The 1977 gross national product reached NT$740.6 billion (about US$19.5 billion), according to statistics of the Directorate General of Budget, Accounting and Statistics of the Executive Yuan.
Real growth was 8.08 per cent in 1977, compared with 11.54 per cent in 1976.
Per capita income reached NT$41,010, or about US$1,079, up 11.59 per cent or 8.08 per cent in real terms.
The directorate general noted that foreign trade was affected by the tight credit policy adopted by many foreign countries for fear of rekindling inflation as economic recovery began to gain strength.
Other 1977 statistics:
- National income: NT$684.5 billion (about US$18 billion) at current prices, up 13.77 per cent. Real growth was about 7.93 per cent.
- Gross domestic capital formation of NT$200 billion (about US$5.3 billion), up 10.95 per cent.
- Private consumption of NT$388.4 billion (about US$10.2 billion), up 12.07 per cent and a real gain of 5.88 per cent.
- International payments up NT$23.5 billion (about US$6,184 million).
- Prices and wages: Wholesale prices rose 4.36 per cent compared with 2.77 per cent in 1976. Consumer prices were up 5.85 per cent (2.39 per cent in 1976). Export commodity prices jumped 7.73 per cent (7.36 per cent in 1976) and import commodity prices rose 7.45 per cent (4.88 per cent in 1976).
- The average wage in manufacturing increased 15.5 per cent compared with 16.75 per cent in 1976.
- Production of major industries showed this comparison with 1976:
(1) Agricultural production up 2.7 per cent, contributing 0.28 per cent to overall economic growth.
a. Output of farm crops rose 2.42 per cent with sugar registering growth of 30 per cent.
b. Livestock, up 10.14 per cent.
c. Timber production, down 26.01 per cent.
d. Fishery products, up 4.1 per cent.
(2) Mining, up 7.41 per cent.
(3) Manufacturing, up 9.67 per cent.
(4) Construction, up 8.82 per cent.
(5) Utilities, up 8.97 per cent.
(6) Transportation, up 9.97 per cent.
(7) Retail sales, up 8.79 per cent.
(8) Services, up 6.46 per cent.
Gain of 7 per cent set for fiscal '79
The Directorate General of Budget, Accounting and Statistics predicted that economic growth in fiscal 1979, which begins July 1 this year, will reach 8.34 per cent and 7.14 per cent in real terms.
The overall supply of natural resources will amount to NT$1,403.8 billion (about US$36.9 billion) in fiscal 1979, of which NT$914.7 billion (about US$24 billion) will be from the gross national product and the rest from imports.
Per capita income in fiscal 1979 should reach NT$46,179 (or US$1,294), compared with NT$43,967 (US$1,157) in fiscal 1978.
Based on per capita, income in fiscal 1979 should reach US$1,479, representing a gain of US$229.
Trade increase exceeds 13 per cent
Foreign trade in 1977 amounted to US$17,836.7 million, an increase of more than US$2 billion or 13.1 per cent over 1976, according to customs statistics.
Exports amounted to US$9,335.4 million, an increase of 14.3 per cent over 1976, and imports were worth US$8,501.3 million, leaving a surplus of US$834.1 million.
However, total trade failed to reach the projected goal of US$18.5 billion.
The December surplus was US$169.4 million in two-way volume of US$1,827.6 million.
Industrial products led the export list at US$8,166.7 million, accounting for 87.5 per cent of the total. They were followed by processed agricultural products, US$688.1 million (7.1 per cent) and agricultural products, US$500.9 million (5.4 per cent).
Raw materials led imports with US$5,643.5 million, accounting for 66.4 per cent. Then came capital goods, US$2,197.3 million (25.8 per cent), and consumer goods, US$660.5 million (7.8 per cent).
The United States remained the biggest buyer with purchases of US$3,627.6 million or 38.9 per cent of exports.
Japan ranked second with US$1,119.4 million (12 per cent), followed by Hongkong with US$634.1 million (6.8 per cent).
Japan was the biggest supplier with US$2,630.6 million worth of commodities (30.9 per cent). The United States was second at US$1,969.1 million (23.2 per cent) and Kuwait third at US$685 million (8.1 per cent).
The Board of Foreign Trade will exert greater efforts to attain the foreign trade target in 1978.
Vincent C. Siew, deputy director of BOFT, said the target of the Council for Economic Planning and Development is US$20.8 billion with exports of US$10.7 billion and imports of US$10.1 billion.
The board will try to balance trade between Taiwan and the United States and Japan, Siew said.
Investment tops the US$1.7 b. mark
Foreign and overseas Chinese investments exceeded US$1.71 billion between 1952 and 1977, the Investment Commission of the Ministry of Economic Affairs reported.
Investments by foreigners exceeded US$1.19 billion and those by overseas Chinese topped US$518 million.
The record for foreign and overseas Chinese investment of more than US$248 million was set in 1973. There was a drop to US$189 million in 1974. The recession of the mid-1970s brought further cuts.
Recovery set in last year with volume of US$l63.9 million.
Most investments from foreign entrepreneurs came from the electrical machinery apparatus industry which accounted for 46.38 per cent. Foreign investments in the chemical industry ranked second at 14.84 per cent.
Investments in the service industries led the overseas Chinese contribution and accounted for 19.8 per cent of the total. Construction was second at 14.78 per cent.
Americans led foreign investors with US$516 million. Japan was second with US$277 million and Europe third with US$222 million.
Businessmen from Hongkong were the biggest overseas Chinese investors, pouring in a total of US$206 million. Chinese from Japan ranked second with US$34.3 million.
NT$ will remain at 38 to the US$
The New Taiwan dollar will remain pegged to the U.S. dollar at NT$38 to US$1, said K.H. Yu, governor of the Central Bank of China.
Testifying before the Economic Affairs Committee of the Legislative Yuan, Yu said the government has no plan to revalue the NT$.
The U.S. dollar has been weak against the Japanese yen. With the United States and Japan as its trading partners, the Republic of China has been affected.
Yu said the decision not to revalue the NT$ was reached after careful consideration. Factors included slow economic recovery in leading industrialized countries, the rise of protectionism and the stagnation of some local industries.
While the NT$ remains pegged to the US$, the result is de facto devaluation of the NT$ against such strong currencies as the Japanese yen, German mark, and Swiss franc. With cheaper NT$s, the exports to these countries should be promoted, Yu said.
Industrial output up 11.2 per cent
Industrial production increased 11.2 per cent in 1977.
Many industrial products became more competitive in world markets.
A breakdown of 1977 growth showed:
- Mining, up 6.8 per cent.
- Manufacturing, up 10.2 per cent (light industry 5.5 per cent and heavy industry 14.7 per cent).
- Public utilities, up 10.8 per cent.
- Construction, up 27.5 per cent.
Exports of industrial products, including processed agricultural commodities, amounted to US$8,834.8 million last year. This was 94.6 per cent of all overseas sales.
US$13 m. invested overseas in 1977
Investments of public and private enterprises in foreign countries amounted to US$13.79 million last year.
This brought the total to US$44.7 million since the first overseas investment application was approved in 1958.
This is the breakdown:
- Thailand: US$4,42 million.
- Malaysia: US$2.11 million.
- Singapore: US$3.59 million.
- Philippines: US$9.86 million.
- Indonesia: US$5.13 million.
- U.S.: US$4.94 million.
- Others: US$14.62 million
Chemicals led the list with US$9.88 million, followed by foods and soft drinks with US$7.27 million and non-metal and metal products with US$6.49 million.
Americans asked to play bigger role
K.T. Li, minister of state, urged American companies to widen their role in increasing economic cooperation between the Republic of China and the United States.
Li suggested local subsidiaries ask parent companies in the United States to increase the variety of Taiwan output, set up research and development departments, and buy more parts, components and instruments from local suppliers.
American companies were urged to shift manufacturing operations from high-cost locations to Taiwan. "The rising value of the Japanese yen," Li wd, "makes Taiwan more attractive for joint ventures to win a larger share of the Asian market now dominated by Japan."
Li disclosed the Chinese government is supporting a project of technical cooperation with foreign companies in the manufacture of diesel engines, heavy-duty trucks and buses.
Chinese and American companies can cooperate in supplying equipment and construction services to Asian and Middle Eastern markets, Li said. He suggested cement-making machinery as one promising product.
The government has decided to build a fourth naphtha cracking plant and additional downstream projects at Kaohsiung, he said, adding that technical know-how of American companies will be welcome.
More sophisticated products emphasized
A breakthrough is anticipated this year in development of electronics, machinery and other sophisticated industries, Economic Minister Y.S, Sun said.
His ministry will make greater efforts to help both state-owned and private enterprises increase the development of new export products, Minister Sun said.
Emphasis will be placed on audio-visual equipment, household appliances, fire and theft warning systems and hospital instruments.
Sun said local production of integrated circuits, which will begin this year, should help the electronics industry. Circuits are now imported from Japan and the United States.
He predicted a substantial increase in the export of color TV sets.
The ministry will help the Taiwan Machinery Manufacturing Corporation and China Shipbuilding Corporation enlarge output of heavy machinery.
Research and development in the manufacture of trucks and compact cars will continue, Sun said. "We will increase efforts to export our cars," he added,
Output of sugar shows big increase
The Taiwan Sugar Corporation exported 644,700 metric tons of sugar last year, an increase of more than 150,000 metric tons over 1976.
Japan was the biggest customer with purchases of 288,000 tons.
South Korea was second with 163,000 tons, followed by the United States (76,000 tons), Saudi Arabia, Malaysia, Indonesia, Sri Lanka, Hongkong and Oceania.
The state-owned corporation produces more than 800,000 metric tons of sugar annually and exports about 60 per cent of it.
Growth of the population and the rising standard of living has led to increased domestic consumption.
Quality main reason for trade disputes
The Board of Foreign Trade considered 1,540 trade disputes last year, including 510 left over from 1976.
Settlements were reached in 1,185 cases (76.95 per cent).
Complaints of poor quality headed the list with 440 cases or 28.75 per cent of the total.
Other causes:
- Failure to meet specifications: 176 cases, 11.43 per cent.
- Delayed shipments: 16 cases, 1.04 per cent.
- Short deliveries: 50 cases, 3.25 per cent.
- Failure to pay commissions: 91 cases, 5.01 per cent.
- Failure to make payment: 64 cases, 4.16 per cent.
- Failure to make delivery: 338 cases, 21.95 per cent.
- Failure to pay marine insurance: 16 cases, 1.04 per cent.
- Failure to send samples: 37 cases, 2.4 per cent.
- Failure to open letters of credit: 16 cases, 1.04 per cent.
- Shipping problems: 37 cases, 2.40 per cent.
- Others, 242 cases, 15.71 per cent.
The biggest number of disputes - 452 or 29.35 per cent was with the United States and Canada.
BOFT issues permits for color TV exports
The Board of Foreign Trade is issuing most export permits for Taiwan-made color TV sets and chassis.
Some permits formerly were issued by local foreign exchange banks.
Exports of products listed under the CCC c1asifications 7308-21 and 7308-22 by factories in export processing zones will still be handled by the Export Processing Zone Administration.
BOFT will seek to limit TV color exports to the United States so as to avoid the imposition of restrictions.
The government also wants to monitor the exports of Japanese companies in Taiwan. Chinese manufacturers say Japan has been shipping its sets to the American market from Taiwan since the U.S. limited imports from Japan to 1,750,000 sets annually.