Good Evening, Mr. Paul Lee and representatives from Global Construction International; representative from Conference sponsors and Economist Conferences; Distinguished participants, ladies and gentlemen:
It cannot be a better time to convene a conference such as Sixth Taiwan Roundtable to discuss the economy. Against the backdrop of a looming global recession, I think the conference serves to generate a brainstorming policy discourse between political and business leaders, between the global and local, and between Taiwan and the world. The critical issues of this two-day conference include the slowdown and recovery of the global economy, opportunities and challenges presented by regional integration, and the restructuring and repositioning of Taiwan’s infrastructures.
The complexities of these issues have been compounded by the Sept. 11 terrorist attacks, worsening the problems of the US economy and pushing the world economy from “slowdown” to the verge of “recession.” The influence of terrorism on the global economy will reshape and redefine the ways we human beings interact, do business, and lead our lives. Terrorism undermines consumer confidence, disrupts commerce, and destroys wealth. It also imposes a profound amount of new costs on business transactions and merchandise transshipping. Most of all, it has piercingly shaken the euphoria of peace and exhausted the peace dividend that came after the end of the Cold War and the Persian Gulf War. All at once, layer upon layer of uncertainty are sweeping the globe and affecting things here in Taiwan.
Taiwan, a compact and energetic island touted as a model of economic and political miracles, is now presented with the most formidable challenges since World War II. Its growth rate and stock markets have fallen dramatically, unemployment is rising rapidly, and traditional industries are fleeing en masse, especially to the Chinese mainland. Some paint a bleak picture for Taiwan’s economic future, forecasting that its main competitor, China, will emerge as a powerful engine of the Asian economy, and overtake the combined might of the four Tiger economies and Japan.
Taiwan has an abundance of human resources long imbued with proactive entrepreneurial spirit. Over one quarter of the workforce has a college degree or higher. Second, Taiwan is now the 13th largest trading country, displaying ingenuity in using its worldwide network to reach out to the global market. Taiwan also has the third largest foreign exchange reserve. The total output of information industries in Taiwan is even more astounding, ranking it the third largest in the world.
It is also worth mentioning that Taiwan’s high-tech products are highly competitive, and they comprise 52 percent of total exports, steering Taiwan’s economy from a labor-intensive to technology-intensive or knowledge-based one. A recent review released by the World Economic Forum ranks Taiwan seventh in global competitiveness, compared with China’s ranking as 39th. In the areas of innovation and high-tech, Taiwan’s competitiveness scores the third and the fourth in the world, consecutively, in stark contrast to China’s 53rd and 63rd. In all measures, Taiwan is rated the fourth of the world’s twenty-one core countries that are most advanced in developing science and technology. All these indicators are even more impressive if we understand that Taiwan’s population ranks only the 43rd and its size is merely the 135th in the world.
In the next few years to come, Taiwan will choose Taoyuan County as a base to develop its aviation industry full-scale under the umbrella of the Asia-Pacific Operation Regional Center and Global Logistics Center. The management of Global Logistics Center is set to develop Taoyuan as an all-inclusive international airport, and Kaohsiung as a highly efficient international harbor. These demonstrate the vivid truth that Taiwan has fairly sound economic fundamentals.
The people of Taiwan have enthusiastically embraced the merits of openness far more than any other society based on Confucian values. We tend to treat friends from afar as guests of honor, and like to regard them with respect. We believe that a hospitable business environment is the best way to engender mutual trust, and we place the Rule of Law above the Rule of Man. During the Cold War, Taiwan adhered to the market mechanism, practicing the free flow of goods and services. The highly talented people on this island have also resolved to pry open the authoritarianism imposed then by the KMT, and have chosen without intimidation an open democratic society and the Rule of Law.
This very societal openness that exists today in Taiwan provides one of the crucial reasons why entrepreneurs are more flexible and agile in responding to the downward spiral of regional recession. Taiwan’s openness helped it weather relatively unscathed the global recessions of 1972-73 and 1990-91, and the 1997 Asian financial crisis. With the arrival of the third wave of democratization worldwide and the information age, Taiwan lost no time in going global, embracing the whole world as an open global village. Just a week ago or so, WTO has decided to adopt Taiwan, further proving that Taiwan is linked to the free trade mainstream, and actively engaged in the international community. Taiwan’s embrace of social, economic and global openness makes it immediately accessible to foreign investors, and through them, to the global economy, eventually bringing an era of cooperation and co-prosperity.
Some have questioned whether the government of Taiwan has the good will as well as ability to foster a stable political environment. Many of you may be worried that Taiwan has been closed off in diplomatic isolation, something like that of China before 1972. Many are even more concerned about the volatility of cross-strait relations, particularly at a time when China is becoming a regional economic power and military hegemon. You may have heard of my philosophy for “Soft Power,” meaning democracy, human rights, peace, love, and high-tech. The very “Soft Power” is in sharp contrast with “Hard Power” that is exhibited by military might and terrorist warfare. Taiwan will continue to advance in this direction of “Soft Power,” hoping that democracies all over the world will be mutually embracing and assisting in an increasingly civilized international arena.
And speaking of cross-strait relations, Beijing’s “one country, two systems” formula is purely the PRC’s political rhetoric. Their “one China” principle tactically includes a hidden spell that “there is only one China in the world,” that “Taiwan is a part of China,” and that “the PRC is the sole legitimate representative of China.” It completely ignores the historical truth and the reality of Taiwan’s full-fledged democracy. Here, let me reinstate a more accommodating proposal of “one Chung-Hua,” literally “One Chinese.”
In late October, the I.R.A. (Irish Republican Army) in Northern Ireland took the initiative to decommission some of its own weapons, setting in motion a peace process between Catholics and Protestants. Through the international efforts of all democracies, if China can demonstrate its conscience and good will to dismantle those missiles targeted at Taiwan, the prospect of peace will be within sight not only in Taiwan, but also in the Asia-Pacific region and the world. Before China’s conscience and good will are addressed, the relationships between Taiwan and China should be metaphorically compared to that of “Cat and Lion” theory. The lion needs to be tamed and the cat to be taken care of. In other words, they should not be put in the same cage before the lion is tamed.
Not long ago, Mr. Naipaul, winner of the 2001 Nobel Prize in literature, attributed the September 11 tragedy mainly to religious hatred. The “one Chinese” formulation I mentioned earlier is designed to avert the contentious sovereignty issue between Taiwan and China. I think Beijing should give this peace proposal serious consideration. Blocking Taiwan’s participation in international organizations and posing a military threat to democratic Taiwan simply engender antipathy that could, under the wrong circumstances, spin out of control and result in human destruction.
Distinguished guests, ladies and gentlemen, it is wonderful to have you all here at this magnificent event. Trust in knowledge, entrepreneurship, openness, and, most of all, the soft power of people is the quintessential strength of Taiwan. Your connection to Taiwan will tremendously improve its openness and soft power, and your friendship very encouragingly helps Taiwan link to the rest of the world. May your two-day conference be a tremendous success. Thank you.