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.

Economic prowess

Furthermore, the 2007 World Competitiveness Report released by the International Institute for Management Development on May 10 this year ranked Taiwan 18th and South Korea 29th. Meanwhile, in the three major indices of the World Economic Forum’s Global Competitiveness Report 2006-2007 released in September 2006 — the Growth Competitiveness Index, the Global Competitiveness Index, and the Business Competitiveness Index — Taiwan ranked 6th (first in Asia), 13th, and 21st, respectively, while South Korea ranked 21st, 24th, and 25th.

As the aforementioned statistics and rankings demonstrate, Taiwan is no less impressive, economically speaking, than South Korea, both nations qualifying as an “Asian tiger” in terms of overall economic performance, government finance, domestic real purchasing power, and various competitiveness rankings.

Currently, Taiwan’s production values in the important categories of large TFT-LCD flat panel manufacturing, contract IC chip making, and IC packaging and testing rank first in the world. As of the end of August, this year’s business turnover at Taiwan’s three major science parks — Hsinchu Science Park, Central Taiwan Science Park, and Southern Taiwan Science Park — stood at NT$1.23 trillion [about US$37.88 billion]. This figure is expected to increase to a record high of NT$2 trillion [about US$60.6 billion] by the end of the year.

In the future, this administration will work to accelerate development of, and attract investment in, the newly expanded facilities of each science park. It will also work to promote precision machinery, communications electronics, and biotechnology to become Taiwan’s third, fourth, and fifth trillion-NT-dollar industries, following the semiconductor and flat panel industries. It is hoped that this will help achieve the goal of balanced industrial and regional development within Taiwan. As for the stock market, which reflects our economy’s prospects, the Taiwan Stock Exchange weighted index has risen about 25 percent from the beginning of the year, and the overall value of traded stocks has hit record highs.

As can be seen, far from falling out of the ranks of the four Asian tigers, Taiwan has become a leader in numerous high-tech realms. It has expanded beyond Asia to achieve a global presence. Given this shining record, I am confident that as long as we keep Taiwan in our hearts and have confidence in her, she will certainly have high visibility in the world.

At the same time that this administration has pursued economic prosperity, we have never forgotten to work toward social fairness and justice. Over the past year, especially since Premier Chang Chun-hsiung took office, we have been striving in that direction by pushing forward the “Big Investment, Great Warmth” plan. For the first time in a decade, we raised the minimum monthly wage by 9.09 percent, and the minimum hourly wage by 44 percent, from NT$66 to NT$95. Over 1.4 million workers are benefiting from these measures.

Labor pension overhual

In addition, following the enactment of its organic law, the Labor Pension Fund Supervisory Committee was established, whose purpose is to enable 8 million workers to share in the fruits of economic growth and enjoy greater security in post-retirement life by “holding shares in Taiwan.”

In the meantime, through cooperation between the ruling and opposition parties, the National Pension Act was enacted on July 20 of this year. It stipulates that a national pension system be launched on October 1 of next year, setting in place the final major piece of our social security network and transforming Taiwan into a modern welfare state.

Unquestionably, this is a landmark program designed to realize social fairness, justice, and solidarity. I would like to urge all of my government colleagues to complete all complementary measures, to ensure that the national pension system can be launched and become fully functional on time.

As for taking care of our farmers and fishermen, the Executive Yuan has raised the monthly payment to elderly farmers, from NT$3,000 to NT$4,000, then to NT$5,000, and recently to NT$6,000. It also approved a program for rebuilding rural villages and completed the drafting of the Farm Village Reconstruction Act. Once the law is enacted, NT$100 billion [US$3 billion] will be allotted to stimulate the rural economy, with priority given to improving the living conditions of disadvantaged citizens. Comprehensive programs will also be launched to beautify farm villages and improve their public facilities. To mitigate the impact of rising oil prices on the fishery industry, the Executive Yuan has approved a program to increase the subsidy for fishing boat fuel to 14 percent as of July 1 this year, while at the same time increasing subsidies for fishing boat insurance premiums.

With respect to helping disadvantaged groups, the Executive Yuan has also completed planning for measures to assist disadvantaged students, including tuition subsidies for children five years of age and under, and to expand assistance to the families of students of all ages. The measures will include the provisions of supplementary after-school tutoring for junior and elementary school students, as well as increased financial assistance for high school, vocational high school, technical college, and university students. An estimated 658,000 students will benefit from the new measures. Thereby, we hope to enable all young people to enjoy equal opportunity in and quality of education.

The Executive Yuan continues to provide assistance and guidance to small and medium-sized enterprises — the backbone of Taiwan’s economy with regard to finance, research and development, and management. On August 20, it appropriated NT$10 billion [US$303 million] from the National Development Fund to invest in small and medium-sized enterprises in cooperation with venture capital funds. This was the first time the National Development Fund departed from its focus on the domestic high-tech sector to invest in SMEs. It is anticipated that 1,000 enterprises will benefit and that 20,000 jobs will be created, injecting new vitality into Taiwan’s economy.

With ongoing implementation of the three-pronged policy to assist Taiwan’s central and southern areas, its middle and lower classes, and its small and medium-sized enterprises, this administration is on course to meet the goals of increasing investment in Taiwan, creating jobs, closing the gap between city and countryside, and reducing disparities of wealth. In addition to pursuing sustainable growth, we will work hard to build a “wellness economy” that accentuates Taiwanese characteristics and places emphasis on quality and human caring.

My dear colleagues and compatriots:

Tomorrow I will leave for the Second Taiwan-Pacific Allies Summit, to be held in the Republic of the Marshall Islands. Whenever I go abroad, far from home, it makes me realize the preciousness of my own country.

Taiwan and its Pacific sister nations — namely the Republic of the Marshall Islands, Solomon Islands, Republic of Palau, Republic of Nauru, Republic of Kiribati, and Tuvalu — share a deep kinship because we are all oceanic nations, and their peoples as well as our indigenous peoples are all Austronesians.

Since I became President, I have visited all of these nations and have witnessed their efforts in pursuit of prosperity, development, and happiness. When I compare what I have seen with what the 23 million people of Taiwan have undergone in the past half century, I know we should cherish even more what we have today.

In the past few years, Taiwan-born stars, such as Ang Lee, Wang Chien-ming, Chen Shih-hsin, Chu Mu-yen, Kevin Lin, Chan Yung-jan, and Chuang Chia-jung, have had stellar performances on the world stage and continue to bring honor to the nation. It is hard to put into words the pride we feel for their outstanding achievements.

At the same time, however, we feel deep distress when people, for political reasons and in pursuit of power, disparage Taiwan. For in denying Taiwan, they deny all the sacrifices and contributions made by the 23 million people of Taiwan for their nation over the past half century and more.

My dear fellow citizens, Taiwan is a success story. We should not underestimate and look down on ourselves. Taiwan is our homeland, our mother. It is the 23 million Taiwanese people’s foundation and source of hope for development. If we lose Taiwan, we will lose everything. Taiwan has never been marginalized or ceased to be one of the four Asian tigers.

As long as we have Taiwan in our hearts, Taiwan will surely always be prominent. We, as her children, must work to strengthen ourselves and unite with a spirit of sincerity, and we must use our hard work, wisdom, and creativity to make her visible to the whole world.

In closing, let me wish you a happy Double Ten National Day. May our great nation enjoy peace and everlasting prosperity. To all our distinguished guests, fellow citizens, and colleagues, may you enjoy good health and success in all of your endeavors. Long live democracy, and go, Taiwan! Thank you.