February 19, 1966
Mr. Chairman, Fellow Delegates, Ladies and Gentlemen:
The fourth session of the National Assembly is being convened here today, in accordance with the will of the people and the provisions of the Constitution, to exercise its political powers on behalf of all the people. This signifies that the banner of constitutional democracy is being carried forward and also heralds our glorious victory in the great task of national recovery.
The fourth session of the National Assembly follows closely its extraordinary session concluded ten days ago. The great and significant achievements of that session assure that this Assembly will make further outstanding contributions at the fourth session and lay a firmer foundation for our counter-offensive and national recovery.
On behalf of the Government, I wish to extend my heartfelt congratulations to you for your hard work in the interests of the country.
Six years have elapsed since the third session. Throughout these years, I have reminded myself day and night of the need of a greater effort in order to fulfill the mission of "recovery of the mainland, reconstruction of China, the maintenance of national territory and administrative integrity, and the liberation and assurance of freedom and a good life for our mainland compatriots". Though we have yet to initiate military operations, which constitute 30 per cent of our task of national recovery, we have already succeeded in political reconstruction, which constitutes 70 per cent, thereby completing our pre-war preparations. This is the result of your guidance and encouragement, the endeavors of our armed forces and the people, and the cooperation and assistance of our allies and friendly nations.
Of the more important undertakings in our political reconstruction, I should like to mention those pertaining to the Principle of the People's Livelihood. Following the successful implementation of the "land-to-the-tiller" program in the rural areas, we have established a system of "equalization of land ownership" in the urban areas. In addition, we have carried out a policy of social welfare under the Principle of the People's Livelihood according to the tenet of "using what is taken from society for society".
On the financial and economic front, the success of our first three "Four-Year Economic Development Plans" has increased the annual growth rate of our economy to 7.4 per cent. There is a favorable balance in our international payments since the termination of American economic aid. Per capita income has continued to increase. It has been more than tripled. Rule by law and full freedom for the people have been assured by our program of local self-government. Development of education and culture has been rapid, both qualitatively as well as quantitatively. Special mention should be made of the training of young people for building up the "Model Province of the Three Principles of the People". More than 65 per cent of the youth of this province have benefited from the program.
In foreign affairs, we have not only strengthened our bonds of cooperation with the United States but also have joined our American allies in the joint struggle for justice and freedom. We have in the meantime expanded our program of technical assistance to countries in Africa, helped consolidate relations among Southeast Asian nations, and fostered a greater faith among free countries in the anti-Communist cause.
In the military field, steps have been taken to ensure the closest cooperation between the various branches of our armed forces so that they can support one another in concerted actions. Reforms have been continuously carried out to maintain our armed forces on a war footing. Vigilance against the enemy is perpetual. Anti-Communist fighters have penetrated deep behind the enemy lines to rally the masses for uprisings at the first opportune moment. Therefore, we have today succeeded:
—In establishing on Taiwan prosperity, security, and happiness based on the Principle of People's Livelihood in Asia which is being plagued by turbulences and calamities.
—In building a sturdy lighthouse for the determined defense of peace and democracy in a region which is being beset with collapse and disintegration.
Moreover, we have become the only invincible force of freedom serving the cause of righteousness and justice that is capable of checkmating the Mao Tse-tung regime which has been spreading chaos from the Chinese mainland.
We must also take cognizance of our glorious victories and often invisible successes in the area of ideology and political strategy which we have accomplished as a result of our arduous struggle during the last 16 years:
—We have exposed the Chinese Communist regime as a poisonous organization of brutal force bent on terrorism, aggression, and subversion-and this regime is now condemned by the free world. We have also revealed the evil nature of Communism as a source of war, hunger, and persecution.
—We have helped bring about the deterioration of the Khrushchev-Mao Tse-tung contradiction, which has since become a deep-rooted schism of "Khrushchevism without Khrushchev". From this has sprung the struggle between "rightist adventurism" and "leftist adventurism", and the struggle between the "policy line of peace" and the "madmen of war".
—We have also caused the Chinese Communists to be isolated and to face domestic antagonism resulting from a tyranny which "runs counter to the popular sentiments of the people and is, therefore, abhored by the people". In such a plight Mao Tse-tung has uttered his woeful cry that: "On all basic questions currently facing us ... there are matters separating us from one another, but none combining with one another; there are matters antagonistic, but none that show affinity."
Today Mao is not only the enemy of the free world but also of the more than 70 countries and areas constituting the Communist camp. This has "reversed the relationship between friend and foe". He is not only the enemy of the 600 million people on the Chinese mainland, but also of the Communist cadres and soldiers who are "dividing one into two". He has, in effect, become a "lone wolf", the antagonist of all, completely isolated and facing "anti-Communism outside the party, anti-within the party", "unable to see clearly, resist pressures, and stand firmly".
Fellow Delegates: Ours is a central government based on a constitution that provides for democratic rule by law for all the people. Our government represents an ethical system, the family, and a society that is free and happy. This is in sharp contrast to the bloodstained, abominable "people's communes" of the usurpers in Peiping. We uphold the national spirit of peace, democracy, righteousness, and justice in diametrical opposition to the Chinese Communists' "salient politics" of liquidation, struggle, bellicosity, aggression, and subversion. For the past 16 years, we have seen many in· stances of the ignominious failure of the Peiping regime's "Three Red Banners"-the Communist Party "General Line", the "Great Leap Forward", and the "People's Commune". Exposed to all has been a tyrannical Communist rule that requires the people to "hand over their hearts", undergo "brainwashing", "work in the rural areas" to produce food, and face "reform through labor". We have witnessed the ceaseless rise of an angry tide in the anti-tyranny, revolutionary movement of the mainland people. We have watched the Peiping regime's so-called "Red successors" escape to freedom at the risk of their lives. These freedom· seekers include those who have flown through the Bamboo Curtain, those who have crossed the sea, and those who have defected while stationed abroad. The young people on the mainland have become the daring vanguard of our anti-Communist, anti-tyranny struggle.
The Three Principles of the People, evolved by the Republic's Founding Father, constitute the main current in contemporary Chinese thinking. The battle which is being fought in the name of the Three Principles of the People is one of upholding justice and freedom. Today we must unite the 600 million Chinese people in decisive life-or-death combat. The construction program stipulated in the Three Principles of the People is an effort at modernization. Though it is being carried out in a single province for the time being, we actually have in mind its subsequent implementation throughout the whole country. This is to say that our experience in building up this base for national recovery will serve as a blueprint for future mainland construction under the Three Principles of the People. Furthermore, we must gear our construction effort to meet battle demands and at the same time acquire the capability to start new construction at any time in the course of the battle. We must be ready to restore harmony and stability to the people quickly in the wake of war. We must endeavor to create for the Republic of China a realm of peace in which there will be lasting peace and stability instead of recurrent chaos and catastrophes.
There is a saying by an ancient sage: "The security of a nation depends on the rightness of its course, not on its strength; the survival of a country depends on the substance of its forces, not on its numerical strength." The Peiping regime often boasts of the numerical strength of its forces. It is true that they outnumber us. But compared with our well-trained, single-minded forces, the Chinese Communists are inferior. The Chinese Communists are now forsaken even by their own kith and kin because they have come to regard the whole of mankind as an enemy. In contrast, we have received unceasing assistance and support from our allies and friends, because we consider that benevolence is our duty. Thus our strength is substantial, whereas that of the enemy is flabby. Moreover, all the 600 million people on the mainland are supporting our national cause deep down in their heart. This shows that we, and not the enemy, are superior numerically. It also means that the current situation is turning more strongly in our favor than in any other period in our revolutionary history, not excepting our uprising against the Manchus, the Northward Expedition against the warlords, and War of Resistance against Japan.
While our anti-Communist struggle has human, ideological, political, and international aspects, the battle against Mao Tse-tung and his cohorts is also a combat to save our country, to preserve the Chinese race, to help our mainland compatriots, and to deliver Asia from Communist aggression. Mao and his cohorts are suffering from megalomania and arrogantly look down on the other people of the world. They say they are "afraid of neither Heaven nor Earth". They say they fear neither "Khrushchevism with Khrushchev" nor U.S. nuclear weapons and the modern equipment of an airborne U.S. cavalry division. But inwardly they are scared about something. What makes them nervous is the thought of the landing and punitive campaign of our armed forces, and the uprising of the military and civilians on the mainland in response to our counter-attack. If all of our fellow delegates and fellow countrymen, military and civilian alike, are firmly determined and united in our revolutionary task of regaining the mainland, we can quickly eradicate the root of all evils in Asia and put an end to wars in such places as Vietnam, Korea, and India. All the crises of Southeast Asia can be terminated immediately. Of course, we have the necessary determination to assume this responsibility. We are wholly confident of our ability in winning the victory.
It has been six years since I began my current term of office. I must say I have done poorly by the nation. The opportunity of national recovery is, however, now firmly within our grasp. Meanwhile, the people of the whole nation are anxiously seeking realization of the national task. Their feelings are rising ever higher and have become irrepressible. On every front we have taken lengthy and unprecedented strides of progress. Nonetheless, the territory of the Chinese mainland remains to be recovered; our compatriots there still await deliverance. We have yet to avenge the wrongs done us by the enemy and to cleanse ourselves of national humiliation and disgrace. Of even greater urgency is the destruction of the Peiping regime's nuclear installations. The time has, therefore, arrived for the launching of a counter-attack. The urgency no longer tolerates restraint; changes in the international scene leave us no time for hesitation.
Day and night, I have submerged myself in work and thought, always aware of the limitations imposed by my own faculties and my own abilities, and of the heavy burden on my shoulders and of the great mission ahead. It is my sincere hope that you, my fellow delegates of this Assembly, will do all in your power to advance our plans and to pool your wisdom for the benefit of the nation. I am confident that from this session of the Assembly will come greater encouragement and more support for the government and at the same time more enlightenment and guidance for me. With unity of purpose and keeping before us our common goal, we must all endeavor to meet the challenge of our times. Let us make sure that the brilliance of the Three Principles of the People shines far, wide, and eternally. Let us accomplish the great task of national recovery and reconstruction as scheduled and help usher in the new era of Ta Tung (the Great Commonwealth) for all mankind. This would then fulfill my personal hope and answer the collective prayer of the whole nation.
Premier C.K. Yen's Oral Administrative Report To The 1st Meeting Of The 37th Session Of The Legislative Yuan
February 22, 1966
Mr. Chairman, Honorable Members of the Legislative Yuan:
The Executive Yuan has already submitted to your esteemed Yuan a written administrative report covering the period from July through December, 1965, and an administrative program for the fiscal year 1967.
In my verbal report to you today, I shall set forth recent changes in the international situation and highlights of the administration. Your continued guidance and support will be greatly appreciated.
The international situation is constantly changing. Our national policy of building Taiwan and recovering the Chinese mainland, however, remains unchanged. We are in firm control of the rudder of our ship of state in order to guide it toward a bright future, and in the midst of complicated and confusing world developments we seek to create opportunities favorable to our national task of recovery and reconstruction.
To begin with, we must point out that the internal contradictions of the Communist bloc are increasing day by day.
We have noted further deterioration in the system of production in the Communist countries, the tottering of the Communist ideology and the weakening of the Communist camp.
Food shortages have grown more acute in Communist lands, especially in Soviet Russia and on the Chinese mainland. Soviet Russia's 1965 wheat production fell 10 million metric tons short of the required amount.
Consequently, Moscow had to import 8 million metric tons from the free world. The Chinese Communists since 1961 have been importing foodstuffs at the annual average of 6,000,000 metric tons. Their foreign food purchases last year again totaled 6,000,000 metric tons.
In industrial production, the Communist countries remain generally far behind the democracies. In a desperate attempt to increase production, Soviet Russia last September adopted new economic measures calling for higher profits and greater autonomy and initiative on the part of various enterprises. They have even formulated a new price system. This shows that the Communist countries are compelled to imitate the production methods of free world nations and is eloquent testimony to the bankruptcy of the Communist ideology.
In the Communist bloc, Moscow and Peiping have shown greater antipathy and intolerance for each other. The Communist satellites of Eastern Europe have also moved farther away from Soviet Russia. The strength of international Communism is obviously waning rapidly.
At the same time, however, we must point out that the Communists have continued to create chaos and unrest throughout the world.
Most conspicuous, of course, is the war in Vietnam. With Peiping's instigation and support, North Vietnam has stepped up its aggression against South Vietnam, thereby causing steady escalation of the conflict. In reply, the democracies have speedily poured in more manpower and materials to defend freedom and to punish the aggressors.
In addition, troubles in various forms have also erupted in many other places. India and Pakistan clashed militarily over the Kashmir dispute. A large bloodbath bas occurred in Indonesia following the Communist assassination of Indonesian army leaders in an attempt to seize control of the government. The armed rebellion in the Dominican Republic has raged on. Coups d'etat have taken place in Burundi, the Congo (Leopoldville), Dahomey, the Central African Republic, and Nigeria. Rhodesia has unilaterally declared its independence. Thailand is now being threatened by armed aggression.
Causes of all these disturbances are both many and complicated. But many of the troubles have been the direct or indirect results of the Chinese Communists' intrigues. The Peiping regime not only has endangered world peace with its belligerent actions, but also has tried in every way to intimidate the free nations. Mao Tse-tung and his cohorts have repeatedly declared that they will launch a so-called "people's war" against the free countries. This totally exposes their wicked nature of militancy and bellicosity.
However, we are positive that light will eventually overcome darkness. Peace will reign as soon as the Chinese Communists are crushed.
The government of South Vietnam has woo the sympathy and support of the free world by fighting so courageously in the war against Communism. The United States has been shouldering the heaviest share of the burden in fighting the Vietnam war. Washington, however, has also tried its best to seek a peaceful settlement of the conflict. President Lyndon B. Johnson in his State of the Union message to the U.S. Congress at the beginning of the year pointed out that during 1965 the United States held some 300 informal talks with both its allies and antagonists on the problem of bringing peace to Vietnam. The United States twice suspended its bombing raids against North Vietnam in order to show its sincerity. The most recent suspension lasted for 37 days. Yet all these U.S. efforts have been in vain.
Besides the United States, the United Nations, the Vatican, and governmental and non-governmental leaders of many nations also have worked ardently in the cause of peace. These undertakings, too, have failed to make the Communist aggressors lay down their arms in Vietnam.
To summarize, though the past six months have seen the Communist bloc go downhill in terms of power, the belligerent actions and utterances of the Communists in Peiping have given rise to more turmoils and wars in various parts of the world. The free world's quest for peace is continuing without interruption, and this effort is proceeding along various channels. It can be said that the world today is at the crossroads between peace and war.
The Republic of China believes in peace. But the peace we advocate must be a genuine one, a lasting one, and a complete one. This kind of peace must be built on a foundation that guarantees freedom and assures international justice. This kind of peace cannot be achieved out of a desire for momentary safety and expediency. If so, it would be a false peace, a momentary peace, and a superficial peace. Not only it could not last but would only lead to a more tragic war. History is full of instances to show that the practice of "allowing an abscess to grow" or "nursing evil with appeasement" brings only more suffering and a greater calamity to humanity.
We in the Republic of China resolutely propose that in their search for a genuine, lasting and complete peace, the civilized nations of the free world must first of all eliminate the root cause of the troubles and unrest plaguing the world-the Communist regime on the Chinese mainland; furthermore, such action must be taken before the Peiping regime succeeds in manufacturing nuclear weapons. This is the only rational and effective way to rid the world of war and conflict, to assure peace, and to enhance civilization and human welfare.
Honorable Members of the Legislative Yuan: I have made several oral reports to your esteemed Yuan during the past two years. Today's report is the sixth. In my previous oral reports, I covered major points in administration for the various periods in question. In my report today, I shall make an overall review of the past, including what was done during the last half a year. I respectfully solicit your guidance and correction.
1. Positive Increase of Military Strength and Preparations for Mainland Recovery
Taiwan is the base for the recovery of the mainland. Our military efforts are concentrated on the makings of preparations for overall national defense and for all-people combat in war.
In strengthening our base, we have continued to improve fortifications on the offshore islands. We have dug in deeper into the ground and have amassed a greater fire power. We also have improved the air, sea, and harbor defenses of Taiwan.
We have steadily modernized the equipment of the armed forces in accordance with a general plan. We have carried out intensive training in combat techniques and improved our logistic facilities.
In political warfare, special attention has been given to units in our armed forces and to activities behind the enemy lines. In the last two years, our work in the enemy's rear has been expanded into 27 provinces and cities on the mainland. We have been making preparations to unite the people of the mainland, help Communist military leaders to defect, and start an angry tide of revolution-all to pave way for our counter-offensive. Convincing evidence of the effectiveness of our undertakings behind the enemy lines is provided in the recent defection of Communist airman Li Hsien-pin and two others aboard a plane and of Communist seaman Wu Wen-hsien and others on a landing craft.
We have maintained the youthfulness and vigor of our combat forces. Through a sound system of conscription, we have been able to build up a reserve force of more than a million men who can be mobilized at any time.
To preserve the youthful spirit and combat vitality of our armed forces, the government in the last six months has retired and resettled 3,666 more servicemen of various ranks, thereby bringing the total number of officers and men thus retired to 147,667. The veterans also receive employment, medical recuperation, and educational benefits. At the same time, this program has improved the utilization of our entire available manpower.
Our armed forces are working hard day and night, facing all difficulties squarely and continuously improving their combat readiness. Their loyalty and courage should serve as an example for the cooperative endeavors of all the people of our nation. Under the leadership of our President, the great task of counter-offensive and national recovery will surely be accomplished.
2. Development of Overall Diplomacy and Preservation of International Justice
The Republic of China has endeavored to develop an overall diplomacy and to promote friendship and cooperation with all free world nations. Special emphasis has been placed on ties with anti-Communist countries in Africa, Asia, and the Pacific region. The principal objective is the maintenance of international justice.
In the past half a year, Minister of Foreign Affairs Shen Chang-huan visited Australia, New Zealand, and Japan at the invitation of those nations. These were the first formal visits by a Chinese foreign minister to the three countries concerned and they were highly significant in strengthening our relations with friendly nations of the Pacific area. In addition, our Presidential Secretary-General, Ministers of Economic Affairs, Communications, Education, and Finance, and the Governor of the Central Bank of China, who is concurrently chairman of the Foreign Exchange and Trade Commission, visited other nations or attended international conferences. More than 500 officials and citizens of nations friendly to the Republic of China came here during the same period. Important visitors included Premier Nguyen Cao Ky of the Republic of Vietnam, U.S. Vice President Hubert H. Humphrey, President Philibert Tsiranana of the Malagasy Republic, and President Park Chung Hee of the Republic of Korea.
To strengthen the Republic of China's diplomatic line-up, we have in the last two years elevated our legations in Luxembourg, Honduras, and Haiti to embassy status. Ambassadors have replaced charges d'affaires in the Ivory Coast, Gabon, Niger, Upper Volta, Chad, Rwanda, and Sierra Leone. In addition, we have opened three new missions abroad: the offices of permanent representatives at the International Atomic Energy Commission and the United Nations Educational, Scientific and Cultural Organization, and a consulate in Kuala Lumpur. In the same period, we have welcomed the establishment in the Republic of China of some new foreign embassies, including one promoted from legation status. Mexico has sent a part-time ambassador here. Both Uruguay and Colombia have established embassies headed by full-time charges d'affaires. To further strengthen our relations with friendly nations, we have at the same time signed 12 treaties and agreements and exchanged instruments of ratification for three previously signed accords.
The Republic of China is a founding member of the United Nations and has the obligation of protecting and preserving the U.N. Charter. During the 20th U.N. General Assembly session last year, pro-Peiping nations were active behind the scenes and again tried to seat the Peiping regime in place of the Republic of China. In the end, the pro-Peiping nations were defeated by joint strength of international justice, but the votes were very close. We should, therefore, be more vigilant. Since last July we have sent delegates to 53 international conferences on a governmental level and to 50 international meetings of a non-governmental nature. Attempts of the pro-Peiping nations to seat the Chinese Communists in our place at these meetings all ended in failure. The government is of the opinion that future developments will pose greater difficulties and that active steps should be taken to cope with the complicated problem-ridden international situation.
The value of the United Nations lies in the spirit of its Charter, which clearly says that the purpose of the United Nations is to maintain international peace and security. It also places a special emphasis on the dignity and worth of the human person. The Peiping regime, however, destroys peace, violates justice, and despises human dignity. This is why we must endeavor to persuade all free nations in the world to oppose any move to admit the Chinese Communists into the United Nations. Otherwise, the basic spirit of the U.N. Charter will be damaged and the world organization will lose its raison d'etre. We must solemnly emphasize our position in this matter and continue to adhere to it.
3. Promoting International Cooperation and Obtaining Overseas Resources
The Republic of China has made an all-out effort to promote international cooperation. To offer technical cooperation to developing nations is an effective means of winning international friendship, and to secure foreign loans and technical cooperation is an important step to the growth of our own economy.
We have dispatched teams of Chinese technicians in agriculture, veterinary science, handicrafts, fisheries, brewing, power generation, medicine, engineering, meteorology, water conservancy, harbor administration, paper making, and plywood production to 14 African nations as well as to Saudi Arabia, the Philippines, Maldive, the Dominican Republic, Brazil, Honduras, Guatemala, Malta, etc. Chinese technicians working in Africa alone total 441. Twenty-eight African nations and areas have sent 304 agricultural technicians to seven consecutive agricultural seminars in Taiwan. We also have assisted friendly Asian neighbors in training more than 2,500 technicians in various fields. Malaysia alone has sent 289 rural leaders to Taiwan for training.
In the past, we relied principally on U.S. economic assistance for foreign materials needed for accelerating our economic development. Realizing, however, that U.S. aid could not go on forever, the government has worked hard to develop a self-supporting economy. It also began early approaches to various international organizations and friendly nations for the supply of needed resources. Considerable progress has been made as a result of incessant endeavor during the last two years. The termination of U.S. economic assistance at the end of June, 1965, therefore, has had no adverse effect on our economic growth. So far we have obtained three loans from the World Bank totaling US$42.8 million and two loans from the U.S. Export-Import Bank totaling US$33.75 million. These loans are being used in the development of the fishing industry, improvement of railroad facilities, increase of power output, and in the implementation of other industrial projects. Last year we also obtained a US$150 million loan from Japan. We have received valuable assistance under the United Nations technical assistance program, the U.N. world food program, and technical cooperation with the United States, the Federal Republic of Germany, New Zealand, and other friendly nations. In addition, we are stilt negotiating for more foreign loans of sizeable amounts.
4. Solidarity of Chinese at Home and Abroad in Smashing Peiping's United Front Intrigues
Through years of close cooperation and mutual endeavor on the part of the military and civilians, Taiwan has become a much stronger base of national recovery. Chinese residing overseas also constitute an important force in our program of national recovery and reconstruction. On the other hand, they are also the main target of the Peiping regime's united front intrigues. For this reason, the government has formulated and carried out plans to strengthen overseas Chinese organizations and arouse the anti-Communist sentiments of overseas Chinese in order to smash the various united front schemes of the Chinese Communists.
Two undertakings in the past half a year are worth mentioning. One was the worldwide observance by overseas Chinese of the Double Tenth National Day and Dr. Sun Yat-sen's birthday centennial. Enthusiastic Double Tenth celebrations were held in 93 overseas areas. In Hongkong alone, mass rallies and dinner parties were held by 23 civic organizations, the people in 27 different districts, and at numerous schools. More than ten gatherings had 1,000 or more participants each. The largest gatherings were attended by 3,000 to 4,000 people. In Macao, more than 80,000 flags of the Republic of China were displayed.
In observance of Dr. Sun's birthday centennial, 26 permanent monuments -statues, memorial halls, libraries, and parks were dedicated by overseas Chinese in various parts of the world. Taiwan received 3,301 overseas Chinese visitors for the centennial celebrations in November. Altogether 5,723 people came from overseas Chinese communities for the Double Tenth and centennial celebrations.
Another important activity was the campaign started by overseas Chinese to boycott Communist Chinese commodities. Overseas Chinese communities have been called upon not to buy or use mainland goods in order to prevent the Peiping regime from obtaining what it needs abroad by exporting goods in spite of hunger and privation on the mainland.
The government also has maintained close contacts with Mongols rind Tibetans residing abroad. Representatives of the Mongols and Tibetans in the United States visited Taiwan last fall for Dr. Sun's birthday centennial. A Mongol middle school in Gorakhpur, India, held elaborate observances on both the Double Tenth and Dr. Sun's birthday last year and invited the local people to participate.
We intend to use every means to unite all Chinese both at home and overseas for them to constitute an overwhelming revolutionary force to push forward our great task of national recovery and reconstruction until it is completed.
5. Improvement of Public Functionaries' Remuneration and Administrative Morale
Overall adjustments in the pay scales of military and government personnel have been made time and again during the past two years. Beginning in January of 1964, for instance, the monthly living expenses subsidy for military dependents was raised from NT$30 to NT$40 per person. In July of the same year, the house rent subsidy for military and government personnel was increased to NT$200 a month. At the same time, it was decided that all military and government personnel should receive an extra month's pay each year and that the armed forces allowance for subsidiary food should be raised from NT$100 to NT$110 per person monthly. Since July of 1965, military and government personnel have been receiving two months' extra pay each year, and the military have been given NT$120 instead of NT$110 per person per month for subsidiary food. In addition, the government has effected spot adjustments according to actual need. Additional allowances, pay raises, subsidies, and research expenses have been approved on a number of occasions. Personnel 'thus benefited include diplomatic, information, cultural, and economic affairs officials stationed abroad, officers and men of the armed forces performing special duties, law-enforcement personnel, college educators, and civilian instructors teaching in military schools. Although pay scales are still too low, the government has done its best within the limits of its financial ability. Further pay raises are planned in fiscal 1967. These will be included in the national budget and submitted to your esteemed Yuan for deliberation.
The quality of administrative morale is intimately related to social mores and administrative achievements. Officials must be upright and capable in order to meet the requirements of "renovation, mobilization, and combat". In the last two years, the government has sought to simplify laws and regulations, improve administrative systems, raise morale of the services, and carry out satisfactory retirement measures. In addition, the power of court prosecutors has been increased so that they can initiate inquiries in corruption cases where government officials are suspected of being involved and take necessary punitive actions according to law. The aim is to meet administrative requirements in the government's positive effort to improve the morale of officials.
6. Enforcement of Social Policies and Promotion of Welfare Measures
Implementation of the social policies according to the Principle of People's Livelihood is an important task of the administration. On President Chiang's instructions, three items of this program for prompt application were begun last year in Taipei, Keelung, Taichung, Tainan, and Kaohsiung, the five cities under direct jurisdiction of the Taiwan provincial Government. The three items are improvement of environmental conditions and the livelihood of people in urban slum areas, free medical care for the poor, and construction of low-priced housing. The last item was primarily intended for Taipei. In addition, the Taiwan Provincial Government has completed a first four-year plan which, beginning from this year, is to be implemented throughout the whole province. Under this plan, the additional revenue of NT$1,028 million, which is expected to be collected from the land value tax during the four-year period, will be entirely set aside as a social welfare fund to be used on 19 social welfare projects including social insurance, employment, relief and assistance, housing, welfare services, and social education.
Public health is also an important part of social welfare. As a result of the efforts of medical personnel at all levels during the past few years, good results have been achieved. For example, at the time of Taiwan's retrocession to China, there were 1,200,000 cases of malaria every year. Last year the World Health Organization of the United Nations proclaimed that malaria had been eradicated in Taiwan province. There has been no serious outbreak of a communicable disease in recent years. This is largely due to quarantine measures and preventive inoculations. For instance, in the first six months of 1965 alone, 10,650,000 persons were given anti-cholera shots. The mortality rate in Taiwan has been sharply reduced. According to a report of the Health Department of the Taiwan Provincial Government, the average life expectancy of people on this island has been considerably prolonged -from 48.5 to 65.3 years for males and from 51.8 to 69.5 years for female between 1948 and 1964. Life expectancy now approximates that in the United States, Britain, France, and Japan.
7. Continued Construction of Public Works and Enhancement of Local Prosperity
Public works are an important part of social and economic reconstruction. Within the limits of its financial resources, the government has planned and completed many public works projects.
Among the projects completed in the last two years, the more important ones are the Shihmen Reservoir, the Paiho Reservoir, the Cross-Island Highways in northern and central Taiwan, the Taipei-Hsintien Highway, the Taipei-Keelung Expressway, the pilot industrial zone at Liutu, the Sun Yat-sen Museum, and the Health Center at Nankang.
The projects still in progress are:
Water conservancy—Major engineering work of the initial phase of the basic flood-prevention project in northern Taiwan has been completed on schedule, and that of the second phase is being planned. Projects for developing underground water resources and for building general irrigation works are being carried out to conserve water and raise productivity of the land. Among underground water projects, follow-up efforts have been made to complete scheduled works. The general irrigation project consists of 19 large and small works. Of these, 11 will be completed in the near future. The proposed Tsengwen Reservoir is a multipurpose project that will have a larger storage capacity than the Shihmen Reservoir. According to a preliminary estimate, it can irrigate some 85,000 hectares of land upon its completion.
Transportation—Projects have been undertaken to extend railroad lines, rebuild stations and marshalling yards, renovate crossings and bridges, and construct a power plant at Linkou and branch lines and railheads in the harbor area at Kaohsiung. In highway transportation, projects now under way include improvement and repair of trunk roads in eastern and western Taiwan and the cross-island highways in both central and northern Taiwan, multi-stage preparation and implementation of traffic development plans in the Taipei area, and the building of access roads to industrial and mining areas in eastern Taiwan. Harbor projects call for expansion of loading and unloading facilities at Keelung and Kaohsiung. In civil aviation, efforts have been continued to improve and rebuild airport facilities at Taipei and Hsiaokang (Kaohsiung)
Urban reconstruction—Plans call for improvement of existing urban areas and the planning and opening of new communities and satellite towns. As for new industrial zones, the industrial land on Taiwan is sufficient for the establishment of 59 more zones totaling 2,453 hectares. This is in addition to the pilot industrial zone already established at Liutu near Keelung and the zone being built on reclaimed tidal land at Kaohsiung in the initial phase of harbor expansion. Moreover, there is potential industrial land totaling 2,522 hectares still unused in the urban plans of various administrative regions. This land can be developed gradually to meet the needs of growing industries.
Land reclamation—First comes the reclamation of tidal land. It is planned to make some 16,900 hectares available within ten years. Of this amount, 5,200 hectares are already in the process of reclamation. Next is the project for land reclamation in eastern Taiwan. Some 2,000 hectares have already been reclaimed and resettled by retired servicemen. Another 3,500 hectares are being reclaimed to provide land for resettled servicemen and for civilian farming families.
8. Cultivation of Manpower Resources and Guidance and Assistance to Youths
Taiwan province is not richly endowed with natural resources. But there is an abundant supply of talented manpower. As long as we continue our systematic efforts to cultivate manpower and improve its quality, we shall be able to overcome our material shortages. With this in mind, the government has collected statistical data on manpower, ascertained the trends in manpower supply and demand, and adjusted the work loads of government organizations and schools. In addition, it has drawn up and carried out plans for manpower education, vocational training and employment.
Young people constitute the most important link in our chain of manpower. They, however, ordinarily do not possess the skills and techniques needed by society when they first embark upon a career. In the process of rapid economic growth, society finds itself short of talent when it is needed most. Therefore, it behooves the government to plan and coordinate vocational training and employment guidance for young people.
Young people that are energetic and vigorous need encouragement and guidance most to have their youthful energy develop along positive and constructive channels. They are warm-hearted, innocent and imaginative, but they are easily disappointed and may go to extremes and become depressed because they lack sufficient experience and understanding with which to surmount their difficulties. Thus, a sympathetic study of these difficulties is required in order to be able to help them.
To strengthen its program for young people, the government has established the Commission for Youth Assistance and Guidance under the Executive Yuan, which is responsible for the coordination, planning, and active implementation of the work for youth. It is to be hoped that young people throughout the country henceforth will have a better opportunity to develop their talents and acquire the knowledge to serve society as well as the country.
9. Promotion of Literary and Art Activities and Furtherance of National Culture
Culture is the spiritual foundation of the nation. It finds expressions in writing, music, fine arts, drama, photography, folk dancing, and so on. All of these deserve promotion and assistance. At a time when an all-out campaign is being undertaken for national recovery and reconstruction, it is essential to augment the combat function of literature and the fine arts and thus further the great cultural tradition of our country.
In recent years, our literary and artistic productivity has shown remarkable progress in both quality and quantity. It is particularly noteworthy that writers native to Taiwan province have done much to present themes based on the land and thus have opened up new horizons. This provides an important sources of inspiration to the younger generation and their thinking.
To meet a recurrent need, the government is planning to establish a Department of Culture in the Ministry of Education. It will have the exclusive responsibility of providing assistance and guidance to cultural undertakings. A bill to this effect will soon be submitted to your esteemed Yuan. Your support is sincerely sought.
10. Strengthening of Science Education and Improvement of Vocational
Education The basic educational policy of the nation is to train citizens who are well balanced in the development of ethics, knowledge, health, and civics. Particular attention is given to instilling in young minds national consciousness and culture. In the present circumstances, the government has emphasized the strengthening and improvement of science and vocational education.
To promote science education and develop scientific research, the government last year successively established six research centers for mathematics, physics, chemistry, biology, engineering, and agriculture. There are students enrolled for research work in each of them. To promote scientific research for national defense, the government last year established the Sun Yat-sen Institute of Scientific Research. To it have been assigned research projects for three purposes: (1) peaceful uses of nuclear energy and the study of defense against nuclear war, (2) study of rockets and missiles, and (3) the application of electronics.
Many of our scientists and technologists have been engaged in scientific research and education in foreign countries and have become internationally famous for their achievements. To bring about a closer relationship with them as a way of raising the standards of science education at home, the Ministry of Education conducted an eight-week seminar during the summer vacation last year. A number of Chinese scholars were invited from abroad to give lectures. The seminar was attended by 378 science professors and students from various universities and research institutions.
Vocational education seeks to develop the skills needed for economic development and also aims at the improvement of secondary and higher education. The government has named a number of Chinese and foreign experts to work with responsible organizations of the Central Government and the Taiwan Provincial Government in the area of vocational education. They will survey the situation, make recommendations, and formulate concrete plans for a wel1-rounded vocational education system. At present, efforts are being made to establish five-year technical colleges and vocational schools. At the same time, a change in altitude is required so that the general public will gradually attach greater importance to vocational education. Young people then will be willing to use both their hand and head and employ their talents in creative pursuits of economic development.
11. Consolidation of Public Finance and Stabilization of the Monetary Market
In public finances, the government has two principal objectives:
The first is strict control of the budget to balance revenues and expenditures. In addition to making up for budget insufficiencies, there were slight cash surpluses in execution of the national budget for fiscal 1964 and 1965. The cash surplus of fiscal 1964 was more than NT$214 million and that for fiscal 1965 more than NT$224 million. The government did not require loans from the Central Bank. This has had a salutary effect on the stabilization of the monetary value. But the government did float public bonds during the two years. Although the total amount was small by comparison with the national income, and the government's outstanding debt for bonds issued in Taiwan constituted only 2.75 per cent of the gross national product, there were still substantial difficulties in government financing.
The second is continued improvement of the tax system. The government is positively carrying out revision of tax laws and regulations, experiments with the national tax card system, reform of taxation data, prevention of tax evasion, collection of tax arrears, and strengthening of controls over taxation personnel. The goal is gradual establishment of a modern tax structure with direct taxes, especially the income tax, as the pivot. Slight progress has been made in recent years. For example, income tax receipts constituted 14.9 per cent of all tax revenue in fiscal 1964. The figure was 15.5 per cent in fiscal 1965. We are not satisfied with this result and shall redouble our efforts.
In the monetary field, we have strengthened controls over banks and credit, prevented inflation of the currency, regulated funds needed by agricultural, industrial, and commercial circles, and established a fund to help small-scale enterprises.
Money supply showed a considerable increase in 1964. The increase slowed down in 1965. Interest rates were steadily reduced. The Central Bank lowered its rates again on February 14 of this year. We hope this will have a wholesome effect on the availability of credit needed for investment and industrial expansion. Additionally, our currency value also has shown increasing stabilization. The black market rates of gold and foreign currencies are drawing close to the official rates of exchange. In addition to maintaining continued stabilization, the government is preparing a monetary and credit expansion plan to meet the growing needs of economic development.
12. Development of National Economy and Acceleration of Its Growth
Our gross national product in 1964 amounted to NT$103,473 million, an increase of 13.2 per cent over 1963. National income totaled NT$84,772 million, an increase of 14.5 per cent over 1963. Per capita income amounted to NT$6,726, up by 11.2 per cent from the 1963 figure. These rates of growth were the highest in more than 10 years. (These statistics are being studied by a council of evaluation experts and a slight revision wilt be made before long.)
The year 1965 was the first of the fourth Four-Year Economic Development Plan. Success or failure in maintaining growth and reaching our planned goals wilt determine whether our economic system and foundation can stand up under test. This deserves our special attention.
According to the fourth Four-Year Economic Development Plan worked out by the government, the economic growth rate in Taiwan from 1965 to 1968 will average 7 per cent annually. That is, our gross national product, calculated in terms of 1964 prices, will increase by 7 per cent each year. Per capita income wilt increase by 4.1 per cent, agricultural production by 4.1 per cent, and industrial production by 11 per cent. The number of people employed will increase by 3.4 per cent, a little higher than the rate of increase in the labor force. In international payments, we estimate there will be an unfavorable balance of some US$200 million because a large quantity of production equipment will be imported in the next four years. This deficit will be made up with foreign loans. This is an inevitable phenomenon during a period of rapid growth in national economy.
According to preliminary estimates, production of most farm products attained target figures in 1965. Production of rice registered a new record of 2,340,000 metric tons. The rate of agricultural growth may have reached 6 per cent in 1965.
Domestic investors showed active interest in industrial production, and the output of most industries continued to increase. The growth rate of industry in 1965 was more than 15 per cent.
Therefore, the increase in the gross national product in 1965 should surpass the planned target of 7 per cent.
Solution of the employment problem is important in improving the people's livelihood. Moreover, the increase in employment opportunities is closely related to the rate of economic growth. According to a labor force report compiled by the Department of Social Affairs of Taiwan Provincial Government, the percentage of unemployed in the total labor population of the province dropped from 6.55 in October, 1963, to 3.79 in July, 1965. During the same period, the percentage of partially employed in the total labor population dropped from 5.39 to 2.84. The national employment situation is obviously improving.
In foreign trade, the Republic of China registered its first favorable balance—US$20 million—in 1963. In 1964, the amount of the favorable balance was up substantially to US$55 million. Imports in these two years included bank import exchange settlements, U.S. aid arrivals, and others.
Trade volume in 1965 was larger than in 1964. According to preliminary statistics, exports increased by 6 per cent and imports by 34 per cent. Export exchange settlements totaled US$490 million and import exchange settlements US$550 million, leaving an unfavorable balance of US$59 million. However, the import total included US$65 million worth of U.S. aid arrivals and US$34 million worth of goods purchased with self-financed foreign exchange. Purely from the viewpoint of bank import and export exchange settlements, therefore, there was a surplus of US$39 million.
The sudden spurt in imports was caused mainly by the huge amount of capital equipment and agricultural and industrial raw materials needed for economic development. A statistical analysis follows. Of 1964 imports, consumer goods constituted 22.3 per cent and the remaining 77.7 per cent was in capital equipment, agricultural and industrial raw materials, and others. The breakdown in 1965 showed that consumer goods dropped to 19.3 per cent and that capital equipment, agricultural and industrial raw materials, and others increased to 80.7 per cent.
Compared with 1963, the index of wholesale prices was up by 2.47 per cent in 1964. In 1965, however, it decreased by 4.64 per cent from the 1964 level. The 1965 index, therefore, was still 2.29 per cent lower than that of 1963. Commodity prices were generally stable.
The growth of our national economy in 1965 in the main surpassed the planned goals. However, we shall redouble our effort to reach new record levels so that the people's livelihood will be further improved and our national strength further increased.
As indicated in the preceding review, the credit for any such achievements of the administration must go to President Chiang Kai-shek for his leadership, to honorable members of your esteemed Yuan for supervision and instruction, and to the general public for its support. There are no doubt unintentional omissions and mistakes. It is my sincere hope that the honorable members will be kind enough to let the administration have the benefit of their instruction so that more progress will be possible.
Our present responsibility is of great magnitude and difficulty. But our future is bright. We are supremely confident that the people at home and abroad will unite and cooperate in moving ahead under the great and wise leadership of our President. We are certain we can launch a counter-offensive to recover the mainland at an early date, liberate our compatriots, and consummate our historical mission of building a new China in accordance with the Three Principles of the People.
I thank you all.
Yen Chia-kan
President of the Executive Yuan