Nineteen hundred and seventy-two may be the Year of the Mouse, but the economy of the Republic of China entered the new year roaring like a lion. The old year had been a trying time period politically. Tides of appeasement had led to the United Nations admission of the Chinese Communists and to the withdrawal of the Republic of China, a founding member and signer of the Charter. Some old international friends had regrettably decided that their self-interest would best be served by recognizing the Peiping regime. Nevertheless, the year of 1971 turned out to be the most successful economically in the history of Taiwan province.
Taiwan's gross national product has consistently been one of free Asia's best performers since the early 1950s. For 1971, growth was 11.4 per cent, well above target and among the top marks of the last two decades. Value of the GNP reached US$6,237.5 million at current prices. Per capita income was US$329, reflecting growth of 12.7 per cent and standing out as one of Asia's highest figures. The Republic of China had overcome not only political difficulties but the physical fact of the world's densest population. The Taiwan population of 15½ million is accommodated in an area of less than 14,000 square miles and only a quarter of the land is arable.
Other preliminary statistics for 1971 showed gains of 21.2 per cent for industrial production. Leaders were construction at 27.5 per cent and manufacturing at 22.2 per cent. Public enterprises were up by 14.9 per cent.
Trade is the lifeblood of the Taiwan island economy. The 1971 gain was 36 per cent, almost a miraculous figure considering the adverse developments of U.S. dollar devaluation and President Nixon's import surtax. Trade volume exceeded US$4 billion. Exports totaled US$2,080 million and made up nearly a third of the GNP. The Chinese Communists, with an area 264 times larger and 47 times as many people, were not able to keep up with Taiwan in the export column and their total trade was only fractionally larger. Furthermore, the Taiwan balance was favorable by a margin five times larger than that of 1970.
Investors showed no slightest lack of confidence in the Republic of China and Taiwan. Foreigners and overseas Chinese brought or pledged US$163 million of their capital to development of the economy. This compared with US$139 million in 1970. The foreign share was US$125 million, much of it for heavy industry. The foreign increase was 15 per cent and that of the overseas Chinese, who invested US$38 million, was 17 per cent.
Free China was prepared to accept the economic challenge of the Communists, confident that the international political situation would not interfere with the continued growth of industry and trade. The government expressed belief that economic strength, willingness to work hard and honesty would also produce the means of continued political viability.
In his New Year's message to the Chinese people, President Chiang Kai-shek pledged the Republic of China to the maintenance of "cooperation and mutual assistance with all friendly nations." He called attention to the economic and social contributions of "our continuous search for the new and the practicable in industry and technology."
Minister of Economic Affairs Y. S. Sun said the government was preparing for a decisive year of "economic warfare against the Chinese Communists." He said the continuation of economic development and the promotion of foreign trade would receive highest priority.
The Republic of China will trade with all countries except those which are its enemies, Minister Sun said. "If we can maintain internal stability, have faith in our future and promote exports by selling quality products, we need have no fear of Communist dumping of goods in overseas markets or the pressure of international politics," he said.
Minister Sun and other government economic and financial leaders called for improved quality control, reduction of industrial costs and development of new products to spur exports. Sun said the Chinese Communists' trade offensive could not match the mobile readjustment policy of the Republic of China in the international marketplace. An example of readiness to adjust came in announcement of the Board of Foreign Trade that exporters with capital of US$50,000 could establish overseas offices.
Economists predicted that Taiwan's two-way trade will exceed that of the Chinese mainland by at least US$1 billion in 1973.
Textiles has dominated Taiwan's export industries since the dethroning of sugar in 1966. Volume for 1971 was about US$690 million, an increase of 44 per cent over the previous year. The textile category (including garments and knitwear) supplies about a third of total exports.
The United States is the biggest textile customer. Although noncottons as well as cottons are now under U.S. quota, the Board of Foreign Trade expects a further substantial export gain this year. Devaluation of the New Taiwan dollar along with the U.S. dollar will give Taiwan an advantage in the markets of those countries with higher currency values. The government and private enterprise are joining in worldwide measures to find new markets and enlarge old ones.
Other leading exports are metals and machinery (paced by electrical apparatus and appliances), processed foods, sugar, bananas, fish, timber and products, rubber products, footwear and chemicals. Principal imports are electrical materials, machinery and tools, ores and metals and products, chemicals, vehicles and vessels and parts, beans and peas, raw cotton, timber, crude and fuel oil, wheat and cereals, wool and rayon and products, iron, pharmaceuticals and textile products.
The United States is Taiwan's principal trading partner. Exports to that country were about US$860 million in 1971 compared with imports of US$590 million.
Japan held second rank last year with exports of US$270 million and imports of US$750 million. The steadily increasing deficit with Japan is Taiwan's biggest trade problem. Machinery, components and processed raw materials are imported from Japan. The Japanese are interested in Taiwan's agricultural products and little else, although this is slowly changing as Japan makes fewer low-priced commodities.
The government has suggested importers "buy where the price is right." With the sharp rise in the value of Japanese yen, this is likely to mean an increase in imports from the United States and Western Europe. However, the habit of buying familiar Japanese goods will not be easy to break.
Trade with Europe has grown rapidly in recent years. Volume was about US$420 million last year with a favorable balance of US$20 million. West Germany, which does not recognize either Taipei or Peiping, is the main trading partner. However the absence of diplomatic relations with the United Kingdom and Italy has not hurt the level of commerce with those countries. The same is expected to be true of Belgium, which severed diplomatic ties just after the U.N. vote on China representation.
Several missions have been sent to Latin America to promote trade. There are problems of trade fit and transportation. Taiwan has deliberately bought more than it was able to sell in the hope of attracting Latin American interest and preserving long-standing political friendships. Of the 1971 volume of an estimated US$77 million, exports made up US$32 million and imports US$45 million.
African trade is favorable in a proportion of better than 3 to 1 but the totals are small: about US$63 million in exports and US$18 million in imports for last year. South Africa is the major partner.
Commerce with Australia has been increasing steadily. Figures for 1971 will be about US$33 million worth of exports and imports totaling US$60 million. Australia maintains an embassy and has a trade counselor in Taipei.
Exports to Canada have continued to climb despite Ottawa's recognition of Peiping. The among for 1971 was around US$110 million and Taiwan bought only some US$12 million worth of goods in return.
Regionally, Asia ranks first ahead of North America in commercial importance to Taiwan. The balance is unfavorable only because of the lopsided trade relationship with Japan. For 1971, exports to Asian countries exceeded US$700 million and imports topped US$900 million. Hongkong is the leading market after Japan. Taiwan sold about US$155 million worth of goods to the colony last year while buying some US$37 million worth.
The volume of trade with these seven other Asian countries surpassed US$40 million in 1971: Indonesia, South Korea, Malaysia, Philippines, Singapore, Thailand and South Vietnam.
Taiwan's economy has been transformed from agricultural to industrial status in a relatively brief time. In 1952, agriculture contributed 35.7 per cent and industry 17.9 per cent of the net domestic product. Agriculture had declined to 19.2 per cent and industry had risen to 32 per cent in 1970. The 1971 figures were 17.6 and 34.2 per cent. Manufacturing contributed 23.5 of industry's 32 percentage points in 1970, an impressive advance from the 10.8 per cent of 1952.
Of 31 leading industries, only six showed declines in 1971: coal (down 5.8 per cent), canned asparagus (17.8 per cent), mushrooms (1.3 per cent), window glass (12.2 per cent), aluminum (1.7 per cent) and fertilizers (4.7 per cent).
Advances were paced by sewing machines at 66 per cent. Then came man-made fibers (55.8 per cent), electrical apparatus components (49.2 per cent), television sets (45.2 per cent), plywood (36.1 per cent), motorcycles (31.6 per cent), automobiles and trucks (30.2 per cent), shipbuilding (25.6 per cent), plastic resin (23.9 per cent), monosodium glutamate (22.5 per cent), cotton yarn (20.8 per cent) and air-conditioners (20.8 per cent).
Registering gains of from 18.7 to 3.9 per cent were (in descending order) cement, refrigerators, natural gas, crude oil, salt, canned pineapple, sugar, wheat flour, alkali, construction iron and steel, refined petroleum and alcoholic beverages.
These were estimated production figures of leading industries for 1971:
—Coal, 4,215,000 metric tons
—Natural gas, 1,044,000,000 meters
—Salt, 600,000 metric tons
—Canned pineapple, 5,088,000 cases
—Canned asparagus, 4,100,000 cases
—Canned mushrooms, 2,850,000 cases
—Sugar, 729,000 metric tons
—Man-made fibers, 101,510 metric tons
—Cotton yarn, 103,538 metric tons
—Plywood, 228,350,000 meters
—Refined petroleum, 5,619,000 kiloliters
—Alkali, 135,145 metric tons
—Window glass, 1,700,000 cases
—Cement, 5,110,000 metric tons
—Construction iron and steel, 638,000 metric tons
—Aluminum ingot, 26,522 metric tons
—Sewing machines, 685,655 pieces
—Refrigerators, 179,000 pieces
—Air-conditioners, 18,285 pieces
—Electrical apparatus components, value of US$137.5 million
—Television sets, 1,821,000 pieces
—Shipbuilding, 258,000 gross tons
—Motorcycles, 147,868 pieces
—Fertilizers, 887,424 metric tons
—Plastic resin, 132,000 metric tons.
In the last six years, the electrical apparatus and appliance industry increased production by more than seven times. Plastics was up 3½ times and textiles by nearly that much. Vehicle output tripled from 1966 to the end of 1971. Production approximately doubled for petroleum and coal products, paper and products, machinery, nonmetallic minerals, chemicals and basic metals. Food processing and lumber and products showed increases of one and a half times.
Expansion of the infrastructure has had to be rapid in order to keep up with the demands of the explosive economy. Generation of electric power has been given the highest priority to serve the needs of industry and to make possible a higher standard of living. Output of electricity was 1,420 million kilowatt hours in 1952. This rose to 13,213 kwh in 1970 and to more than 14,000 in 1971. Installed capacity has reached 2.32 million kilowatts.
Two-thirds of power generation was hydroelectric and the other third thermal two decades ago. The ratio has been reversed to assure a steady supply of power without regard to seasonal changes in rainfall. Installed capacity will be nearly 9 million kilowatts by 1980. One nuclear plant will be completed in 1975 and a second in 1976. Two more are scheduled to begin operation by the end of the decade.
Electrification of the west coast mainline railroad has been approved by the Executive Yuan (Cabinet). Work on the US$145 million project is to begin this year with completion expected in 1977. Time for the 215-mile run between Taipei and Kaohsiung, Taiwan's second largest city, will be cut to about three hours. Atmospheric pollution will be reduced.
Plans are under study for two links to complete the round-the-island rail system. Construction would include a line between Suao and Hualien on the rugged east coast, where mountains drop precipitously to the Pacific; a transmountain line from Kaohsiung on the southwest coast to Taitung on the southeast coast; and widening of the present east coast narrow gauge line between Taitung and Hualien.
Construction began last year on the US$500 million, 235-mile expressway from Keelung (Taipei's port city on the northeastern tip of the island) to Kaohsiung, the biggest port. Width will vary from four to eight lanes. Completion is expected before the end of the decade.
Guatemala Vice President E. C. Lenhoff inspects farm mechanization, which includes use of Taiwan-made tillers. (File photo)
A second harbor entrance at Kaohsiung will be completed in 1975. Planning is under way for a fourth international port near Taichung on the west coast to relieve pressure on Keelung and Kaohsiung, which handled more than 25 million tons of cargo last year. Keelung expansion is reaching the point of diminishing returns as a consequence of geographical factors. The other international port is at Hualien on the east coast.
Foreign and overseas Chinese investment in the Taiwan economy reached a total of US$723 million in 1971. In the wake of the U.N. China representation voting, new investors came forward to express confidence in the Republic of China with allocation of large amounts of capital to Taiwan projects. Investors with plants already completed went ahead with expansion projects. There were no important withdrawals of investment.
Approved in October by the Ministry of Economic Affairs' investment screening committee were plans for the island's first integrated steel mill. The US$322,150,000 plant will be built by the state-owned Voest Steel Corporation of Austria, which will invest US$16 million and lend another US$50 million. Private investors and the government of the Republic of China will buy US$64 million worth of stock in the company and provide the remaining US$192,150,000 in the form of loans.
The Austrian contribution of US$66 million is the biggest ever from a foreign source. Construction of the Kaohsiung mill, which will have annual production capacity of 1.1 million tons and employ between 4,000 and 5,000 workers, will begin this year. Production to start in 1976 will be 90 per cent for domestic use and 10 per cent for export.
Expression of confidence in Taiwan's future also came from the National Distillers and Chemical Corporation, the parent company of USI Far East Corporation. John E. Bierwirth, the chairman of NDCC, announced an investment of US$6 million to more than double production of the USIFEC low-density polyethylene plant at Kaohsiung.
The present US$6 million plant was built in 1966 and began production in 1967. Production of 72 million pounds will be raised to 172 million pounds by 1974 for domestic use and export. All raw material will come from the Chinese Petroleum Corporation refinery at Kaohsiung.
The government has approved the sale of 24 million new shares of USI Far East Corporation stock to Chinese investors. A first offering of 6 million shares is scheduled for early 1972. When all shares have been sold, half of the USI Far East Corporation ownership will be in local hands.
Bierwirth also announced plans for a US$7.5 million high-density polyethylene plant at Toufen in northwest Taiwan. The new United Polymer Corporation will be jointly owned by the National Petrochemicals Corporation, an affiliate of National Distillers and Owens-Illinois, 40 per cent; Solvay et Cie of Belgium, 10 per cent; and a consortium of Chinese investors, 50 per cent. Production of 55 million pounds a year will be for use by domestic processors and for export.
Another investment testimonial came from Russell DeYoung, chairman of the Goodyear Tire and Rubber Co., who visited Taiwan in December to inspect the company's local plant and look into expansion possibilities.
DeYoung spoke of Taiwan as "an island fortress with great potential for further economic growth." He said: "Goodyear International Corporation is a new comer to Taiwan's rubber manufacturing industry; it was only in August of this year (1971) that we obtained our interests in General Rubber. Despite recent political developments in the United Nations, we at Goodyear continue to have confidence in the investment climate here. The quality of the labor market in Taiwan is exceptionally good. This taken with this government's support and encouragement of the rubber industry continues to make Taiwan an ideal location for our investment. It is our hope to update and expand our Taiwan technical facilities and to further develop the export market."
One of the Republic of China's most successful investment ventures is based on the export processing zone concept, which combines the advantages of an industrial estate and a free port. Components and raw materials move into the zones with a minimum of red tape and are processed or assembled for export. Except in cases where there is no competition, local sales are not permitted.
The first zone was established at Kaohsiung in 1966. Exports exceeded US$155 million last year for an increase of US$55 million over 1970. The more than 160 plants are employing 41,000 workers. Investment has risen to US$41 million compared with a target of US$18 million. Many investors have enlarged their factories.
With KEPZ sold out, the government began construction of a second and larger zone nearby. Also newly opened is a special zone for sophisticated industry at Taichung in central Taiwan. The two new zones have attracted some 40 plants and more than US$20 million in capital during their first months of operation.
The government builds and sells standard factory buildings in the export processing zones. If they prefer, investors can erect their own plants. All public utilities are installed by the government and charges for water and electricity are among the lowest in the Far East. Customs and foreign exchange transactions are carried out on the spot.
External capital began to flow into Taiwan in 1952, but the amount was barely over US$1 million in that year. The US$50 million mark wasn't passed until 1967 and the US$100 million figure in 1969. Volume in 1970 was slightly less than US$139 million. There were 1,288 separate investments in that year, of which 701 were from overseas Chinese and 587 from foreigners. However, the foreigners supplied the lion's share of the capital—US$396 million to US$163 million for the overseas Chinese.
Americans were responsible for 156 investments with capital of US$242 million through 1970. Japanese were second among foreigners. They made 386 investments but supplied a little less than US$93 million in capital. By far the large number of overseas Chinese came from Hongkong, and their 457 investments were worth nearly US$63 million. Overseas Chinese from Japan put up US$14 million in 81 cases. More than half of the US$163 million investment of last year was from Western Europe, indicating that diversification efforts are succeeding.
Through 1970, electrical apparatus manufacturing was by far the most popular line of investment. Plants opened totaled 162, built at a cost of more than US$221 million. Chemicals came second (113 cases, US$81 million), followed by services (54 cases, US$48 million). Services was the leading category for overseas Chinese with 42 cases and US$40 million. Most of the service investments were in tourist hotels.
The statute providing incentives for investment was passed in 1960 and revised in 1970. The Ministry of Economic Affairs is now considering relaxed screening regulations which would encourage prompt approval of applications unless the proposed investment would seriously damage domestic industry or impede the economic progress of the Republic of China. Encouragement also will be given to the enlargement of existing investments.
Plans for the reduction of red tape include simplification of tax procedures, easier factory registration and reduction of entry and exit formalities.
Investment incentives are offered corporate enterprises in these 14 categories: manufacturing, handicrafts, mining, agriculture, forestry, fishery, animal husbandry, transportation, warehousing, public utilities, public housing, technical services, tourist hotels and heavy machinery construction.
These are the principal incentives:
—Exemption of business tax for five years or accelerated depreciation of fixed assets. In the case of expansion, the business tax may be exempted for four years on income generated from additional plant or business capacity, or the depreciation of new fixed assets may be accelerated.
—Reduction of business income tax by 10 per cent for two to three years if corporate shares are publicly issued and listed on the stock exchange.
—Exemption from income tax withholding on undistributed profits realized in the year a stock is publicly issued and listed on the exchange.
—Limitation of business income tax and surtaxes to a total of 25 per cent of annual income.
—Eligibility for reduction if business income tax and surtaxes exceed 22 per cent of annual income.
—Exemption or installment payment of import duty on machinery and equipment for a new enterprise or an expanded one.
—Reduction of deed tax by 50 per cent on real property acquired for productive use.
—Setting aside of a reserve of 7 per cent of debt balance annually to cover loss incidental to adjustment of foreign exchange rates on debts incurred in importing machinery and equipment.
—Reduction of the house tax by 50 per cent on buildings for productive use.
—Acceleration of depreciation by up to one-third of the service life when machinery or equipment is renovated.
—Reduction of the business income tax by 10 per cent for two years in the merger of enterprises which exported more than half of their products.
—Exemption from the business income tax of stock premiums set aside as reserve.
—Exemption from the business income tax of new stocks issued as a result of capital increase through investment of undistributed profits provided the stocks are not transferred, bestowed or inherited.
—Exemption from income tax of business done by overseas branches of a productive enterprise with headquarters or principal office in the Republic of China.
—Exemption from income tax of dividends from investments in other domestic companies limited by shares which have not enjoyed the five-year tax holiday or accelerated depreciation.
—Exemption from income tax of the appreciated value of assets resulting from revaluation.
—Exemption from income tax of the capital gains from the sale of company stocks and securities, government or bank bonds, and development bonds which have been held for a year or longer.
—Exemption from or reduction of the stamp tax.
—Exemption of approved mergers from income, stamp and deed taxes. The new enterprise will continue to enjoy investment encouragement incentives until the expiration dates provided for predecessors.
—Exemption of the deed tax on purchase of factory buildings in industrial districts.
—Exemption for one year and reduction for four years of the house tax on factory buildings leased in industrial districts.
—Exemption from the business income tax of amounts stipulated in invoices for exports.
—Refund or bonding of taxes and duties on imported raw materials which are processed and exported.
—Charging off as operational expense the cost of sending personnel abroad to promote exports.
—Exemption from income tax of the business of a foreign enterprise which has no branch or agent in the Republic of China.
Incentives also are offered to profit-seeking enterprises. This means any public, private or joint company engaged in industry, commerce, agriculture, forestry, fishery, pasturage, mining, metallurgy, etc., and organized as a sale proprietorship, partnership, company or other form of association. The incentives include the following:
—Exemption from the business income tax of dividends from investments in other domestic companies which have not enjoyed the five-year tax holiday or accelerated depreciation.
—Exemption from the business income tax of the appreciated value of assets resulting from revaluation.
—Exemption from the business income tax of business done by overseas branches of a profit-seeking enterprise with headquarters or principal office in the Republic of China.
—Exemption from the business income tax of capital gains from the sale of company stocks and securities, government or bank bonds, and development bonds held for a year or longer.
—Exemption from or reduction of the stamp tax.
—Exemption from income, stamp and deed taxes growing out of an approved merger.
—Exemption of deed tax on standard factory buildings purchased in industrial districts.
—Exemption for a year and reduction for four years of house tax on standard factory buildings leased in industrial districts.
—Reduction by 50 per cent of house tax on buildings used for productive purposes.
—Exemption from the business income tax of new stocks issued by productive enterprises as a result of capital increased through investment of undistributed profits provided stocks are not sold or transferred.
—Exemption from the business income tax of export transactions.
—Refund or bonding of import duties and other taxes on raw materials used in export products.
—Charging off as operational expense the cost of sending personnel abroad to promote exports.
—Exemption from income tax of the business of a foreign enterprise with no branch office or agent in the Republic of China.
Individual Chinese nationals who have domicile and foreign nationals who have residence within the territory of the Republic of China are entitled to these incentives:
—Exemption from the business income tax of capital gains from sale of company stocks and securities, government or bank bonds and development bonds held for a year or longer.
—Exemption from income tax of up to US$150 annually of dividends from publicly issued stocks.
—Deduction from taxable income of up to 25 per cent of the amount paid for stocks or ponds in the third year of continuous possession when the individual subscribes to registered shares or corporate bonds maturing in not less than three years and issued by enterprises engaged in approved activities, or of the amount paid for development bonds of the government or industrial banks maturing in not less than three years.
—Exemption from the business income tax of interest on new stocks issued by a productive enterprise as a result of capital increase through reinvestment of undistributed profit provided such stocks are not sold or transferred.
—Exemption from income tax of interest derived from two-year savings deposits and trust funds in the nature of savings; or savings deposits made for the purpose of making tax payments; or reconstruction saving debentures maturing in three years or longer.
—Installment payment of increment tax in five equal installments for land purchased for the use of a productive enterprise covered by encouragement regulations.
—Limitation of income tax to 15 per cent of the profit earned by an individual who as shareholder or partner has no domicile or residence within the territory of the Republic of China.
Enterprises established in export processing zones are eligible for all benefits plus exemption of import duty on machinery and equipment, semi-finished products and raw materials.
The Central Bank of China implemented on January 5 a four-point measure to help reduce import cost of capital equipment and raw materials to help stabilize the domestic price structure following downward valuation of the New Taiwan dollar in company with the U.S. dollar. The measure included:
—Raising from US$4 million to US$6 million the amount of capital loans to authorized banks for letters of credit. The discount rate for bank loans was cut from 7.5 per cent to 6.5 per cent annually.
—Reduction of the deposit requirement for letters of credit from 30 per cent to 20 per cent of the amount. The reduction is from 15 to 10 per cent in case of postdated letters.
—Waiving of bank guarantees for down payments on imported machinery and heavy equipment and reduction of the minimum advance from 20 to 15 per cent.
—Restoration of capital loans for the mining industry.
The 10 banks authorized to handle foreign exchange loans have been charging importers interest at 9 per cent annually. With reduction of the discount rate, interest in L/C loans will be reduced to about 7.5 per cent.
Export loans rose by about 47 per cent in 1971 and contributed to Taiwan's high rate of trade growth.
Agriculture was the only soft spot in last year's economy and the government is moving to correct that as quickly as possible. Growth for the whole agricultural sector (which includes fisheries, forestry and animal husbandry as well as crops) was 2.5 per cent. The low figure was partly attributable to typhoon damage and other natural disasters, but also reflected the growing disparity between rural and urban-industrial conditions.
Governor Chen Ta-ching said that the government is considering suspension of interest payments on agricultural loans for a year to lighten the farmer's burden. Farmland consolidation also may be held up for a second year while farmers adjust to changes already made or in progress. Economic Affairs Minister Y. S. Sun pointed out that the government reduced the income tax of farmers by nearly US$2 million last year.
Dr. Chang Pao-shu, secretary-general of the Kuomintang (Nationalist Party), visited rural communities throughout Taiwan during 1971 and reached the conclusion that these developments were afflicting rural life on the island:
—Change of dietary habits from rice to more proteins, thereby throwing the rural economy out of gear.
—Shortage of manpower during periods of heavy labor demand. This has led to a sharp increase in wages and raised farm costs.
—Overall, the expenses of farmers are rising faster than their income.
—Prices are beyond the control of farmers, who thus are left at the mercy of middle men and market conditions.
—Mechanization cannot make rapid progress because of the small size of farms.
The Kuomintang and the government will cooperate in remedial measures which will include:
—Stabilization of farm prices and the reduction of costs.
—Encouragement of mechanization on larger farms, including those established on a cooperative basis.
—Increased agricultural productivity based on improved technology.
—Rural community development to serve the farmer.
—Development of a sound sales system to benefit farmers rather than traders within the next four years.
Cooperative farming will stress sizable operating units which can move into transportation and sales as well as production. Such farms will use bigger tractors and employ other machinery more efficiently than is presently the case. Thousands of farmers have purchased power tillers, but these small machines are comparatively expensive and require larger input of time than the bigger tractors.
Taiwan's agricultural future is bright despite temporary difficulties and setbacks. The island has the all-year climate to produce fruit, vegetables and other specialized crops for sale fresh or processed to Northeast Asia, with its cold winters, and Southeast Asia, with its persistent heat. Such examples as pineapple, mushrooms and asparagus combined are already approaching the US$100 million category of export earnings.
All in all, 1971 was a very good year. No one was predicting that 1972 would be better. That would be asking a great deal. On the other hand, no one was suggesting that the new year would bring much of a letdown. There was a deep and abiding determination to try to make it at least as good.