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Foreword

Over four decades , the Republic of China has been bent on developing Taiwan's economy and has achieved marvelous results. The success has brought prosperity to the island and greatly enhanced the country's international status . The secret behind this success is Taiwan's ability to keep pace with the vibrancy of the World and to fashion a stage-by-stage out-ward-looking developmental strategy, which has enabled Taiwan to play to its full comparative advantages. Looking back over the past four decades , we realize that only when we set our vision on the whole world , consistently pursue the course of economic liberalization and keep pace with the global economic activities can we overcome Taiwan's constraints in natural resources and create a new horizon for break-through. New ChallengesĦANew Opportunities As the world marches toward the 21st century , Taiwan is faced with a new set of internal and external challenges . The rapid transformation of Taiwan's overall economy In terms of Taiwan'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 to deal with this change and overcome the barriers to investment will determine whether Taiwan can further develop its economy . Drastic changes in the global economic situation Success in the Uruguay Round of negotiations of the General Agreement on Tariffs and Trade(GATT)and formation of the World Trade Organization(WTO) spearhead global trend towards more economic freedom, which will affect the longrun economic development of Taiwan . On the other hand , economic regionalism has grown rapidly, especially in the naturally evolving Asia-Pacific economic region . Many statistic indicators show that the Asia-Pacific region will become the new center of gravity for global economic activities. Many enterprises hope to increase their investment in this region in order to play a role in the rapidly-growing east Ascian market. Some of them are strong economic competitors of Taiwan. Change in economic and trade relations across the Taiwan Straits In recent years the economic and trade relations across the Taiwan Straits have intensified, creating ever-increasing interdependence. The long-run influence of such relations on Taiwan's economic development cannot be taken lightly. Meeting Economic Challenges with A Winning Strategy--A Plan to Develop Taiwan into an Asia-Pacific Regional Operations Center To meet the challenges at home and abroad, outperform our competitors , sustain the steady development of cross-Straits relations, and find a new international role for Taiwan, we must consider the possible changes wihtin and without Taiwan and our qualifications and those of our competitors in developing a "winning strategy" . By comparison, Taiwan has many advantages over our competitors in future 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 applications of science and technology, high-quality manpower, and proximity to the southeast Asian markets. If we can combine these advantages and make the best use of them, Taiwan cam acquire a key place in the Asia-Pacific region and even in the world. It can also become a formidable economic player in the 21st century. After careful consideration , aided by a thorough evaluation by experts , a consensus for adopting a "winning strategy" for Taiwan's future economic development has emerged, i.e., the development of Taiwan into an Asia-Pacific regional operations center. The Asia-Pacific regional operations center takes on a twofold meaning. From the viewpoint of the business community, it is a strategy for attracting local and foreign enterprises to make Taiwan their operational base for investment and business activities in the Asia-Pacific region, including southeast Asia and the Chinese mainland. From the macroeconomic perspective, it means to turn Taiwan into a base for developing comprehensive economic and trade relations with members of the Asia-Pacific region. These evaluations now confirm that Taiwan enjoys substantial potential in developing itself into a center for manufacturing, transshipping , financial, telecommunications , and media activities. If we can develop Taiwan into an Asia-Pacific regional operations center ,we can fully use our strategic geographical position in the Asia-Pacific region and in the cross-Straits relations to maximize our economic strengths , expand our economic horizons and reach a new plateau of development . Meanwhile we can also highlight Taiwan's pivotal role in regional economic integration . Taiwan may also serve as a bridge between mature and developing economies . In sum , this "winning strategy" is a grand scheme of omnidirectional economic development for Taiwan. If we pursue this course vigorously, Taiwan's economy will enjoy a promising and illustrious path into the 21st century .

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