President Henson, Assistant Secretary Lash, distinguished guests, ladies and gentlemen, good evening!
The American Chamber of Commerce hosts its annual Hsieh Nan Fan banquet this evening and once again, I am honored and privileged to join you on this grand occasion. Let me begin by wishing you in advance a happy and successful Year of the Horse as Lunar New Year approaches. Meanwhile, I want to express my sincere respect and gratitude for your outstanding contributions to the economic development of Taiwan over the past years.
The Chamber's efforts have helped economic and trade relations between Taiwan and the United States grow closer in the last year, demonstrating a mutually beneficial and prosperous relationship. For many years, the Chamber has been a bridge between foreign businesses in Taiwan and our government, and has thus contributed enormously to Taiwan's economic and trade development. The Chamber's annual Taiwan White Paper has constructive advice on Taiwan's current financial and economic policies and investment environment. This publication presents the opinion of the foreign business community in Taiwan, and is a valuable reference for our government.
In the December elections for county magistrates, city mayors, and legislators, the Taiwanese people exercised their democratic rights. Both domestic and foreign media considered this a fair and clean election, another step forward in our democratic development. The government's commitment to crack down on "black gold"politics and vote buying immediately improved the image of the Legislative Yuan.
After the elections, the ruling party's seats in the Legislature increased. This greatly helps stabilize our political situation and will allow us to implement major policies in the future. In the upcoming local elections for village and township mayors and councilors, the government will continue to eradicate vote buying and "black gold" politics, as we strive to hold fair and clean elections. Meanwhile, I call on all political parties and candidates to campaign cleanly, strengthening democratic culture in Taiwan in the new century.
On January 1 of this year, we entered the World Trade Organization. This is both a gratifying moment and the beginning of another milestone for Taiwan. From now on, Taiwan will engage in free trade with the other 143 WTO members, including Beijing, on an equal basis. WTO membership will facilitate closer relations between Taiwan and the rest of the world. In the future, we will fulfill our responsibilities as a member of the international community and abide by WTO regulations. We are also willing to treat each of our trading partners based on the principles of cooperation, mutual prosperity, equality and reciprocity.
WTO membership will inevitably bring many challenges, particularly impacting traditional industry and agriculture, which may increase unemployment. On the other hand, entry also brings us new opportunities. Taiwan's high-technology industries, such as the electronics and information-technology industries, will benefit as a result of tariff reductions and market opening by other countries. With a small domestic market, Taiwan is heavily dependent on foreign markets for its economic development. Therefore, the most important task for us at this stage is to maintain a stable economic and trade relationship with other countries and sustainable economic growth. Taiwan's accession to the WTO offers another opportunity for further economic development. Although the accession may also bring considerable impact on Taiwan, our government has already adopted measures which give us confidence that we will overcome these problems. Our participation in the WTO is both a challenge and an opportunity.
The terrorist attacks on September 11 have negatively affected the U.S. economy. We are confident, however, that with its economic strength, the U.S. will eventually overcome the current difficulties and resume the robust economic growth that we witnessed in the 1990s. The economic and trade relationship between Taipei and Washington is mutually beneficial. In the years ahead, we will continue to promote economic and trade cooperation with the U.S., based upon the common interests of the two nations. We will also join the U.S. in promoting prosperity and peace in the Asia-Pacific region and elsewhere in the world.
I continue to believe that the two sides of the Taiwan Strait must coexist peacefully and that the relationship should not be viewed as a zero-sum game. Now that both sides have joined the WTO, we are willing to promote cross-strait economic and trade exchanges through this international trade system, seeking to maximize the interests and well-being of the people on both sides. Beginning this year, our government has allowed tourists from the Chinese mainland to visit Taiwan. In addition, we are working on measures to lift the ban on mainland investment in Taiwan and to introduce mainland professional personnel.
After joining the WTO, we will use advanced technology to upgrade traditional industry and foster innovation, fulfilling the vision to develop Taiwan into a "green silicon island." If Taiwan wishes to build its competitive edge in the world market, in the short term, we must actively commit ourselves to innovation as well as to research and development, thereby creating our own new technologies and brands. In the medium and long term, however, we should invest more of our resources in research and development in industries with high growth potential, such as environmental protection, energy, biotechnology and nanotechnology. By doing so, we can then develop the more advanced technologies and competitiveness that will make Taiwan a technology power in the knowledge-based world.
The Chamber's 2001 Taiwan White Paper points out that poor government efficiency is a major obstacle for foreign business operation in Taiwan and has adverse effects on Taiwan's competitiveness. In this regard, my administration has made promoting government efficiency one of our major objectives. I have asked government agencies to raise efficiency standards by casting off their conservative mentality. We have recently established the Government Reform Committee, of which the goal is to raise our national competitiveness as a whole through government restructuring. With regard to improving the overall investment environment, we held the Economic Development Advisory Conference last August, conducting a comprehensive review on the local environment for business operation. The conference concluded with 322 consensus points and agreed upon a national economic development strategy of "deeply cultivating Taiwan with global perspectives." After the conference, we drew up concrete measures to create an obstacle-free, ideal investment environment.
To deal with the deterioration of local financial institutions, the government has consolidated 36 grassroots financial institutions, including credit cooperatives and the credit units of farmers' and fishermen's associations. Through the implementation of the Financial Institution Merger Law and the Financial Holding Company Law, we are currently encouraging mergers among different financial institutions and expediting the establishment of a management system for financial holding firms. In particular, after our WTO entry, we have encouraged foreign financial institutions to invest in or merge with their local counterparts, in order to strengthen the financial competitiveness of Taiwan.
In striving to work towards a better economy and to implement reforms, I have appointed Mr. Yu Shyi-kun as the new Premier, creating a new "proactive cabinet." As you may have noticed, the ongoing cabinet reshuffling has named business leaders as finance and economics ministers. The new cabinet also includes former county magistrates and city mayors with local government experience. The combination of private sector vitality and administrative experience is invigorating and will also enliven the central-local government partnership in the future. I believe that the new "proactive cabinet" will definitely meet people's expectations and I hope everyone gives their utmost support for the new cabinet.
Ladies and Gentlemen: You are participants of Taiwan's economic development, and witnesses of our democratic development. You have worked with us to create economic prosperity and shared with us our accomplishments of freedom and democracy. Facing the challenges ahead, I trust that our American friends will continue to collaborate with the people of Taiwan to further contribute to the prosperity of the two countries, as we all believe in the ideals of democracy, freedom and a market economy. I sincerely hope that based on your support for Taiwan in the past, you will increase your investments in and trade with Taiwan, while offering us advice and suggestions. Finally, on behalf of the government and people of the Republic of China, I would like to express our heartfelt gratitude to the American Chamber of Commerce for your prominent contributions to Taiwan's economic development. I wish you a happy and prosperous New Year.