Sat, May 27, 2000 - Page 1 News List

Officials talk up nation's economy

JAW BONING After a spate of bank runs and jitters in the financial markets, the new administration's top brass held a news conference to say that everything was okay


Premier Tang Fei (唐飛) and the nation's top economic officials presented a united front yesterday in an effort to dispel widespread fears brewing over the state of the country's financial sector.

At an unscheduled news conference, Tang set the tone by stating that Taiwan's economic fundamentals are good and economic growth this year is expected to reach 6.73 percent -- the world's fifth highest.

The premier also said that President Chen Shui-bian's (陳水扁) inauguration speech -- which won "high international praise" while not drawing strong criticism from China -- had eased tensions across the Taiwan Strait.

Passage of permanent normal trade status for China by the US House of Representatives Thursday would also contribute to peace, Tang said, and that development combined with public confidence in the new government would "clear the clouds shadowing our stock market."

China's war games off the coast of Taiwan have spooked the Taiwan stock market, sending the index down for five consecutive days through Thursday.

The government's stabilization fund intervened twice in the past week to prevent the market from falling further.

Tang also said that the government would continue to promote policies favorable to the market and would work to make Taiwan Asia's asset management center.

The premier was speaking after emerging from a closed-door meeting with Minister of Econo-mic Affairs Lin Hsin-yi (林信義), Minister of Finance Shea Jia-dong (許嘉東), Central Bank Governor Perng Fai-nan (彭淮南), National Stabilization Fund secretary general Yen Ching-chang (顏慶章) and Government Information Office chief Chung Ching (鐘琴).

Taking his turn at the podium, Shea cautioned that the overdue loan problem plaguing the banking sector and subsequent bank runs could trigger a domino effect in other areas of the economy.

"If the public panics, large banks will discontinue lending to small banks. That will in turn tighten credit to businesses, expanding the problem beyond the banking sector," Shea said.

The average overdue loan ratio at domestic banks, including investment and trust companies, stood at 5.11 percent at the end of March.

But Shea encouraged the public to remain calm as the central bank has taken measures aimed at assisting banks in reducing their overdue loans. He said the public should be patient as the fruits of their efforts would been seen in due time.

Shea and Lin also announced that their ministries would set up a joint task force to map out a short-term rescue package for the nation's traditional industries.

The task force plans to tackle fiscal problems faced by traditional industrials and help them undergo industrial upgrading, the finance ministry said in a statement. Details of the plan will be unveiled soon.

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