President Ma Ying-jeou, accompanied by Vice President Wu Den-yih, attended a Lunar New Year luncheon for representatives of Taiwan-invested enterprises based in mainland China at the Grand Hotel in Taipei on February 24. In addition to expressing his best wishes and Lunar New Year greetings to the attendees, the president also stressed that the government will continue to embrace the "1992 Consensus," whereby each side acknowledges the existence of "one China" but maintains its own interpretation of what that means, as the foundation for the sustainable development of cross-strait relations.
In remarks, President Ma stated that in his 2014 New Year's Day Message he proclaimed that the government would make every effort to promote economic growth and hoped to realize economic breakthroughs. The Executive Yuan's Directorate-General of Budget, Accounting and Statistics has over the course of the past year adjusted Taiwan's economic growth forecast five times, with 2014 growth now expected to register 3.74%, higher than the 2.82% projection at the beginning of the year. This increase of nearly one full percentage point reflects the continued efforts of the public and private sectors, which have enabled Taiwan's economy to gradually recover. In addition, our economic growth rate last year surpassed that of Singapore, Korea, and Hong Kong, making 2014 the first time in 16 years that Taiwan's growth rate was the strongest of the four Asian tigers. The contributions of the corporate community in achieving this have been considerable, the president stated.
The president also noted that the Taiwan Stock Exchange Index closed ahead of the Lunar New Year on February 13 at 9,529 points, the highest level at the end of a lunar year in nearly 15 years. Based on 9.43 million active stock accounts throughout Taiwan, the average investor earned NT$366,000 from stock market investments over the past year. Furthermore, the government over the past six years has created nearly 700,000 jobs, enabling the average unemployment rate for 2014 to fall to 3.96%, the lowest since 2008. At the same time, the number of tourists visiting Taiwan last year reached 9.91 million, with tourists from mainland China comprising over one-third of the total, and travelers from Southeast Asia also accounting for a considerable number. The number of tourist visits this year is poised to exceed 10 million, with the president attributing this to the efforts of the entire public. This shows that Taiwan is becoming more and more popular as a tourist destination.
The president also elaborated on a variety of issues associated with the course of development of cross-strait relations. First, the improvement of cross-strait ties has been substantively beneficial to Taiwan's economy, he said. While some have expressed concern that Taiwan has become overly reliant on mainland China, which could impact Taiwan's overall economic development, the president stated that in fact mainland China is the largest trading partner for 17 of its 23 neighbors. Consequently, the two sides of the Taiwan Strait have close economic and trade dealings. The president went on to say that since he took office in 2008, the percentage of Taiwan's exports to mainland China and Hong Kong has decreased from 40% to 39% as of last year, which is largely a reflection of the government's efforts to diversify Taiwan's export markets. While the volume of cross-strait trade has risen, the percentage of that trade as a part of total exports has declined, which has been helpful in reducing Taiwan's reliance on the mainland.
The president then acknowledged that some circles have criticized the signing of the Cross-Straits Economic Cooperation Framework Agreement (ECFA), saying that the benefits have only been enjoyed by conglomerates, and not by small- and medium-sized enterprises (SMEs). He pointed, however, to data from the Ministry of Economic Affairs showing that from January to November of last year, SMEs accounted for 49.96% of the exports under the ECFA's early harvest list, and that SMEs provided components for products made by a number of major enterprises. In particular, Taiwan is home to approximately 1.33 million SMEs, accounting for about 98% of all Taiwan enterprises, and these companies are bound to directly or indirectly participate in, and thus benefit from, the ECFA. The president affirmed that the ECFA is certainly beneficial. Given the relatively low percentage of products included in the ECFA early harvest list, the government is working as quickly as possible to iron out the Cross-Strait Trade in Goods Agreement to enable even more enterprises to benefit.
The president also mentioned that the government is actively encouraging Taiwan-invested companies to come back and invest here. He pointed out that a company he recently visited that specializes in industrial computers, Advantech Co., Ltd. , intends to invest NT$3.5 billion here and hire about 2,200 local workers. In fact, Taiwan-invested companies last year returned to invest NT$54 billion here, with those investments set to generate over 24,000 jobs. Roughly 80% of these companies returning to invest in Taiwan are SMEs, making them an irreplaceable role in our economy that is undeniable.
The president also said that cross-strait relations have become increasingly stable as a result of cross-strait trade, investment, and educational activities. Citing as an example the policy of allowing mainland students to come to Taiwan to study, the president noted that prior to taking office, 823 mainland Chinese students were studying here. That number has now grown 30-fold to over 32,000. He said that enabling young people from across the Strait to interact from an early age would help reduce misunderstandings, an extremely important factor in realizing long term, sustainable cross-strait peace.
The president remarked that Daniel Russel, US Assistant Secretary of State for East Asian and Pacific Affairs publicly stated at a press conference the other day that the improvement in cross-strait relations has been a major reason for the smooth development of Taiwan-US relations in recent years. This is an important spillover effect from the improved cross-strait relationship, he said, expressing hope that this trend and approach will continue. The president stated that no matter which party is in power, we have limited options in dealing with mainland China, and should think about ways to derive the greatest benefit from those options. Over the past six years, the government has worked to find the most sustainable and viable path forward in its relationships with the United States, Japan, and mainland China, and this is extremely important for national development, he said.
Looking forward, the president emphasized that the government will continue to embrace the "1992 Consensus," whereby each side acknowledges the existence of "one China" but maintains its own interpretation of what that means, as the foundation for the sustainable development of cross-strait relations. Although over the past year the domestic political situation has changed and the cross-strait situation has had a few setbacks, the government will gradually work these things out. The direction of the nation's policies at present is to reflect general trends and the aspirations of the people, he said, furthermore stating that, "We will courageously move forward with no thought of retreat, and no hesitation." The president ended by expressing his hope that Taiwan-invested companies will continue to work together with the government to promote cross-strait peace and prosperity.