Economics minister sworn in

Minister of Economic Affairs Steve Chen (陳瑞隆) was sworn in yesterday, vowing to strengthen the economy and create a good environment for businesses.

"With a solid foundation and vigorous private enterprises, I have confidence in Taiwan's economic development," Chen said at the inauguration ceremony.

Premier Su Tseng-chang (蘇貞昌), who supervised the handover, praised Chen's international trade experience, including his efforts toward Taiwan's accession to the WTO, and his leadership in inking free-trade agreements (FTAs).

Chen began his government service with a job at the Bureau of Foreign Trade in 1973 and built up a substantial record in international trade.

As a ministry veteran, Chen would not need an orientation period, Su said.

Steve Chen is the sixth economic minister in President Chen Shui-bian's (陳水扁) government.

With Steve Chen taking over the top job at the ministry, his former job as political vice minister will be filled by administrative Vice Minister of Economic Affairs Shih Yen-shiang (施顏祥).

No replacement has yet been named for Shih's old post, but the position may be filled by Department of Industrial Technology Director-General Huang Chung-chiou (黃重球), according to a report in the Chinese-language media yesterday.

Despite Steve Chen's optimism about the nation's economy, he faces a bumpy road, given Taiwan's current economic woes.

A report released by the Council for Economic Planning and Development last month said business indicators showed signs of a slowdown.

After 10 straight months of "green" light status, the monitoring indicators flashed a "yellow-blue" light in June, indicating a deceleration in major economic activities, the report said.

Increases in the consumer price index (CPI) will be another headache for the new minister, as the government tries to keep the CPI below 2 percent even though gasoline and utility prices need to be adjusted given the huge losses reported by state-run Chinese Petroleum Corp (CPC, 中油) and Taiwan Power Co (台電).

Although Formosa Petrochemical Corp's (台塑石化) announced that it would raise the price of household liquefied petroleum gas by 13 percent, from NT$19 per kilogram to NT$21.5 per kilogram, as of yesterday, Steve Chen said yesterday that CPC has no plan to match the hike right now.

Another thorny issue that Steve Chen faces is cross-strait trade policy, including the long-awaited lifting of the ban on investing in IC design, IC packaging and testing, and 12-inch wafer fabs in China.

The government agreed to allow local semiconductor companies to build a total of three 8-inch wafer factories producing chips using the less advanced 0.25-micron processing technology in China by the end of last year.

While Taiwan Semiconductor Manufacturing Co (台積電) set up one factory in Shanghai in 2004, the applications of Powerchip Semiconductor Corp (力晶半導體) and ProMOS Technologies Inc (茂德科技) for factories in China have yet to be approved.

Officials said in March that the ministry would resume reviewing applications, but the companies may have to cool their heels a while longer, given the expected fallout in cross-strait relations from Chad switching its diplomatic ties from Taipei to Beijing last weekend.