A. Problems and Developmental Strategies
---The widespread economic recovery of the major industrial nations from 1994 onward led to a period of worldwide prosperity. This ended a four-year recession that had begun in 1990 and caused a clear increase in the amount of international trade.
---Having encountered favorable conditions, the government sought to lay a solid foundation for the R.O.C.'s emergence as a modern nation by carrying out twelve major construction projects that would enhance the quality and quantity of the nation's infrastructure; implementing the "Economic Stimulus Program" in order to improve the investment environment and stimulate private investment; encouraging private participation in major public construction projects in order to effectively utilize private resources and lessen the government's fiscal burden; implementing the Asia-Pacific Regional Operations Center to develop Taiwan as a regional business center; and promoting trade liberalization on an ongoing basis in order to meet the conditions for membership in the World Trade Organization (WTO). In addition to these actions, the government has also been carrying out a step-by-step social welfare policy in order to increase citizens' well-being, and has been intensifying conservation and environmental protecti on measures aimed at improving citizens' quality of life and placing equal importance on living, working, and the ecology.
B. Economic Development Programs and Major Public Construction Projects
---The "Six-Year National Development Plan" (1991-'96) encompasses the overall objectives of rebuilding the social and economic order and seeking balanced development in all areas.
The plan's policy objectives include:
1. Raising citizens' incomes.
2. Cultivating the great potential of Taiwan's industries.
3. Balancing regional development.
4. Raising citizens' quality of life.
---The implementation of the "Economic Stimulus Program" in 1993 actively promoted private investment.
---In order to upgrade the national infrastructure, raise citizens' standard of living, cultivate industry's potential, promote balanced regional development, maintain financial stability, andmeet the people's urgent needs, the government selected 26 subprojects from the Six-Year National Development Plan, added twelve additional subprojects, and combined them as the Twelve Major Construction Projects.
---The "Plan to Develop Taiwan as an Asia-Pacific Regional Operations Center" implemented in 1995 will seek to help Taiwan become a regional center of manufacturing, sea transportation, air transportation, finance, telecommunications, and the media.
---The Comprehensive National Development Plan was revised in 1995. In the context of equal regard for both economic development and environmental protection, the overall objectives of this plan are to promote the optimal use of national territory, improve the manufacturing environment, and raise citizens' quality of life. ---In 1995 the Public Construction Supervisory Board was upgraded to the Public Construction Commission.
C. Industries
1. Agriculture:
---The "Comprehensive Agricultural Adjustment Program" was instituted in 1991; this program has sought to intensify the cultivation of "core" farmers, lay out agricultural districts, develop key areas, and put the agricultural production and marketing system on a sounder footing.
---The "Follow-Up Plan for Rice Production and Conversion of Paddy Fields to Other Crops" was put into effect.
---The Agricultural Policy White Book was issued.
---The passing of the "Agricultural Land Release Program" in 1995 released agricultural land for other uses.
2. Industry:
---Enacted in 1991, the "Statute Governing the Promotion of Industrial Upgrading" supplanted the expired "Statute Governing the Encouragement of Investment."
---The 1991 "Statute Governing the Privatization of Public Enterprises" accelerated the privatization of national enterprises.
---Measures promoting industrial upgrading have included the development of technology- and knowledge-intensive industries, the promotion of ten major emerging industries, and the nurturing of eight key new technologies.
---Energetic development of the Changpin and Yunlin offshore industrial districts, the Hualien Hoping Cement Industrial District, and the Hsinchu, Taichung, and Tainan science-based industrial parks is underway.
---Within the "Statute Governing the Promotion of Industrial Upgrading," a regulation has been added giving investors the choice of a five-year tax holiday for high-tech enterprises or stock investment deductions; this will promote industrial upgrading by creating a favorable tax environment and stimulating private investment.
---From 1992 onwards, the "Key Parts, Components, and Products Development Program," "HDTV Industry Development Program," "Aerospace Industry Development Program," "Five-Year Industrial Automation Plan," and "Program to Step Up Promotion of the Biotechnology Industry" have been implemented.
---From 1992 onwards, the "Twelve-Year Long-Term National Sci-Tech Development Plan" and the "Six-Year Mid-Term National Sci-Tech Development Plan" have been carried out in order to put Taiwan on the map as a stronghold of science and technology in the western Pacific region.
---The "Major Investment Promotion Task Force" was established in 1992.
---Seven dedicated research organizations have been established from 1992 onwards: the "Shoe Design and Technology Research Center," "Bicycle Industry Research and Development Center," "Precision Machinery Research and Development Center," "Plastics Industry Technological Research Center," "Pharmaceutical Industry Technological Research Center," "Printing Industry Technological Research Center," and "Stone Industry Development Center."
---Beginning in 1994, the "National Information Infrastructure" project (NO) has established Taiwan as one of the world's leading "informatized" nations.
---The "Plan to Develop Taiwan as an Asia-Pacific Regional Operations Center" implemented in 1995 seeks to help Taiwan become a regional center of manufacturing, sea transportation, air transportation, finance, telecommunications, and the media.
3. Service Industries:
---The acceleration of efforts to promote the deregulation and globalization of such areas as transportation, telecommunications, finance, legal services, and accounting will facilitate the goals of membership in the WTO and development of Taiwan as an Asia-Pacific regional operations center.
D. Finance and Banking
1. Finance:
---A comprehensive review of all tax exemptions contained in the "Income Tax Law" has put the tax system on a sounder footing.
---The "Fair Trade Law" was completed and enacted in 1991.
---The "Fee Law" drawn up in 1993 stipulates that "those who use, benefit from, or pollute public assets must pay for their privileges."
---The promulgation of the "Statute Governing Encouragement of Private Participation in Transportation Projects" in 1994 has stimulated public investment in public construction.
---The "Consumer Protection Law" was enacted in 1994.
---The establishment of National Tax Administration branches in northern, central, and southern Taiwan marks a return to the spirit of centralized collection of national taxes as mandated in the constitution.
---The enactment of the "General Guidelines for Regional Tax Laws" seeks to increase regional fiscal autonomy.
---The revision of the "Inheritance and Bequest Law" greatly increases the amounts of tax waivers and exemptions.
---The revision of the "Statute Governing the Promotion of Industrial Upgrading" has added a regulation giving investors the choice of a five-year tax holiday or stock investment deductions for high-tech enterprises.
2. Banking:
---The establishment of 15 new commercial banks was authorized in 1991.
---Restrictions on capital accounts were greatly eased.
---Promotion of banking industry globalization was stepped up.
---Deregulation of financial services was implemented; new types of financial services were permitted; offshore financial services were expanded.
---Restrictions were eased on securities and negotiable instrument services offered at banks; the call money market was reformed and new securities firms permitted.
---The foreign exchange futures market was put on a sounder footing and restrictions on the establishment of foreign exchange brokerages eased; restrictions on various types of foreign exchange services were loosened.
---In 1992 the revised "Insurance Law" loosened regulations governing the establishment of domestic insurance firms.
---The easing of conditions needed by foreign insurance firms to set up branches in Taiwan has led to the diversification of insurance services.
---Restrictions on direct investment in the domestic securities market by foreign individuals have been eased and deregulation of security futures services has been speeded up.
---The R.O.C.'s foreign exchange reserves topped US$90 at the end of 1994.
E. Trade
1. Trade policies:
---Active participation in international trade organizations is expanding Taiwan's freedom of action in the sphere of trade.
---In 1991 the R.O.C. became a member of APEC under the name "China Taipei."
---The board of directors of GATT accepted the R.O.C.'s membership application in 1992.
---Taiwan is stepping up readjustment of its trade system and promoting industrial upgrading.
---A broader dispersion of markets is being sought in order to facilitate the balanced development of trade.
2. The "Exports to Mainland China while Conducting Documentary Draft Negotiations in Taiwan" regulations were liberalized in order to facilitate firms' fund transfers.
---The "Statute Governing Relations between Residents of Taiwan and Mainland China" promulgated in 1992 laid down guidelines for trade relationships between the two regions.
---The "Regulations Governing the Authorization of Investments or Technological Cooperation Projects in Mainland China" passed in 1993 set guidelines for investments and technological cooperation projects in mainland China.
---The "Regulations Governing Permission to Engage in Trade Between Taiwan and Mainland China" expanded the scope of permitted indirect imports from mainland China.
---The "Regulations Governing Permission to Engage in Financial Services Involving Taiwan and Mainland China" passed in 1993 allowed the overseas branches of Taiwan banks to engage in financial transactions with the mainland China branches of foreign banks, the overseas branches of mainland China banks, or the overseas offices of mainland China financial institutions.
---The passage in 1993 of the "Regulations Governing Permission to Introduce Industrial Technology from Mainland China" opened the door for the introduction of industrial technology and relevant human resources from mainland China.
---The announcement in 1994 of the "Regulations Governing Permission to Engage in Commercial Activities in Mainland China" set guidelines for commercial activities in mainland China apart from investment, trade, or technological cooperation.
---The announcement in 1995 of the "Regulations Governing Authorization of Residents of Mainland China to Come to Taiwan to Engage in Trade or Economic Activities" allowed mainland Chinese managers and specialists to obtain permission to come to Taiwan to engage in such trade- or economic-related activities as factory tours, interviews, or conferences.
F. Manpower
---The "Manpower Development Program" has been instituted (1994-'96).
---The revision of population policy has shifted its goal from the slowing of population growth to the maintenance of reasonable population growth; immigration policy has now been incorporated within population policy.
---Skills classes have been instituted in high schools for third-year high school students who wish to receive vocational education or who are already working.
---The ongoing relaxation of restrictions on the establishment of private colleges and universities is opening up abundant opportunities for higher education.
---To meet the need to transform the employment structure, effect industrial upgrading, and develop Taiwan as an Asia-Pacific regional operations center, continuing education and training for adults has been promoted in the nineties in the hope of creating a "learning society" and realizing the ideal of lifelong education.
---The announcement of the "Employment Service Law" and related regulations in 1992 sought to increase the labor supply by allowing private firms to employ foreign contract workers and promoting participation in the labor force by women, the elderly, the handicapped, and members of low-income households.
G. Social Welfare
---The "Regulations Governing Health Insurance for the Handicapped" and "Regulations Governing Subsidies for the Rehabilitation, Care, and Education Expenses of the Handicapped" were promulgated in 1991.
---The implementation of the "Living Subsidies for Elderly Citizens in Low-Income Households" in 1993 addressed the needs of seniors whose household income was less than 1.5 times the standard minimum cost of living; the cut-off point for assistance was raised to 2 and 2.5 times the minimum cost of living in 1994 and 1995 respectively.
---The "Civil Servant Insurance Law" and the "Labor Insurance Law" were revised in 1994.
---The "National Health Insurance Law" was announced in 1994, and national health insurance instituted in 1995.
---The "Outline of Social Welfare Policy and Implementation Projects" was announced in 1994; in 1995 the "Provisional Statute Governing Welfare Subsidies for Elderly Farmers" was announced and the "New Pension System for Retired Soldiers, Teachers, and Civil Servants" enacted.
H. Culture
---Cultural development programs were included in the 1991 Six-Year National Development Plan in order to comprehensively raise cultural levels.
---Beginning in 1994, the "Enhancing Cultural Facilities and Programs at the Provincial (Municipal), County (city), Township, Town, and Community Level" has been included among the Twelve Major Construction Projects. Twelve subprojects have already received the Executive Yuan's approval and are being actively carried out.
I. Urban Planning
---The Taiwan Comprehensive Regional Development Plan was revised in 1995 and renamed the "Comprehensive Development Plan for the National Territory." Short-term objectives of this plan include promoting rational land use, improving the living environment, and balancing the need for land for industry with the needs of other uses; long-term objectives include promoting balanced regional development, harmonizing urban and rural development, improving the living environment, and creating a favorable environment for industry while maintaining safeguards for the ecology.
---New cities are being established at Tanhai and Kaohsiung.