Taiwan Of Tomorrow:

Since last four decades, the Republic of
China has been trying to develop Taiwan’s economy and has also achieved marvelous results
in its endeavor. The success has brought prosperity to the island and greatly enhanced the
country’s international status. The secret behind the success is Taiwan’s ability to keep
up pace with the vibrancy of the world and to fashion a stage-by-stage outward-looking
developmental strategy, which enabled it to play to its full advantage. Over the past four
decades, Taiwan has learnt one key lesson, ie, ‘Set your vision on the world, consistently
pursue the course of economic liberalization and keep pace with the global economic
activities.’ This is the only way to overcome its constraints in natural resources and
create a new horizon for breakthrough.

New challenges, new opportunities
As the world marches toward
the 21st century, Taiwan is faced with a new set of internal and external challenges:

Rapid transformation of Taiwan’s overall
In terms of the city’s economic structure, its scientific, technological
and service industries are replacing the traditional industry in importance. However, the
domestic environment for investment has encountered bottlenecks and various economic
problems have become increasingly complex. How it deals with this change and overcomes the
barriers to investment will determine whether Taiwan can further develop its economy.

Drastic changes in the global economic
Success in the Uruguay round of negotiations of the General Agreement
on Tariffs and Trade (GATT) and the formation of World Trade Organization (WTO)
spearheaded the global trends toward more economic freedom. This also helped in the
economic development of Taiwan. On the other hand, economic regionalism too has grown
fast, especially in the naturally evolving Asia-Pacific. Many statistics show that in the
future the region will emerge as the hub of global economic activities. Many companies are
planning to increase their investment in the hope of cashing on the boom in the east Asian

Change in economic and trade activities
across Taiwan Straits:
In recent years, there has been a spurt in the economic
and trade relations across the Taiwan Straits, creating ever-increasing interdependence.
The long-term influence of relations on Taiwan’s economic development cannot be ignored.
To meet the challenges at home and abroad and outperform competitors, sustain the steady
development of cross-Straits relations, and find a new international role for itself,
Taiwan must consider the possible changes, both within and outside, and its qualification
and those of its competitors in order to develop a ‘winning strategy.’ Taiwan enjoys many
advantages over its competitors that can help it in further economic development. These
include substantial economic resources, a strategic geographic position, a comprehensive
economic and trade network, a solid industrial foundation, the ability to make practical
application of science and technology, high-quality manpower and proximity to southeast
Asian markets. All it needs is to combine these advantages and make the best use of them.

If Taiwan develops into an Asia-Pacific
regional operations center, it can fully exploit its strategic geographical position in
the region and in the cross-Straits relations to maximize its economic strengths, expand
economic horizons and reach a new plateau of development role in regional economic
integration. Taiwan may also serve as a bridge between mature and developing economies. If
it pursues this course vigorously, its economy will enjoy a promising and illustrious path
in the 21st century.

The concept of developing Taiwan into an
Asia-Pacific regional operations center is to mold a highly liberalized and
internationalized economic environment. One which can facilitate the free movement of
goods, services, persons and funds for attracting MNCs and encouraging local businesses to
make Taiwan their base for investment and other operations in east Asia.

Macroeconomic adjustments
The key area for macroeconomic
adjustments include:
Liberalizing trade and investments to lower
tariffs, remove non-tariff trade barriers and open up service industry
Reducing entry and exit restrictions on personnel
to allow foreign professionals and specialists to engage in short-term stay and work in
Easing restrictions on capital movement to
liberalize foreign exchange control in stages; and
Establishing a modern legal environment to satisfy
the information needs of a society. This includes allowing free circulation of information
and the use of government information, protecting intellectual property rights and
preventing computer crimes.

Development of specific operations
Taiwan will selectively
establish in accordance with its economic condition, specific operation centers that will
have great potential. According to evaluation by experts, Taiwan is most suited for
developing manufacturing cargo and passenger transportation, and professional services.
These advantages will be developed by establishing six specific operation centers, namely,
manufacturing, sea transportation, finance, telecommunications and media.

the scientific and technological capability of the industry and making Taiwan into a
‘Science and Technology Island.’ To attain this goal, in the future, the government will
vigorously improve the general environment for developing the manufacturing industry and
strengthen the industry’s R&D capability. In the next 10 years, it will establish
20-30 intelligent industrial parks on the island by setting up the establishment standards
and encouraging the private sector to invest.

Today, Kaohsiung Harbor handles only about half of the containerized shipment volume of
Hong Kong and Singapore, an indication that its competitiveness can be further improved.
An offshore trans-shipment center will be set up to overcome the difficulties arising from
the ban on direct transportation between the two sides of the Taiwan Straits. This
offshore center will allow foreign ships, including those flying the flags of convenience,
to ply between the two shores of Taiwan Straits.

The facilities of the Chiang Kaishek International Airport will be used to develop an
express cargo transportation center as a short-term measure. This will make Taiwan into a
passenger and cargo transportation center for the Southeast Asian region. In the medium
and long term, development will proceed on the basis of progress of the cross-strait
relations by establishing a passenger center at the appropriate time.

short term, service functions and legal framework will be used as standards for dividing
the financial market into domestic segment and an offshore segment. Operations of the
offshore market will be totally free, whereas those of the domestic market will be
liberalized gradually. Emphasis is being laid on deepening and broadening the foreign
exchange market, offshore banking unit and foreign currency market to attract foreign
financial institutions to establish a presence in Taiwan.

The regulatory structure of the telecommunications industry, in keeping with the policy of
liberalization, will be revamped. The business and regulatory aspects of the Directorate
General of Telecommunications of the ministry of Transportation and Communications is
likely to be separated. Subsequent to this, a national information network based on the
efficient telecommunication sector will be developed, thus making Taiwan a hub of
Asia-Pacific digital information network.

foster a conducive environment for media development, satellite TV broadcast will be
liberalized, the regulation of the cable TV industry will be strengthened, professional
media talents will be cultivated and restrictions on travelling to the Chinese mainland
for news gathering, shooting and producing programs will be eased. A high-tech media park
is also in offing.

Time of essence
The Asia-Pacific Regional Operations Center plan is divided into three phases, with
different priorities for each phase. For the phase up to 1997, the priorities included law
and regulations and small-scale addition or improvement in facilities. In the phase from
1997 to 2000 and beyond, the plan will proceed diligently in keeping with the completion
of various major construction projects and the progress of the Twelve Development Plans.

Efficiency of administrative
Administrative efficiency of
the various government ministries and agencies is crucial to succeed in the international
economic scenario. To this end, the Executive Yuan has set up a task force under the
premier’s personal command. This task force is responsible for formulating major policies
and studying and coordinating the various views and proposals to ensure expeditious
decision-making. Responsibilities for implementation of the plan for the six operation
centers have been allocated to various ministries and agencies. In addition, a window has
been established under the Council for Economic Planning and Development, by creating a
Coordination and Service Office for Asia-Pacific Regional Operation Center to provide
businesses with one-stop service and overcome investment barrier.

Forging consensus
Any new policy of the
government requires detailed planning, wide publicity and consensus-building of the people
before it can be carried out effectively. This is particularly true for the Asia-Pacific
Regional Operations Center Plan, whose successful implementation calls for a consensus by
all citizens of the democratic society.

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