TNAG-2794-FCO40-4034-Relations-between-Hong-Kong-and-Taiwan-1993 — Page 109

Immediate issues facing the new Cabinet is the

the worsening financial plight of central and local government which will involve a review of certain areas of the Six-Year Plan; the dispute with US on intellectual property rights, and the negotiations on Taiwan's GATT application. Lien's promise to enhance social welfare and healthcare for all will also be closely monitored.

Foreign trade

Whilst two-way

two-way trade reached US$ 153.5 in 1992, 15 per cent increase in imports (US$ 72bn) as against a 7 per cent increase in exports (US$ 81.5bn) meant that Taiwan's trading surplus fell to an eight year low of US$ 9.5 bn, a 29 per cent fall on 1991's surplus. This trend is likely to continue over the next

few for 1993, years, with a US$ 8 billion surplus forecast for 1993, in line with Taiwan's need for increased imports.

T

Taiwan's surplus with the US also fell to an eight year low of US$ 7.8 bn, while the trade deficit with Japan increased by a third to US$ 12.9 bn. Two way trade with Europe reached US$ 26.4 bn,

a 10 per cent increase and representing just over 17 per cent of Taiwan's total trade. Exports of US$ 13.9 bn and imports of US$ 12.4 bn resluted in a much reduced surplus compared to the US$ 4 bn recorded in 1991.

Trade with Mainland China

Trade with the Mainland, mostly via Hong Kong, grew by 28 per cent to US$ 7.4 billion, accounting for just under 5 per cent of total trade. Exports surged by 35 per cent to US$ 6.3 bn, whilst imports shrank slightly to US$ 1.1 bn. Two-way trade of over US$ 9 bn is forecast for 1993, though the Board of Foreign Trade is advising businessmen against over-reliance on the Mainland in case the authorities there impose credit and other restrictions to check an overheating economy.

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Investment too continues to register significant gains, with official figures now putting total investment at US$ 1 billion. This figure is likely to be much higher Mainland sources reckon the Taiwan S aggregate investments add up

to at Jeast. US 7 billion in 7,000 factories - મૂડ many projects are not registered with the Taiwanese authorities. To try and regularise the situation the Ministry of Economic Affairs has recently announced a form of amnesty, inviting an estimated 3000 companies to formally register their business without penalty, as long as they can prove that the investment funds went through indirect channels.

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