A. Problems and Developmental Strategies
---Among the unprecedented transformations that the international economy underwent during the latter half of the eighties were a trend towards the integration of regional economies, global economic liberalization, the breakup of the Soviet Union, and the adoption of market economies by many socialist nations.
---Beginning in the middle of the eighties, Taiwan's macroeconomic situation became severely imbalanced. On one hand, the rapid expansion of exports and disproportionally slow growth of imports caused the favorable balance of trade to balloon, which led to an outward imbalance. On the other hand, inadequate public investment and weak domestic demand caused the accumulation of excessive savings, which led to an internal imbalance.
---In order to rectify the macroeconomic imbalances and insure that society, culture, and the economy developed in a harmonious manner, in 1984 the government proclaimed that the basic direction for long-term development would be a policy of deregulation and globalization. Apart from reviewing and revising outdated laws and regulations in order to set the stage for promotion of deregulation and globalization in a smooth and orderly manner, the government also stepped up the pace of public construction and set about upgrading the national infrastructure, improving the investment environment, stimulating private enterprise, and accelerating industrial restructuring.
B. Economic Development Programs and Major Public Construction Projects
---The new reformulated national four-year plan (1982-'85) contained the following focal areas:
1. Adequately stabilizing commodity prices.
2. Promoting continued economic growth.
3. Coordinating industrial development.
4. Providing ample employment opportunities.
5. Fostering an equitable income distribution.
6. Balancing regional development.
7. Maintaining social harmony.
---The "Ninth Mid-Term Taiwan, R.O.C., Economic Development Plan" (1986-'89) contained the following focal areas:
1. Promoting trade liberalization.
2. Increasing public works investment.
3. Placing the financial and banking system on a sound foundation.
4. Speeding up modernization of the service sector.
5. Actively developing key technologies.
6. Intensifying pollution prevention and abatement measures.
---The "Prospects for Long-Term Economic Development in Taiwan, R.O.C." (1986-2000) was announced. The aim of this plan is to balance outward and inward development, devise major strategies to guide the nation's future economic and social development, and realize the following two objectives:
1. Maintaining stable and equitable growth; placing equal stress on stable commodity prices, adequate growth, and equitable enjoyment by all social strata of the fruits of economic development.
2. Harmonizing overall development, promoting the harmonious development of culture, society, and the economy, and effecting an all-round improvement in citizens' standards of living.
---The "Tenth Mid-Term Taiwan, R.O.C., Economic Development Plan" (1990-'93) encompassed the following basic policies:
1. Increasing public outlays.
2. Revising laws and regulations and pursuing a policy of economic reform.
This plan also included the following focal areas:
1. Improving the investment environment.
2. Large-scale promotion of transportation infrastructure.
3. Intensifying environmental protection.
4. Enhancing social welfare.
---The promotion of the "Fourteen Major Construction Projects" in 1984 sought to achieve economic growth, technological upgrading, and an improvement in citizens' quality of life.
---Established in 1985, the Executive Yuan Economic Reform Committee (May to November 1985) conducted planning and review of economic reform principles and strategies, and made 56 reform proposals.
---The "Public Construction Supervisory Board" was established in 1990.
C. Industries
1. Agriculture:
---The "Program to Accelerate Local Development and Increase Farmers' Income" was promulgated in 1982.
---The second phase of agricultural reform was implemented on an ongoing basis.
---The "Implementation Plan for the Current-Phase Policy of Strengthening Agricultural Infrastructure" was enacted in 1988.
---The promotion of the "Six-Year Plan for Rice Production and Conversion of Paddy Fields to Other Crops" provided for the cultivation of a variety of grains or taking fields out of cultivation.
---The enactment of the "Forestry Management Reform Program" made soil and water conservation the highest priority of forestry management.
---The "Fisheries Development Program" was promulgated in 1987 and revised in 1990.
2. Industry:
---The main priorities during this decade consisted of developing strategic industries and promoting economic liberalization.
---The "Regulations for Tax Deductions on Investment of Manufacturing Enterprises in Purchasing Equipment" and the "Auto Industry Development Program" were announced in 1980.
---A system of central and satellite factories was promoted beginning in 1983.
---The "Basic Labor Law" was enacted in 1984.
---The Executive Yuan approved the establishment of the "Synchrotron Radiation Research Center" in 1984 to spur technological upgrading of domestic industry.
---The "Biological Technology Development Center" was established in 1984.
---A major revision of the "Import Tariff Schedule" in 1984 reduced tariffs; the average tariff on industrial products dropped from 27.2% in 1985 to 7.2% in 1990.
---The "Regulations for Tax Deductions on Investment of Manufacturing Enterprises in Research and Development" was announced in 1985.
---The establishment of the Environmental Protection Agency in 1977 instituted an environmental review framework.
---The "Unified Industrial Waste Reduction Counselling Task Force of the Ministry of Economic Affairs and Environmental Protection Agency" was jointly established by the Ministry of Economic Affairs and Environmental Protection Agency in 1989.
3. Service Industries:
Many restrictions on investment in domestic service enterprises were eased as follows:
---A second bus company was allowed to begin passenger service on Taiwan's freeways; restrictions on taxi licenses, small bus rental, travel agencies, commercial air freight, securities firms, newspaper firms, and gas stations were eased.
---The "Measures to Curtail Public Extravagance and Waste" was abolished in 1988, and restrictions on the establishment of more than ten types of special enterprises were revised or eliminated.
---The government revised regulations concerning investments by foreigners or overseas Chinese in 1988 and used a "negative list" to state new standards; only a few key areas including transportation, finance, postal delivery, and telecommunications were listed as "businesses in which investment is forbidden."
D. Finance and Banking
1. Finance:
---Revision of the Business Tax Law changed the basis for computing business tax from according to various income brackets to according to the difference between input and output value (value-added tax).
---The enactment of the "Regulations Governing Use of Uniform Invoices" allowed more efficient collection and auditing of business taxes.
---Income tax ceased to be levied on income from securities transactions.
---A value-added business tax was implemented in 1986.
2. Banking:
---The implementation of the "Plan for Effecting an Overall Improvement in the Securities Management System and Promoting the Development of the Securities Market" in 1983 eased restrictions on the capital market.
---The enactment of the "Implementation Bylaws for the Statute Governing International Financial Services" in 1984 allowed the growth of offshore financial services and promoted the globalization of bank services.
---The abolition of the "Statute Governing Management of Interest Rates" in 1975 eliminated controls on interest rates and effected interest rate deregulation.
---In 1986 American insurance firms were allowed to open subsidiaries in Taiwan.
---Following of the New Taiwan Dollar's appreciation in 1987, the NT Dollar/US Dollar exchange rate passed the 35:1 barrier.
---Taiwan's foreign exchange reserves topped US$50 billion in 1987, giving the R.O.C. the world's second largest foreign exchange reserves.
---The revision in 1987 of the "Statute Governing Management of Foreign Exchange" removed most restrictions on the movement of capital.
---The promulgation of the "Standards for the Establishment of Commercial Banks" in 1990 eased restrictions on establishing commercial banks and made it easier for foreign banks to enter the local market.
E. Trade
1. Trade policies:
---In 1990 the R.O.C. made an application to enter GATT under the name "Individual Tariff Territory of Taiwan, Penghu, Kinmen, and Matsu."
---The revision of the "Regulations Governing the Oversight and Counselling of Import and Export Firms" in 1988 strengthened the oversight and counselling of trading firms.
---Efforts to eliminate commercial piracy were stepped up and protection for intellectual property rights was intensified.
B. Trade between Mainland China and Taiwan:
---Taiwan residents were allowed to visit relatives in mainland China from 1987.
---The promulgation of the "Regulations Governing the Management of Mainland Chinese Goods" in 1979 allowed the indirect import of products originating in mainland China.
---The promulgation of the "Regulations Governing the Management of Goods Indirectly Exported to Mainland China" in 1990 opened the door for firms in Taiwan to indirectly export goods to mainland China.
---The promulgation of the "Essentials for Handling Personnel of Taiwan Firms Who are Sent to Mainland China in Order to Perform On-Site Investigations or Attend Trade Shows" in 1990 allowed Taiwan firms to send personnel to mainland China to attend trade shows or carry out fact-finding missions.
---The promulgation of the "Regulations Governing the Management of Indirect Investments or Technological Cooperation Projects in Mainland China" in 1990 allowed firms in Taiwan to make indirect investments or engage in technological cooperation projects in mainland China; firms (manufacturers) that meet conditions for the easing of restrictions need only inform the government of their intention to invest in mainland China.
F. Manpower
---The "Manpower Development Subplan for the Taiwan, R.O.C., Ten-Year Economic Development Plan" (1980-'89), "Mid- and Long-Term Manpower Development Plan for the Economic Development of Taiwan, R.O.C." (1986-2000), and "Manpower Development Subplan for the Tenth Taiwan, R.O.C., Mid-Term Economic Development Plan" (1990-'93) were implemented.
---The implementation of the "Program to Reinforce Manpower Policies" in 1983 and the "Eugenics and Health Care Law" in 1984 helped protect citizens' health and enhanced the quality of the nation's human resources.
---The implementation of the "Six-Year Plan to Develop and Improve Public Education" helped improve public elementary and high schools and, in order to expand opportunities for higher education, allowed the establishment of private colleges of engineering, medicine, and the arts and sciences.
---The "Occupational Training Bureau" was established in 1981 and the "Occupational Training Law" promulgated in 1983.
---The promulgation of the "Labor Standards Law" in 1984 safeguarded the rights of labor by laying out minimum working standards.
---The establishment of National Open University in 1986 provided advanced adult education to all, and thereby broadly improved the quality of manpower and enhanced citizens' levels of education and culture.
---The "Council of Labor Affairs, Executive Yuan" was established in 1987.
---The implementation in 1989 of the "Measures to Meet the Need for Engineering Manpower in Conjunction with the Fourteen Major Construction Projects" allowed foreign labor to be employed in Taiwan for the first time.
G. Social Welfare
---The "Statute Governing Sickness Insurance for the Dependents of Civil Servants" was passed in 1982; the announcement in 1985 of the "Regulations Governing Sickness Insurance for Retired Civil Servants," "Regulations Governing Sickness Insurance for Spouses of Retired Civil Servants," and "Regulations Governing Sickness Insurance for Retired Private School Teachers and Their Spouses" served to gradually expand the coverage of social insurance safeguards to the dependents of insured personnel. Following the trial implementation of health insurance for farmers, in 1989 the "Statute Governing Farmers' Health Insurance" was announced and the "Health Insurance for Various Levels of Elected Representatives, Village, Li, and Neighborhood Chiefs in Taiwan Province" was instituted. A total of 49.5% of the population was covered by health insurance by 1990.
---The "Youth Welfare Law" and the "Mental Health Law" were announced in 1989 and 1990 respectively. The revision of the "Handicapped Persons' Welfare Law" (1990) instituted quotas for hiring the handicapped.
H. Culture
---Established in 1981, the Council for Cultural Planning and Development took charge of cultural planning for the nation as a whole.
---The revision of the "Program for Strengthening Cultural and Recreational Activities" in 1983 provided for more refined cultural activities.
---The National Museum of Natural Science was established in 1985.
---The "Program for Strengthening Cultural Development" was promulgated in 1987.
---The establishment of the National Chung Cheng Cultural Center together with the National Theater and National Concert Hall in 1978 raised the standards of artistic events and helped nurture international cultural exchanges.
---The second approval of the "Cultural Development Program" by the Executive Yuan in 1990 sought to achieve such goals as raising the quality of society, increasing the nation's social resources in the humanities, and promoting the development of the arts.
I. Urban Planning
---All counties and cities successively enacted "Comprehensive County and City Development Plans."
---Four regional development plans -- for northern, central, southern, and eastern Taiwan -- were enacted (the scope of the regions was redefined).