Taiwan Must Move Forward: Strengthen the Economy, Connect with the Asian-Pacific Region, and Adopt a Global Outlook

Taiwan Must Move Forward
Strengthen the Economy, Connect with the Asian-Pacific Region, and Adopt a Global Outlook
by Ma Ying-jeou
May 2, 2007


ONE. UNITE OUR FORCES, ENSURE OUR VICTORY

The Kuomintang (KMT) Central Standing Committee has just approved me as the party's presidential candidate in 2008, and will report its decision to the KMT Party Congress in June this year. I feel honored by their decision. I also feel the weight of responsibility on my shoulders. Next year's presidential election will determine whether Taiwan can regroup and move forward. I promise to unite our forces to ensure our victory at the polls. I will personally invite Chairman Wang Jyn-ping to be my running mate, and together we will fight for Taiwan's future.

What worries the public on Taiwan the most is the economy. Therefore I would like to take this opportunity to share my vision for Taiwan, and to suggest the means by which this vision can be made a reality.




TWO. THE ISLAND'S ECONOMY IS DEPRESSED, THE PEOPLE'S LIVES ARE HARD

Recently I visited Wang-kung Fishing Port in Fang-yuan Rural Township, Changhua County. I met a 70 year old woman named Yang, whose daily work was shucking oysters. Her work looked hard. I asked her how many hours she worked, and how much money she made. She said she worked ten hours a day, but the economy wasn't what it used to be, so she made only NT$ 200 a day. When I heard this, I felt a twinge of pain in my heart. This is Taiwan's plight. The common man works long hours, makes little money, and lives a hard life.

Ever since the Democratic Progressive Party assumed power, the economy has been in a free fall, and the suicide rate has skyrocketed. Incomes no longer keep pace with living costs. University graduates' starting salaries are in decline. Among the Four Asian Tigers, Taiwan's economic performance is bringing up the rear. South Korea's per capita GDP has surpassed Taiwan's. The gap between rich and poor increases day by day. One hundred forty thousand schoolchildren cannot afford a decent lunch. Unemployment has nearly doubled during the past seven years. Fewer and fewer foreign businesses come to invest. More and more Taiwan businesses list on the Hong Kong exchange. The US and South Korea have reached a Free Trade Agreement. Asean and mainland China have established a Free Trade Area disadvantageous to Taiwan's development. Taiwan is increasingly being marginalized.

Confronted with this reality, we cannot pretend to be blind, because people can feel the pressure, and are losing confidence in the future. If the Kuomintang regains power in 2008, we will bring order out of chaos, restore public confidence, and revive Taiwan's economy.

THREE. A STRATEGY TO REVIVE TAIWAN'S ECONOMY: STRENGTHEN THE ECONOMY, CONNECT WITH THE ASIAN-PACIFIC REGION, AND ADOPT A GLOBAL OUTLOOK

In 2008, once the Kuomintang is in office, our goal will be an annual growth rate of 6%, and an average annual income of US$ 20,000 by 2011.

The specifics of our strategy are:

First: Establish Local Reconstruction Funds to improve Local Finances; Promote Local Development to increase Taiwan's Prosperity

Given the embarrassing state of local finances, payrolls can't be met, making it difficult to promote local development. By the end of last year, long-term local government debt was NT$ 600 billion, revenues and expenditures were seriously out of balance, and local development was seriously hampered.

Central and local governments should be partners. But for seven years the central government has not only been grabbing all the power, it has been pocketing all the money. Local governments have been poor relations without a penny to their name. During my term as Taipei mayor, I experienced this hardship first hand. Many county and municipal chiefs are in the audience today. Once the Kuomintang is in office, we will reestablish the partnership between central and local governments. The central government should use its surplus revenues to establish a Local Government Financial Reconstruction Fund. It should help local governments pay off their debts, improve their finances, and promote local development. It is not necessary to wait till 2008. The central government should act now.

For the past several years central government tax revenues have exceeded expenditures. Why not use the surplus to help local governments? Haven't local governments contributed to the central government's budget surplus? In 2005, central government revenue surpluses totaled NT$ 188 billion. Last year, they totaled NT$ 125 billion. The total for both years exceeded NT$ 300 billion. The central government will enjoy a surplus this year as well.

The election is drawing near, and the Democratic Progressive Party government is recklessly writing blank checks, buying political support from all quarters. We maintain that government money should be used to help local communities. We suggest emulating private sector debt restructuring mechanisms, and before the end of this year, allocating at least NT$ 100 billion of the central government's surplus revenues to a Reconstruction Fund to help local governments pay off their debts. If we are in office in 2008, we will continue such a policy.

Second: Found Emerging Industries, Promote Traditional Industries, Create 100,000 Job Opportunities

Reviving Taiwan's economy requires founding emerging industries and promoting traditional industries, including service industries, manufacturing industries, and agriculture, directly creating job opportunities. If the Kuomintang is in office in 2008, we will reduce unemployment to less than 3%, and create 100,000 jobs per year.

In the emerging industries, for example, biotechnology and the solar energy industry, if the Kuomintang is in office in 2008, we will implement concrete measures for achieving world leadership in emerging industries, and expand the scope of emerging industries, enhancing the potential for economic growth.

In the service industries, we will immediately eliminate unnecessary controls, creating income and job opportunities.

In the traditional manufacturing industries, we will promote competitiveness while upholding strict standards for environmental protection. Some industries face restructuring pressures. We must assist them, allowing these industries to become high value-added industries producing products akin to French perfumes, Italian shoes, and Swiss watches. Which of these traditional industries is not a local, traditional industry? Because global consumers follow fashion, they are willing to pay high prices for these products, therefore these traditional industries have all become high value-added industries. If the government is diligent, Taiwan brands and products can be marketed the world over.

Taiwan's agriculture is not a sunset industry. It has the potential to reinvent itself. Once the Kuomintang is in office, we will support agriculture. On the one hand, we will transform agriculture into a service industry. On the other hand, we will develop special crops, increasing overseas and mainland competitiveness. The Kuomintang will not cancel Welfare Subsidies to Elderly Farmers. If the National Annuity System has not been established as scheduled, Welfare Subsidies to Elderly Farmers should be increased NT$ 1,000 to NT$ 6,000, providing a safety net for senior citizens in rural regions.

Third: Connect with the Asian-Pacific Region by promoting Global Strategies: Transform Taiwan into a Bi-regional Airline Hub for both NE Asia and SE Asia. Transform Taiwan into a Dual Purpose Operations Center

The KMT's third strategy for reviving Taiwan's economy is to exploit Taiwan's geographical advantage, transforming Taiwan into a Bi-regional Airline Hub for both the Northeast Asian and Southeast Asian regions. We will do this by linking Taipei's CKS Airport to Tokyo's Haneda Airport, Seoul's Gimpo Airport and Shanghai's Hongqiao Airport in the north, and to Hong Kong's Chek Lap Kok Airport, Singapore's Changi Airport, and airports in the ASEAN nations in the south. We will establish Taipei's CKS Airport as a "double-gold" airline hub, then add existing trans-Pacific air routes. Taiwan-based enterprises can then set up global operations centers on Taiwan, and foreign companies can set up Asian-Pacific regional operations centers on Taiwan, transforming Taiwan into a Dual Purpose Operations Center.

The concept of a Bi-regional Airline Hub and a Dual Purpose Operations Center has implications not only for cross-Straits relations, but for the entire world. It connects Taiwan's economy to the economies of the Asian-Pacific region. We also seek to cooperate with the U.S. and other important economic partners in Asia, and to actively negotiate free trade agreements.

Fourth: Normalize Cross-Straits Economic and Trade Relations, predicated upon "Taiwan and the People First" and "Open as a Rule, Restricted as an Exception"

The ruling DPP knows the importance of the mainland market. However, because of its ideological bias and its closed-door policy, no opening is possible. Controls on cross-Straits economic policies should be eased. As long as provisions are made for crisis management, and as long as the Taiwan region and ROC citizens are given priority, Taiwan's policy should be "Open as a Rule, Restricted as an Exception." Specific provisions include:

( 1 ) Control Technology, not Capital, when Businessmen from Taiwan invest on the Mainland

Regulations stipulate that companies based on Taiwan may not invest more than 40% of their net value on the mainland. Such restrictions harm only Taiwan, not the mainland. Take Taiwan Semiconductor Manufacturing Corp. (TSMC) for example. If the government had allowed TSMC to invest on the mainland before the mainland developed its own wafer industry, TSMC would be the leader in IC manufacturing. Instead, the mainland’s Semiconductor Manufacturing International Corporation (SMIC) has assumed that role. Even Intel has announced that it will set up a 12-inch wafer plant in Dalian. Taiwan has lost its edge.

If the KMT regains power, we will control only technology, not capital. If Taiwan -based enterprises keep their R&D on Taiwan, they can develop and own key technology. If that happens, we won’t need to limit the flow of capital. Allow businesses based on Taiwan to explore new frontiers and promote local prosperity.

( 2 ) Encourage Businessmen from Taiwan operating on the Mainland to list on Taiwan's Stock Market

Businessmen from Taiwan operating on the mainland are forbidden to list their companies on Taiwan's stock market. This prevents them from reinvigorating the capital market, from establishing new industries, and from keeping their roots in Taiwan. Permitting them to list their companies on the TAIEX would attract more foreign direct investment, benefiting Taiwan. Last year the number of companies listed in Hong Kong, Singapore, and South Korea jumped. Only Taiwan experienced a drop. Listings on the TAIEX fell from 691 to 688. Further losses are expected in the near future. More and more companies based on Taiwan are listing in Hong Kong. This trend is definitely hurting Taiwan. Therefore, Taiwan should welcome investments by businessmen from Taiwan operating on the mainland.

( 3 ) Change Cross-Straits Tourism from Unilateral Consumption to Bilateral Exchange

Large numbers of tourists from Taiwan visit the mainland each year, but the ruling DPP stubbornly refuses to allow mainland tourists to visit Taiwan. This is irrational. If we wish to increase economic prosperity, we must change cross-Straits tourism from Unilateral Consumption to Bilateral Exchange, and open our arms to mainland tourists. We intend to set a quota of 3000 visitors per day, one million visitors per year, and increase that number to three million visitors per year within four years. By doing so, we intend to create business opportunities totaling NT$ 100 billion per year.

( 4 ) Set Limits on the Import of Mainland Agricultural Products

We will not unconditionally open Taiwan to mainland produce. We are concerned about the sustainability of some of Taiwan's agricultural products and consumer goods. Mainland produce that threaten Taiwan's agricultural development will not be imported. We will evaluate the impact of low-priced products from the mainland on Taiwan's production. What should be allowed will be allowed. What shouldn't be allowed won't be allowed.

4. CONCLUSION: LET DEPRESSION END, LET HOPE BEGIN

The public on Taiwan has endured a shrinking economy caused by ruling DPP incompetence for seven years. That is seven years too long. Only change can offer hope. Only a change in leadership can bring about a change in our future. Let us work together hand in hand for that future.

Only genuine commitment can unite the people and make Election Day 2008 a turning point. Let depression end. Let hope begin.

Taiwan must not sink. Taiwan must not remain stuck. Taiwan must move forward!

Thank you very much!

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