President Sorenson, Friends of the American Chamber of Commerce, Distinguished Guests: Good evening.
Tonight I have the honor of attending my third Hsieh Nien Fan Banquet of the American Chamber of Commerce, and it is my great pleasure to join you on this special occasion at the opening of the Year of the Goat. First of all, in the age-old "Chinese New Year" tradition, I would like to wish you business prosperity with the beginning of spring--may each of you see your fortunes blossom like flowers in May.
This is truly a special day for me, because today happens to be my wedding anniversary. I must apologize in advance because I will have to leave early and rush home to have dinner with my wife. But, no matter how much today means to me, I always put official duty ahead of my own personal business. I wanted to join you all tonight in person to have the opportunity to express my sincerest appreciation for your longstanding support of Taiwan and for your many contributions to the development of economic and trade ties between our two countries. We especially commend you for the Chamber's annual Taiwan White Paper, which offers an invaluable perspective on the investment environment and our financial and economic policies. It is an excellent reference for the administration.
Looking back on the past year, Taiwan has encountered trials and tribulations both at home and abroad. However, we are not discouraged by these difficulties. As the Taiwanese saying goes, "Bearing hardships is the equivalent of taking tonics." This old adage means that we should regard economic downturn as a chance to accumulate our strength and turn possible crisis into opportunities.
In my New Year's Day Message, I proposed "one goal and two tasks" for my administration in this New Year. The "one goal" is to provide a better life for the people of Taiwan. The "two tasks" are "to revive the economy" and "to instate comprehensive reforms." What we have is clear direction, indomitable resolve, and concrete actions instead of slogans without substance. I am confident that, through the concerted efforts of the government, private sector and foreign businesses, we can overcome the current obstacles to rebuild prosperity and create yet another milestone for Taiwan's long-term development.
It is encouraging that, as the world economy begins to show signs of recovery, the local economy is also taking a turn for the better. Last year, Taiwan's economic growth rate reached 3.27 percent. According to a forecast by the International Monetary Fund, the global economy will grow by 3.5 percent this year, while Taiwan's growth rate will reach 4 percent, the most rapid pace in the past few years. At the end of this past January, our foreign exchange reserves totaled US$164.8 billion, an increase of US$42.6 billion compared with the same period last year.
A recent evaluation by the London-based Economist Intelligence Unit (EIU) shows that among the 60 countries surveyed, the business climate in Taiwan ranks 18th in the world and 3rd in Asia. Such figures support our confidence in the onset of economic recovery.
Though fully confident in our future economic development, we realize that Taiwan must confront increasingly fierce global competition, especially from China and its economic magnetism. In the face of unrelenting economic challenge, Taiwan must substantially improve the domestic investment climate, strengthen business research and development and marketing, encourage industrial transformation, and perfect the financial system in order to bolster competitiveness. To cope with the current economic situation, the Executive Yuan has launched a number of major initiatives, including the Challenge 2008 Six-Year National Development Plan, the Investing in Taiwan First Plan, the Infrastructure Expansion Plan and the Public-service Employment Expansion Plan. I would like to take this opportunity to call on American enterprises to increase investment in Taiwan. With Taiwan as a regional operating headquarters in Asia, US firms will be ideally positioned to take advantage of global business opportunities and capitalize on the coming global economic boom.
Another important task for our administration this year is "Comprehensive Reform," which encompasses financial reform, educational reform, judicial reform and political reform. With regard to financial reform--probably the area of greatest concern to the American Chamber of Commerce and other foreign businesses--the government is actively advocating for key legislative bills such as Amendments to the Regulations for the Establishment and Management of the Financial Restructure Fund under the Executive Yuan and the Organic Law of the Financial Supervision and Management Committee under the Executive Yuan. These steps will enhance the ability of our domestic financial institutions to alleviate and reduce the ratio of non-performing loans. We will then have stronger oversight mechanisms for our financial institutions. We are confident that passage of the legislation will bring about "2-5-8" financial reform, that is, in two years time, the reduction of the ratio of non-performing loans to fewer than five percent and increasing the capital adequacy ratio to at least eight percent.
Moreover, we are cracking down on financial crime and prosecuting major financial fraud cases in order to effectively deter further financial crime and ensure the stability of the system. Establishing a sound investment environment is the key to encouraging cooperation between foreign financial institutions and their domestic counterparts.
Of course, we will continue our program of government restructuring, striving to streamline governmental infrastructure and maximize administrative efficiency, in line with the concerns so often expressed by the Chamber. We are looking forward to fostering a favorable environment through our reform efforts, to increase competitiveness and realize our goal of economic revitalization.
I would also like to take this opportunity to reiterate our firm commitment to the protection of intellectual property rights (IPR). As a member of the World Trade Organization, Taiwan acknowledges its responsibility and obligation to uphold, defend, and protect intellectual property rights, a principal that is reflected in our current IPR policies; the implementation of these policies will correspondingly benefit Taiwan's own knowledge-based economy. In fact, last year alone, anti-piracy task forces set up by the Ministry of Justice and the Ministry of Economic Affairs investigated 5,000 cases, launched claims against 6,000 suspects, and exposed counterfeit goods valued at over US$300 million, our most impressive effort to date. This past January, the National Police Administration under the Ministry of the Interior established a special 200-member IPR Investigative Task Force to combat piracy. Government agencies are also evaluating measures for revising relevant laws that will allow for stiffer penalties for IPR offences and provide greater deterrence. Amendments to the Copyright Law that take into account U.S. recommendations will be forwarded to the Legislature for review. Meanwhile, Premier Yu will coordinate relevant governmental agencies to demonstrate our resolve in IPR protection issues. The government has also intensified consumer education efforts in synergy with our objectives.
The relationship between Taiwan and China is another topic of concern, and since taking office I have pursued peace and stability in the Taiwan Strait while exploring opportunities to break the stalemate. In my New Year's Day Message, I reiterated that both sides must mutually promote the constructive development of cross-strait relations based on the principle of goodwill reconciliation, active cooperation, and permanent peace. I also made an earnest call for both sides to strive toward building a framework of interaction for peace and stability, so as to bring about a breakthrough in the current impasse. Taipei and Beijing can begin by addressing economic and trade issues such as direct transportation links. Through such cooperation, both sides can build mutual trust and dissolve differences, thereby laying a sound foundation for long-term development. Peace and stability in the Taiwan Strait will not only ensure economic prosperity and the well-being of the peoples on either side of the Strait, but will likewise serve the interests of other East Asian countries as well. Here, let me once again offer my personal reassurance that throughout the rest of my current term as President, Taiwan will make every possible effort to maintain peace and stability in the Taiwan Strait. There is no intention to cause surprises. We do hope that China will make the same efforts.
I look to the year ahead with much anticipation, knowing that it holds exciting developments in the realm of politics, the economy, and the cross-strait relationship. As faithful supporters of Taiwan's democratization and economic liberalization, you have all witnessed the goodwill and sincerity with which we have pursued stable cross-strait relations and maintained peace in the Taiwan Strait during the more than two years of my administration. In the upcoming years we will move forward with efforts to build confidence—especially among foreign corporations—in Taiwan's investment environment, giving priority to "investment first, the economy first, Taiwan first, investing in Taiwan first," so as to realize our 4-goal strategy of economic globalization and liberalization. I hope that you will continue working hand in hand with us to promote Taiwan's economic development and competitiveness to ensure lasting prosperity for the both the United States and Taiwan. Again, I thank you for your invitation to join you here tonight. For your affirmation and support, we extend our sincerest appreciation—both as a government and as a people.
In closing, I wish all of you happiness, success, and, most of all, peace throughout the Year of the Goat. Thank you.