Full text of President Chen Shui-bian’s 2007 National Day Address. Vice Preside – II


As I have often reiterated in the past, the mini three-links must precede the three links; charter flights must precede regularly scheduled flights; and facilitation of cargo transportation must precede that of passenger transportation. Now, the ball is in China’s court. If China truly has the sincere desire to enter into negotiations on facilitation of cargo charter flights, we can look forward to solving a lot of problems.

Regarding economic relations between Taiwan and China: The volume of two-way trade was US$31.2 billion in 2000, and rose to US$88.1 billion in 2006. Over the same period, according to the Investment Commission of the Ministry of Economic Affairs, annual China-bound investment figures increased from US$2.6 billion to US$7.6 billion, and registered investments in China totaled US$46.6 billion, or about NT$1.56 trillion. This goes to show that economic interchange between Taiwan and China has become overheated, not too cold. About 70 percent of all outbound investment goes to China. This cannot be considered normal for any country.

Taiwan cannot cut itself off from the world, nor can it afford to lock all of its economic bargaining chips and lifeblood in China. It is perfectly understandable that businesses strive for profits. For its part, however, our government must consider the impact Taiwan-China trade has on the capital and labor markets as well as on the livelihoods of farmers, fishermen, and people in the middle and lower income brackets. It must also strictly safeguard the sustainable development of industries in Taiwan. Therefore, our economic policy of “proactive management and effective liberalization” vis-a-vis Taiwan-China economic interaction is certainly correct and necessary.

Though China is a very important market, it is not the only or ultimate market. We can never accept a “Taiwan-China common market” — that is, a “one China market” based on acceptance of Beijing’s “one China principle” — as that would cause Taiwan’s economy to lose its autonomy and render it utterly defenseless. China’s cheap labor and agricultural products would flood the Taiwan market, resulting in our being economically absorbed even before we have been politically annexed.

Only by keeping a firm grip on Taiwan’s economic lifeblood can we ensure our nation’s continued existence and sustainable development. Over the past seven years, some people have tried to promote disparagement of Taiwan’s prospects as a political movement. Recently, they have even repeatedly claimed that Taiwan has lost its place as one of the “four Asian tigers.” I would like to call upon my compatriots to realize that so long as we cherish Taiwan in our hearts, we certainly will not fail to note its presence as an economic power.

Take, for example, forecasts for this year released by Taiwan’s Directorate General of Budget, Accounting and Statistics and by the Central Bank of Korea concerning their respective nations: Each country’s economy will grow by 4.6 percent. Taiwan’s consumer price index will post a rise of 1.5 percent, South Korea’s a rise of 2.5 percent. Taiwan’s unemployment rate for the year will be about 3.8 percent, compared to South Korea’s 3.3 percent. And the ratio of average incomes in the highest 20 percent and lowest 20 percent income brackets is 6:1 in Taiwan, while in South Korea it is 8:1.

Also according to the two organizations’ projections for 2007, although Taiwan’s nominal GDP per capita, at US$16,563, will be less than that of South Korea’s US$19,921, when evaluated in terms of purchasing power parity (PPP), and discounting exchange rate fluctuations, Taiwan’s GDP per capita figure is equivalent to US$31,041 while South Korea’s is equal to US$23,331.

As of the end of last year, Taiwan’s foreign exchange reserves amounted to US$266.2 billion, while those of South Korea stood at US$239 billion. Our government’s outstanding debt-to-GDP ratio was 31 percent as compared to South Korea’s 33.4 percent.