Office of the President Republic of China(Taiwan)

Legislative Yuan President Wang Jin-Pyng, President Tommy E. Remengesau, Jr. of the Republic of Palau; Prime Minister and Mrs. Gordon Darcy Lilo of Solomon Islands, Vice President Aja Dr. Isatou Njie-Saidy of the Republic of The Gambia; Delegations from abroad; Members of the diplomatic corps; Vice President Wu; Presidents of the Five Yuan of the ROC; Senior Advisors and National Policy Advisors; Heads of government agencies; Overseas compatriots; My fellow citizens: Good morning to you all!

Today is the 102nd National Day of our beloved Republic of China. On this day we happily celebrate the birthday of our nation and of course want to give thanks for the efforts of our predecessors. But more importantly, we want to stride toward the future. Our future will be of our own choosing. We need to ask ourselves a few questions: On the path of democratization, do we want to choose a civil society characterized by reason and tolerance? Or do we choose political infighting stemming from suspicion and confrontation? In cross-strait relations, do we want to choose mutually beneficial cross-strait rapprochement? Or do we choose a cross-strait standoff of tension and conflict? In the global economy, do we wish to be a bold nation that faces the challenges of free trade head on? Or do we choose to be a feeble people who hide beneath the umbrella of protectionism? These issues are all key to national development. These are crucial choices that the entire public must face together.

National strategy: Remake the nation, identify our niche, find a viable way forward
In the face of these issues and choices, it is my duty as president to come up with a forward-looking and pragmatic national strategy. Domestically, this strategy must allow our country to remold its economy, politics, and society from the inside out. Externally, it must enable Taiwan to identify its niche amidst intense global economic competition, and to find a viable way forward within a complex international political environment. In short, this national strategy must allow our country to remold itself, find its proper place, and take a viable path forward.

Normalization of peace; institutionalization of exchanges
In the past, Taiwan chose confrontation and isolationism, allowing the Taiwan Strait to rank alongside the Korean Peninsula as one of the two main East Asian flash points. Today, our strategy is to uphold the values of freedom and democracy while promoting rapprochement and cooperation with mainland China. After these five years of effort, the Taiwan Strait today has become one of the most peaceful waterways and most prosperous passageways in Asia.

My fellow citizens: The people of both sides of the Taiwan Strait are all Chinese by ethnicity. Cross-strait relations are not international relations. In the past five years or so, based on the 1992 Consensus whereby each side acknowledges the existence of “one China” but maintains its own interpretation of what that means, the two sides of the Strait have signed 19 agreements that have brought about direct sea and air transport links, visits to Taiwan by tourists from mainland China, mutual judicial assistance, economic cooperation, and other such breakthroughs. We’ve seen a lot of progress. For example, three years ago the two sides signed the Cross-Straits Economic Cooperation Framework Agreement (ECFA). This past June we further signed the Cross-Strait Trade in Services Agreement. And just four days ago, former Vice President Vincent C. Siew, who acted as my representative at the APEC summit this year in Indonesia, held talks while there with Mr. Xi Jinping, the leader of mainland China. In the meantime Wang Yu-Chi, the minister of our Mainland Affairs Council, also met during APEC with Zhang Zhijun, the minister of the mainland’s Taiwan Affairs Office. It’s noteworthy that the two ministers greeted each other by their official titles. The two sides have achieved these results by pursuing a basic policy of “facing reality, not denying each other’s authority to govern, and together creating win-win solutions.” The two sides should utilize frequent contacts and interaction to boost political trust, and should continue expanding and deepening exchanges in a variety of fields to further the people’s welfare, while promoting the establishment of representative offices in each other’s territory to better serve their people. By this approach we can take cross-strait cooperation to a new level, and revitalize Chinese society.

Global access for our citizens; streamlined and reformed national defense
My fellow citizens, our strategy for peace has won unanimous international affirmation and secured substantive benefit and dignity for Taiwan. The ROC’s relations with its diplomatic partners remain stable, while our relations with the US, Japan, ASEAN, New Zealand, Australia, the European Union, and other countries with which we currently do not have diplomatic relations, are continually improving. Also, the number of countries and areas from which our nation has obtained visa-waiver or landing-visa treatment has recently increased by one, to 134. This means that, for 98% of the jurisdictions to which the people of Taiwan travel most often, a visa is no longer needed.

Our policy of “viable diplomacy” has yielded huge rewards this year, with concrete accomplishments coming almost monthly. In February, the ROC and the US signed an “Agreement on Privileges, Exemptions and Immunities,” which extends protections to each side’s diplomats. In March, we resumed talks with the US under the Trade and Investment Framework Agreement after a hiatus of six years, and there has been considerable progress already. In April, we signed a fisheries agreement with Japan, resolving fishery disputes that had vexed our two nations for over 40 years. And we did this while attaining the goal of “achieving great progress on fishing rights without making any concessions on sovereignty.” In May, we took part in the World Health Assembly for the fifth time, which generated many opportunities for bilateral meetings and dramatically boosted our international visibility. In July, our country signed an economic cooperation agreement with New Zealand. This is very significant because it is our first free-trade agreement with a non-diplomatic partner country. In August, we settled the dispute with the Philippines over the armed attack on our fishing vessel, the Guang Da Xing No. 28, securing justice for and upholding the rights and interests of our country’s fishermen. In September, we participated as a special guest at the International Civil Aviation Organization Assembly for the first time in 42 years. And just this month we sent former Vice President Siew to take part in the APEC summit as the leader’s representative. While there, he held bilateral talks with many leaders and leaders’ representatives from around the Asia-Pacific region, including the US, mainland China, and Japan, further creating the necessary preconditions for us to participate in regional economic integration through, for example, membership in the Trans-Pacific Partnership. So, the Republic of China now is not only a peacemaker, but also a promoter of international cooperation.

Fellow countrymen, a peace strategy cannot ignore risks. When we have a peaceful environment, we are better able to vigorously pursue national defense reforms. A robust national defense capability is the foundation underpinning our “resolute defense, effective deterrence” strategy. The armed forces deserve affirmation and respect for the contributions and sacrifices they have made for Taiwan’s security over the last six decades and more. Over the past few years, we have continued to purchase weapons of a defensive nature. We have begun putting a volunteer military service system in place, and have strengthened our technological capacity for warfare in order to further safeguard Taiwan’s security.

After the tragic incident with army corporal Hong Zhongqiu in July, we promptly amended the law so that court martial cases are transferred to civilian courts, and began a comprehensive reform of military administration. While we must protect the human rights of soldiers and maintain discipline within the military, we must also improve the combat readiness of our military forces. We intend to ensure that our children can serve in the military with peace of mind, and that they can learn professional skills while they are there. And, more importantly, we want to boost morale among our troops and restore their sense of honor, so that they become respected by the public. These are my pledges to the nation.

Redefining Taiwan’s economy: A free economic island and key value chain
Fellow countrymen, Taiwan’s economy is facing the twin challenges of globalization and regional integration. We must redefine ourselves. On the one hand, we must transform Taiwan into a global supplier of key components and precision equipment, as well as into a pioneer of innovative models for the service industry. On the other, we must actively engage in global competition and attract investment from around the world in order to develop export markets for our commodities and services. This will pave the way for Taiwan to truely become a “free economic island.”

We are in the midst of integrating industrial and academic resources, and developing ten fundamental industrial technologies so that they take root in Taiwan and form the foundation for industrial innovation and upgrading in the future. We must actively help companies transform into “backbone enterprises” so they can develop key technologies and gradually establish themselves as “hidden champions” in the global supply chain.

In order to become a free economic island, Taiwan must comprehensively take part in regional economic integration and speed up the promotion of free economic pilot zones. There is nothing optional about our current situation; we have fallen well behind other countries, and the gap absolutely must be closed. According to 2012 statistics, as a result of obtaining free-trade agreements, Singapore received tariff exemptions or preferential rates on US$63 out of every US$100 worth of trade, and the corresponding figure for the Republic of Korea (ROK) was US$34. For Taiwan, this figure initially stood at just US$0.14. Now, three years after the ECFA came into effect, it has increased to US$4, which is still far behind Singapore and the ROK. Fellow citizens, how can we not be in a hurry to catch up?

We signed a Trade in Services Agreement with mainland China in June that could give a big boost to our service industry. Moreover, it could create the conditions for our participation in regional economic integration, and could potentially generate more job opportunities for our people. A good case in point is 31-year-old Ms. Mayuki Chou, who is the brand director of an online retailer based in Chiayi City called Tokyo Fashion. She told me that she firmly supports the signing of this agreement, since the preferential treatment for e-commerce businesses that the government has managed to secure is unprecedented. She feels it will allow many more excellent online stores like hers to set up official websites in mainland China and make inroads into the international market with their own brands.

Similarly, the chairman of Taipei-based online game developer XPEC Entertainment, Aaron Hsu, also told me that the review and approval process for bringing video game content to mainland China used to take at least six months, and sometimes dragged on seemingly forever. However, the Trade in Services Agreement will dramatically shorten the time to two months. This will be a big boost for Taiwan’s video game companies eager to test the mainland market.

Another example is 85°C Café, which anyone in Taiwan will be familiar with. It began life as a corner coffee shop nine years ago in New Taipei City’s Yonghe District, but today has made its way to Hong Kong, mainland China, the United States, and Australia after prospering in Taiwan. Of the 744 outlets it had around the world as of August 2013, 340 are in Taiwan, fully 395 are in mainland China, and nine are in the US and Australia. Its chairman, Wu Cheng-hsueh, shared with me his plan to set up an “85 Academy” in Taiwan to train 8,000 local recruits to meet the massive human resource requirements for opening outlets worldwide. He sees it as a way to give something back to his homeland.

Fellow countrymen, as president, I definitely want to help our young people realize their dreams. Like me, these courageous young people see limitless opportunities. Taiwan has many service sector entrepreneurs like this, so I say, why not let them try out their wings? Let’s give them a chance to make their dreams come true!

In addition, the free economic pilot zones (FEPZs) have already entered the launch phase. The Executive Yuan has relaxed 12 regulations to dramatically streamline customs procedures applying to pilot zone firms when they outsource processing operations, so that new operating models based on smart logistics can be gradually established in these zones. The Shanghai Free Trade Zone officially opened recently, giving us yet another competitor. Therefore, we must step up efforts to open up our market. The Executive Yuan is actively deliberating on whether to allow other industrial activities in the FEPZs, such as the financial sector’s wealth and asset management services. This is the right direction. We should expand the scope of liberalization for both domestic and international financial and economic activities. This will help Taiwan to advance more quickly toward the goal of becoming a “free economic island.” We hope these liberalization measures, along with other industrial development plans, will generate NT$300 billion worth of investment and create 45,000 jobs in the next two years.

I would like to stress that only by opening up our market will Taiwan’s young people have a grand stage for realizing their grand hopes. In this era of global competition, the use of labor has become more internationalized and flexible, so we have to put greater emphasis on investing in our youth than before. The government is stepping up efforts to develop a policy aimed at increasing employment opportunities for young people. The idea is to make them more employable and help them realize their dreams of starting businesses and finding jobs. In recent years, young students from Taiwan have won high marks in international invention and design competitions. This clearly demonstrates the effectiveness of our country’s promotion of creativity education and cooperation between industry and academia. My fellow countrymen—“grand liberalization, grand skill sets, grand stage, and grand dreams”—these are the grand pledges we make to our young people!

My fellow countrymen, our hope is that Taiwan will become a “free economic island” characterized by what I like to call “the 3H’s”—high productivity in its people, high added-value in its products, and most importantly, high incomes and well-being for its citizens as a result. This kind of Taiwan will become the top investment choice for businesses around the world. And for our people, it will be a happy home. However, unless we have the broadness of mind and courage to open up to the world, this will be beyond our reach.

Some are concerned that liberalization will have a negative impact on our country. However, economic competitiveness has always been Taiwan’s strength. The flexibility and resilience of our enterprises, as well as our progress in many global competitiveness rankings, prove that our economy is strong and robust. The government has made thorough preparations for the possible adverse effects of liberalization. My fellow citizens, there is no need to sell ourselves short. Fear of competition will cause our economy to wither. Only if we have the courage to compete can we create economic prosperity. This is the only way forward for the structural transformation of Taiwan’s economy.

Embracing a civil society; showing greater concern for the disadvantaged
My fellow countrymen, it is not just our economy that should be aligned with global trends. Our entire civilization must be aligned, as well. To my way of thinking, there are two indicators by which the degree of civilization in Taiwan’s society can be measured: its civil society, and its concern for the disadvantaged.

Along the path to democratization, my responsibility as president is to continue reinforcing democratic beliefs and culture so as to build up civil society. When we established democracy, we learned as we went; now we need to put civil society into practice in a nation that is already democratic. In concrete terms, a mature civil society demonstrates high-quality democracy. That is to say, under the principle of constitutionalism, human rights are protected, the rule of law is thoroughly implemented, and the judiciary is independent and impartial, so civil society is able to thrive. Under this philosophy, my foremost mission as president is to respect the Constitution and implement constitutional governance.

Fellow countrymen, I have full confidence in our society. We seek a civil society where diversity and tolerance are valued, governance is rational, citizens are friendly and caring, and government is actively responsive. Through dialogue, the citizenry and the government can jointly promote social progress, realize social reform, and foster rational competition among political parties. This may perhaps be a painful learning process that involves a lot of trial and error, but the fruits of this effort will allow us to savor the sweet reward of a happy Taiwan.

Anyone who comes to Taiwan discovers an abundance of volunteers and kind-hearted people. This is the most impressive thing about our country! Society has compassion, and the government has heart. We have amended the Public Assistance Act to raise the poverty line, thereby benefiting 660,000 disadvantaged people. Five-year-olds have been exempt from tuition since the 2011 school year, and subsidies have been made available to fund childcare allowances and parental leave allowances. These programs have benefited hundreds of thousands of people thus far. More importantly, the government has launched a National Pension scheme and a Labor Insurance Annuity scheme, thus providing pensions to 3.75 million people previously without social insurance, and to 9.62 million laborers.

In Taiwan, we care about the disadvantaged and gladly offer them assistance. We are building a vigorous civil society that cares for the disadvantaged. This is what makes Taiwan a benchmark for the Chinese-speaking world, and enables us to hold our heads high anywhere around the globe.

A covenant with our children
My fellow countrymen, now is the time to unite and move forward. The goal is clear, and our commitment firm: We must bequeath to our children a liberalized and prosperous economic environment, a rational and caring civil society, a peaceful cross-strait relationship, and a friendly and cooperative space for ourselves in the international community. This is our niche, and our way forward. This is the ROC’s national strategy.

My fellow countrymen, we do not fear a long road, only a lack of direction. We do not fear difficulties, only faltering will. As long as we stay the course and have the courage to march forward, hope will be there before us.

Now, let us all join in proclaiming:
Long live freedom and democracy!
Long live the Republic of China!
Go Taiwan!

Thank you, everyone!