Approval of overseas investments will be more selective from now on, said Economic Affairs Minister Y. S. Sun.
Sun said these investments will continue to be welcome:
—Industries which utilize local raw materials or semi-finished products in the manufacture of goods for export.
—Industries which introduce new technical know-how.
—Cooperative undertakings to prospect for or exploit natural resources.
—Heavy industries requiring large amounts of capital and sophisticated technology.
—Industries that offer training in scientific operations and modern management.
Up to now, Sun said, labor-intensive industries have dominated overseas investments in Taiwan. These are expected to meet with increasing competition from other developing countries.
Therefore, further sophistication and management modernization will be sought from now on. He named the following industries which will receive increased attention:
—Power development and exploration of the continental shelf for oil deposits.
—A steel mill with production capacity of 2,000,000 tons.
—Shipbuilding to include vessels of the 200,000-ton class.
—Machinery, including autos, rolling stock and farm machines.
—Petrochemicals.
—Aluminum and copper.
—Electronics.
—Modernized textile plants with dyeing and processing capacity.
—Small and medium industries such as toys, wigs and porcelains.
Economic growth of 10 per cent seen
Economic growth will reach 10 per cent this year compared with last year's 8.8 per cent.
This projection was made by economic affairs authorities at a meeting convened by the Economic, Financial and Monetary Conference of the Executive Yuan (Cabinet).
The authorities forecast increase of per capita income from last year's US$260 to US$292.
The rise in commodity prices has averaged 3.9 per cent this year compared with 1969's 4.5 per cent.
The Executive Yuan said wholesale markets and supermarkets will be established in Taipei and other large cities to reduce the retail price of farm products. The project will cost NT$502 million and be carried out in four years starting in 1971.
The Economic, Financial and Monetary Conference has planned 10 collecting stations to grade and package produce.
Wholesale markets will be established in Taipei, Keelung, Taichung, Tainan and Kaohsiung. Meat supply centers will be set up in big cities.
The project will be jointly carried out by the Ministry of Economic Affairs, the Joint Commission on Rural Reconstruction, Taiwan Provincial Government and Taipei Municipal Government.
Foreign trade will reach US$3 billion
Foreign trade is expected to exceed US$3 billion this year compared with US$2.32 billion in 1969.
The Board of Foreign Trade said trade totaled US$2.22 billion in the first nine months of this year, an increase of about US$500 million or more than 30 per cent over the US$1.67 billion in the corresponding period of 1969.
The board said trade in the fourth quarter should reach a minimum of US$800 million, bringing the year's total to more than US$3 billion.
Exports in the first nine months of 1970 amounted to US$1,128 million and imports to US$1,103 million, for a favorable balance of US$25 million.
Exports to the United States, West Germany, Hongkong and Canada were up sharply. Textiles topped exports at US$330 million followed by metals and products, US$197 million, and agricultural products, US$102 million.
Metals and metal products valued at US$395 million topped the list of imports followed by agricultural products, US$193 million.
Exports to the United States reached US$419 million and imports were US$330 million. Exports to Japan amounted to US$171 million and imports to US$422 million.
Hongkong, took third place for the first time with exports of US$100.3 million and imports of US$18 million. Hongkong bought more textiles, steel and iron, hardware, meat, fruit and vegetables.
Farm production takes giant strides
Farmers of Taiwan are growing twice as much as at the outset of land reform two decades ago and taking further steps of modernization.
Guidelines for the island's second revolutionary change in agriculture are to be found in an "Outline for Current Rural Economic Construction" adopted last April at the Second Plenary Session of the 10th Central Committee of the Kuomintang (the Republic of China's Nationalist Party).
These guidelines are a further expression of the Three Principles of the People (nationalism, democracy and social welfare) enunciated by Dr. Sun Yat-sen, the father of the Republic.
Land reform of two decades ago was based on belief the nation would prosper only when farmers had land of their own and the right to till it in their own way. The program included reduction of rent, sale of government-owned farmlands and the land-to-the-tiller program: The government bought lands from non-farmer owners and" sold them to the tillers. Payment was in installments spread over 10 years.
Land reform and follow-up measures spurred agricultural production by 4.6 per cent annually in the 1953-60 period and 5.9 per cent annually in the succeeding eight years.
The 1968 growth of 6.1 per cent was broken down into farming, 4.9 per cent; forestry, 5 per cent; fishery, 20.4 per cent; and livestock, 5.7 per cent.
Despite this progress, Taiwan has agricultural problems. Marginal land is almost nonexistent and the cultivated area has increased by only 3 per cent since 1952. Population has reduced the farm area per capita. The farmer's income has not kept pace with that of workers in industry and the services.
In the 16 years from 1953 to 1968, industry grew by 6.9 times, averaging a gain of 13.8 per cent annually. Per capita income of the non-agricultural sector rose 4.9 times in terms of current prices; the increase was only 3.3 times for the agricultural population.
With industry moving ahead of agriculture, labor-intensive farming is no longer economical. Emphasis has to be placed on per capita productivity—the use of fewer men and more machines.
However, mechanization is not possible on small, irregular farm plots. Agricultural conditions of the 1970s demand larger farms with more financial muscle and competent management.
Plans call for bringing several farmers together in a voluntary pooling of lands. Labor and financing will be contributed in proportion to land ownership and profits shared accordingly. Individual titles will not be affected. Elimination of boundary paths will open up the enlarged farms to tractors, power tillers and other machines. Government loans will stimulate mechanization. Irrigation and other costs will be reduced.
The Taiwan Sugar Corporation, largest enterprise on the island, has already experimented with such cooperative farming. Production has been increased by as much as 25 per cent and farm income raised.
Taiwan has shared its agricultural know-how with farmers of Africa, the Middle East, Latin America and Southeast Asia during the last decade. Farm demonstration teams have served in 27 African countries. Thirty-one African states have sent more than 500 agriculturalists to Taiwan in series of 11 five-month seminars. Two of these are held annually.
The underlying spirit of Taiwan land reform—both old and new—is jen or benevolence. This expresses the differences between free Chinese agricultural reform and the Communists' expropriation of land on the mainland. The Communists killed millions of landlords, then usurped the land and herded the peasants into communes and production brigades.
Taiwan's new program is cooperative, not communal. The farmers' standard of living will be raised without paying the price of government dictation, the socialization of holdings or the loss of jen.
Taipei and Seoul seek cooperation
The Third Conference of the Sino-Korean Economic Cooperation Council drew some 80 business leaders for two days of talks in Seoul.
There was agreement to soft-pedal competition and promote co operation in trade and closer industrial ties.
The Korean delegation led by Tae Sup-choi asked for the preferential import of Korean iron and steel products, ceramiss, petrochemical products and seafoods.
Korea urged joint action to seek reduction of the Japanese tariff on plywood and removal of U.S. barrier's against import of textile goods.
The Chinese delegation headed by Koo Chen-fu, president of the Chinese National Association of Industry, suggested Korea use 60 per cent of the foreign exchange it earns from selling apples and pears to Taiwan to import Taiwan bananas.
The Chinese proposed a triangular cooperation system with Japan for the export of textiles to and through Hongkong and joint efforts of Korean and Chinese steel producers to find new markets.
Each country may give priority to the goods of the other.
Fund proposed for heavy industry
The Chinese government is planning a US$250 million National Reconstruction Fund to finance heavy industries.
The fund will extend medium and long-term loans to both government and private industries. The plan is being worked out by the Ministry of Finance, Central Bank of China, Council for International Economic Cooperation and Development, Ministry of Economic Affairs and Ministry of Communications.
The idea for such a fund derives from the rapid accumulation of savings, which are not being fully utilized.
The Bureau of Industrial Development, Ministry of Economic Affairs, recommended last July that the government extend a loan equivalent to US$400 million to such industries as shipbuilding, machinery, petrochemicals, metals, electronics, automobiles and textiles.
Trade company planned in New York
The Executive Yuan approved October 29 a request by the Central Trust of China to establish a trading company in New York. Office of the China Trading Center Ltd. will be in the International Trade Center Building.
CTC has rented 6,000 square feet of floor space in the newly completed skyscraper. Chiu Chia-chi, CTC's representative in New York, is in charge of preparatory work.
CTC will cooperate with the China External Trade Development Council in establishing a permanent products display hall in New York.
CTC is a government company engaged in trade, insurance, trust and savings operations. It has overseas branches in Japan, the United States, Europe, Australia, Korea and Southeast Asia. Sales income reached US$40 million in 1969 with net earnings of about US$5.25 million.
US$5 million to be invested in tourism
Overseas Chinese and local tourism leaders will establish a tourism company capitalized at US$5 million in Taipei.
Among those attending the October 3 meeting in Taipei were overseas Chinese leaders Li Ho-chu from Japan, Hsu Heng from Hongkong, Li Cheng-hua from the Ryukyus and Tsai Shai-hua from the Philippines.
Also present were Chang Wu-hsiung, representative of tourist hotels in Taiwan; Ho Yi-wu, vice chairman of the Overseas Chinese Affairs Commission; and Yu Mi-chien, president of the Taiwan Tourism Association.
The new company plans to build hotels in Taipei and Tokyo.
A six-day tour of Taiwan is being introduced by the Taiwan Visitors Association at US$135 per person for double room occupancy or US$155 for a single room.
The itinerary:
First day—Free time in Taipei.
Second day—Visit the Palace Museum and other places in Taipei in the morning: fly to Hualien in the afternoon to visit Taroko Gorge; stay overnight at Tienhsiang at the western end of the gorge or at the newly completed Astar Hotel in Hualien.
Third day—Fly to Taichung (via Taipei) and motor to Sun Moon Lake for an overnight stay at the Evergreen Hotel or the Sun Moon Lake Hotel.
Fourth day—Return to Taichung by bus for a trip to Tainan or Kaohsiung by the Chu Kuang Express or by air, slay overnight at the Tainan Hotel or at Kaohsiung's Kingdom Hotel or Garden Hotel.
Fifth day—Tour Kaohsiung and nearby Cheng Ching Lake; fly back to Taipei.
Sixth day—Free after breakfast at hotel.
ROC has lessons to teach Americans
If General Motors wants to improve employee relations, it should send a delegation of union leaders to visit the Chinese Display Center in Taipei, according to Frederic S. Marquardt, editor of the Arizona Republic.
A visit to Taiwan, he said "just might make them insist that the U.S. put its economic house in order, as the Chinese people in Taiwan have done."
Marquardt attended Chinese Double Tenth National Day celebrations and visited industrial and cultural establishments.
In one of four articles for the Arizona Republic, he said Taiwan exports are no longer limited to handicrafts.
At the Display Center located in a seven-story building in Taipei, a foreign buyer, he said, can place orders for large air compressors, stainless steel kitchen equipment, electronic devices, sophisticated photo equipment and plastics for all purposes.
The silks of another era, he continued, have been replaced with artificial fibers, electric refrigerators and precision machine tools,
"The array of cheap—but not shoddy-goods is the result of a determined effort to industrialize Taiwan, always referred to as economically the most progressive province in China," he wrote.
"Unlike many emerging nations, the Republic of China insisted on economic stability. The inflation factor in the growth has been held to 2.1 per cent a year.
"A population boom, which reduced per capita income, has been held in hand. The rate of natural increase was a moderate 2.4 per cent in 1968.
"Congress is considering an enforced limit on Japanese textiles and shoes. 'How can we compete with cheap Japanese labor' is the plaintive question, Ironically, the Japanese are asking how they can compete with cheap Chinese labor in Taiwan."
Marquardt said "Taiwan's national product of US$4 billion per year may he peanuts compared with America's GNP of US$1,000 billion. But the ability of the Chinese (and the interplay with Japanese entrepreneurial qualifications) is something the U.S. should not ignore."
New York Times tells of ROC aid
The business and finance section of the New York Times of November 9 gave prominence to a story about the Republic of China's foreign aid program in general and the work of a four-man agricultural team at Njala, Sierra Leone, in particular.
The story was illustrated by two pictures, one showing Peter King, head of a team of Chinese farm experts, teaching a worker in Njala and the other showing another member of the team supervising the mixing of a chemical spray.
The dispatch by Brendan Jones of the Times business and finance staff, said: "Some 1,000 Chinese technicians currently are carrying out aid projects for agricultural, fisheries and other rural development in 27 African countries, as well as a dozen or more Asian and Latin-American countries."
Jones said the fact that the programs have been repeatedly extended in a growing number of countries is evidence that they are welcome and effective.
The four-man team which Jones visited at Njala is part of a 50-member group from Taiwan which is operating nine demonstration farms of from 20 to 100 acres in the hilly bushland and river valleys of the West African country.
Jones observed: "The Chinese experts are armed with their own traditional store of patience and good humor. This, together with back-bending work and a flair for perfection, is undoubtedly the secret ingredient of rice crop techniques.
"The Chinese methods are impressive, if not spectacular. Using simple, inexpensive tools and trying to improve local seed strains rather than introducing miracle varieties, the Chinese have shown Sierra Leoneans that they could more than quadruple the traditional rice yield."
Sierra Leone's traditional rice-growing methods produce only about 800 pounds an acre per year. The Chinese experts have produced an average yield of 3,500 pounds.