Lloyd's Register of Shipping is the recognized authority on the merchant marines of the world. The 1970 edition published last December recorded a significant milestone in the history of the Republic of China. It showed that the ROC now ranks as one of the major maritime nations of the world. For the first time, merchant ships flying the flag of free China joined the exclusive list of countries with more than a million tons of merchant ships.
In terms of Taiwan's population and land area, the Republic of China's achievement is impressive. This country has moved into the company of such maritime powers as Japan, Britain, West Germany, Holland and Norway. All of these states have a long history of maritime leadership. Among the merchant fleets of the world, the ROC ranks 23rd and is rapidly gaining on the leaders.
Lloyd's Register of Shipping records other facts which enhance the significance of the Republic of China's expanding merchant marine. In contrast to the maritime services of some other nations, the Republic of China's merchant ships are modern. Average age is 12 years, compared with to from 20 to 30 years for some fleets. Ships under five years old make up 37.7 per cent of the total. The average speed of vessels is 15.3 knots.
In 1970 a total of 26 older ships with aggregate of 175,647 tons was scrapped. In the same period, 22 new ships of 403,634 tons were added to the merchant fleet. The goal under the fifth Four-Year Economic Development Plan is to build and purchase additional ships with an aggregate of 830,000 tons. The China Merchants Steam Navigation Company now operates a merchant fleet of 21 vessels with tonnage of 496,000 compared to 317,000 tons in 1969.
The merchant fleet includes an impressive number of specialized vessels. Taiwan had only one refrigerated ship in 1962. Today there are 17 reefers totaling 72,000 deadweight tons. In 1970 tankers totaled 403,877 tons. There are five semi-container ships and one full container vessel totaling 72,000 tons.
Lloyd's Register of Shipping lists 172 ships in the Republic of China's merchant marine. If Chinese-owned carriers operating under the flags of other nations are included, the total of Chinese-owned shipping rises to approximately 7 million tons and places this country among the 10 leading maritime nations of the world. The government is urging all Chinese shippers to fly only the ROC's flag.
Approximately 90 per cent of the merchant fleet operates on international routes. A total of 47 ships maintain regular scheduled service and 101 other vessels operate on non-scheduled routes. These figures are economically meaningful. Freight rates collected by Taiwan ships contribute to the nation's favorable balance of trade. They assure exporters of favorable rates and routes to overseas markets.
A nation which does not have a strong merchant marine is obviously at the mercy of foreign lines which tend to favor shippers of their own countries. Moreover, it is an axiom of international trade that a nation's flagships are its best salesmen in winning and expanding overseas markets. There is no doubt that the Republic of China's merchant marine is an important factor in enhancing the nation's international prestige.
In 1970 the government-owned China Merchants Steam Navigation Company Ltd. reported a net profit of NT$80 million (US$2 million). If Taiwan's exports had been transported in foreign bottoms, it would have meant the loss of that amount and more in the nation's balance of trade.
An illustration of the importance of ships flying the flag of the Republic of China is to be found in the importation of crude oil. The Chinese Petroleum Corporation owns and operates its own tanker fleet. Taiwan imports approximately 6 million tons of petroleum annually from the Middle East. The international freight rate averages US$11 per ton. The Chinese Petroleum Corporation transports its petroleum for US$1.50 a ton. The substantial difference in freight rates will be an important factor offsetting recent increases in Middle Eastern petroleum prices.
The Ministry of Economic Affairs has approved the search for oil and natural gas deposits on land and under the continental shelf. Taiwan ultimately should be able to supply most of its petroleum requirements. Meanwhile, the saving in freight costs will help keep domestic petroleum prices under control.
If he were alive today, Cheng Ho would understand and appreciate Taiwan's growing maritime stature. The Republic of China commemorates his achievements in Ming dynasty times (1368-1644) on national Maritime Day July 1. It is interesting that the United States also celebrates Maritime Day. The American observance comes on May 22, anniversary of the first crossing of the Atlantic by a steam-propelled vessel, the S.S. Savannah, in the first decade of the 19th century.
Cheng Ho was making maritime history more than 400 years before the Savannah's voyage. The eunuch navigator of China ranks among the great sailors of all time. Born in 1371, he crowded into the next 64 years a notable list of maritime "firsts" and carried the flag of China upon most of the seven seas. His sailing vessels touched at every part of Southeast Asia, including Taiwan. His influence is still to be seen in Malaysia, where he established a trading post at Malacca. In Indonesia a shrine is dedicated to his memory: He visited the islands of Japan. His ships were seen in the Indian Ocean and in 1405-7 he made a historic voyage to Africa.
Cheng Ho had returned to China from Africa 44 years before Christopher Columbus was born. Some historians have suggested that he may have sailed to America long before Columbus' discovery of 1492. Although there is no convincing evidence of this, his maritime exploits were at least as impressive as the explorations of Columbus and Amerigo Vespucci.
Cheng Ho's ships appear to have been much larger than the Nina, Pinta and Santa Maria which made up Columbus' fleet. Commanding a sizable fleet on what may have been history's longest voyage up to that time, he was helped by one of China's three great inventions. The Chinese had a reliable maritime compass long before Europe did. This was an invention to rank with movable type and gunpowder.
Cheng Ho's explorations marked the high tide in China's maritime history until emergence of the Republic of China as a major commercial sea power. It is ironic that the rulers of the Ming dynasty did not understand, as he did, the importance of maritime progress. Virtually single-handed, he extended China's sphere of influence and trade to nearly all of Asia. In the period when Europe was still under the shadow of the Dark Ages, China could have become the greatest maritime power on earth.
If Cheng Ho had had his way, there probably would not have been a European invasion of Asia in the 18th and 19th centuries. Portugal, Spain, Britain, Germany and France colonized India, Ceylon, Indonesia and Malaysia and forced trade concessions and territorial enclaves on China. But the rulers of Ming and Ch'ing pulled away from the sea and entered upon an isolation which was to encourage intrusions by the European powers.
Cheng Ho would also have approved the rapid growth of Taiwan's shipbuilding industry. Taiwan ranks second in Asia after Japan, which since World War II has become the greatest shipbuilding nation in the world. The Taiwan Shipbuilding Corporation, owned and operated by the government, can build up to 170,000 tons of vessels annually at its shipyard in Keelung.
The first Taiwan-built vessel in the 100,000-ton category, the M/T Yu Tsao, was launched last October. Built for the Chinese Petroleum Corporation, it cost US$9 million and is 253 meters long and 36.8 meters wide. Its diesel engines develop 20,000 horsepower for a top speed of 16 knots.
In January the Taiwan Shipbuilding Corporation launched the Tai Keng, a 28,000-ton bulk carrier. It cost US$4 million and is the third of its type built in Taiwan.
Last December the Ministry of Economic Affairs approved a shipbuilding expansion program which will include construction of a second major yard at Kaohsiung to build vessels of up to 150,000 tons. The Keelung yard will continue to build ships of up to 100,000 tons. Between them, the two yards will take care of Taiwan's needs for huge tankers and some of its cargo-carrying requirements. Keelung also has two 100,000-ton drydocks and the capability for overhauling 1.5 million tons of shipping annually. The Kaohsiung yard will have facilities for overhauling larger vessels.
An important factor in development of the merchant marine is Taiwan's harbors of Keelung and Kaohsiung. Keelung, which is only 20 miles from Taipei is the principal arrival point for passengers. Last year the government completed at Keelung a five-story passenger terminal, one of the most attractive in Asia. Kaohsiung in the south is the principal cargo port.
Plans are under way for development of a harbor and international zone at Taichung. The harbor at Hualien is being improved. In 1960 a total of 1,505,000 metric tons of cargo moved through Keelung. Last year the total was 6 million tons. Kaohsiung handled 3,775,000 tons of exports and imports in 1960. This had risen to more than 13 million tons in 1970. Cargo volume at Keelung and Kaohsiung has increased at an annual rate of 9 per cent, equal to overall economic growth, during the last decade. Hualien's annual rate of growth was 6.7 per cent.
The need for additional harbors is indicated in the increasing congestion at Keelung. Because Keelung can handle a maximum of 30 cargo ships at a time, many vessels must be diverted to Kaohsiung or omit Taiwan calls. Kaohsiung may be reaching the saturation point. It was visited by 9,200 ships last year.
China did not own a single ocean-going vessel at the end of World War II. To C. Y. Tung goes much of the credit for postwar growth of the merchant marine. In a recent series of articles in the Central Daily News he recalled the beginnings. China had just two river boats, the Peiming and the Huashang, when the Japanese surrendered in 1945. One was of 1,000 tons and the other even smaller.
Transportation was a critical problem. Trains had ceased operating. Coal, oil and food were needed desperately. Without fuel, the generating of electricity would have stopped. The Ministry of Communication set up a special committee in Shanghai and Tung became its driving force. Vessels totaling about 10,000 tons were obtained from General Douglas MacArthur in Tokyo. Later the Japanese Government asked payment for the rental of these ships.
China leased 10 ships from the War Shipping Administration in Washington. These were used to transport coal to the mainland but remained under U.S. ownership. Petroleum shipments to the Shanghai Power Company were made by the United States Army.
China had no shipyards. It was proposed that Japanese shipbuilding equipment be dismantled and sent to the mainland. All China ever received was one large crane. China appealed to the United States once again, asking for 185 vessels. The United States agreed to sell 159 ships with payment over a 15-year period. However, the offer was conditioned on acceptance of a coalition government with the Chinese Communists. In the end the 159 ships turned out to be, in Tung's words, "only a dream."
When the Republic of China moved to Taiwan, American aid was resumed but did not extend to acquisition of merchant shipping. Subsequent growth has resulted from the unaided efforts of the Republic of China. The 10 ships leased from the United States and two more purchased from that country provided the basis for establishment of the Fu-Hsin Shipping Company. There were many economic difficulties in the early years. Specialized banking facilities were lacking. The country was just beginning to develop overseas markets.
From such a modest beginning the C. Y. Tung Group has grown to be one of the largest shipping combines in the world. Time magazine recently listed Tung as among the 10 largest ship operators.
Tung was one of the leaders of the Third World Chinese Shipping Conference in Taipei March 23 and 24. Attending were 136 Chinese shipping men from 14 countries. One of the developments stressed at the meeting was the fact that more overseas Chinese capital is going into international trade, thereby increasing the demand for Chinese shipping. Conferees authorized establishment of a liaison center in Taiwan for overseas Chinese interested in shipbuilding investment. Inexpensive labor, high technical standards and deep water ports were set forth as Taiwan assets in further development of shipbuilding.
Testifying recently before a Congressional committee in Washington, Mrs. Helen D. Bentley, chairman of the U.S. Maritime Commission, described containerization as "the most hopeful technological and economical (shipping) development of our time." Containerization began in the United States. Now Taiwan is moving swiftly to take advantage of this new concept. Ground was broken in March for Taiwan Container Manufacturers Ltd. This Kaohsiung plant to produce containers is the first in Taiwan and the third in Asia. The other two are in Japan and Hongkong. The Kaohsiung factory, to be completed late this year, will produce 300 steel containers monthly at a cost somewhat under the international level. The estimated selling price for Taiwan containers is US$1,1 00, about US$100 less than the price of competing products. A contract has been signed with Interpool Ltd., one of the world's largest leasing companies, for 3,600 containers. Interpool Ltd. already leases more than 10,000 containers.
Kaohsiung output will consist of sizes up to 40 feet. Aluminum and reinforced plywood containers can be made as well as those of steel. The Containerization Institute predicts at least 500,000 twenty-foot units will be required annually for the next four years.
Export products using containers include canned foods, plywood, furniture, textiles, footwear, electrical products, glass and toys. Import items include pharmaceuticals, electronic components and cartons. Providing container service at Kaohsiung are the Orient Overseas Container Line, United States Lines and Sealand Service Inc.
Shippers say Taiwan is ideally situated for Asian container transshipments. Facilities for handling shipments are being developed rapidly at both Keelung and Kaohsiung. The Wutu Container Terminal at Keelung is as modern as any in the world. It has a large bonded warehouse and hoisting equipment capable of handling fully loaded 40-foot containers. Facilities are being expanded at Kaohsiung, which is expected to become Taiwan's biggest container port and the center for feeder service in the Far East.
Keelung received 5,976 loaded containers and shipped 9,673 last year. Tonnages were 120,000 for imports and 240,000 for exports.
The Trans-Pacific Service of the C. Y. Tung Group has ordered six high-speed container ships to be delivered in 1972. Each will have a capacity of 1,000 containers and cruise at 23 knots. Another company of the C. Y. Tung Group, the Chinese Maritime Trust, began regular container service to Taiwan last October.
Addressing the closing session of the Third World Chinese Shipping Congress, Ho Yi-wu, vice chairman of the Overseas Chinese Affairs Commission, said the Chinese merchant marine is the "bridge for the nation's foreign trade." He might have added that merchant ships flying the flag of the Republic of China are the key to the economic growth of Taiwan in the next decade.
Government leaders stress development of heavy industry and expansion of exports as basic goals for the 1970s. Both objectives will require expansion of the Chinese merchant marine. By the end of this decade the Republic of China should be even closer to the top among world maritime powers.