cent of 1975 to 3 per cent - usually con­sidered the lowest attainable minimum - in 1981.

Agricultural growth will average 2.5 per cent for the six years. However, the agricultural share of the GDP will decline from 14 per cent in 1975 to 10.5 per cent in 1981.

Manufacturing will show annual growth of 9.5 per cent and its share of the gross domestic product will rise from the 35 per cent of 1975 to 39 per cent in 1981.

In keeping with the government's policy of stressing capital-intensive and sophisticated industry, the light industrial share of the GDP will decline from 22.1 per cent to 21.6 per cent. Manufacturing requiring larger capital input and know­how will rise from 12.9 per cent to 17.4 per cent to the GDP.

Electric power generation will be increased by 8.3 per cent annually. Transportation and communications will show an annual gain of 8.9 per cent.

Foreign trade is expected to climb by more than 11 per cent annually with increases of 12.2 per cent for exports and 10.6 per cent for imports. Deficits averaging US$300 million a year have been forecast through 1980 with a favorable balance of US$60 million in the last year of the plan.

However, the planners may have been too conservative about trade. Export industry showed remarkable recuperative powers in the first half of 1976. Growth was ranging close to the record figures of the early 1970s. Imports also were up but more slowly, leaving a modest surplus.

Continuation of this performance is of course dependent on unimpeded recovery and the pros­perity of the two major trading partners, the United States and Japan, as well as that of other customers in Europe, the Middle East and East Asia.

The government showed concern because prices were edging up. The six-year forecast is for price increases limited to 5 per cent annually. For 1976, the retail increase is likely to be somewhat higher than that.

In agriculture, modernization will be the key objective of the first six-year plan. Specific measures will include the encouragement of cooperative farming, mechanization, technological and institutional innovation, development of high value crops for export, improved marketing and the construction of model rural communities.

Industrial emphasis will be placed on heavy and sophisticated plants making ships, iron and steel, petrochemicals, machinery and other capital-intensive products. Measures will include a suf­ficiency of credit, technical assistance and tax reform.

The investment law will be revised to make incentives more flexible. Foreign investment is expected to decline as Taiwan capital formation increases. Capital from foreigners and overseas Chinese still will be welcomed, however, because it is accompanied by know-how. Research and development will be encouraged and rewarded.

Education is already undergoing changes to serve an industrialized economy. Science and technical training are emphasized. Those who are not among the 25 per cent of high school graduates passing college entrance exams will receive vocational training. Taiwan needs foremen as well as managers.

The government has taken in more than it spent for many years. This will continue to be the case through 1981 but with a declining sur­plus as the result of increased expenditures for infrastructure expansion and public welfare. Rev­enue will grow by 7.1 per cent annually and make up about 24 per cent of the gross domestic product. Direct taxes will rise from 21.7 per cent of the total in 1975 to 29.4 per cent in 1981.

Propensity to consume was high in 1975 as the recession began to recede. Efforts will be made to hold the growth rate of private consump­tion to an average of 5.4 per cent over the six­-year period. The consumption rate of private income is expected to decline from the 86.5 per cent of 1975 to 74.7 per cent in 1981. Resulting savings will provide required investment from domestic sources.

Once the Ten Basic Projects are completed, more funds will be available for development of neglected aspects of the economy. One of these will involve the mountains and upland areas which make up three-quarters of the Taiwan land area. More roads will be built and the south bend railroad constructed to provide an around-the­ island system. Forestry and resources will be exploited and reforestation with trees of higher value stepped up. Production of minerals is to be increased.

Most goals were exceeded during the course of the six four-year economic development plans.

Less emphasis will be placed on specific targets under the six-year plans. The principal tasks are to complete transfer of the economy from simple agriculture to sophisticated industry and to keep the living standard rising.

Some American businessmen and industrialists have expressed confidence that Taiwan eventually will surpass Japan in industrialization. The Republic of China already has an economy with more freedom than Japan's. Although Taiwan's domestic market is smaller, this means a greater challenge to win foreign outlets for goods and services.

Petroleum exploration offshore and onshore will be pressed at the outset of the first six-year plan. If the Republic of China should strike it rich in the raw material of energy and petro­chemicals, its economic cup would be filled to overflowing.