Economic officials had warned of a possible slowdown in the Taiwan boom during 1968. Some even expressed fear of a recession resulting from the world monetary situation and the tightening up of international trade. With the first quarter figures in hand, Taiwan obviously has avoided anything like a recession and the slowdown is not serious.
The economy as a whole is right on target with January-March growth of 7 per cent, which is the figure forecast for the whole year. Growth was 8.9 per cent last year, but that was well above target. The 1968 goal may be exceeded, too, because the pace of progress should pick up during the last three quarters. Lunar new year holidays are included in the first three months, and this alone equates to loss of about a week's production.
Industrial expansion was down by about a third in the first quarter. However, construction, electronics, electrical appliances and transportation showed healthy advances.
Foreign trade gained by 8 per cent with a volume of US$358 million. Exports reached a record US$170 million. The small deficit was not important. It was caused by imports of machinery and raw materials that eventually will be transformed into exports. Textile orders were holding up well.
Although the money supply increased and some commodity prices rose - including that of rice - government officials said inflation is not expected to become a serious problem. A wet spring was to blame for the higher prices of vegetables.
The Republic of China's international monetary position is the strongest in history. Foreign exchange reserves totaled US$350 million at the close of 1967 as the result of a US$58 million gain during the year. Although 1967 imports were US$768 million and exports US$650 million, the difference was more than made up for in foreign loans, investments and transfer payments.
Gross foreign investment and loans totaled US$238 million last year. The outward flow of capital left a net favorable balance of US$159 million. Foreign exchange earnings from tourism were estimated at US$40 million, including about US$10 million from the approximately 50,000 American GIs who came from South Vietnam for rest and recreation visits.
President and Madame Chiang Kai-shek gave their annual reception honoring nearly 1,000 American servicemen and their wives at the Chungshan Building on Yangmingshan. The U.S. officers and men are members of the Military Assistance Advisory Group/China, which marked its 17th anniversary on May 1.
President Chiang addressed the group informally, expressing appreciation for U.S. assistance to the Chinese Armed Forces and hope that military cooperation between the two countries will increase still further. Joining the First Couple in greeting the American guests were Admiral Ni Yue-si, chief presidential military aide; Foreign Minister Wei Tao-ming; Defense Minister Chiang Ching-kuo; and General Kao Kwei-yuan, chief of the general staff.
The American group was led by American Ambassador and Mrs. Walter P. McConaughy; Vice Admiral John L. Chew, commander of the U.S. Taiwan Defense Command, and Mrs. Chew; Maj. Gen.
Richard G. Ciccolella, chief of MAAG, and Mrs. Ciccolella; Brig. Gen. Carlos M. Talbott, chief of staff of USTDC, and Mrs. Talbott; and Brig. Gen. Levi R. Chase, commander of the 327th Air Division, USAF, and Mrs. Chase.
In a MAAG anniversary interview, General Ciccolella said the free Chinese offshore islands of Kinmen (Quemoy) and Matsu are invulnerable. He said the strongholds are so powerfully defended that the Communists dare not attack.
He told of the modernization of the ROC Armed Forces and asserted that they are on a par with any in Asia. "Morale is extraordinarily high," he added. The free Chinese armed forces know they are pinning down at least half a million Chinese Communist troops just across the Taiwan Straits.
Defense Minister Chiang sent messages of congratulation to Admiral Chew and General Ciccolella. He said in part: "The United States and Republic of China have always been peace-loving nations. This is attested by the camaraderie developed between the American and Chinese forces as they fought shoulder to shoulder against a common enemy in World War II. Such bonds are indeed lasting. Despite difficulties and hardships which lie ahead, I know we shall achieve victory over our common enemy."
On May 5, President and Madame Chiang entertained at a reception for top officials of national, provincial and local governments. Again the place was the Chungshan Building, dedicated to Dr. Sun Yat-sen, on scenic Yangmingshan. He told the ranking government officials that the international situation is developing favorably for the Republic of China. Any setbacks can be only momentary, he said, and then went on to contrast the great progress made in Taiwan with the setbacks of Chinese Communism on the mainland. It is up to government officialdom, he added, to set an example of improvement and lead the way toward the spiritual reformation of country and people.
On May 10, the First Couple were hosts to the Taipei diplomatic colony. Addressing the doyen, Ambassador Larracoechea of Spain, and the other assembled diplomats and their wives, the President said:
"I join with Madame Chiang in expressing deep appreciation for your presence. As a consequence of your diligence and cooperation, the friendly relationship between your countries and the Republic of China has been greatly enhanced. Our economic and cultural ties have been expanded. Please accept my sincere appreciation for your many contributions.
"All the peoples of the world are hoping for peace. Although the international Communists are resorting to war wherever and whenever they can, the free world is determined to do everything possible in the cause of a peaceful order.
"The Republic of China has been threatened by the Communists throughout the last two decades. But thanks to Your Excellencies, the chiefs of our friendly diplomatic missions, we have been able to maintain close cooperation with your countries and mitigate the threat to world peace. I am convinced that our mutual efforts will continue to lead us toward this goal.
"Here in China we have an aphorism to the effect that 'morality always finds company'. When you are on the side of virtue, you can always be sure of friends and good neighbors. We of the Republic of China have always upheld the principle of morality. Clearly, this is the reason we have found so many different friends in so many different parts of the world.
"I am convinced that if we pool our efforts and if we work together even harder than we have in the past, an order of morality and peace and justice is surely within our reach. In the final analysis, justice and peace can never be denied. I want to reiterate my gratitude that you have been able to join us here today.
"Finally, permit me to address a few words to the ladies. Thanks to your untiring efforts, your distinguished husbands have been able to carry out their duties with signal success. All of the ladies present in this hall deserve a vote of thanks from me and from their husbands. If you will pardon me, I would like to express the hope that from now on you will lend even more outstanding assistance to your helpmeets. In doing so, you will assure the accomplishment of our common objective. Thank you all."
Madame Chiang officiated at the opening ceremonies of the Armed Forces General Hospital in the southern section of Taipei. The US$5,250,000 medical facility was inspired by Maj. Gen. Chester Dahlen, then chief of MAAG, in 1964. When completed, the hospital will have 1,555 beds and a staff of 1,000, including 137 doctors and 110 nurses.
The newest medical equipment has been installed in the five-story building. Yet to be completed are an outpatient building, clinic for dependents, nurses' hall, research labs, examination facilities and cancer treatment center. The operating rooms are equipped with closed-circuit television for teaching purposes.
Honored by President and Madame Chiang at an 80th birthday luncheon party was Dr. Chang Chun, the presidential secretary-general and one of modern China's outstanding statesmen. More than 1,000 well-wishers, including the President and Madame Chiang, called at Dr. Chang's home. Ten years ago Dr. Chang declined any observance of his birthday with the remark that "life begins at 70".
From 1,500 friends in Taiwan and abroad came a scroll measuring 70 feet by 20 feet painted by Chang Dai-chien. It depicts the Yangtze River sweeping down to the East China Sea from Dr. Chang's birthplace in Szechwan.
The secretary-general was a fellow-cadet of President Chiang at the Tokyo Military Academy. He was mayor of Shanghai and governor of Hupei before becoming foreign minister in 1935. Dr. Chang was governor of his native province during the last two years of World War II and headed the cabinet in the critical period of 1947-48. He has directed the presidential office since the early 1950s.
Dr. Chang has been President Chiang's representative on many top-level foreign missions and is especially well known for his negotiations with Japan, where most of the leading statesmen are his personal friends. Madame Chiang gave him one of her paintings as a birthday present and the President wrote the inscription. Mrs. Chang is also 80 years old.
The April-May period was an active one in diplomacy and overall relations with other countries. At the United Nations, a marble plaque inscribed with the words of Confucius and in the calligraphy of Dr. Sun Yat-sen was mounted on the wall in the main corridor leading from the Secretariat to the General Assembly Chambers. The inscription says:
"When the great principle prevails, the world is a commonwealth in which rulers are elected according to their wisdom and ability, mutual confidence is promoted and good neighborliness cultivated.
"Helpless widows, orphans, childless and lonely men, as well as the sick and disabled, are well-cared for. Men have their respective occupations and women their homes.
"Hence men do not regard as parents only their own parents, nor do they treat as children only their own children. Provision is secured for the aged till death, employment for the able-bodied and the means of growing for the young.
"They do not like to see wealth lying about in waste, yet they do not keep it for their own gratification. They despise indolence, yet they do not use their energies for their own benefit.
"In this way, selfish schemes are repressed and robbers, thieves and other lawless men no longer exist and there is no need for people to shut their outer doors. This is called the great harmony."
In accepting the plaque, Secretary-General U Thant said it was welcomed not only for artistic merit but also because of the nobility of the thought. Chinese Ambassador to the United Nations Liu Chieh said the words of Confucius coincide with the "lofty principles of the United Nations" and "in the quick, fluid motions of the brush are reflected the energy and movement of life itself".
Foreign Minister Wei Tao-ming told principals of 40 agricultural schools that the Republic of China will send more farm demonstration teams to Africa. Eighteen teams with personnel of 570 already are working there. Hundreds of African agriculturalists have been trained in Taiwan in a series of five-month seminars.
Gambia and the ROC agreed to extend their technical cooperation agreement for two years. Additional agricultural personnel will be sent to Gambia for extension work. A 16-man team is already working there. The new accord was signed by Gambia Agriculture and Natural Resources Minister Yaga Lang Ceesay and Economic Minister K.T. Li. Gambia now imports rice from Burma and hopes to achieve self-sufficiency with China's help.
Upper Volta suggested a trade pact with the Republic of China in the hope of expanding commerce. Taiwan has been selling textiles, canned foods, handicrafts, electrical appliances and machinery to the West African country. Trade relations were established in 1965.
Diplomatic relations were resumed with the Central African Republic after a lapse of three and a half years. The ROC will reopen its embassy in Bangui.
Diplomatic relations were first established on April 13, 1962. Then the Central African Republic recognized the Peiping regime and the embassy was closed November 5, 1964. In January, 1966, President Jean-Bedel Bokassa suspended relations with the Chinese Reds and expressed interest in resuming ties with free China. The landlocked African republic has supported the Republic of China in the last two China representation votes at the United Nations.
An agricultural demonstration team probably will be dispatched to Bangui in the near future. The Central African Republic grows coffee and cotton.
Foreign Minister Fernando Arturo Amiama Tio of the Dominican Republic and Wei Tao-ming of the ROC agreed that the two countries should strengthen their cooperation in international organizations, especially the United Nations, in order to frustrate Communist expansionism.
The occasion was a communique to mark the conclusion of Foreign Minister Amiama's five-day visit to the Republic of China. The Central American leader was honored by President Chiang Kai-shek at a luncheon and was briefed on the Taiwan economic situation by Vice President and Prime Minister C.K Yen. He received the key to Taipei from Mayor Henry Kao.
Minister Amiama thanked the Chinese government for sending agricultural experts to Dominica to help increase farm output. He saw something of Taiwan's agricultural and industrial progress.
Off for Europe on a mission to increase trade with that continent were S.Y. Dao, the secretary-general of the Council for International Cooperation and Development, and seven others. They will be gone for 40 days and will visit West Germany, Switzerland, Luxembourg, Italy, Spain and possibly other countries.
Trade with Europe currently makes up about 10 per cent of the Taiwan total and the balance is favorable. The Dao mission will offer to buy more of Europe's machinery in return for Taiwan's textiles, canned foods and other products. This is part of a government plan to reduce heavy dependence on Japan and the United States as trading partners. These two countries dominate Taiwan trade to the extent of more than 60 per cent but sell twice as much as they buy.
Of the 12 trade fairs that the ROC will participate in during the coming fiscal year, half will be in the European area: Malta, West Germany, Denmark, Italy, Belgium and Spain. Free Chinese goods also will be seen in Korea, Chile, Kuwait, South Africa, Japan and Niger. Of the 92 fairs that China has entered in the last decade, 29 have been in North America, 21 in Europe, 17 in Asia, 14 in Central and South America, 6 in Africa and 5 in Oceania. Plans are already under way for the Chinese pavilion at Expo 70 in Osaka.
An economic cooperation agreement will be signed with Thailand in June. The occasion will be a Sino-Thai economic conference in Taipei. Chinese rice specialists will be sent to Thailand and the Thais will reciprocate with highway and city planning engineers.
Under study by both the Philippines and Chinese governments is a trade agreement to amend that of 1956. The rising volume of commerce has made changes advisable. President Ferdinand E. Marcos is expected to visit Taiwan before the end of 1968.
Korea and China are getting ready for an economic cooperation conference in Taipei July 1. Petrochemical integration will be one major subject. Avoidance of competition for the South Vietnamese market will be another.
Government approval was given to the US$10 million line of credit for Indonesia that was negotiated by private businessmen of the two countries. If the experiment is successful, another US$20 million may be extended. Indonesia will send 30 business and industrial employees to Taiwan for technical training. Subjects are expected to include accounting, management and trade promotion.
News from the industrial sector continues to be favorable. For the first three months of 1968, exports of processed goods were up 26 per cent to nearly US$87 million. Leaders were textiles, chemicals and plywood. Textiles gained 33 per cent and chemicals 49 per cent. Steel and paper and pulp were down, principally because of the Vietnam market situation.
More than 1,000 government and business leaders and diplomats journeyed south to Taiwan's second largest city of Kaohsiung for the dedication of the island's first big petrochemical complex. It consists of the USI Far East Corporation's US$15 million polyethylene plant and the US$10 million naphtha cracking unit of the Chinese Petroleum Corporation.
Vice President - Prime Minister C.K Yen presided - assisted by Dr. Sun Fo, son of Dr. Sun Yat-sen; Economic Minister KT. Li; and American Ambassador Walter P. McConaughy. Vice President Yen and Ambassador McConaughy wielded a giant pair of scissors together in cutting the ribbon at the USI Far East plant.
The CPC cracking unit will turn out 120 million pounds of ethylene annually, of which 77 million pounds will go to the Taiwan Alkali Company for processing into raw material for PVC plastics.
USI is a wholly owned subsidiary of the National Distillers and Chemical Corporation of the United States - but up to 50 per cent of plant equity will be sold to Chinese investors after three years of operation.
The government will establish a second petrochemical complex in the north to take advantage of plentiful natural gas as a raw material. Plans call for a US$20 million government corporation to carry out petrochemical projects.
Another projected corporation-tentatively slated to come into existence next October - will build a US$96 million steel rolling mill as the first phase of a US$200 million integrated plant. Investment funds will be sought in Japan, Australia, Europe and the United States. The' Kaohsiung area has been chosen as the site.
One of Taiwan's fastest growing industries is footwear, which had exports of US$12.5 million last year for a gain of 50 per cent. About half of the sales were to the United States. Taiwan-made shoes also went to Hongkong, Malaysia, Singapore and European and African countries. A footwear exhibition of several hundred products was held in Taipei and attracted tens of thousands of people.
U.S. Time, the leading American watch and clock manufacturer, is expected to invest US$2.5 million in a Taiwan plant to make low-cost timepieces. So far only electric clocks are made locally.
Mitsubishi Heavy Industrial Group officials announced plans to participate in a US$500,000 venture to make elevators in Taiwan. Three Mitsubishi enterprises will participate together with the Yung Shing Corporation of Taipei. Production is expected to be about 80 elevators a month.
Taiwan television sets now number more than 250,000 and the total is expected to pass the 300,000 mark by the end of the year. Eleven manufacturing plants have a capacity of 100,000 sets a year, but some 40 per cent of the parts are imported, mostly from Japan. The present commercial station and one educational channel are planning to expand their programming, and a second commercial station is slated to go on the air next year. The demand for advertising time is such that TTV is turning down large amounts of business.
Fertilizer production reached 800,000 metric tons last year for an increase of 23 per cent. Exports are increasing. The 1967 output was divided among the Taiwan Fertilizer Company, 527,000 metric tons; Mobil China Allied Chemical, 114,000 tons; and Kaohsiung Ammonium Sulfate Corporation, 162,000 tons.
On Labor Day, Vice President-Prime Minister C.K. Yen addressed a rally of employers and employees at Taipei City Hall. He said government seeks to promote the interests of both. Labor and management should rise above their traditional rivalry and work together as equals, thus contributing to the increase of social wealth, he added.
Transportation developments continue to be important in Taiwan's growth. For Taipei, a major problem of the last few years has been the existence of trunk line railroad tracks running through the heart of the city. Surface traffic is complicated by the frequency with which crossings are blocked. Only two fly-overs have been built.
Plans have been advanced to put the tracks underground or elevate them. Based on lower cost, elevation is the most likely solution.
Pending an overall project, a subway crossing may be built on Linsen Road. This street paralleling Chungshan North Road was widened and developed to provide an alternate north-south route into the downtown area. But the scheme fell afoul of the Huashan switching yard. Trains are now blocking Linsen Road an average of once every five minutes.
The prospect is for more and not fewer trains into Taipei. A survey showed that 80,000 students are commuting by train, most of them in the Taipei area. Sardine-packed students are asking that more cars be added to commuter runs. This will mean longer trains to block crossings.
Students were doing their bit for safety. As new and stricter traffic regulations went into effect, they paraded through Taipei by the thousands to urge compliance. Leaflets setting forth the new rules were airdropped.
Four-phase traffic lights will be installed at the heavily traveled intersection of Chungshan North Road and Nanking East-West Road. It is impossible to abolish left turns at the intersection because of Taipei's shortage of north-south and east-west thoroughfares.
Parking meters will come to Taipei soon on Chunghua Road alongside the emporiums that have replaced what once was called Haggler's Alley. Meters will be installed for 72 cars in an area at the edge of the theater district. The charge will be US10 cents an hour. Sixty per cent of the returns will go to traffic projects and 40 per city to welfare projects for city employees.
Nearing completion in eastern Taiwan is a highway that will give access to sizable areas of virgin land. The road is 160 kilometers long and has six branches. Construction began more than three years ago. Opened up will be 11,300 hectares of flatland and 21,000 hectares of slopeland.
Taipei airport will be made ready for the coming of jumbo jets in 1971. Improvement projects include installation of spans that will reach from planes to the terminal building and fast self-service baggage pick-up. The runway is to be extended and new apron space provided. Eventually, when the supersonic jets come into operation, international flights probably will be moved to a contemplated airport near Taoyuan west of Taipei and close to the sea.
Shipping is essential to the island province of Taiwan. The government plans to send a special mission overseas in an effort to persuade more overseas Chinese shipping companies to operate out of Taiwan. Special incentives may be offered. About 5 million tons of overseas Chinese shipping is operating under foreign flags as compared with only about 1 million tons under the ROC flag.
Construction will begin in June on the second entrance for Kaohsiung harbor, the island's largest. The 10-year project will cost US$27.5 million. The new portal will be able to accommodate 100,000-ton tankers and 70,000-ton ore vessels.
Suao, a sleepy fishing port on the northeast coast, will be made into a lumber port at a cost of US$6 million. It has the advantage of being the railhead of the west coast mainline that reaches through Taipei and to Kaohsiung. There is no railroad between Suao and Hualien on the east coast but one is planned. A narrow gauge line connects Hualien with the southeastern city of Taitung.
With the nine-year program of basic education to be enforced beginning this fall, Taipei will allocate 44.3 per cent of the city budget to the school system. The budget itself represents an increase of more than 65 per cent - partly attributable to the incorporation of six satellite townships into Greater Taipei as of July 1. The city's area will be expanded from 67 to 272 square kilometers.
Some interesting educational statistics came from the youth committee of the Executive Yuan (cabinet). Among college graduates, majors in the humanities, law, commerce and agriculture are finding it more difficult to find jobs. The need is for technicians, engineers and others who have learned how to keep an industrial society growing. However, most graduates still aspire to government service. In 1967, more than 36 per cent listed government as their first choice - but the percentage is declining (42.5 per cent in 1966). Industry is gaining.
The bright lights of the big city are the most attractive. Nearly 44 per cent of students polled in 1967 wanted to work in Taipei, compared with a little over 31 per cent in 1966. Those willing to exile themselves to the remote (but developing) east coast went down from 3 per cent in 1966 to 1.8 per cent in 1967. What do they expect to be paid? For college graduates, from US$50 to $62.50 a month - a real bargain compared with wage rates in many other parts of the world.
College entrance examination regulations and practices were tightened to a point where further cheating should be almost impossible. At the same time, 82 persons involved in last year's entrance examination scandal drew jail terms ranging from three months to more than five years. Heavy fines also were levied. The racket involved the substitution of professional exam-takers for those who feared they were not smart enough to pass on their own.
The Ministry of Education said 1,377 college graduates left for advanced foreign study in the second half of 1967. Of these, 1,297 went to the United States, 110 to Japan and 106 to Canada. West Germany's figure was only 14 and the rest scaled off to 1 each for Australia, Israel, Lebanon and the Philippines.
MOE will include more courses in the qualification examination for those who want to study abroad. The new fields will include geology, oceanography, fishery, plant physiology, quantitative economics and business management. For government-financed students, other new fields will be meteorology, mechanical engineering, biochemistry, education and space communications. Privately financed students may now qualify in soil and water preservation, electronic engineering, electronic physics and nuclear engineering. The total of permissible courses is now 93. The next examination will be given June 23.
Taipei was the site of a five-day Conference on Population Programs in East Asia. Addressing the opening session, Vice President-Prime Minister C.K. Yen urged more attention to the qualitative growth of populations. The meeting was attended by 60 demographers and related experts from 12 countries and areas.
Dr. Bernard Berelson, president of the Population Council of New York, held up Taiwan's population policy as a good example of control without limiting free family choice. The government cooperates with family planning groups but does not attempt to dictate or interfere. The birth rate was reduced from 3.95 per cent in 1960 to 2.85 per cent in 1967. The goal is 2.03 per cent by 1974 and 1.12 per cent by 1990.
The conference adopted 12 recommendations, including one for a permanent regional association. Summarizing accomplishments, Dr. Ronald Freedman, chairman of the Population Studies Center at the University of Michigan, said there is a growing consensus that government participation is desirable in family planning.
Taiwan tourism continues to grow at a rate of around 35 per cent annually, the highest in the Asian region. Two of Taipei's biggest hotels, the Ambassador and the President, have announced plans for additions. The Ambassador will add 200 rooms, raising its total to 530, and the President will add 90 for a total of 420. Plans have been approved for a 500-room hostelry on Chungcheng Road just east and south of the railroad station.
Government tourism officials estimate that the number of visitors will rise to a million a year with earnings of US$100 million a year by the mid-1970s. A proposed promotion plan calls for simplified entry and exit formalities, reduced fares between Tokyo and Hongkong (a Taipei stopover adds nothing to transportation cost), hotel improvements and discounts, better services and facilities, expansion of the National Palace Museum and increased advertising and other efforts to extol the beauties of Taiwan and the attractions of Chinese culture.