After listening to reports on the financial and economic situation, President Chiang issued these instructions:
1. The Executive Yuan will consult with the National Defense Industry Development Foundation on allocations from the Self-Reliance and National Salvation Fund for the purchase of 18 F5E fighter planes. These aircraft will be organized as a Self-Reliance Squadron of the Chinese Air Force. An aircraft presentation ceremony will be held on the Double Tenth National Day this year.
2. Considering the present stage of economic development, the production of domestic products should be upgraded from the imitative to the creative through continued emphasis of science and technology. Research and invention will be encouraged to spur the improvement of production techniques and marketing methods; success will be rewarded.
3. Export operations and procedures for agricultural and industrial exports by both air and sea should be studied further and simplified so as to accelerate the process and avoid costly delays for farmers and manufacturers.
4. The construction industry is important to the economy and provides impetus for other industries. Banks and other monetary institutions should provide the building industry with loans as usual. There should be no curtailment.
5. As the prices of raw materials for production (including oil) continue to rise in the international marketplace, measures should be taken immediately to minimize the increased cost of domestic products. Special care should be taken to assure the stability of prices for daily necessities, especially food.
One hundred and sixty-five youth representatives attended a reception given by President Chiang Ching-kuo on the eve of Youth Day.
Included were representatives of fishery, agriculture, manufacturing and trade; overseas Chinese students; press corps members; writers; Communist defectors; returned scholars; and college students.
Citing as examples the founding revolutionaries of the Republic, who were young men of courage, he called on youths of today to carry on that undaunted spirit in their striving for peace and freedom.
The boy runner, Wesley Paul, presented his latest trophy, a gold medal from the 1978 U.S. Junior Olympics, to the President. President Chiang gave him a basket of bananas. Cartoonist Huang Mu-tsung presented his documentary "The Techniques of Making Cartoons" to the President.
Participants were invited to see the President's office and to have their picture taken. Also attending were Vice President Shieh Tung-min, Secretary General to the President Ma Chi-chuang and Secretary General of the Central Committee of the Kuomintang Chang Pao-shu.
The hope of the Chinese nation rests on young men and young women, the President said. For youth, the task of the era is national reconstruction.
The President suggested that the Three Principles of the People can lead the way to innovation, perseverance and the consolidation of national unity.
For innovation, youth must keep expanding the scope and range of knowledge in order to discover and answer new questions, he said.
For perseverance, young Chinese must ban the word "difficult" from their vocabulary, he added.
To consolidate national unity, young people should cooperate with their compatriots to assure the success of the national program, he said.
Premier Y.S. Sun called on Chinese youths at home and abroad to take up responsibility for national salvation and to cushion the impact of difficulties faced by the nation.
At a rally on Youth Day, Premier Sun praised the unity and determination shown by Chinese young people all over the world following U.S. recognition of the Chinese Communist regime.
"Your ardent patriotism during the past three months has enhanced the confidence of the people in Taiwan in achieving their national goals," Sun said.
Some 3,000 government officials and representatives of civic organizations attended the rally at the Sun Yat-sen Memorial Hall.
Wu Yu-sheng, a National Chengchi University student, presided. He urged youths of the nation to emulate the spirit of self-reliance and dedicate themselves to the national cause. "We must redouble our efforts to fight for freedom today, or we shall become refugees drifting on the sea tomorrow," he said.
A minute of silence was observed in memory of President Chiang Kai-shek.
Premier Sun presented citations to 13 outstanding youths in recognition of their contribution to society. The winners came from all parts of Taiwan.
A declaration called for support of the government under the leadership of President Chiang Ching-kuo, for fulfillment of the Three Principles of the People and for increased vigilance against Chinese Communist "united front" plots.
A message to the youth on the Chinese mainland called upon them to overthrow Communist rule and pledged full support of the people of the Republic of China in the fight for freedom and democracy.
The message said that unless Communism is eradicated, the "four modernizations" can never be accomplished. "Based on our 30-year experience," the message said, "the establishment of democratic society must come before modernization."
Similar celebrations were held in other parts of the nation in observance of Youth Day, which marked the sacrifice of 72 revolutionaries killed in a 1911 Canton uprising against the Manchus.
First locally assembled F5E fighter aircraft equipped with Maverick missiles and laser-guided bombs will be delivered to the Chinese Air Force in early 1981, according to Welko Gasich, vice president and general manager of the Aircraft Division of the U.S. Northrop Corporation.
The planes are part of 48 additional F5Es promised by President Carter last November to compensate for denying the ROC the more advanced F-16s and F-18s. They will be built at the CAF's Aircraft Industry Development Center in Taichung.
Gasich visited Taiwan and inspected the CAF plant, to which Northrop lends technical assistance under an agreement signed with the Chinese Air Force in 1973.
Gasich said half the 200 F5Es previously ordered by CAF have been completed. Delivery of the rest will be made before the end of 1983.
This group is equipped with Sidewinder missiles. Speaking of the Northrop proposal to sell the ROC F5G all-weather planes, an improved version of the F-5E, Gasich said this will depend on government-to-government agreements. The F5G is equipped with the radar-guided Sparrow missile.
Gasich said he believes the ROC is capable of assembling the F5Gs as well as the F18s with the adaptation of facilities.
"You have very high technology and skilled workers," he said.
Free Chinese forces have heightened their vigilance to repel any invasion attempt by the Chinese Communists following U.S. recognition of the Peiping regime, Defense Minister Kao Kuei-yuan said.
Kao assured the Legislative Yuan that ROC forces can safeguard the security of the anti-Communist bastions of Taiwan, Penghu and the offshore islands of Kinmen and Matsu.
The national defense administration will follow government's established policy, using new concepts and new methodologies to cope with the changing international situation and accomplish the sacred mission of mainland recovery, Kao said.
Efforts will be made to expose the subversive plots of the Peiping regime, which include "united front tactics," political warfare and peace offensives to undermine this country's defenses, Kao said.
The Defense Ministry has launched a training and education program to combine combat skills with political awareness that the Three Principles of the People will eventually prevail over Communism, Kao said.
The government is modernizing the defense industry. Arsenals will accelerate the production of new weaponry, especially for defense against air and amphibious attacks.
Defense plants now can make rockets, missiles and other new arms and equipment.
The defense minister said that the Chinese Air Force controls the skies over the Taiwan Straits, although the Chinese Communist air force has numerical superiority.
Kao said a Chinese Communist pilot has an average of no more than 1,000 hours of flying time, while a CAF pilot has at least 3,000. "Our pilots are better trained and we have higher morale," he added.
He said the Chinese Communists have 10 times as many troops as the Republic of China. But they don't have the capability to mount an amphibious operation across the Taiwan Straits. "So long as we control the Taiwan Straits, Taiwan is safe and secure," Kao said.
Kao said the Chinese Communist troops made a poor showing in their invasion of Vietnam. "Coordination between air and ground forces was messy," he added. He said the Chinese Communist air force has had no combat experience.
F5E fighter planes are made in Taiwan with some parts and technical assistance supplied by Northrop of the U.S. (File photo)
The new Republic of China Strategic Association elected Tao Hsi-sheng, an international affairs commentator, as chairman of the board of directors.
General Wego Chiang, president of the Armed Forces University; General Wang Sheng, director of the Political Warfare Department; and Dr. Tsai Wei-ping, chairman of the Coordination Council for North American Affairs; were named vice chairmen. Other board members include Professors Ting Chung-chiang, Henry Mao, Wei Yung and Kuan Chung.
The association's strategic studies will be used as reference materials by related organizations. Specific strategic issues will be studied at the request of research or government organizations. Academic articles and books concerned with strategy will be translated and published.
Financing will come from membership fees, donations and interest on funds.
The association has 120 members and will accept more. Foreigners are not eligible. The annual membership fee is NT$100.
The inaugural ceremony was addressed by former President Yen Chia-kan, Premier Y.S. Sun, Huang Shao-ku, secretary general of the National Security Council, and Chen Li-fu, senior adviser to the President. Tao Hsi-sheng and General Wego Chiang made reports.
Yen Chia-kan said national strategies include politics, economics, psychology and military science. Grand strategy links two or more nations with common interests, Yen added.
Premier Sun said the Republic of China occupies a most important position in the conflict between political ideas, social systems and ways of life in the world.
He said that Taiwan is in a central position and is a key to the maintenance of peace and security in the Asian-Pacific region.
"The Republic of China is the key in rebuilding permanent world peace and human well-being," Premier Sun said. He noted that for victory in war the armed forces must be backed up with mobilization of resources, technology, manpower and the will of the nation and its allies.
He said there are no limitations of time and space in the confrontation between East and West and between the democratic world and the Communist bloc.
Huang Shao-ku said many people had been misled into believing that Taiwan is not important strategically in ensuring the security of the Pacific.
The association should make an objective and systematic analysis of the strategic position of Taiwan and provide the information to related organizations in foreign countries, he declared.
Free China will accept 1,000 additional Indo-Chinese refugees on an individual basis, the Government Information Office announced.
The government made the decision as an expression of its sympathy and concern for the Indochinese refugees.
In the period between April, 1975, and March 12 of this year, the Republic of China accepted 9,904 Indochinese refugees through the assistance of the International Red Cross and in other ways. Improvements of facilities at the reception center will allow 1,000 more to be accommodated now and further expansion is planned.
The land area under the administration of the Republic of China is limited. With some 17 million people crowded onto 36,100 square kilometers, the population density is 464 persons per square kilometer, one of the highest in the world. Despite this population pressure, the Republic of China has accommodated nearly 10,000 refugees resettled in Taiwan since 1949 by the Free China Relief Association. The government of the Republic of China has done everything possible to help refugees and thereby has strengthened its position as a beacon of hope for the freedom seeking people on the Chinese mainland, GIO said.
The government of the Republic of China also announced it will donate US$500,000 to the International Rescue Committee for use by the Citizens' Commission on Indochinese Refugees in New York to establish a fund to help resettle Indochinese refugees.
China needs peace but it must be accompanied by freedom. China needs unification but this has to be democratic, Dr. Ku Cheng-kang, an anti-Communist leader, said in Taipei.
"Peaceful unification must be based on the Constitution of the Republic of China and achieved on the basis of the government of the people, by the people and for the people," he said.
Dr. Ku said Peiping uses negotiations to achieve its war goals.
The Republic of China refuses to hold "peace talks" because Peiping is seeking to disrupt the construction this nation is carrying out in line with the Three Principles of the People, Dr. Ku said. "Peace talks" are a part of the Chinese Communists' united front tactics to "ally them selves with secondary enemies and defeat primary enemies."
Dr. Ku urged the people on the mainland to rise against the Communists and join with the free people on Taiwan to overthrow them.
"We are confident that the surge of freedom will continue, that our mainland compatriots will be spurred to action and that Peiping's odious tyranny will be washed away by the torrent," he said.
Dr. Ku addressed the 47th General Meeting of the Committee for the Study of Constitutional Problems of the National Assembly. General Wang Ching-hsi, commander-in-chief of the Taiwan Garrison General Headquarters, reported on the united front tactics of the Chinese Communists and called for redoubled vigilance.
General Wang cited these attempted Chinese Communist tricks in the "hidden war" against the Republic of China:
Smearing the leadership of the Republic of China and creating discord between people and government, between civilians and the military, between workers and employers, between poor and rich and between native-born Chinese and Chinese who moved to the island in 1949 and afterward.
Proclaiming that the existing system and way of life in Taiwan will not be changed after "liberation" of the island province.
Sending overseas Chinese and foreigners, especially from Japan and the United States, to Taiwan for subversive purposes.
Engaging in a radio propaganda campaign to support dissidents in Taiwan and members of the "Taiwan independence movement" abroad.
Spreading rumors intended to undermine the morale of the people.
Converting Chinese students and tourists abroad and assigning them subversive tasks to be carried out on their return to Taiwan.
Asking overseas Chinese visitors to the mainland to persuade friends or relatives in Taiwan to accept Peiping's assignments.
Offering discounts to shoppers from Taiwan who buy articles in Chinese Communist stores in Hong Kong and luring them to visit the mainland.
Ordering those with relatives in Taiwan to apply for entry so as to create an immigration problem for the Republic of China.
Creating the impression that the Republic of China is already trading with the mainland so as to confuse the world.
General Wang said existing laws and regulations are no longer adequate to cope with intensified Communist subversion. They are being revised, he added.
No telephone calls, telex messages or telegrams from Red China will be accepted in the Republic of China, either directly or via a third country, the Government Information Office said.
The decision came after Tokyo's international telephone switchboard relayed six telephone calls from Peiping to Taipei by dialing the requested Taipei numbers directly and not going through the Taipei international switchboard.
In such countries as Japan, the United States and Britain, operators can dial Taipei through automatic equipment.
The calls were made after Peiping announced it would allow journalists in mainland China to call "fellow journalists" in Taipei.
The Government Information Office issued this statement:
A wire service report of March 9 said a foreign journalist stationed in Peiping had been in contact with counterparts in Taipei via Tokyo telecommunications facilities.
This is another form of Chinese Communist united front conspiracy carried out through foreign journalists. It is not surprising that two branch offices of any foreign news service should get in touch with each other, directly or indirectly, through a third party or third place.
For a long time, the Chinese Communists prohibited telecommunications between foreign journalists in Peiping and Taipei. Now they have suddenly allowed foreign journalists in Peiping to call fellow journalists in Taipei and have made a molehill into a mountain by publicizing this in the international mass communications media. In asserting that these were the first "telephone and telegraph hook-ups" between Peiping and Taipei, a journalist has obviously played into Chinese Communist hands and confused the world.
In the past, both during the War of Resistance Against Japan and during the peace talks between the government and the Chinese Communists, it was common practice of the Chinese Communists to disseminate rumors unfavorable to the Republic of China and push their united front conspiracies. At a time when the Chinese Communists are trying to carry out various united front plots to confuse the world and undermine the morale of our soldiers and civilians, we ask foreign journalists to adhere to the ethics of their profession and stick to basic principles so that they will not be holding up a candle for the devil.
The Republic of China has a free and open society in which communication is unrestricted and convenient, while the Chinese Communists have a closed society in which journalism, speech and movement are under control of the central authorities of the Chinese Communist party. Now the Chinese Communists are cashing in on this characteristic of an open society to infiltrate, subvert, harass and sabotage the Republic of China and attempt to carry out their conspiracies. It is hoped that all the people of the country will heighten their vigilance.
If anyone communicates with relatives or friends on the mainland by mail, telephone or telegram, these relatives will immediately be used as hostages. The Chinese Communists may subject them to threats and blackmail at any time they wish. In consideration of humanity and human rights, we cannot allow our relatives to be thus exploited and used by the Chinese Communists.
According to Communications Minister C.S. Lin, the Republic of China is in the process of establishing a full automatic electronic switching system to raise the efficiency of its international telecommunications services to the highest level. This policy of the most advanced modernization will not be changed by any Chinese Communist conspiracy of infiltration and division.
Exporters and manufacturers have been warned of possible competition from mainland China in the international market.
Officials of the Ministry of Economic Affairs and the Board of Foreign Trade said Red China will use its cheap labor to persuade foreign investors to set up processing plants and then export the products.
Exporters and manufacturers were urged to improve the quality of products and promote sales so as to head off Red Chinese competition.
Taiwan competes with such other Asian countries as South Korea, Hong Kong, the Philippines, Malaysia, Singapore and Thailand in the world market. Difficulties have arisen in the EEC market because the Republic of China is denied preferential treatment.
Local traders also face increased protectionism in the developed countries.
Economic conditions and living standards on the Chinese mainland are lagging far behind those in the Republic of China, experts on Chinese Communist affairs said at a symposium. It will take at least 30 years for the Peiping regime to catch up, the experts agreed.
Their conclusions included the following:
Peiping has only US$2,000 million in foreign exchange and gold reserves and will be unable to expand its imports.
In 1985, two-way trade between Peiping and the United States is expected to be about US$6,000 million compared with about US$20,000 million between Taiwan and the United States.
Peiping signed an eight-year trade agreement with Japan last year. The Communists will import machinery and equipment and pay with crude oil and coal. Because of limited petroleum production on the mainland, Japan and Peiping will fail to achieve the targets set in the trade accord.
Red China has achieved nothing in the first three years of its 10-year (1976-1985) economic development plan. The regime now faces a struggle between those want more economic freedom and those who don't. In the long run Chinese Communism is doomed, the experts concluded.
Government agencies are working on a compulsory energy conservation plan, Economic Minister Chang Kwang-shih said. Answering a question at the Legislative Yuan, Chang said the measures will not curtail industrial production or create undue inconvenience for the people.
Commenting on pollution, Minister Chang said a certain amount is unavoidable during the process of industrialization and that drastic preventive measures could hurt the economy.
"The public must put up with some pollution," Chang said.
Richard Chih, director of the Department of Monetary Affairs of the Ministry of Finance, said borrowing is being diversified to avoid overreliance on loans from big U.S. banks.
"This office will continue to pursue the stated policy of diversifying our sources of borrowing," he said, and cited the US$50 million loan put together for the Taiwan Power Company without the participation of major banks.
The Europeans are coming, he told American and Chinese bankers.
"Before long, we will have a syndicated loan subscribed by European banks on favorable rates and conditions," he said.
He assured bankers the ROC's credit standing is sound despite severance of diplomatic relations with the United States.
"Mr. Carter's announcement of establishing diplomatic ties with the Chinese Communist regime has not had any negative impact on our country's creditworthiness in the international money market," he said.
He said foreign banks will prosper with the growth of Taiwan's economy because "the government has sufficient funds and borrowing capacity" to finance new projects and investments.
However, new concepts and technologies must be introduced to propel the ROC on up the economic ladder, he added.
New concepts will include the profit center concept, account officer system, classification of job functions, simplification of work and paper flow, and customer-oriented banking practices. All are standard practice with U.S. banks but are new here, Chi said.
"I envision a total data processing system linking all the bank branches on this island and with the capacity of performing all the financial transactions that one sees today in the U.S. and other developed countries," he said.
Chi confirmed that Taiwan's Securities & Exchange Commission will be placed under jurisdiction of the Ministry of Finance in the near future.
The ministry plans to clamp down on trust companies because "their operations have deviated somewhat from their original charter," he said.
"The laws governing them are so loosely structured and full of loopholes that they have the potential of engaging in virtually all financial transactions."
Each of the seven trust companies is trying to carve out its own niche, he said, and the Finance Ministry will put them back on the right track by revising regulations.
Taiwan remained the world's leading ship breaker last year, according to the Taiwan Regional Association of the Shipbreaking Engineering Industry.
In 1978, a total of 260 vessels, including tankers, freighters, bulk carriers, refrigerated vessels and log carriers, were dismantled, mostly at Kaohsiung. Ships ranged from 2,180 tons to nearly 30,000 tons, totaled 2.82 million LDT (light displacement tons) and were worth US$300 million.
These figures represent an increase of over 1 million LDT and 70 ships over those of 1977.
This year the association expects to dismantle about 300 ships worth some US$350 million. "We believe we can meet the target," an official said.
The 260 ships broken up in 1978 came from many countries, including the United States, West Germany, Japan, France, Italy, Spain, Norway, Greece, England, Sweden, Switzerland, Portugal, the Philippines, South Korea and Malaysia.
Spain ranked second in the number of ships dismantled last year, followed by Pakistan and South Korea.
The price of old ships was up about 10 percent in 1978 compared with 1977. January prices were up by another 10 percent.
Red China may pose a competitive threat to Taiwan ship breakers. Ports for shipbreaking are being opened at Shanghai, Canton, Chingtao and Fukien.
The Japanese government is providing financial subsidies to shipbuilding companies now idle and turning to the dismantling of old ships.
Taiwan shipbreakers supply raw materials for more than 100 steel and iron works and related plants.
Between 3,000 and 5,000 workers engage in shipbreaking at Kaohsiung. A 5,000-ton vessel can be taken to pieces in 20 days.