Asia Times: Taiwan's troubles come in threes


	July 31, 2001	atimes.com

China

Taiwan's troubles come in threes

TAIPEI - Vice President Annette Lu says that Taiwan faces three tough challenges to its economic development - a global economic recession, the impact of its entry to the World Trade Organization (WTO) and Beijing's "united front tricks".

Lu made the remarks while presiding over a plenary meeting of a science and technology advisory commission under the Presidential Office at the weekend. "Our economy is being troubled by three 'economic cold spells'," Lu said.

She called for all commission members to pool wisdom to help Taiwan cope with these challenges. Of the three challenges, Lu said, mainland China's "united front tricks" were the most worrisome. Quoting intelligence reports, Lu said mainland China had stepped up efforts to lure Taiwanese entrepreneurs to invest in the mainland.

"By so doing, mainland China intends to increase its economic clout against Taiwan to complement its military intimidation and thwart the Taiwan people's morale and confidence," Lu said.

Worse yet, Lu said, mainland China had intensified efforts to court Taiwan's elected representatives from the opposition camp with a view to throwing Taiwan's mainland policy off track. Mainland China was endeavoring to buy into Taiwan's financial and media institutions, also as part of its "untied front" tactics.

Lu said local people should heighten their awareness of what she described as mainland China's "new economic disturbance plus military intimidation" strategy toward Taiwan.

In her view, Lu said, the current global economic slowdown posed another tough challenge to Taiwan's economic development, as it had hindered the export-driven local economy from bottoming out of its lingering downward cycle.

Meanwhile, Lu said, Taiwan was expected to be admitted to the WTO in four to six months. "In the long term, WTO accession will benefit our economic development. But in the short term, the WTO entry would have an adverse impact on Taiwan's agricultural and some industrial sectors," Lu said. In preparation for the WTO accession, Lu called for the government and business sectors to join forces to carve out effective measures to minimize the possible adverse impact.

Meanwhile, the Cabinet-level Council for Economic Planning and Development (CEPD) says the chances for Taiwan to see a significant economic recovery in the fourth quarter are increasing.

Chen Pao-jui, deputy director of the CEPD economic research department, based the optimistic prediction on reports that the leading indexes in the United States, Japan and OECD countries have begun to pick up.

He said that Taiwan's exports are expected to register a growth from the fourth quarter because the Taiwan currency has been devalued 6.7 percent against the greenback in the first six months of this year.

The gradual recovery of the US information communication technology industries is also helpful to Taiwan's exports in the coming months, Chen added.

He said that the number of newly registered factories began to rise in June, indicating that the investment willingness of the private sector was recovering. As the government is stepping up the implementation of public projects to expand domestic demand, the CEPD official noted that public investment will show a double-digit growth in the fourth quarter.

The year-end elections for legislators, magistrates and mayors will also help stimulate the consumption in the private sector, Su said. He predicted a 5 percent increase in consumption for the whole of 2001.

Meanwhile, according to the results of a recent CEPD survey, 50 percent of local manufacturers said that the island's economic performance will remain unchanged in the next three months. Forty-two percent said it will worsen, while 8 percent said it will improve.

(Asia Pulse)

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