Q1: First of all, I just wanted to say thank you to the president for taking the time to meet with us today. This is obviously an important time for Taiwan. With elections just a few months away, there are obviously several important themes and issues that we'd like to talk about.
Perhaps we might start with a general question about the president's record and the coming years. What do you regard as the biggest success of your first term, and if you get re-elected, what is going to be your most important policy goal?
A: In talking about our success in the areas of economy and finance, I think the successes that we have been able to achieve over the past three years lie in the fact that despite a global economic downturn, we were able to overcome this difficult challenge and have some positive results in financial reforms and enhancing Taiwan's international competitiveness. This was accomplished thanks to the concerted efforts of various government teams and everyone working hard together, especially the diligence of Taiwan's 23 million people, which have allowed Taiwan to enjoy the fruits of success that we have today despite the numerous obstacles that confronted us.
Regarding the economic downturn that faced every country in 2000, just as I was assuming the presidency on May 20, the whole world was faced with the bursting of the Internet bubble and Taiwan was no exception. After reaching its highest point in March 2000, the US NASDAQ index began to fall, and naturally, this drop affected Taiwan, which registered an economic growth rate of negative 2.18 percent in 2001. By 2002, however, our growth rate had returned to a more normal level of 3.59 percent. In the second quarter of 2003, though, Taiwan again registered a negative growth rate of 0.08 percent due to the impact of the SARS epidemic. However, the figure quickly rebounded in the third and fourth quarters to achieve an average growth rate of 4.50 percent for the second half of 2003. In the first half of 2003, Taiwan had an economic growth rate of 1.70 percent, and it is estimated that the average rate for this year will be 3.15 percent. We are optimistic that next year we will be able to increase that figure to 5 percent.
In terms of financial reforms, we were very happy that Taiwan was able to survive the Asian Financial Crisis relatively unscathed. However, at the end of 2000 and in early 2001, some thought that there might be a domestic financial crisis here in Taiwan. However, the government took very cautious steps, responded in the best possible way, and did not allow a domestic financial crisis to occur. That is why we feel that financial reforms are our first priority. We decided on 2001 as the first year of our financial reform. In that year, we passed six major laws relating to financial reform, and this year we have passed the Agricultural Finance Law as well as the Financial Supervisory Committee Organization Act.
My administration hopes to increase financing for the RTC Fund, but this proposal has been stalled in the Legislative Yuan. However, this government still hopes to take action to improve our financial structure by lowering NPL ratios and writing off bad loans. For example, in 2001, the overall NPL ratio stood at 8.04 percent; however, with the writing off of bad loans this figure was reduced to 6.12 percent in 2002. In the first half of this year, the NPL ratio was down to 5.62 percent. Most recently in November, the seven biggest banks in Taiwan had a non-performing loan ratio of 4.72 percent. This is indeed quite a remarkable record.
In terms of enhancing Taiwan's international competitiveness, the World Economic Forum this year ranked Taiwan's growth competitiveness at number five in the world. Last year we ranked sixth, two years ago seventh, and in 2000 we ranked tenth in the world. Although the progress might seem somewhat limited, Taiwan continues to advance. According to a report released by IMD, among countries with a population of more than 20 million, Taiwan's international competitiveness ranked number six in the world after ranking number seven last year.
Furthermore, this administration also encourages the establishment of operations headquarters and research and development centers in Taiwan. So far, 168 domestic and foreign enterprises have set up operations headquarters here in Taiwan. On top of that, 15 multinational companies—including Hewlett Packard, Intel and Microsoft—have set up R&D centers here in Taiwan, in addition to the R&D centers established by 63 local companies here in Taiwan.
Q2: If the president wins the next election, will his priority in the next term be economic or have to do with Taiwanese identity and cross-strait relations? Because it seems in most countries and in most elections, the main issues tend to be economic livelihood; but looking at the campaign in Taiwan, it seems that the main issues floating before the president seem to be about cross-strait relations, Taiwanese identity, and constitutional reform. So what will be the priority in the next term, should the president win?
A: Our priorities lie in reviving the economy, instituting comprehensive reforms, giving the people a better livelihood, and making Taiwan a normal, complete, and great country. This is not just our dream, but also our vision and goal.
Concerning our efforts to reinvigorate Taiwan's economy, in May of last year we proposed our Challenge 2008 National Development Plan. After a year and a half of planning and evaluation, we have now proposed a blueprint for the Ten New Major Construction Projects, and will allocate NT$500 billion over five years. If we can obtain the Legislative Yuan's support, we predict that the Ten New Major Construction Projects will be able to create 64,000 new jobs each year over the next five years and increase Taiwan's economic growth rate by 1.03 percent annually. We are confident that Taiwan's economic growth rate will top 5 percent in 2004. In 2005—next year—the unemployment rate will fall to less than 4 percent. And by 2006, R&D expenditures will account for more than 3 percent of our GDP.
At the same time, I am also confident that should I succeed in my bid for re-election, we will be able to put an end to the three major sources of chaos. The first is chaos in our political environment, the second is chaos within our legislature, and the third is chaos regarding constitutional rule. Putting an end to these three sources of chaos should lead to the normalization of interactions between the governing and opposition parties. It can also bring about further normalization of cross-strait relations once we have broken through the deadlock. Moreover, in the legislative elections at the end of next year, we can win a majority of seats and will be able to normalize relations between the executive and legislative branches. Then in 2006 we can push for a new constitution for Taiwan and finish our constitutional reform, which will enable us to build Taiwan into a normal, complete, and great democratic country.
Q3: I would like to ask some specific questions about the constitutional reform and referendum. But just before that, I would like to ask a general question, which is whether there is tension or a contradiction between economic development and economic progress in Taiwan and the issues of constitutional reform, referendums and cross-strait relations? Because clearly they create great tension with China and also with the United States, and that can affect the Taiwanese business community and the international business community. So is there tension or contradiction between these issues?
A: I believe that only by engaging in democratic reform and consolidating and deepening democracy in Taiwan can we ensure genuine and everlasting peace across the Strait. The more democratic Taiwan is, the more conducive it will be to improving and enhancing the investment climate and environment.
Q4: Obviously the plan for a referendum against war and missiles has met with a negative response from the United States administration. I'd like to hear the president's response or reaction to this US response. Will you consider not holding the referendum? How do you plan to respond to the US position? Will you send someone to the United States to communicate with them?
A: Referendums are a universal value and a basic human right. Many countries in the world have enjoyed this basic human right for more than a hundred years. Even though some have had referendums for only a few years, they share a common experience. Taiwan aspires to be a democratic country. I am confident that most people in the world believe that referendums are a universal value and a basic human right, so why should the 23 million people of Taiwan be deprived of this right or have this right restricted? According to our understanding, in the year 2003, at least 21 countries in the world held national referendums. In countries that were once under communist rule, and even in countries with very low national incomes, people enjoy the basic right of referendum. Why then are the people of Taiwan accused of being provocative when they pursue this right of referendum?
On March 20 of next year, we will exercise the right of referendum in accordance with the recently passed Referendum Act. This referendum will have no bearing on the issue of unification or independence, nor will it contradict my "five noes" pledge. We will hold the referendum in order to maintain the status quo—the status quo of sustainable development for Taiwan, the status quo of a sovereign independent Taiwan, and the status quo of peace without being subject to the threat of missiles. In the face of 496 missiles deployed by China targeting Taiwan and the refusal to renounce the use of force against us, the 23 million people of Taiwan want to use this referendum to voice their wishes for peace and democracy, as well as their stance against missiles and war. I don't think such wishes should be suppressed or stopped. We do not intend to change the status quo; instead, we want to avoid the status quo being changed.
Q5: Although you have explained very clearly, the United States seems to have very serious concerns about this. Since the US is Taiwan's closest ally, do you think relations between the United States and Taiwan will change or suffer as a result of your proposal for referendum? If so, what do you intend to do to minimize the damage and tension?
A: This pressure comes from China. The United States expressed such concerns under pressure from China. But clearly, what Taiwan is doing is based on the American values and spirit of democracy, freedom, human rights, and peace. We are trying to let these values take root in Taiwan. Is it wrong for the people of Taiwan to pursue democracy and defend peace?
During his recent visit to London, President Bush said that the United States and Great Britain share not only security and economic alliances, but more importantly, an alliance of common values. I believe that Taiwan and the United States also share an alliance of universal values of democracy, freedom, peace, and human rights. We all have the same beliefs.
Q6: I have a bigger question here. That is, if you look at the economic and business and political relationship between the United States and China, it does seem to be getting much closer. If you look at the statements made by the Bush administration when it first assumed office, and compare them to what they are saying now, it does seem that the US relationship with Beijing is getting closer. From the perspective of Taiwan, is it realistic to expect the same degree of support given the degree of investment by US businesses in China? Is it realistic to expect any more military support if that was necessary? And if the relationship between the United States and China has undergone a fundamental change, will it affect relations between Taiwan and China?
A: After President Bush's meeting with Chinese Premier Wen Jiabao, the White House spokesperson has repeatedly emphasized that Taiwan-US relations have not changed and that US policy toward Taiwan has not been affected either.
The White House spokesperson specifically said that if China dares to attack Taiwan, the United States would be there right through to the end. We particularly appreciate a statement by President Bush in April 2001 that the United States would do whatever it takes to help Taiwan defend itself.
President Bush has said that he does not want to see the status quo of Taiwan being changed unilaterally and we have repeatedly emphasized and given the assurance that we do not intend to change the status quo, but instead, we want to defend and maintain Taiwan’s status quo. President Bush and I share a consensus on maintaining the status quo of Taiwan and avoiding the status quo from being changed unilaterally.
We are very pleased to see improved relations between the United States and China. However, Taiwan's interests should not become a bargaining chip, or be sacrificed or traded off.
The United States government has repeatedly assured us that Taiwan's interests will definitely not be sacrificed in the improvement and enhancement of relations between the US and China. For example, when I traveled through the United States on transit at the end of October, the degree of hospitality that I received was unprecedented. We appreciate this very much.
Q7: I just want to be very, very clear. The president will go ahead with the referendum even if it seems the United States is opposed to it?
A: Unless China responds to our request with goodwill and agrees to immediately withdraw all the missiles and openly renounce the use of force against Taiwan—if they do this—then we will consider not holding a referendum on March 20 of next year.
Q8: I'd like to ask some questions about the issue of the defensive referendum. The president has defined the defensive referendum as giving voice to the wishes of Taiwan's people, in opposition to missiles, in favor of peace, and opposing China's military threat. What if, however, it just so happened that before holding the referendum, China steps up its military threats and engages in verbal attacks and military intimidation? Would the president then plan to add further items to the topic of the referendum to be held on the same day as the presidential election? What I mean by China stepping up its military threat is that if there were something like the crisis situation in the Taiwan Strait in 1996, would the president add other topics to the referendum?
A: Since we define it as a defensive referendum, of course we oppose the missiles and oppose war; this is the most basic and modest kind of call or demand. According to Article 17 of the Referendum Act, if our country is faced with an imminent threat to our sovereignty, then the president, with the approval of the cabinet, may resolve to put issues of national security to vote as a referendum. We do not wish to address the issue of Taiwan sovereignty in the referendum, as I have made the “five noes” pledge. One precondition of the “five noes,” however, is that China has no intention of using force against Taiwan. If they really do use military might against Taiwan, then the “five noes” pledge would no longer be valid. We do not want to see this happen.
Q9: Just to be clear, would missile tests count as an offensive action for which you would be required to change your referendum? Because I was in Hong Kong in 1996 and I remember the missile tests then. Would missile tests be regarded as an aggressive act?
A: Yes. Of course it is a provocation. It is an attack.
Q10:Just to make sure we've understood: You're saying that a missile test which fell near would be an aggressive act?
A: Yes. Of course this is very clearly a provocative act.
Q11:I'd like to be clear what that would therefore mean in terms of the referendum. Would the referendum be changed to respond to that? If there were missile tests ahead of the election, would the nature of the referendum change?
A: Of course, we don't want to see this happen, but if it does happen we won't exclude any possibility.
Q12:Including dropping the “five noes?”
A: If the precondition is not met, the “five noes” would of course no longer exist.
Q13: I just want to ask a couple of broader, more in-depth, long-term questions. You once said that you were not satisfied with the current version of the Referendum Act. You also do not wish to go through the Legislature when pushing for constitutional reform. Can you elaborate on how and when you plan to propose Taiwan's new constitution? What procedure will you follow to amend the Referendum Act?
A: The current Constitution of the Republic of China was promulgated and implemented on mainland China in 1947. The 23 million people of Taiwan did not truly participate in the process or approve the Constitution. At least two-thirds of the current 175 articles in our Constitution need to be amended. Whether we want to adopt a presidential system like that of the United States or a parliamentary system like that of Great Britain, we must make a choice. Do we want a three-branch division of power or a five-branch division of power? We must make a decision. We have different views on whether the president should be elected by absolute majority or relative majority. It has always been hotly debated as to whether we should adopt a three-tier or a two-tier government. On several other issues, such as those concerning basic human rights, economic development, and the care and welfare of disadvantaged groups, we have to refer to articles in the Constitution.
If we want to have an additional vice premier or an additional vice president of the Legislative Yuan, we will need to amend the Constitution. If we want to lower the voting age from the present 20 years to 18 years so that people can begin to enjoy their citizens’ rights at the age of 18, we will need to engage in constitutional amendments. During the decade from 1991 to the year 2000, we had six rounds of constitutional amendments, but even today none of us are satisfied. Neither the governing party nor the opposition is satisfied with the results. We do not want to repeat our past mistakes. We want to complete all tasks with one stroke. However, it will be a major undertaking of tremendous effort, given the current constitutional amendment procedure, the high threshold of approval by a three-fourths majority in the Legislature, and the need to elect 300 National Assembly delegates for the purpose of voting on constitutional amendments. We will not be able to accomplish a comprehensive or extensive revision of the Constitution. Instead, we will still be repeating our past mistakes. Because of the high threshold requiring approval by three-fourths of the legislators on constitutional amendments, we will have to make compromises and concessions. With this high threshold in place, the result is that a quarter of the Legislative Yuan can out-vote the three-quarter majority. That means that the majority has to submit to the minority. Therefore, we can anticipate that the Constitution can never be amended. Even if we amend it six times in the next ten years, we will never be able to do a good job. This is why we hope to proceed by introducing a new constitution. A constitution, after all, reflects the will of the people. We propose that a revised constitution, a new constitution, be put forth by a constitutional convention, and that the final decision be made by the people through a national referendum.
Like Taiwan, Poland had six rounds of constitutional amendments in a decade’s time from 1987 to 1996. Eventually, in 1997, it introduced a new constitution to resolve its constitutional issues. China has had four constitutions. In light of these examples, why would it be so difficult for Taiwan to introduce a new constitution?
Q14:I'm sorry that we've taken up so much of your time. Perhaps we could just ask a final question, which in some respect is perhaps the most important question. It is a question about long-term trends and fundamental trends about relations between Taiwan and China, which on the one hand, a lot of politics and society nowadays is driven by economic forces, and if you look at the economic integration between Taiwan and China, that would argue for bringing Taiwan and China much closer together. On the other hand, there are some forces about culture, identity, films, literature, et cetera, which Taiwan develops itself and has a very strong voice. Furthermore, there seems to be a growing confidence and growing sense of autonomy in Taiwan. In the next five or ten years, or even further, will the back-and-forth struggle between these forces push Taiwan closer to China or pull it farther away?
A: Two separate countries can share international economic ties. They can engage in international commercial exchanges and economic cooperation. Given the geographical proximity to China, it is understandable that cross-strait economic and trade relations will grow closer and more active.
According to a number of public opinion polls, there is a growing sense of Taiwanese identity. More than 50 percent of the people in Taiwan now regard themselves as Taiwanese and not Chinese. Furthermore, with respect to the future of the cross-strait relationship, there are more and more people who support independence for Taiwan. This is a trend worth observing. We believe there will still be closer economic and trade ties between the two sides; however, politically, they will grow further apart, and I don't see any conflict or contradiction in this.
I can only say this: If China continues to deploy more missiles against Taiwan and continues to threaten Taiwan with the use of force, it would only drive Taiwan further away. Not only would it invite a backlash from the people of Taiwan, but at the same time would cause even more people to see China as an enemy country.
We hope that the Beijing authorities can make a greater effort to listen to the true voices of the 23 million people of Taiwan, instead of sitting in Zhongnanhai and listening only to the good news that they are willing to hear while ignoring the genuine opinions of the people of Taiwan.