Taiwan has increased its farm production rapidly without substantial expansion of planted area. The achievement results from intensive land utilization and improvement in farming techniques.
Crop figures just released by the Ministry of Economic Affairs cover the period from 1949, when the Chinese government moved its seat to Taiwan, through 1964, Products include staple foods, principally rice, and such other crops as sugar cane, bananas, pineapple, and citronella.
The planted area of rice was increased only slightly from 747,675 hectares in 1949 to 764,935 hectares in 1964. But within this limited area, which is about 21 per cent of Taiwan's land, rice production was increased from 1.2 to 2.2 million tons, a gain of nearly 90 per cent.
The island had a population of 7.4 million in 1949 and 12 million at the end of last year, a gain of about 50 per cent in the 15-year period. But the tempo of population increase is much slower than the gain in rice production. Taiwan thus still has surplus rice for export.
Per hectare yield in 1949 was only 1,624 tons. In 1964, the figure was 2,937 tons.
Astride the Tropic of Cancer, Taiwan has a genial climate and grows a wide diversity of crops. However, as in all subtropical areas with year-round warm temperatures and heavy rainfall, the soils are subject to rapid chemical decomposition and leaching. This is aggravated by intensive use of the land. The upkeep of soil productivity through concentrated fertilization is of the utmost importance. Thanks to industrial development, Taiwan is self-sufficient in fertilizer at reasonable prices.
Government and people have joined in developing scientific farming. Steps include the use of choice varieties and of healthy, high quality seedlings, the careful preparation of fields, transplanting at the proper time, intensified disease and pest control, and better management of irrigation and drainage.
Taiwan has developed a crop rotation and intercropping system that makes it possible to grow up to four crops a year on the same piece of land. These include two crops of rice, a winter crop of Wheat, tobacco or vegetables, and a summer crop of melons. For diversification of crops, interplanting of soybeans, cotton, vegetables, wheat, and tobacco between the two rice crops or in fields of young sugar cane has been practiced.
With the development of the food processing industry, Taiwan has increasingly emphasized such crops as pineapple, oranges, and mushrooms. Most of the output is canned for export. Such other crops as sugar cane and bananas also have been increased sharply. Export of sugar and bananas in 1964 earned more than US$168 million, accounting for a third of exchange earnings.
Credit must also be given land reform and other government measures. Land reform has provided incentives for farmers to increase production through improvement of irrigation and drainage, and purchase of better seeds, insecticides, implements, and fertilizers.
Banking institutions, government agencies, farmers' associations, and credit societies have provided agricultural credit. A recent report by the Taiwan Provincial Government said that in 1964 a total of NT$5.7 billion (US$143 million) was offered by such agencies as the Land Bank, Cooperative Bank, Credit Department of Farmers' Association, and the Taiwan Provincial Food Bureau.
Taiwan has well-developed farm organizations, including farmers' associations, irrigation associations, and 4-H clubs, which provide a variety of services to the rural population. They are to be found everywhere and receive guidance and help from government and academic institutions. A prime mover is the Sino-American Joint Commission on Rural Reconstruction, which gives both financial and technical assistance.
New Lubricants
A large lubricating oil plant with Sino-American joint investment was completed in June. Site is Tsoying near Kaohsiung in southern Taiwan.
Built at a cost of US$11 million, the plant is operated by the China Gulf Oil Company, Ltd., a joint venture of the Gulf Oil Corporation of the United States, which put up 70 per cent of the capitalization, and the Chinese Petroleum Corporation, which paid the other 30 per cent.
The investment is the second largest in the Republic of China involving foreign capital. The largest is the US$22.5 million Miaoli urea plant, an investment of the Chinese Petroleum Corporation and the Socony Mobil Oil Company and the Allied Chemical Corporation of the United States.
The plant will produce 1,500 barrels of lubricants a day, of which 70 per cent will be exported. It is the first integrated lube manufacturing plant ever built. The refining process is continuous—without any inter-mediate storage of partially refined lube stocks.
May 7 dedication ceremonies marking the start of production were attended by Chinese Premier C.K. Yen and U.S. Ambassador Jerauld Wright. Many high officials of the Gulf Oil Corporation, including W. K. Whiteford, board chairman, and E. D. Brochett, president, also were present.
Premier Yen said the plant is a good example of how the Chinese government has taken the initiative to develop the national economy.
He recalled that the Republic of China long had hoped to establish a lubricants plant. But not until October 14, 1963, was the China Gulf Oil Company organized. Its capitalization was beyond the capability of private investors and there were many marketing problems to be solved.
He said Taiwan needs only 300 barrels of lubricants a day, but that a profitable plant must produce more than 1,000 barrels. This marketing problem has been solved by the China Gulf Oil Company. One of its investors, the Chinese Petroleum Corporation, will be responsible for domestic sales; the other, the Gulf Oil Corporation, will take care of the export business.
The plant was jointly built by the M. W. Kellogg Company of the United States and the China Technical Consultant Incorporation. Chinese engineers and technicians obtained much experience in the construction.
With an area of more than a million square feet, the plant is located near the Kaohsiung refinery of the Chinese Petroleum Corporation. It will use crude oil from Kuwait as raw material for automotive, marine, military and commercial lubricants.
There are five large production units. A lube vacuum distillation unit will separate lubricating oil stocks from other petroleum products and a propane deasphalting unit will remove asphalt from the available lubricating oil stocks.
A furfural extraction unit will remove undesirable carbon compounds from deasphalted oil. Wax then will be removed from the product at a so-called M. E. K. (methylethyl-ketone) dewaxing unit. The dewaxed lube oil then will be ready for the last finishing process at a rerun vacuum distillation unit, where unstable compounds in the lube oil will be hydrotreated and stabilized and the product re-distilled into the proper grades according to viscosity.
Beginning with 10,000 barrels per day of charging stock, there will be 8,500 barrels of petroleum products not suitable for lube oils and removed by the five process units. This control insures high quality and efficient operation. The base oils will be blended and compounded in a blending plant to produce various lubricants. Products will be packaged in cans and in 55-gallon drums for shipment. Most will be delivered as bulk lube base oils in special tanker to buyers in the Far East.
Power From Gas
The first power plant in China to use natural gas as fuel will begin generation in September.
The plant, with capacity of 56,000 kilowatts, is located at Tunghsiao near Miaoli, where there are natural gas wells. The Chinese Petroleum Corporation has installed a natural gas pipeline to supply 600,000 cubic meters a day.
The plant, with four turbo units from the General Electric Company of the United States, will burn natural gas to produce mechanical energy. All turbo units are of packaged type, comprising a turbine package and a generator package. The first two units were completed in June and the rest will be installed in September. Construction cost is US$6.15 million.
This is part of a four-year program to expand facilities of the Taiwan Power Company. Other projects include a 200,000 kw unit at the Shanao thermal station, 300,000 kw unit at the Linkou thermal station, and a 180,000 kw unit at the Tachien hydro station.
Taipower is a state enterprise with 24 hydro and 8 thermal stations. Installed capacity at the end of 1964 was 1,130,000 kw and this will increase to 1,940,000 kw in 1968. Power generation last year totaled 5,914 million kilowatt hours. The figure may reach 8,200 million in 1968.
Taiwan has a confirmed reserve of 18.5 billion cubic meters of natural gas. To make use of the large reserve, the Chinese Petroleum Corporation has in cooperation with American investors built a US$22.5 million urea plant to consume 150 million cubic meters annually. The Taiwan Fertilizer Company is building a factory at Hsinchu that will use natural gas as raw material.
Electronic Parts
American and Japanese investors are making Taiwan into a world center of electronic component and parts manufacturing.
The Philco Corporation of the United States recently sent a management team to the island to study the feasibility of establishing a television and radio receiver assembly plant with products exclusively for export. The team has indicated satisfaction with the investment climate and is expected to submit an investment proposal to the Philco board of directors.
According to the Industrial Development and Investment Center, the plant will be set up near Taipei. It is expected to be larger than the US$1 million Taiwan Electronics Corporation factory, which is producing 26 million television and transistor radio components annually. TEC is a wholly owned subsidiary of the General Instrument Corporation of the United States and began production last November.
The Westinghouse Electric International Company recently sent an engineer to Taiwan to survey the possibility of a plant making radio receivers for export. The plant would be solely owned by Westinghouse, which has entered into technical cooperation agreements with a number of local manufacturers.
IDIC has reported that another American manufacturer, Sprague Electric Company, has indicated interest in establishing a plant to manufacture television components. A vice president of Sprague recently visited the island.
Two American investors have organized a Taiwan United States Industries Co., Ltd. to make electronics accessories and parts with the cooperation of Chinese businessmen. The Americans are Paul M. Kuefler and E. J. Rehfeldt.
Two Japanese manufacturers are cooperating with local companies to expand production of television and radio components. The Elna Electric Company of Japan has a contract with the Sanyo Electric Manufacturing Company of Taiwan, which makes television sets and phonographs under the Sharp brand, and the Matsushita Electric Company of Japan has a contract with the Matsushita Electric (Taiwan) Co., which produce International brand television and radio sets. A Chinese from Japan has established the Tahua Industrial Company in Taiwan to make transistor and tube radios and phonographs for export.
IDIC also reported that the International Telephone and Telegraph Company (ITT) is considering establishment of a Taiwan plant to make telephone exchange and switchboard equipment. Total investment would be around US$1.2 million.
End of U. S. Aid
The Republic of China owes much to U.S. aid for economic growth and other achievements in Taiwan province, Premier C. K. Yen declared June 30 on the eve of U.S. economic aid termination.
The United States has given free China some US$1,400 million worth of aid since 1948.
In a written statement, Yen said China began to receive U.S. aid after the conclusion of an agreement with the United States on July 3, 1948.
In 1949, when the Communists overran the mainland, U.S. aid was suspended but was resumed on July 1, 1950, after the National Government had moved its seat to Taiwan. Timely U.S. aid was steered into economic reconstruction programs as the nation withstood its darkest hours, Yen said.
Since 1953, the government has carried out three four-year economic development plans. National income, reconstruction, employment, and exports have shown great progress, the premier said.
Meanwhile, K. T. Li, minister of economic affairs and concurrently vice chairman of the Council for International Economic Cooperation and Development, has obtained loans amounting to US$300 million from various sources during the last six months for economic development programs during the next five years.
Li said the government will continue to seek foreign loans as development plans require.
In a statement on the termination of U.S. aid, Li said that although ordinary aid ends June 30, the United States will continue to provide China with surplus farm products totaling some US$170 million in the next two or three years.
Taiwan Provincial Governor Huang Chieh said June 30 that the island's reconstruction is fast approaching the goals prescribed by Dr. Sun Yat-sen in his Principle of the People's Livelihood.
The governor said the gross national product last year was a record NT$94,331,000,000 and the per capita income was NT$6,003, representing a 7.3 per cent increase since he took office two years and seven months ago.
"This is pleasing but we are by no means complacent about our present achievements," he said.
Gerald H. Huffman, acting director of the U.S. aid mission to China, praised the Republic of China as "an outstanding example of how a developing country can reach the point where it can carryon without concessional aid."
Hailing China's achievements during the last 15 years as "a near economic miracle", Huffman listed these facts:
—Industrial production increased four-and-a-half times.
—Agricultural production more than doubled.
—Per capita income up more than 100 per cent to US$150.
—Foreign trade with a favorable balance of US$52.7 million in 1964.
—Power supply to industrial plants in creased more than four and a half times to 4,978,000,000 kilowatt hours last year.
In addition to these gains, Huffman said the gross national product has been increasing by an average of 6 to 7 per cent a year and is expected to continue growing at about the same rate.
David Bell, administrator of the Agency for International Development, said in Washington June 30 that "We who have worked in this truly mutual (Sino-American) enterprise salute the Chinese on their achievement of economic independence."
For China, this is "the remarkable economic development that has been achieved in just 16 years."
"This very impressive and exceptional accomplishment represents a visible and tangible evidence of the success of foreign aid," Bell said.
Grant to Chad
The Republic of China will extend grant aid of US$33 million to the Republic of Chad over the next five years.
China's first such assistance to a foreign country was announced in a joint communique in Taipei June 26 by Minister of Economic Affairs K. T. Li and Minister of Economic Affairs of Chad Adboulaye Lamana.
A third of the grant will be used to finance construction projects in the Chad capital, Fort-Lamy, and the rest for industrial and agricultural development and employment of Chinese technicians in Chad.
Technical personnel will help Chad develop agriculture and forestry, improve public health, and expand handicrafts. A Chinese demonstration team is already working there.