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Remarks by President Ma at the 2013 APCAC Spring Conference and 2013 Hsieh Nien Fan

Mr. Alan T. Eusden, American Chamber Chairman,

Mr. Christopher J. Marut, AIT Director,

Mr. Jiang Yi-huah, Premier, Executive Yuan,

Mr. Jason Yuan, Secretary-General, National Security Council,

Mr. Atul Keshap, Senior Official from the US for Asia Pacific Economic Cooperation,

Friends from APCAC in the United States,

Ladies and Gentlemen:

Good Evening!

I. Appreciation and recognition of AmCham Taipei's contributions, and welcoming of APCAC members to Taiwan

I want to thank the American Chamber of Commerce in Taipei for having invited me to attend today's Hsieh Nien Fan. This year marks the 62nd year of the American Chamber of Commerce in Taipei, the largest and most influential foreign business organization in the Republic of China and an important facilitator of Taiwan-US relations. AmCham plays a pivotal role in helping integrate Taiwan into the global economy.

This year's APCAC is especially significant, as it is being held here in Taiwan for the first time since 1993. Important members of 28 American chambers of commerce from 22 economies in the Asia-Pacific region are attending the conference to discuss many important issues facing the Asia-Pacific business community. We welcome American business leaders' choice of Taiwan as the venue for this important economic and trade conference. I believe that, with Taiwan's active participation and the joint efforts of regional partners, cross-border economic and trade cooperation across the Asia-Pacific will enter into a new era.

AmCham Chairman Eusden just asked: "Where is the beef?" You will be served with American beef tonight -- I was told.

II. The Asia-Pacific region is the engine driving global economic development; Taiwan is a key member of the Asia-Pacific region

As you know, in 2012 the global economy suffered a downturn attributable to the European debt crisis and a sluggish US economic recovery. The downturn poses enormous challenges to Asia-Pacific countries, particularly Taiwan, which is highly dependent on exports. About 70 percent of our GDP growth comes from our exports. However, these developments have not detracted from the growing importance of Asia to the global economy.

In December 2012, the US National Intelligence Council released the Global Trends 2030 Report, predicting that by 2030 Asia will have surpassed North America and Europe combined in terms of GDP, population size, military spending, and technological investment.

Indisputably, Asia will continue to be a driving force for the global economy. During this time of challenges, the Republic of China has the ability to play a key role. First of all, Taiwan is a hub in Asia's industry value chains. In its Knowledge Economy Index (KEI) 2012 Rankings, the World Bank ranked Taiwan first in Asia. This indicates that Taiwan is in a very good position to become a global innovation center and an Asia-Pacific regional economic and trade hub.

Secondly, Taiwan is located at the center of East Asia. As you know, Korea proclaims they are located in the center of Northeast Asia. Singapore proclaims they are located in the center of Southeast Asia. But only Taiwan can claim we are the center of East Asia. In addition, we are near mainland China, with which we share deep historic and cultural ties. Since I took office, we have greatly improved cross-strait relations, signing 18 agreements and reaching two points of consensus. These have led to an expansion in cross-strait economic and trade relations, and provided greater incentives for foreign businesses to invest in Taiwan.

According to the AmCham Taipei's 2013 Business Climate Survey, expanding ECFA (the Economic Cooperation Framework Agreement between Taiwan and the Chinese mainland) -- if we expand its coverage and speed up its implementation -- it would benefit the development of Taiwan and its enterprises. Taiwan has optimal conditions for becoming a global headquarters for Taiwan businesses and a regional headquarters for foreign multinational corporations.

By improving cross-strait relations, Taiwan has made a great contribution to regional security and stability as well as development of economic and trade activities. Taiwan-invested firms around the world are big players when it comes to economic, trade, and investment ties. Taiwan's bilateral trade with mainland China reached US$162 billion last year, and we enjoyed a trade surplus of US$75 billion. Moreover, mainland Chinese tourists made 2.58 million visits to Taiwan last year. This is also a record.

As for Southeast Asia, Taiwan's investment in ASEAN countries had reached US$85 billion as of October 2012. Taiwan was the largest foreign investor in Vietnam, the third-largest in Thailand, and the fourth-largest in Malaysia. In addition, Taiwan's trade volume with the 16 members of the Regional Comprehensive Economic Partnership (RCEP) totaled US$335 billion, accounting for nearly 60 percent of Taiwan's foreign trade. All these facts stand as testimony to the closeness of our economic and trade ties with ASEAN countries.

I think you are probably interested in what we will do in the next three years for our relations with the Chinese mainland. At a time when the US is actively pursuing a policy of "rebalancing to Asia," and Taiwan's Straits Exchange Foundation and the mainland's Association for Relations across the Taiwan Straits -- these two instrumentalities, as you know, are working as what we called "white gloves" in dealing with each other -- are planning to establish offices in each other's territory on either side of the Taiwan Strait. This will bring the two sides closer together, because these offices will provide services to investors, students, and travelers. This is a very important step which, as I always say, we will use as a very important line of defense, because institutionalization of cross-strait relations is probably the best line of defense for Taiwan compared to other means. As you know, we signed the ECFA almost three years ago. But it covers only about 20% of the goods and services. Beginning last year, we've been trying to complete the rest of the ECFA. We are first dealing with trade in services, and we are near the completion of that. And the part on trade in goods, we hope we could get it done before the end of this year. By then, if we have a full-fledged Economic Cooperation Framework Agreement with the mainland, which is our largest trading partner and the second largest economy in the world, this will present very good opportunities to use Taiwan as a springboard to mainland markets, and there are also opportunities for the two sides to expand economic and trade ties in the emerging markets in the ASEAN region. Again, I am sure by then Taiwan will play an even more important role in East Asia's economy.

III. Embarking from Taiwan and embracing the world

On the other hand, we have engaged in a major effort to upgrade and transform our own economy. To build up stronger momentum and successfully confront challenges, the government has adopted the Economic Power-Up Plan, which is designed to strengthen our industries and help them to transform themselves. The Power-Up Plan involves building an aerotropolis near the airport in Taoyuan and setting up three economic pilot zones. The idea eventually is to make Taiwan a free trade island. But we have to do that step by step. We have to further liberalize our trade policy. We have to do more deregulation. I remember six years ago, when I first embarked on my campaign trail, I used the opportunity to ride a bike from the southern tip of Taiwan, Eluanbi (鵝鑾鼻), to the northern tip, Fugui Cape (富貴角). Before I reached the final destination, we stayed overnight in a ranch in Taoyuan -- Pushin Ranch (埔心牧場) -- where I met with the proprietor of one of the most successful businesses in mainland China, the one that sells fast food noodles (方便麵), -- Master Kong (康師傅). I asked him how many packs of these fast food noodles they sold the year before. He said it was roughly 8.1 billion packs. I was very much surprised. So I asked him, "If I am elected president, what do you think I should do for you." He said, "Nothing, just leave us alone." This is a very important message. And this is the very reason we started the deregulation project after we took office and we'll continue to do that in the future.

About the economic transformation plan, we call it the "Three Sectors and Four Transformations." It entails, first of all, "incorporation of an element of service by manufacturing firms," secondly, "incorporation of advanced technology and an international reach by service firms," and "achievement of greater distinctiveness by firms in traditional sectors." I am confident that these steps will make our economy stronger and more competitive in the years to come. Of course, when we are ready to become more liberalized in our trade policy, certainly we will want to join the regional economic integration in this part of the world. As you know, before I took office, for a long time we didn't have a chance to enter into FTAs, free trade agreements, with our major trading partners, like mainland China, the United States, and Japan. We did conclude four agreements with five Central American countries, but the total trade between us and these five countries accounts for less than 1% of our overall bilateral trade. So we were very eager to start such negotiations with our major trading partners. The first partner we chose was mainland China. And two years after that we were able to conclude an investment agreement with Japan -- an investment protection and liberalization agreement. Ladies and gentlemen, Japan has invested in Taiwan for 60 years. Never before had they thought about having such an agreement with us. Why did they do that? Exactly because we had concluded the ECFA with the mainland, and they could make good use of that. And this is exactly what happened.

IV. US-Taiwan ties will continue to deepen, especially on the economic and trade front

Another step we've taken is to improve our trade and economic relations with the US, which has been blocked as a result of the importation of American beef with ractopmine. Do you know what ractopmine is? Many people don't, but never mind, now it's allowed to be imported. Chris, did you find out whether we're going to have American beef tonight? I hope so. We actually paid a very dear political cost in order to get that passed. Thanks for the CODEX decision of the United Nations Food and Agriculture Organization. We want to let you know that, because of the success in solving that problem, we are now embarking on negotiations with the US the Trade and Investment Framework Agreement, which we concluded with the US back in 1994. With that, we are able to take a different approach to directly conclude a free trade agreement. We call it a "building blocks" approach -- one agreement at a time -- so that we could weigh the importance and prioritize the order. Certainly, as I said, in addition to completing the ECFA with the mainland, ever since the year before last, we've been negotiating with Singapore and New Zealand on economic cooperation agreements. We hope we can also wrap them up before the end of the year, maybe sooner. We understand Taiwan faces very serious challenges for our economy. As you can see, last year Taiwan's economy remained sluggish until September. Ever since then the recovery has shown some momentum. Beginning this January, we did see much better opportunity for growth this year. Our government predicted the growth rate will be 3.59%, and the minister of the Council for Economic Planning and Development predicted that we could also reach 4%. So if we don't get 4%, ask him over there. By the way, in the last four and a half years, we have successfully restored mutual trust with the United States on many issues. And I can say, quoting some American scholars, that our relations with the US are the best in the 30 years since we severed diplomatic relations. We certainly want to make sure the current approach, a low key and surprise-free style, could further strengthen our mutual trust.

V. Conclusion

Well, so much about trade and investment, and the ROC-US relationship. I think you must be very curious about my meeting with the pope. It was a very interesting process, because before we went to the Vatican we didn't even know whether he speaks English. According to all the information we received, he speaks Spanish, Italian, and German. But even one minute before I met him I asked his staff, and they didn't even know very much. So I had to prepare my short remarks in Spanish, which I know very little about. But I tried to hold it for about 30 seconds. I first saw him and said, "good morning, Your Holiness, very nice to see you. My name is Ma Ying-jeou. And I am the President of the Republic of China on Taiwan. And this is my wife, Christine. And many many felicitations for your inauguration." And the last sentence I said, "Your Holiness, that's all the Spanish I can speak." He smiled broadly. Then I said, "I assume you understand English." So I continued with English. It was a very warm meeting. He seems to have a very pleasant personality. And I also told him that all the contributions of the Catholic priests in Taiwan have been a strong moving force for our society. And I told him that we appreciate their contribution, and hope we'll continue to cooperate. This was a very warm trip for me. And this was also the first time in 71 years -- ever since we established formal relations with the Holy See in 1942 -- that a president of the Republic of China has had an opportunity to meet with a new pope. This was a very important and warm experience for every member of our delegation. But I assure you that we'll continue to improve relations with the Holy See in many ways. We even arrange training opportunities in Taiwan for Catholic priests from mainland China, with a view to improving their relations with the Holy See. I think, for the church, whether in mainland China or Taiwan, they actually worship the same God. In that spirit, we hope to work out something which will demonstrate that improvement of cross-strait relations could also lead to improvement in our international relations. I always believe this is an area where we can transform from a vicious cycle to a virtuous cycle. It just depends on how you do it. So I can assure you we will continue to work very hard to make that happen.

Tonight, I thank you again for inviting me. And I hope you will have a very pleasant Hsieh Nien Fan.

Thank you very very much.

【Source: Office of the President】