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Warning on China market repeated

"Although China has registered impressive economic growth rates of 8 or 9 percent, this is certain to peak and then decline."

President Chen Shui-bian

China's economic boom is bound to wane and Taiwanese businesspeople should not regard the Chinese market as their only business opportunity, President Chen Shui-bian (陳水扁) said yesterday.

"Although China has registered impressive economic growth rates of 8 or 9 percent, this is certain to peak and then decline. This is the law of economic development," Chen said. "It is impossible for any country or region, including China, to be the only market in the global economy."

Chen made the remarks at a Lunar New Year gathering held by six local industrial and business groups at the Ambassador Hotel yesterday afternoon.

Chen repeated his call to Taiwanese businesspeople to broaden their horizons and not commit themselves solely to the Chinese market.

"Due to political factors, some people regard Taiwan's overall industrial development as cross-strait economic development and think China is the only market in the world," he said. "Some people even simplify the government's cross-strait economic policy as `tightening' or `relaxing.'"

In addition to touting the nation's economic development and low unemployment rate over the past year, Chen outlined his economic policy for the coming year with the goal of achieving growth through stability.

The policy will focus on three main areas, he said: investment, employment and commodity prices.

Chen said that since investment is the driving force of economic development, the investment environment must be improved so that local businesses will want to keep their roots here, which would improve the nation's competitive edge.

Since businesses often complain about the government's property, labor and environmental restrictions, Chen pledged to strengthen the government's law enforcement capability and ameliorate the local investment environment in those three areas.

Although the jobless rate in December hit its lowest point since March 2001, Chen said that structural unemployment remains and that the government is in the process of mapping out a strategy to tackle the issue.

Regarding commodity prices, Chen said that the government will more closely monitor their fluctuation and make an effort to reduce the variables affecting them as much as possible.

In a bid to curb the nation's overdependence on crude oil, Chen said that the government must develop alternative energy sources.

While 90 percent of the nation's energy is generated by crude oil, Chen said that he would like to see more of the nation's power produced by renewable energy to limit the impact of oil prices on the economy.

As long as commodity prices are stable, interest rates will be steady and operation costs will stay at a lower level, which would help boost the economy, he said.

In response to the president's tougher stance on businesses' cross-strait investments, commercial and industrial heavyweights yesterday called on the government to consult more with them before it adjusts its China policies.

"Taiwanese businesspeople all know that they must consider global positioning when expanding investments. This must be done by standing firm first in regional economies," said Theodore Huang (黃茂雄), chairman of the Chinese National Association of Industry and Commerce (工商協進會). "Therefore, cross-strait relations are something we cannot avoid, and likewise something we cannot solely depend on."

While the government is now trumpeting the advantages of investing in India, Huang said businesspeople would not miss the opportunity, provided India has the resources they want.

Rock Hsu (許勝雄), chairman of the Taiwan Electrical and Electronic Manufacturers Association, said he hoped that the government would be able to execute more of its policies by passing the laws and regulations currently piled up in the legislature.
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