In a report commissioned by the Civil Aeronautics Administration (CAA), the Chung-hua Institution for Economic Research conducted an analysis on the need for the construction of another international airport in the south of Taiwan within the next two decades. For this research, which assessed the demand for airports in the south, we used, for the first time, statistics on freight volume for cities and counties in six customs districts compiled by the Directorate General of Customs for the period 1996 through last year. With this information we were able to make an in-depth comparative analysis of the demand for air freight.
Only products of relatively high inherent value or high-tech products justify the cost of airfreight. Our research shows that the highest growth in demand for air transportation was for items such as glass ceramics and other optics-related products, precision instruments and machinery.
Looking at the figures for the north, center and south, expressed in terms of export volume in tonnes per hectares, Taipei City is ranked top, at 180.93 tonnes/hectare, although this may be explained by the fact that a large number of parent companies for plants located around Taiwan are registered in the capital. Following Taipei City we have Taipei County at 50.43, Hsinchu City at 46.86, and Taoyuan County at 27.54. All of these fall above the national average of 24.77, and all of them are located in the north of the country. Cities and counties whose export volume per hectare falls below the national average include Taichung City, Hsinchu County, Kaohsiung City, Changhua County, Taichung County, Tainan City, Nantou County and Pingtung County. The remainder have a figure of less than 10. With the exception of Kaohsiung City, all of the southern cities and counties are ranked lower than those in the center of the island.
Naturally, the regional differences in demand for air freight found here can be accounted for in terms of the nature of the industries within these areas. As a result, the south will only increase its demand for air transportation in the future if the cities and counties located there embrace high-tech industries such as optics, biomedicine and the manufacture of precision instruments.
As it happens, there is currently very little undeveloped land available for industrial use in the north, with an average of 11.9 percent.
The situation is more drastic in Taipei City and Hsinchu City, where there is virtually no land available, and only 6.65 percent of land available for industrial use in Taipei County remains undeveloped. This compares with an average of 23.23 percent in the central region and 20.32 percent in the south. As a result there is already a deficit of land in the north, and a trend already exists for businesses to set up further south.
In the future, the speed at which the investment environment in the central and southern regions can be improved, the price of land for industrial use and regional government efficiency will all be crucial factors.
From my own discussions with business managers in the south, they are more disciplined and hardworking, and in terms of their international perspective and openness to new ideas, they are little different from businesspeople from the north. However, this cannot be said of city and county officials in the south, who fall considerably short of their counterparts in the north when it comes to their understanding of economics and the degree to which they feel responsible for finding solutions for businesses. This has even led some businessmen to comment that they would rather not approach local government officials with their problems, for fear that these officials will seek favors in return in the future.
The south is the support base for the Democratic Progressive Party (DPP). Party members rose through activism. As a result, they should be fully aware that it is vastly more important to make local officials understand the importance of fostering the high-tech industry. This should certainly take priority over efforts to build a new airport in southern Taiwan.
The key to developing a sufficient volume of products that would require air freight services in southern Taiwan is the education of local officials involved in planning and construction, as well as those in semi-governmental organizations -- such as agriculture, business and industrial associations -- so that they can provide better economic, industrial and business services, as well as computerized support for businesses seeking to establish themselves in the south.
Chen Lee-in is a research fellow at the Chung-hua Institution for Economic Research.
TRANSLATED BY PAUL COOPER and Ian Bartholomew
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