For thousands of years, the sages of the Middle East and the Far East have recited the pleasures of learning. K'ung Fu-tzu, who is universally known as Confucius, once said that he had gone a day without food and a night without sleep so as to give himself to thought. It was no use, he said. It is better to learn. He also observed that those who know the truth are not up to those who love it, and those who love the truth are not up to those who delight in it. We learn from everything and everyone, or we should. As Confucius put it, when in the company of two others one has two teachers - one to emulate and one in whom the bad may be observed so as to correct oneself. And what is knowledge? Confucius defined that, too. He said that when you know a thing, say that you know it. When you do not know something, admit it. This, he said, is knowledge. How much do we know about the land of Confucius?
China is one of the oldest countries on earth. Its recorded history has a duration of more than 4,000 years. But let us go back no farther than 1911. The Founding Father of the Republic, Dr. Sun Yat-sen, had tried again and again to overthrow the tired and decadent dynasty of the Manchus. China was ripe for new ideas but the hold of the traditional was also strong. Worst of all, there was no unity. History cannot be denied, however, and the moment came on October 10 of 1911. We call it the Double Tenth because it was the 10th day of the 10th month. Ironically, Dr. Sun wasn't even in the country. He was in the United States raising money to continue the struggle. His inspiration was sufficient. Less than three months later on January 1 of 1912 - the Republic of China was proclaimed with Sun Yat-sen as its provisional president. The Ch'ing and the long lines of dynastic emperors were swept off the Chinese stage.
Dr. Sun was a remarkable man. He had left China as a young boy and acquired a Western education in Hawaii. Then he won his doctorate of medicine in Hong Kong and practiced in Macao and Canton. As a man of science and of two worlds, he could see that China had to leave medieval times and enter the 20th century. Yet he was also Chinese to the core. He would not have understood the Mao Tse-tung dictum to destroy the old and usher in the new. He knew that the old can never be destroyed, but he also knew that what had gone before could not be allowed to become a straitjacket. Science had taught him that you build on what you have; you advance on a basis of what you know.
Our Founding Father did not stay at the helm of state for long. He had trouble with the warlords, and especially with those who aspired to return to the ways of empire. In a sense, politician and compromiser he was not. When the politics got too nasty, he retired to the sidelines there to think of what would be best for China. In time he expressed this in his Three Principles of the People, which is still the lodestar of the Republic of China. These principles are Nationalism, Democracy and the People's Livelihood; the last may also be described as social welfare.
For China, Nationalism was an obvious corner stone. The Middle Kingdom had failed to keep up with military science. We suffered the ignominy of unequal treaties. We were, in fact, nearly carved up by the colonial powers of the 19th century. Dr. Sun described our people as loose grains of sand. Those grains were looking for the beach of a great Chinese nation. China was disintegrating under the Manchus. Our culture was intact but our sense of nationhood and national purpose were almost gone. Those who ruled us absolutely had not kept up with the times.
Dr. Sun's concept of nationalism was both old and new. He retained the China of the dynasties and carried it forward into the era of nation-states. As a Republic, the China of antiquity could hold up its head and be proud, yet be as modern as any battleship that came maneuvering into Chinese waters from the West. The Founding Father was not naive about democracy. He did not expect it to spring full-blown from the head of Confucius or Mencius. Democracy had to be learned and earned. He established the Kuomintang, or Nationalist Party, as the tutor. As in nationalism, his democracy combined the old with the new. We are still learning in keeping with the guidance he provided.
Sun Yat-sen had learned well the ancient Chinese lesson of the mandate of the heavens. This is nothing more complicated than that the ruler who fails his people will not rule for long. People must eat, people must be clothed, people must work. They must be educated in childhood and cared for in old age. They may not be born equal but they must be accorded equal opportunity. This is not a conception of charity but of right. It is not capitalism, nor is it socialism. It is Confucian humanism, certainly, but with a stronger sense of governmental obligation than is to be found in the writings of a sage who lived 2,500 years ago.
To try to make a long story short, the Three Principles of the People is the heritage left to us by Dr. Sun. These Principles are effective; they do assure the good, the free and the proud life. We have proved that on Taiwan. We acknowledge our debt to Sun Yat-sen. We believe that the rest of the world will appreciate the genius of his teachings in time to come. Dr. Sun is well worth consulting.
Our Founding Father died prematurely in 1925. His dream was the unification of China. He did not live to see its realization. The instrumentality of that accomplishment was Chiang Kai-shek, who is today our President and national leader. From 1926 to 1928, President Chiang marched against the warlords - advancing from Canton to Peiping. These days much is made of the so-called "long march" of the Chinese Communists. This was a retreat which should have led to defeat. The March Northward of Chiang Kai-shek was one of the greatest victorious offensives in all history. With the warlords beaten, total Chinese unity was challenged only by a handful of Communist dissidents.
Too little is known of the Republic of China's achievements from 1928 to 1932. While a Great Depression was developing in the West, we built industries and railroads. The people moved 50 years closer to the mid-20th century. The alien philosophy of Marxism, fostered by the Russians, was attacked in the cities and the countryside. Had the Japanese militarists not attempted to conquer China, the Communists would never have had a chance in our country. They were beaten once, and the Japanese then gave them a new lease on life.
The world thinks of our last war with the Japanese as lasting from 1937 to 1945. Actually, the period was 13 years - from 1932 to 1945. And the roots reached well into the 19th century. Although we do not wish to blame everything on the Japanese, the fact remains that Japan opened the doors for the Communist usurpation. The Japanese war was hard and long. First we had to pretend not to fight. Then we had to fight alone from 1937 to 1941. Finally, from the time of Pearl Harbor we had allies, but we were at the end of the line. We scorched our earth and we retreated into our hinterland in order to survive and fight another day. All the while we were devoting everything that we had to the defeat of imperialistic Japan, the Communists were conserving and building up their strength. Their purpose was to overwhelm us, not to fight the Japanese.
No sooner had we celebrated V-J day than the Communists unlimbered their hoarded weapons and struck with all their might at our weakened forces. Russia signed a peace treaty with us and at the same time gave surrendered Japanese weapons to the Communists. This was the bitterest pill China has ever had to swallow. Our people didn't want Communism. They were tired of fighting, however, and they wanted peace. The Communists usurped the mainland by default. Always the realist as well as the idealist, President Chiang had foreseen that victory over Japan might be followed by reversals at the hands of the Communists. He prepared this island of Taiwan as an impenetrable fortress - a bastion where wounds might be healed and weapons mended. In 1949, and again in 1958, the Communists were stopped at the water's edge of the Taiwan Straits. As the French once had said to the Germans, "Ils ne passeront pas," so we said that the Communists would never cross the 100-mile channel between the mainland and Taiwan. They have not. Nor will they, no matter how long it may take to liberate the mainland and free our countrymen.
This bastion is no continent - no vast expanse of land like the nearly 4 million square miles that we had to leave temporarily. Taiwan could be described as a sort of middle-sized island - not big like Greenland or New Guinea, but not a tiny flyspeck, either. The area is just under 14,000 square miles, which means it is almost the size of Holland. This tobacco-leaf shaped piece of land is about 250 miles long and 90 miles wide at the broadest. The climate is subtropical – although you might not think so in January and February. In general, nature smiles on us, although we do have typhoons which well up from the depths of the South Pacific plus an occasional destructive earthquake. Incidentally, the Chinese name Taiwan is not less poetic than the Portuguese Formosa, which refers to the beauty of the island. Taiwan means a kind of dais rising from the sea. The island is aptly described in both languages.
Taiwan bows to no other province of China in the fascination of its historical experience. Peoples of the South Pacific came to the island before the dawn of written records. They are with us still - some nine tribes of aboriginal people with their own languages and remnant cultures. Pushed into the mountains by later arrivals, they are now being assimilated but with as much cultural preservation as can be managed. Those who visit us today have opportunity to see the dances and hear the songs of the Amis - a people perfectly named even in French, because they are warm and friendly - as well as some of the other tribes.
Chinese from the mainland began arriving in Taiwan early in the Christian era. Numbers were relatively small until the 17th century, which also brought the Dutch. These Redbeards from Europe encouraged the immigration of Chinese farmers to cultivate sugar cane. Dutch and Spanish fought for the island. The Dutch won but Cheng Ch'eng-kung - also known as Koxinga - expelled them in 1662. Cheng was a Ming loyalist. Had he lived, the Manchus might well have been driven from China and the Ming dynasty restored.
Only the aborigines and the Chinese really settled down in Taiwan. The Japanese, who took the island as a spoil of war in 1895 and held it for 50 years, were exploiters rather than colonizers. All their efforts to settle Japanese farmers on Chinese soil came to naught. Although compelled to speak the Japanese language and adopt Japanese ways, the people of Taiwan remained essentially Chinese. Today the thin veneer of Japaneseness has worn off. Members of the younger generation speak the national language, which is generally known as Mandarin. If their parents are island-born, they also speak one of the Taiwan dialects: that of Amoy or of the Hakka people. They are as likely to know some English as Japanese.
Taiwan was retroceded to the Republic of China by the Japanese in 1945. The island was in bad shape. Allied bombings of World War II had destroyed industry and much of the transportation system. At first Taiwan couldn't be given any special reconstruction priority. The mainland had suffered grievously, too, and the conflict with the Communists was raging anew. The island had to shift for itself for a time. But in 1949, Taiwan became the temporary seat of the Central Government and the island province received the full attention of China's best administrators and entrepreneurs.
Modernization of Taiwan began in the decade of the 1950s. War damage was repaired. Absentee landlords held part of the farmlands and tenants did not have the incentive to produce more and accumulate the surplus capital needed to finance the beginnings of industry. This shortcoming had to be corrected. Defense forces had to be rebuilt. People on Taiwan had no experience with elections and self-government. If the democratic institutions of the Republic of China were to be preserved and nurtured, the people had to learn the uses of power. We had to educate our children. There were just four institutions of higher learning in existence when the Japanese departed. Today we have one hundred.
Land reform came first. This is a program of which the whole free world can be proud. For the first time in history, the land of a sizable political entity was redistributed peacefully and without uncompensated expropriation. We first reduced the rents paid by tenants and then sold public lands to those who tilled them. By 1953 we were ready for the final stage. Excess lands were bought from the owners and resold to tenants for the same price and with 10 years to pay. Landlords received part of their payment in crop bonds and part in the stocks of four government corporations which were handed over to private management. Some of the former landholders went on to become our first big industrialists.
As of 1974, only about 10 percent of our farmers were still renting their land. We hope in time to eliminate tenancy altogether. Agricultural output has increased more than five times since the program began. The farmer has the incentive of land that belongs to him. He is interested in increasing the input so he can have a bigger output. He is willing to invest in machinery and spend money for fertilizer, pesticides and better seeds. Land reform has given rise to mechanization, scientific farming and land consolidation. A land reform Institute has been opened near Taipei in cooperation with an American foundation. Interested nations in every part of the world send agronomists to the Institute to learn how the Republic of China succeeded where the Chinese Communists failed. Europeans and American often fail to understand that to Asia until recently a region of peasants - land reform symbolizes the ultimate in freedom. Given land of his own, the Asian farmer will overcome almost any difficulty.
As soon as the land reform program was well along the road to success, we were ready to develop light industry. Happily, the United States was on hand to help, just as was the case in postwar Europe. American aid administrators attest that the 1,500 million U.S. dollars contributed to the Taiwan economy was the most effectively spent of all the billions America contributed to free Asian countries. The U.S. aid program to the Republic of China was begun in 1951 and concluded in rnid-1965. In the later stages, almost all of the assistance was in the form of loans. The interest and repayments are continuing to generate about US$50 million a year for projects to stimulate the economy.
At the outset of industrialization, we made products to help the farmer and serve our most basic needs. Nothing was fancy and nothing was complicated. The summers in Taiwan are long and hot. So we made electric fans. The winters are nippy and people have to wear warm clothing. So we started a textile industry. Before that, we had imported nearly everything we wore. We found we could make farm pumps and light machinery. Our entrepreneurs moved from pounding out beer cans into simple containers to the fabrication of stain less steel pots, pans and kitchen implements.
We had little if any thought of exports at the outset. We were interested in our own people, who were desperately poor and who thought everything worth having must come from Japan, the United States or Europe. In 1954 - and that was a year when the Taiwan reconstruction program was already well under way we had exports of a mere US$93 million. Last year's total was more than US$5,600 million.
From the beginning, the government dedicated itself to the free enterprise system. This wasn't a matter of anti-Communism, or even of anti-socialism. Our economic ideas are based on the thinking of Dr. Sun Yat-sen, who taught that government would have to do what private interests failed to accomplish. We are not opposed to government participation in the economy. We have government corporations engaged in generating power, refining petroleum products, building ships, producing fertilizer, making aluminum, rolling cigarettes and so on. Ours is a mixed economy based on the philosophy that all things being equal, private industry has incentives which may make it more productive than state corporations. The rule ought to be the needs and the service of the people. Industry and business are not established for the welfare and profit of private entrepreneurs; they must fulfill the public interest first and their own interest secondarily.
Politics cannot be separated from economics. Taiwan has never had a Communist problem. We have had subversionists and infiltrators. The Communists always try guile and deception before resorting to overt aggression. Our people have paid no attention. Any Communists we have had in Taiwan over the years were sleepers - those planted by the enemy between 1945 and 1950- or more recent imports. People are not fools. They look at what they have and what is in prospect. Why should anyone on Taiwan throw away his full rice bowl for the thin gruel that the Communists have to offer?
If the Communists can say to a people, "What do you have to lose but your chains?" and if this is really the case, such a people may well decide to take a chance on Communism. The people will find Communism worse than what they had, but they do not always know this. What I am saying is that the best defense against Communism is a society of plenty and hope. The defense against tyranny and enslavement is freedom. Our people are loyal and dedicated. Why? Partly it is because the people can vote and elect their own representatives. Partly it is because they are informed and can discuss their own affairs and the world's situation freely. But most of all it is because they have bettered their own lives and because they know that an even brighter horizon is opening up for their children.
Our people have been severely buffeted by international developments within this decade. We were compelled by appeasement of the Communists to withdraw from the United Nations in 1971. It so happens that we were a founding member of that organization and one of the five permanent members of the Security Council. We had conducted ourselves honorably. But appeasement is one of the world's most contagious and deadly diseases. Once it was well started at the United Nations, we could not stop it. That is why there is now so much sentiment in America for getting the United Nations out of the United States and the United States out of the United Nations. Principle was thrown out of the United Nations along with the Republic of China. It cannot be returned under present conditions.
workers are adjusting the casing of the oceangoing rig. Wildcatters have already found gas. (File photo)
When we left the U.N., our President told us, "Don't be disquieted in time of adversity. Be firm with dignity and self-reliant with vigor." The people have heeded his counsel. Some of our good friends - such countries as Japan and Australia, Brazil and Argentina - decided to join the parade of the appeasers. We know that they were not motivated by opposition to us or our cause, but by the hope of promoting their self-interest. Our people did not flinch under these blows. They only tried harder to make friends without benefit of diplomacy - to say in trade and tourism and cultural exchange what formerly was said through the official representation of embassies and legations.
The Communists thought to isolate us; they failed utterly and dismally. We continue to maintain substantive relations with more than 120 countries of the free world. The number varies from month to month and year to year. But I can say without fear of contradiction that we have or have had within the last year or so contact and relationship with all states of the world except those which have embraced Communism. We could be isolated only if the world sold its birthright for the mess of porridge held out by the Communists. I see no likelihood of that.
Give people a rising standard of living. Give them political liberty. Protect their rights. Assure a benevolent but strong government. Place the law above men. In such a society you need have no fear of Communism or the Communists. If Communists dare to raise their heads, they will have their ears boxed and their nose punched in. Of course, we have one additional advantage. Those of our people who came from the mainland know Communism by bitter experience. Those who have never seen the mainland could not escape learning a lot second hand. Almost every day we have refugees from Communism arriving in our midst. They tell their stories freely and honestly, then they look around them and proclaim Taiwan to be a paradise. It is far from that, but their sincerity is undeniable. Compared with what they have known, this is heaven on earth. And that goes for idealism as well as materialism. Man lives not by bread alone. He also needs hope and a small dose of what we might call the metaphysical. These are not to be found in the mystique of Maoism, which quickly becomes empty rhetoric. Mao thought has yet to perform its first miracle. There was a brief time when some of our mainland compatriots were taken in. They soon learned that the hundred flowers bloomed only to be trampled and that steel could not be made in the backyard, no matter how hard the would-be steelmaker might work.
In the last year we have been beset by economic problems not of our own creation. First there was inflation and then there was recession. Those who blame all of this on the oil producing countries are shortsighted. The reasons for stagflation are numerous and complicated. We cannot examine them here. Suffice it to say that whatever the causes, economic slowdown hits the developing countries harder than the developed. There just isn't so much that we can give up. The economy doesn't have to lose much steam to bring us down to the subsistence level of food, shelter and clothing.
Economically, Taiwan was flying high through 1972 and into 1973. Our rate of economic growth had exceeded 10 percent annually for years. The 1973 figure was 12.3 percent despite the turndown at the end of the year. For that same year, foreign trade was up by more than 50 percent. Furthermore, and some said almost miraculously, this growth was accomplished with minimal inflation. Prices were rising by annual increments of only 3 to 6 percent during the 1960s and into the 1970s. Per capita income reached US$467 in 1973. Until the second half of that year, the people's buying power was strong.
The inflation of late 1973 and early 1974 was severe. Everything we bought - not just oil - cost a good deal more. Yet we found resistance when we were compelled to increase the prices of our commodities. At the end of 1973, the government decided the people were willing to bear their full share of the burden and that the most important thing was to stop inflation. That was done with a series of stabilization measures early in 1974. The government said that increases for services and essential goods would be a one-time proposition and we have been able to keep our word. As of the end of 1974, most wholesale and retail prices were lower than those of February or March. This is nearly unique in the world. It shows what government and people can do together, even in a land where so many raw materials must be imported.
There was a price for this success, naturally. The economy slowed down - not that this was a strange phenomenon in 1974. All economies slowed and the majority of them wound up with zeroes or minuses in the growth column. The Republic of China did a little better than that. Our economic growth was about 0.5 percent in terms of the gross national product. Per capita income reached US$697. Although much of the gain was lost to inflation, the 16 million people of Taiwan were confirmed in their enjoyment of the second highest living standard in East Asia. The Japanese were better off in absolute terms but not in growth. Trade was up by more than 52 percent in 1974. Imports climbed much faster than exports, but that was only to be expected in this strange and difficult year.
Comparisons may be more revealing than actual figures. The Chinese mainland has an area of more than 3.7 million square miles and a population of over 700 million. Yet in 1974, this vast land and all those people had about the same volume of trade as Taiwan with its 14,000 square miles and 16 million people. We were outnumbered 50 times, had only 1/264th of the area and still out traded the Communists in 1972 and 1973 and came close to it again in 1974. The last was a year when the Peiping regime began to capitalize on mainland oil and the high price it brings from Japan and other countries.
Trade is our lifeblood. Exports make up more than half of our gross national product. Not surprisingly, we are concerned about a deficit which exceeded US$1,300 million last year after favorable balances in the three preceding years. We are trying to cut down on unnecessary imports and improve our terms of trade with Japan, which is our biggest supplier. In fact, the deficit with Japan alone was slightly larger than the total. The Japanese sold more to us last year than to the Chinese Communists, although they have made such a fuss about that huge market. Our biggest customer is the United States. The two-way volume was more than US$3,700 million last year, which meant that we out traded the Chinese Communists 3 to 1 in the American market. Our favorable balance in U.S. trade was about US$360 million.
The degree to which our economy has become industrialized is clearly shown in the composition of trade. Exports of industrial products made up nearly 85 percent of the total in 1974. Even the agricultural exports tended to be processed ones in a ratio of 2 to 1. Imports, on the other hand, were dominated by raw materials at 61 percent, followed by capital goods at 32 percent. Consumer goods stood at just under 7 percent, indicating that we are now in a position to make most of the necessities and many of the luxuries to be found in Taiwan retail markets.
Many countries have shown interest in our concept of export processing zones. These industrial estates combine the advantages of an ordinary factory zone with those of a free port. The first one was opened at Kaohsiung, our southern port city, in 1966. A second has been developed nearby and a third at Taichung in west central Taiwan. Exports of the three earned US$511 million last year for an increase of 26 percent. The gain in foreign exchange exceeded US$200 million. Nearly three hundred plants have been established with an investment of close to US$157 million. Jobs are made available for 68,000 workers, of whom 85 percent are women.
The Republic of China welcomes foreign investment. Admittedly, the seeking of foreign capital - which comes in search of a profit - is a two-way street. The oil-producing countries of the Middle East can attest that for a long time most of the traffic was one way. However, we have found that foreign investment is constructively useful. We get industries which otherwise we could not develop so soon, capital which we don't have, know-how from which we can learn, employment opportunities and substantial tax revenue. Nearly US$1,300 million worth of investment has flowed into Taiwan from abroad since 1952 - more than US$900 million of it supplied by foreigners and nearly US$400 million by overseas Chinese.
Overseas investors continued to express confidence in our economy last year, although the total was down from the US$248 million of 1973. Still, US$189 million is an impressive figure which included 168 new projects and the expansion of 281 existing ones. The current favorites of these external investors are electrical machinery apparatus - mainly home entertainment products nonmetallic manufacturing and chemicals. Japan led the United States by a slight margin as the principal source of investment. In total the Americans are far ahead with a total of about US$450 million.
Industry more or less marked time last year. But not all the news was bad. More than half of important industrial enterprises showed production increases. We made more air-conditioners and bicycles and turned out more cement. Export declines hit the manufacturers of TV sets, plywood and rubber shoes. Textiles, our biggest export product, chalked up modest gains. In competition with Japan, Hong Kong and South Korea, we were the only country to record a slight enlargement of our U.S. textile market. There is no secret about this. We have tried to keep up with the times and to make good cloth and garments at a reasonable price. Make a better undershirt and sell it at a price many can afford; buyers will beat their way to your door.
Our government is optimistic about the prospects for trade and industry this year. Raw materials prices are coming down. Prices of finished products are catching up. The world is using up its stocks of textiles and some of the other light industrial products which we make. Competition is keen. But we are sending out trade missions and improving the quality of our product.
The Republic of China has always avoided grandiose projects. We think the livelihood of the people is more important than whether or not we can make any specific project. In fact, we went a little too far in this direction. With our economy growing by more than 10 percent annually, we found that we were falling behind in the construction of infrastructure. Inflation and recession or no, there was no question of waiting longer. We had to get going with transportation, communications and basic industrial expansion or face slow paralysis.
China Shipbuilding Corporation is rebuilding sturdy vessels for petroleum exploration in waters off Taiwan. This is the Wodeco No. VIII. (File photo)
Premier Chiang Ching-kuo and the Cabinet gave the necessary orders in 1973 and projects which should transform Taiwan into a developed land by the 1980s are already well under way, at a cost of more than US$6,000 million. Much of the foreign financing has come from the U.S. Export-Import Bank and from U.S. commercial bank loans guaranteed by that institution. The 10 approved projects will require nearly 200,000 workers and use tremendous quantities of such raw materials as steel, cement and lumber.
Briefly, these are the projects and how they were doing early in 1975:
- West Coast railroad electrification. Work begins in March and will be completed in mid 1979. The carrying capacity of the rail mainline will be increased by about a third and speeds boosted by roughly the same amount. When our nuclear power plants come into production, we will save money on the energy required to power locomotives. Incidentally, the estimated cost of electrification has risen about two times since we made our first plans.
- International airport to serve Taipei. We have expanded the Sungshan International Airport three times in the last 15 years. Now we are reaching the end of the geographic setting on Taipei's near-northeast side. Acquisition of land has been completed and an access road built at a west coast site close to the industrial city of Taoyuan some 18 miles southwest of Taipei. Construction of drainage facilities, the main runway and terminal buildings will begin soon. Completion of the first stage is expected before the end of the decade.
- North-South Freeway. One section is already open and work is under way on two more. This project parallels the west coast railroad and will carry goods to ports as well as passengers between Taipei in the north and Kaohsiung 235 miles to the south. The latest estimate of cost is US$1,210 million, well above the original figure. In fact, we could have built this road for less than US$500 million five years ago. Such rising costs constitute a big problem for the developing countries and deserves the attention of both the developed countries and states which are rich in energy resources.
- Suao-Hualien railroad. This east coast link will complete about seven-eighths of the around-the-island railway. Only the southern bend will remain to be completed. The east coast is now largely isolated except by air. Roads are frequently blocked by mountain landslides and torrential typhoon rains. The 55-mile railroad will have nearly 20 miles of bridges and tunnels. It is boring its way through some of the most rugged mountains in our part of the world. This is a project that defied the Japanese, although they are notable builders of mountain and forest railroads. Work is proceeding from both terminals and is on schedule.
- Taichung port. This will be the first commercial port between Keelung at the northern tip and Kaohsiung near the end of the southwest coast. It will open up central Taiwan and give the rapidly growing industrial city of Taichung a direct outlet to the outside world. Work is 30 percent complete. By the end of 1976, this harbor will have a capacity of 2.8 million metric tons of cargo annually. This will rise to 12 million tons by 1982.
- Suao port. This is a supplementary harbor for Keelung and will help serve the needs of Taipei. Construction was begun in July of 1974. By 1982, Suao - once a quiet fishing haven - will be able to handle 6.5 million tons of cargo annually.
- Kaohsiung shipyard. Taiwan has a shipyard at Keelung building tankers of more than 100,000 tons and bulk carriers of up to 54,000 tons. Geographical considerations rule out extensive expansion. So a new yard is under construction in the south. Orders are already in hand for tankers of 450,000 tons. Work is nearing the halfway point. The huge dry-dock, second largest in the world, will be ready to accommodate its giant cranes by the end of this year. Construction of the first ship will begin before the end of 1976.
- Steel mill. The government long resisted entering the highly specialized steel business. We have many small and medium-sized producers but no big, integrated plant turning out plate and other sophisticated products. The demands of shipbuilding, automobile and other industries led to a change of heart. First-stage production of 1.5 million metric tons will begin in 1978. Capacity will reach 2.7 million tons in 1980 and 6 million tons in 1983.
- Petrochemicals. Construction of a third naphtha cracker is under way and several downstream projects will be completed this year. The quadrupled price of oil will not, in the end, interfere with plans to make Taiwan one of the principal Asian centers of petrochemical processing. Oil is becoming too valuable to be burned for energy; it is worth much more as a raw material for a myriad of products.
- Nuclear power plants. Two plants are under construction and the first generator will go on line in the fall of 1976. Foreign financing of the third plant has been obtained. By 1972, the three plants - two in the north and one in the south - and six generators w ill be producing 5.1 million kilowatts of electricity. When the first commitment to nuclear power was made in 1969, the cost promised to be considerably more than thermal generation from oil. This has been drastically changed by increases in the price of petroleum. Nuclear power will give the Republic of China greater energy self-sufficiency at a reasonable price. By 1982, the Taiwan Power Company will be dependent on petroleum for less than 25 percent of its generation, compared with 75 percent in 1973.
Taiwan is fortunate to have hydroelectric resources. In 1954, water power provided 87 percent of our electricity. Industrialization has changed that. Our short but fast-running rivers now provide only 17 percent of electricity. Still, that is a lot better than nothing. We are also exploring geothermal power sources and the possibilities of both solar and windmill generation in a land that has plenty of sunshine and a liberal supply of wind. We have gas, too - 1.45 billion cubic meters of it in 1973 - and coal reserves of more than 225 million tons. Gas reserves are estimated at 30 billion cubic meters and new discoveries are keeping up with exploitation. Oil is often present where oil is found. This is a still unrealized hope, but exploration has been under way since the 1950s. So far the amounts of petroleum discovered are insignificant. But offshore drilling began only a couple of years ago and we have found sizable quantities of gas and some condensate. The prospect is at least promising.
We have another industry of which we arc inordinately proud. This is tourism. Confucius said that welcoming friends from afar provides one of life's greatest pleasures. So it does, and we even get paid for it! Taiwan had 825,000 visitors in 1973 to rank just behind Hong Kong and Japan in our part of the world. The number was down to 820,000 in 1974 for the first decline of modern times. But that was nothing to be ashamed of. We still did well, comparatively, in an era of inflation, rising travel costs and the inclination of Japanese and Americans to stay home and save their money. Then, too, we lost more than 60 flights a week between Taiwan and Japan when China Airlines and Japan Air Lines suspended their flights in developments growing out of the Japanese civil aviation agreement with the Chinese Communists.
Tourism earnings amount to several hundred million dollars a year. But our greatest interest is not in a profit but in making friends. We want people to come and see what we have and what we have done. And we are most happy if they are among the very few who have also been to the Chinese mainland. Then they will be able to judge for themselves the difference between freedom and a totally managed regime in which the individual dares not express himself. We want people to see our educational system - free through nine years and with nearly 300,000 students in 100 institutions of higher learning. We urge them to sample not only our fine cooking from every province but also the wide variety of our culture. They will find nothing managed and nothing phony. The old and the new are inextricably woven, and both are welcome.
What of the future?
As for business and industry, one of our foreign investors and a part-time journalist summed things up in a column which expressed doubt that the Japanese economy will move ahead of that of the United States by 1990. This had been a projection of the weekly Economist of London. "There are," he said, "reasons for projecting Taiwan into a high income future and without too much difficulty forecasting it to go ahead of Japan. We have all the advantages of Japan - which are not many and with more scope probably to expand competitively. We are not encumbered by Japan's high cost and subsidized agriculture and do not, there fore, have that food-drain on potential income levels. We are unhandicapped also by Japan's atrociously inefficient procurement and marketing and distribution system, and have the opportunity at least to develop a better one. When you come right down to it, Taiwan has, as I have often claimed, the soundest base of any economy in Asia - and at present about the most competent direction from government. Good futurologists should pay attention to our potential for becoming the richest of them all. Our curves (of growth) make good projecting, too, better than Japan's."
Move over, Japan, and the United States, too here comes little Taiwan. Imagine what we could do with the wealth and wasted energies of the Chinese mainland!
All of us - here and on the mainland - are Chinese together. We have the same forefathers, the same culture, the same willingness to work, the same intelligence, the same aspirations. We did not leave all the stupid Chinese on the mainland and bring all the bright ones here - nor the other way around. Those who say Communism is the wave of the Chinese future don't know what they are talking about. I am not sure exactly how it is going to happen, nor when, but China is going to be free and prosperous and Chinese again. There will be no Taiwan and no mainland just one China dedicated to peace and not violence, to cooperation and not aggression. The foundations of change have been laid in the Chinese heart; they are visible in the instability of the mainland and the solidity of what we have built on Taiwan.