ex: Fco.
Bently
Mr Wize RAD 1. Mr Laton
2. Mr Mons
7/22 +pa
REPORT BY SIR WILLIAM RECENTLY ON A VISIT TO TAIWAN 7; MARCH
Dr. Harken
interest
2
2
Waren 26/3
My wife and I visited Taiwan as guests of the government from 7-12 March. We met a number of Ministers and senior officials. Most notably Dr Fredrick F Chien, the Minister of Foreign Affairs and his deputy Dr Chin Yen Fang, the Vice Chairman of the Cabinets Council for Economic Planning and Development. Mr Chang Lung Shen and the Secretary General for the new Straits Exchange Foundation, Mr Roy Jey Chen. also spoke to some of our local businessmen and called on Mr David Pointon, the outgoing head of the ATTC.
I
On a similar visit in 1991 I found Taipei's volatile stock market in collapse and a degree of uncertainty about the economic future. Though the market is not yet back to 1990 levels, confidence is fully restored, the small investor is back with a vengeance and new paper fortunes are being made every day. This optimism is backed by an economy which grew by 8% in the past year, generating foreign exchange reserves of just under US$80 billion, probably the biggest in the world in absolute terms and certainly the biggest per head there are just 20 million people in Taiwan.
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This robust economic performance and renewed confidence is reflected in the staggeringly ambitious Six Year Development Plan, the first year of which has just been completed and which will come to an end in 1996. By then GNP per capita is expected to be US$14,000 (at present it is rather more than $8000) a figure which needs to be increased by at least 20% to take account of the flourishing black economy and with inflation averaging 4% per annum over the six years. It would be easier to dismiss this as pie in the sky if the first year of the plan had not ended with both these important targets comfortably exceeded: 8% growth against a target of 7% and 4.5% inflation, against a target of 5%.
Huge sums will be spent on infrastructure during the six year plan (apart from the four national parks and the mountains it seems to me likely that the whole island will have been cemented in by the end of the decade) and I was assured that there will be real opportunities here for foreign suppliers. The French, who quite clearly are going for broke in Taiwan, seem to be making much of the running on high speed trains, the next nuclear power station and defence sales- though a rumour that they intend selling 100 Mirage fighters seems to me about as likely as Edith Cresson taking out Japanese citizenship.
It is not for me to say where best a British effort should be made to get a decent slice of this enormous cake, though I have formed an impression that if the Taiwan economic juggernaut has a weakness it is in banking and financial
HKC 026/3
CHLAKH
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