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Remarks by President Ma Ying-jeou at American Chamber of Commerce in Taipei

Vision for a Golden Decade Ahead
Remarks by President Ma Ying-jeou at the American Chamber of Commerce in Taipei
AmCham Taipei Chairman Bill Wiseman,
AmCham Taipei President Andrea Wu,
NSC (National Security Council) Secretary General Victor Hu,
Vice Premier Chen,
Minister of Economic Affairs Shih,
And AIT Director William Stanton,
Distinguished guests, Ladies and gentlemen,
Good morning!
It is really an honor for me to be with you here today. My friendships with quite a few people here go back many years. Just this past September, as many of you remember, I attended the celebrations marking AmCham's 60th birthday.
I suppose you may have invited me here to get a better understanding of my policies in the next four years if I get re-elected. Many of you will not be able to vote for me. [laughter] Well, it’s a pity! But each and every one of you has a stake in Taiwan’s future prosperity. So I feel there is a need for me to let you know what I will be going to do in the next four years if the KMT remains in power.
When foreigners come to Taiwan to do business, obviously they believe this is a good place to do business. They’re right. We do have several unique conditions that make Taiwan a good place to do business. First of all, it’s our advantageous geographic location in the center of East Asia. Korea can claim they’re in the center of Northeast Asia. Singapore can claim they’re in the center of Southeast Asia. But only Taiwan can claim that we’re in the center of East Asia. The quality of life here, the political stability, particularly after the democratization of Taiwan, and the quality of our human resources are also our strengths. Prior to 2008, when I took office, Taiwan actually had failed to take proper advantage of these good conditions. At the time, relations with the mainland were very tense, and trade and investment were booming, for sure, but there weren’t any direct travel or transport between Taiwan and the mainland. For many of you and many of the local people, that was really unthinkable. But it was the reality.
So it seems that the government at the time didn’t care very much about that situation, which actually made Taiwan much less competitive and much more isolated. So three and a half years ago when I took office, I decided first thing after my inauguration to resume the cross-strait negotiations, which very soon resulted in the opening of direct links with the mainland, and arrival of mainland tourists. So Taiwan no longer misses out on opportunities, and the businesspeople here also share the feeling.
Actually, AmCham had for several years in its White Paper continued to urge the government to open up ties with the mainland. Eventually, we took your advice. [applause] Thank you. That was your vote, even if you don't vote. Actually, what we did is not only to change Taiwan’s relations with the Chinese mainland, but also to change the economic status of Taiwan in East Asia and the world. But we were not lucky when we first took office. We encountered the financial tsunami and economic downturn. So we spent a lot of time trying to rescue the economy. Gradually, we’ve been able to take care of the high unemployment and slow economic development. But during the same period, we have also conducted a series of reforms of the government, which many government leaders have wanted to do for several decades. For instance, we have restructured our national government, primarily the Executive Yuan, by cutting 37 ministries to 29. And we have also changed our local governmental system by allowing seven counties to form five metropolitan areas. And we have also effectively improved our relations not only with the mainland but also with Japan, with the United States, and with the rest of the world. So Taiwan’s economy is back on track. Last year, we recorded 10.88% growth, which was the fourth highest in the world, and second highest in Asia. But most importantly, our inflation rate was relatively modest, which is only 1.22%, compared to over 4% or 5% in South Korea, Hong Kong, and Singapore. So that makes our misery index—unemployment rate plus inflation rate—also one of the lowest in the world. And this year, if all our predictions are right—well, this is November now, I hope everything is right [laughter]—we will be able to raise our per capita GDP to US$20,000 at the end of this year. As you know, when our per capita GDP reached US$10, 000, it was 1992. So after 19 years, we made it!
But on the other hand, the global economy is still not so good, although the bases of our economy are OK. So we still face huge challenges ahead. What I had in mind, particularly a year ago, at the second anniversary of my inauguration, I tried to map out a plan for the future. That is the “golden decade.” The idea is to make sure that Taiwan’s prosperity will continue while preserving peace and stability with the other side of the Taiwan Strait. So I’d like to just briefly describe what we will be doing in the future. There are eight items, which could be also shortened to seven. First of all is a robust economy. We are doing OK, but on the other hand, we have structural problems. So we have to change from an efficiency-driven to an innovation-driven economy. I have always wanted to make Taiwan the innovation center of the world, and the trade and investment center of East Asia, and the home, the global headquarters, of Taiwanese companies, and the regional headquarters of foreign companies. Looking at what we did, we’re doing OK. But unless we change from an efficiency-driven economy to an innovation-driven economy, we will not be able to compete with the rest of the world. So this will be a major goal of the next four years.
On the other hand, our liberalization effort in trade has been rather slow. Yes, we did join WTO in 2002, but in the last 10 years, we concluded only four FTAs with our five Central American allies. But the total amount of trade with these five countries accounts for less than 1% of our total trade. That’s why we started by negotiating the ECFA with the mainland in order to break the ice, in order to make Taiwan part of regional economic integration. Now we’re negotiating one with Singapore and one with New Zealand. We want to do more with the rest of the world. Also, we want to do more trade liberalization, but as you know, it’s a painstaking job. Protectionist tendencies always exist among our own firms, so we have to do a lot of public communication to make everybody understand that more trade means more economic prosperity. So one target is to join the TPP, the Trans-Pacific Partnership arrangement, in 10 years. Why in 10 years? Because we don’t have the conditions right now. We have to create them. We have to do a lot of communication and persuasion to make people understand. We certainly will cite our experience 9 years ago when we joined the WTO. We started applying for the GATT in the year 1990. We waited for 12 years to join. But during the process, everybody said, “If we join, our agriculture will collapse.” But that didn’t happen. There are fewer farmers for sure, but higher productivity for each farmer. And our agricultural exports have increased. It shows the traditional wisdom that FTA, free trade, creates trade rather than diverting trade, is very true. So we have to do a lot of discussion and communication in the next few years to let people know our national target. Think about the situation, the scenario, 10 years from now—suppose we are still not a member of TPP. What’s going to happen to Taiwan? That is why we have no choice. We have to charge ahead.
The second one is a clean and competent government. As you know, I used to be the Justice Minister. So I care a lot about corruption, and I have always said, corruption and vote-buying are not just twins, they are Siamese twins. So we have to get rid of them. After I took power, I appointed a very prominent prosecutor as our prosecutor general. As you can see, in the last two years, prosecutors have taken serious action on their own initiative against, first of all, some people in the judiciary, some corrupt judges and prosecutors, some corrupt presidents of local hospitals, some officials in the customs system, and even some elementary school principals. We are trying to clean up the government to make sure that people can trust us. We also think we have to make the government more efficient. So in terms of taxation, as you know, we have lowered our gift and estate tax from 50% to 10%, and business income tax from 25% to 17%. And we have deregulated more than 698 laws and regulations to really loosen up our control. I remember four years ago when I started my bike ride from the southern tip of Eluanbi (鵝鑾鼻) to the northern tip of Taiwan, Fugui Jiao (富貴角), the day before I reached my destination, I stopped over at 埔心牧場 (Puxin Ranch). I met the general manager. They have a great investment on Chinese mainland—康師傅方便麵 (Master Kong instant noodles). We had a nice chat during dinner, and I asked him, “You’re a very successful businessman on mainland from Taiwan. What would you want me to do when I become president?” He smiled and said, “Uh, leave us alone. Just leave us alone.” Well, I got that message. That is why I’ve deregulated so many laws and regulations to make sure they will be left alone. Well, that is not enough. I think we have to do more to give the businesspeople enough space to run their business and make more profits, and then we will be able to get more taxes. Look at what has happened under ECFA. We had a very serious debate last year. And we eventually concluded the agreement, and it brought many opportunities not just for large corporations, but also for farmers, like grouper farmers, and fishermen, and saved millions of dollars in custom tariffs. So I think this is not only good for the Taiwan economy, but also to our interest in joining the regional economic cooperation. Before I took office, there were 58 FTAs concluded among Asian countries. Taiwan is one of the most prominent absences, and the other one is North Korea, but North Korea’s total trade is just about 1% of Taiwan’s. So this is a little bit embarrassing, to be placed with North Korea.
Now the situation has changed. As I said, we’ve signed ECFA, and then an investment agreement with Japan, and are working on an economic cooperation agreement with Singapore, and another one with New Zealand. We want more. We hope we’ll have one with the United States, and with the European Union, so that we could have more trade with these countries. So we have done a lot to really reinvigorate our economy to build an able and clean government. But we also want a just society, in the sense that, we have to put more resources in the social welfare area. One important step I took after I took office is to set up the labor pension and the national pension. This is unprecedented in the history of this country. Take the labor pension for instance. For a regular laborer, upon retirement in the past, he could get a payment from the government, but that was just a one-shot payment. So the longer he lived, the less the money. And the most important problem he had was the problem of dignity. Sometimes he had to get money from the kids. But now, if he retires at 55, which used to be 60, if he earned NT$40,000 per month while employed, then he can get 70%. That is NT$28,000 per month. One such laborer told me in person, he said, “Mr. President, I thank you so much because the difference is that now the longer I live, the more I get, and now I don’t have to ask my kids to give me money. And that is a very important way to keep my dignity as a father.” This is something that really touches me. I think we did the right thing.
In addition to that, we raised the basic wage twice. Compare that to the previous administration. In 8 years, they did it only once. We did it twice in three and a half years, and effectively helped some workers. And we also change the Public Assistance Act—社會救助法—so as to increase the number of beneficiaries from 260,000 to 860,000. We have changed the threshold for qualifying as a recipient, and that has really benefitted a lot of people. Why are we doing that? Because we recognize the widening gap between the rich and the poor, particularly after the globalization of the economy. We did better last year compared to the year before. The top 20% of families earned 6.34 times more than the bottom 20% in the year 2009. Last year, this ratio went down to 6.19. But if you get rid of other transfer payments, the ratio is 5.67 times. And if you count only individuals instead of families, it’s even lower. In East Asia, we are one of the lowest. But for the people on the streets, they still have the feeling of alienation because they’re not making enough money. And for many senior citizens, giving them a job doesn’t make sense because they can’t work. You have to give them transfer payments before they could really increase their income. This is something we will be doing more in the future. For instance, we have just decided to raise the subsidies to eight categories of recipients of social welfare from 16% to 33%, and that will solve the problem of some of the categories, which we had been seeking for 18 years to change. So this is an unprecedented move for social welfare. And for the year 2012, the central government budget for social welfare for the first time is more than NT$400 billion, or 21% of the total budget. Number one, this is unprecedented. It shows how much effort we have made in this area. But it is still not enough. We want to try more to reduce the unemployment rate and to increase transfer payments to recipients of social welfare.

And most importantly, we must address environmental issues. We have to build a sustainable environment. I’m so happy to see that, in the year 2008 and 2009, we have seen the reduction of carbon emission. Emissions dropped by 4.1% in 2008, and and by 5% in 2009. But last year, they went up 6%, on the already lowered base. And, energy efficiency went up 2%. This is something we very much like to see. We promised the whole world that by the year 2020, carbon emissions will be at the same level as 2005. Now, we’re in a much better position to reach that goal. I take that promise very seriously. We have no chance to join either the Kyoto Protocol or other international conventions on this subject, but we want to commit to do our part. We want to make that commitment to the rest of the world, because after all, we are an important member of the international community. We’d like to abide by the rules of the game. So we try everything to save energy, and ever since we raised the price of electricity, we’ve been able to save 1.8 times the amount of electricity used by Taipei citizens in a whole year. So this is a very important savings, because if you are able to save electricity for two consecutive months, we will give you a discount. Well, this is really goes against human nature, because the Taipower is selling electricity and they are asking people to save electricity. This is a little bit contradictory. But still, we’re doing a very good job. But again, this is not enough. And we have to make sure that there is a proper balance between economic development on one hand, and environmental protection on the other. This is precisely one reason why we abandoned the original plan to build a Suhua Freeway, and switched instead to improving the existing Suao-Haulien Highway; we needed to strike a balance between environmental and economic concerns. And so far, both the environmentalists and the local people can accept that, although neither side is satisfied. But this is probably the only way to solve the problem. On the other hand, on the Kuokuang Petrochemical case, we have decided to drop that because we don’t believe it could continue in the next couple of years given the very historic conditions it will face. So we have a very clear idea in our mind. There needs to be a delicate balance between the two. And according to our constitution and our environmental basic law, we have to put top priority on environmental protection if a project will seriously hurt the environment.
Number four is the subject of education and culture. We have already announced that we will have 12-year compulsory education beginning in the year 2014. This is, again, unprecedented. We started with vocational high schools this year. We want to make sure that the graduates of vocational schools will become the backbone of our small- and medium-sized business and traditional industries. There is a serious shortage of such people. But we also want to help the families of students who go to vocational schools. Usually they are in a much weaker economic position than families who send their children to regular high schools. And another thing is, I want to make Taiwan a higher education center for East Asia and the Pacific. As you know, we now have roughly 50,000 students from outside of Taiwan, from the mainland, from Southeast Asia, from Europe and the United States. We hope by the year 2020, the number will grow to 130,000, roughly 10% of our college student population, because we do have some room for that. In 1968, when I took the college entrance exam, the admission rate was 27%, but this year the admission rate was 92%. And if you do not count the people who take the exam twice, the admission rate could even exceed 100%. So it is extremely difficult now in Taiwan not to get into a college. This is very strange, and is in sharp contrast with the rest of East Asia, particularly Southeast Asia. Many countries could only admit less than 20% of their high school graduates to college. So why not come to Taiwan? At the moment, more than 4,000 college teachers from Vietnam, Thailand, India, and Indonesia will be financed by their government to come to Taiwan to attend graduate school at our technical universities. Certainly, this trend will continue and expand. I’d like to see that, and we want to make Taiwan a higher education center pretty much like the United States. But certainly we still have a long way to go. We have to improve our language of instruction, and we have to improve our facilities, but as far as the volume is concerned, we are able to take care of that.
And last but not least is the issue of cross-strait relations, and our ties with the international community. We want to have a lasting peace across the Taiwan Strait, and friendly ties with the international community. In the past, these two things were in conflict with each other, but since we took power, a virtuous cycle been established. We improved relations with the mainland by signing 16 agreements with them. This is unprecedented. And we have encountered numerous problems, but because we adopted a very clear policy of “no unification, no independence, and no use of force” under the framework of the Republic of China Constitution to maintain the status quo in the Taiwan Strait, and to develop relations with the mainland on the basis of the “1992 consensus,” which means “one China, respective interpretations.” So, “no unification” means, during my term of office, no unification talks. “No independence” means no pursuit of de jure independence. And “no use of force” is quite self-explanatory. The idea is that maintaining the status quo is the most important thing for Taiwan. And so far we have achieved it. But we want to institutionalize it, not only for the people of Taiwan and the mainland, but also as an important line of defense for Taiwan. We don’t rely only on weapons; we also rely on ideas to maintain peace. Now, either side, if they want to change the status quo unilaterally, they will incur a prohibitively high cost. So nobody wants to do that. Both sides want to maintain the status quo, so peace could be maintained. This is probably the most important strategy for Taiwan—institutionalization of cross-strait rapprochement. And building on that base, we could develop more trade, more investment, and get more students coming to Taiwan. You know, quite a lot of mainland tourists now, more than 2.6 million, have come to Taiwan. They have done a lot of consumption in Taiwan, and spurred a tourism boom. At the same time, moreover, they have also got a sense of Taiwan’s democracy and freedom. A lot of them didn’t go out during the evening. Instead, they lock themselves up in their hotel rooms, watching the political talk shows to see our people criticizing their president. [laughter] Well, that’s democracy. That’s, you know, freedom of expression. But after a while, they began to ask why they couldn’t do the same when they go home? So, this is a very powerful question, and gradually they will make some changes, not only in our cross-strait relations, but also in their own internal system. So this is a very important way to build friendship between the people of the two sides, in a rather natural and peaceful way. So maintaining peace and stability across the Taiwan Strait will continue to be a very important policy. Of course, we hope, if the conditions are right, we certainly will want to institutionalize this aspect, as I said. The number 3 “no” is “no use of force.” We have already announced that we will not use force, but we are waiting for the mainland to do the same. So if they could agree to that, maybe there would be a possibility of having a peace agreement, but we don’t know when. But before we move to do that, we have to get approval from our people through a referendum to make sure it’s fully supported by our people. This is a very important matter that deserves a referendum.
Ok, again, in the international arena, we want to improve relations with the US, for sure. We also want to have an FTA or a similar type of arrangement. But at the moment, all we can hope for is the TIFA—Trade and Investment Framework Agreement. So we hope we could resume the negotiations on that. Of course, Bill will say: “Hey, don’t forget the beef!” [laughter] No, I will not forget. We will try. You will have beef a few moments later. [laughter] But on the other hand, we hope we could do a lot of public communication with our people, let them understand the pros and cons of such a policy, and hopefully they will agree in the future. But on the other hand, we hope that beef issue will not derail the normal negotiations between Taiwan and the US on TIFA, so that we could have closer economic ties with the US. Particularly while we have such close relations with the mainland, we certainly want to do the same with the United States, which of course is a very, very old and good friend. On the other hand, as you can see, before I took office, there were 54 countries and territories which gave Taiwan visa-free status. When former president Lee handed power over to former president Chen, it was 54. And when former president Chen handed power over to me, it was also 54. No change. But now, I have changed that from 54 to 124. For those of you who travel a lot, you will see the difference. But of course, when I go to the countryside, some people don’t understand the importance. It’s not just the saving of the visa fee. It’s not just the saving of time. It’s an important element of dignity. The countries who gave us visa-free status are showing respect Taiwan as a decent country. They understand the quality of our people. That is why they gave us that treatment. Countries require visas, that’s normal. But for visa-free treatment, that is sometimes a very… it’s kind of a privilege. We have to understand this. So, well, let me just sum up by letting you know that, you may ask me, “President Ma, why do you think your people should vote for you?” My answer is that I have changed Taiwan. I have successfully transformed and upgraded Taiwan. And I want to do more. So I want four more years. And I think I will make it. [applause] Thank you. During the process, I promise you, I won’t forget you, my American friends. We will continue to work together. As Secretary of State Hillary Clinton said, Taiwan and the United States are close security and economic partners. I fully endorse that statement. Thank you very much.
【Source: Office of the President】