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Ministry promises economic reforms

The government will take a more progressive approach in liberalizing financial regulations to boost the economy and stimulate the stock market, Council of Economic Planning and Development Chairman Chen Tain-jy (陳添枝) said yesterday.

Chen made the announcement after the weekly meeting of a Cabinet task force on commodity price stabilization convened by Vice Premier Paul Chiu (邱正雄).

“The new government has to reflect humbly on whether its economic opening policy fell short of the expectations of investors after it assumed office, as a result of which they took some action [to sell their shares],” Chen told a press conference.

The weighted index of the Taipei stock market yesterday closed at 7,855, a drop of 1,213 points, or 13.37 percent, from 9,068 points when the new government took office on May 20.

“Although the Taipei stock market had a relatively good performance earlier this year in comparison with markets in other countries, stock prices in May are slumping badly,” Chen said.

He said the new government had not taken any measures to halt the stock market plunge because it had to first determine the causes of the drop.

Chen blamed the stock market fall on the overall decline of the global markets and a retreat by foreign investors.

“The fundamentals of the market shares are basically good, but foreign investors may think that the government is slow in implementing an open economic policy,” he said.

Chen said the government has exchanged ideas with US, EU and Australian business associations and they all suggested the government speed up the liberalization of financial services including banking, insurance, stocks and bonds, and private funds.

“Nevertheless, foreign investors still considered the dropping Taipei stock exchange a potential market, or they wouldn’t have expected us to be more positive about financial liberalization. We should grasp the opportunity to turn the country into an important financial center,” he said.

Chen said that the government would continue to stabilize commodity prices, as price increases could negatively affect the economy.

Yeh Huey-ching (葉惠青), director-general of the Ministry of Economic Affairs’ Bureau of Energy, said yesterday that the recent hike in fuel prices has had a positive effect on curbing energy consumption.

After prices were frozen for six months, the government allowed the state-owned CPC Corp, Taiwan (台灣中油), the nation’s biggest oil refiner, to raise its unleaded gasoline prices by 13 percent and diesel prices by 16 percent from May 28.

Sales of gasoline dropped 11.7 percent last month, while those for diesel declined by 21.5 percent, in comparison with March, when Formosa Petrochemical Corporation raised its prices of gasoline and diesel, Yeh said.

“Compared with the same time last year, the number of commuters taking the [Taipei] mass rapid transit system between June 1 and June 15 increased by 9.7 percent, and the number of commuters taking buses in the period rose by 4.5 percent,” Yeh said.
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