President Chen Shui-bian, New Year’s Address January 1, 2008

Office of the President

January 1, 2008

Vice President Lu, Esteemed Colleagues and Dear Fellow Countrymen:

Happy New Year and greetings to you all!

In keeping with tradition, on this first day of 2008 at 6:30 in the morning, I stood with many of my fellow citizens in the cold to take part in the flag-raising ceremony outside the Presidential Office and welcome a brand-new year full of hope. As we all know, in Chinese societies ba [eight] signifies fa [develop, flourish], symbolizing good fortune, abundant harvests, and prosperity. As the new year commences and the work of renewal is launched on many fronts, besides praying for the security, prosperity, and peace of our nation, Taiwan, we also pray that people all over the world can enjoy everlasting peace, prosperity, and progress.

On October 15 last year, in his report to the 17th National Congress of the Communist Party of China in Beijing, Chinese President Hu Jintao, for the first time, advocated the negotiation of a peace agreement to formally end the state of hostilities across the Taiwan Strait. We wholeheartedly welcome and look favorably on any proposal that might be conducive to maintaining peace and stability across the Taiwan Strait.

On February 3, 2004, before I was re-elected as president, in a memorandum to the Executive Yuan regarding the holding of the two "peace referendums" (defensive referendums) [in tandem with the March 2004 presidential election], I put forward the idea of a "peace and stability framework for interactions across the Taiwan Strait." And in a policy statement produced at a high-level meeting of the National Security Council on November 10 of that same year, I called for cooperation between Taiwan and China in establishing a military buffer zone and a security consultative mechanism that would lead to the formulation of a code of conduct in the Taiwan Strait. This was a proactive approach that demonstrated my earnestness and determination to maintain peace and stability across the Taiwan Strait.

However, normalization of relations between Taiwan and China cannot be advanced if preconditions are already imposed. Setting preconditions is equivalent to establishing foregone conclusions, lacking sincerity and allowing no room for consultations and negotiations. If President Hu persists in demanding our bowing to the precondition and narrow framework of a "one China principle," then his call for negotiations represents no substantive departure from the "Eight-point Proposal" made by Jiang Zemin twelve years ago. This once more underlines the reality that the "one China principle" poses the biggest obstacle to improving Taiwan-China relations.

In step with changes in China's "united front" tactics against Taiwan, the Beijing authorities have put forward a variety of differing versions and formulations of the "one China principle." The most straightforward definition, however, can be found in the Preamble to the Constitution of the People's Republic of China, which clearly states, "Taiwan is part of the sacred territory of the People's Republic of China (PRC)." Further, the white paper "The One-China Principle and the Taiwan Issue" issued by the PRC State Council in February 2000 contains the following assertions:

"On October 1, 1949, the Central People's Government of the PRC was proclaimed, replacing the government of the 'Republic of China'¡Kthereby bringing the historical status of the 'Republic of China' to an end¡KSince the KMT ruling clique retreated to Taiwan, although its regime has continued to use the [designation] 'Republic of China'¡Kin reality, [it] has always remained only a local authority in Chinese territory."

Besides steadfastly denying the existence of the 'Republic of China,' Beijing has done all in its power to suppress Taiwan and prevent it from enjoying the international status and space to which it is entitled as a sovereign country. This is the harsh reality now confronting us. China's military threat to Taiwan, its suppression of us in the diplomatic arena, and its "united front" economic warfare against us have continued irrespective of whether Taiwan's governing party is green or blue [referring to the "pan-green" political alignment, led by the ruling Democratic Progressive Party, and the "pan-blue" alliance of opposition parties led by the Kuomintang (KMT)]. Nor has Beijing ever moderated its behavior in consideration of who is serving as our president. Whichever party is in power must deal with this increasingly serious challenge.

During the era of KMT rule, the number of countries with which we had diplomatic ties once dropped to a low of 21, a situation more problematic than that of today. During former President Lee Teng-hui's administration, despite the existence of a National Unification Council and its Guidelines for National Unification¡Xwhich advocated "one China" and ultimate unification¡XChina created a crisis by test-firing missiles into the waters off the coast of Keelung and Kaohsiung in the run-up to our presidential election in March 1996.

Moreover, on March 14, 2005, almost a year before the council and guidelines were shelved, China brazenly passed an "anti-secession law" in order to create a so-called legal basis for using force against Taiwan. And last April, before our government applied for membership in the World Health Organization (WHO) and the United Nations (UN) under the name "Taiwan," Beijing had already been relentlessly pressuring the UN Secretariat to parrot the fallacious claim that Taiwan is a part of the People's Republic of China, in a bid to further denigrate Taiwan's status as a sovereign nation.

Over the past seven-plus years, the number of tactical ballistic missiles deployed by China on its side of the Taiwan Strait has increased from 200 in 2000 to today's 1,328, by our accounting. In addition to setting in motion a three-stage plan for its People's Liberation Army to invade Taiwan, Beijing is poised to designate an "air defense identification zone" in the Taiwan Strait and open a new civil air route along the median of the Taiwan Strait. In doing so, China is once again challenging and attempting to unilaterally change the status quo in the Taiwan Strait.

Faced with China's belligerent rhetoric and military intimidation, the people of Taiwan have no choice but to become more strongly united. United, we need not fear the enemy's "united front warfare" and divisive tactics. United, we can transcend our differences over national identity, break through barriers that divide the governing and opposition parties' policy stances, and actively form a new national collective consciousness. Only then can lasting peace and stability be realized in the Taiwan Strait.

Before our nation withdrew from the United Nations, the United States devoted considerable efforts in helping us retain our seat in the UN General Assembly. Then-President Chiang Kai-shek, however, held to the erroneous position that "gentlemen do not stand together with thieves, and it is preferable to be a broken jade than a perfect tile" which has resulted in Taiwan's being excluded from the UN system for the past 37 years.

Ever since Taiwan began actively seeking participation in the UN in 1993 and the WHO in 1997, respectively, we have imposed limitations on ourselves due to a lack of consensus on national identity. We had never formally applied for new membership in either organization until last May, when I wrote letters to WHO Director-General Margaret Chan and UN Secretary-General Ban Ki-moon, applying for membership in the two organizations under the name "Taiwan."

UN General Assembly Resolution 2758, passed on October 25, 1971, did not recognize Taiwan as a province of the People's Republic of China; nor did it acknowledge PRC's sovereignty over Taiwan. The 23 million people of Taiwan are entitled to have their own UN seat and apply for accession as a new member state.

In the past, we agreed to participate in the Asia-Pacific Economic Cooperation Forum (APEC) as "Chinese Taipei" and in the World Trade Organization (WTO) as the "Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu." Hence, our approach of applying for new membership in the WHO and the UN under the name "Taiwan" has absolutely nothing to do with changing our national moniker. Furthermore, doing so clearly indicates that we fully respect UN Resolution 2758 and have no intention of competing with the PRC for representation of China.

Health, life, security, and peace are all basic human rights that cannot be restricted or taken away. This is in keeping with the spirit embodied in the principle of universality of UN membership. Approving or rejecting applications for membership are the prerogatives of the Security Council and the General Assembly. As a peace-loving, sovereign nation, Taiwan has the right to demand that the UN give its application a chance for fair review. The efforts of Taiwan's 23 million people to protect their basic human rights cannot be characterized as "provocative" or misconstrued as attempts to change the status quo in the Taiwan Strait merely because of China's objections. Taiwan must not be allowed to remain the only gap in the global disease prevention system and continue to be an orphan ostracized from the world's collective security mechanisms. Doing so constitutes discrimination against the Taiwanese people and a form of political apartheid. In the name of truth and justice, the international community should say "no" to China's unreasonable behavior, rather than say "no" to Taiwan's reasonable demands.

Taiwan is a sovereign country. Only the 23 million people of Taiwan have the right to decide the future of this country and its relationship with China. Neither China nor any other country can arrogate to itself the power to make such decisions for us. Taiwan has the right to a seat in the UN and its 23 million people have the right to voice their aspiration for UN participation through referendum.

We find it extremely regrettable that, under tremendous pressure from China, the United States and the European Union have expressed varying degrees of opposition to Taiwan's referendum on joining the United Nations. While the two "peace referendums" in 2004 were initiated by the president, the referendum on applying for UN membership is a grassroots initiative. A total of 2,726,499 petition signatures were collected in support of this proposal, which should soon be certified as having met legal requirements for holding a referendum concurrently with the presidential election on March 22. This is an expression of our people's will. Referendum is a basic right guaranteed by law, and cannot be opposed or cancelled by anyone, not even the president.

China's opposition to referendum in any form, on any topic, is fundamentally different in nature from that of some friendly nations with regard to our referendum on joining the UN. China utterly opposes referendum, democracy, and respect for human rights, while other nations are weighing national interests against democratic values. Nevertheless, we solemnly remind the international community: No red line can be drawn to restrict Taiwan's democracy; much less should it be limited or taken away because of China's undemocratic, totalitarian nature.

Taiwan has its own national interests, but we have never ignored our responsibilities for and commitments to the international community. Taiwan's experience in democratization is a very precious asset to the global community of democracies. Taiwan's road of democratization has been long and winding, and all the while we have been confronted with, externally, China's savage suppression and, internally, a lack of cooperation from some opposition politicians. Our hard-won right of referendum is still so encumbered by limitations that it allows us to conduct only "bird cage referendums." Some opposition politicians, meanwhile, have been seeking to obstruct the referendum scheduled for January 12, stirring up disputes on the so-called one-step vs. two-step voting formats.

Despite this, we will never backtrack on the road to democracy. We will, in true democratic spirit, hold regular elections as prescribed in the Constitution, and we will abide by our promises to the international community. In so doing, we will ensure that constitutional order and mandated processes are respected.

My dear countrymen:

Taiwan is our motherland. It is solely upon her that we depend for our survival and development. If we lose Taiwan, we lose everything. Taiwan is not a Hong Kong, and Taiwan most definitely is not a colony. Economic growth cannot be our only goal in national development. Still more essential is to ensure that Taiwan's independent existence and development are not infringed upon or undermined in any way.

According to statistics compiled by the Investment Commission of the Ministry of Economic Affairs and organizations in other countries, the ratio of Taiwan's annual China-bound investment to its GDP increased from 0.81 percent in 2000 to 2.15 percent in 2006, and the latter figure is much higher than the highest corresponding ratio over the same period for Singapore, South Korea, Japan, and the United States¡Xat 1.71 percent, 0.44 percent, 0.1 percent, and 0.02 percent, respectively.

The ratio of China-bound investment to total outbound investment, meanwhile, more than doubled from 33.93 percent in 2000 to 71.05 percent in 2005. The latter figure is exceptionally and disproportionately high compared with the highest ratios seen for neighboring countries during the same period: South Korea at 47.38 percent; Singapore at 33.05 percent; and Japan at 18.94 percent. Taiwan has invested too much rather than too little in China. China's magnetic pull on foreign investment threatens not only Taiwan's national security but also that of neighboring countries, including Japan and South Korea, and it has had serious impacts on the industrial and social fabrics of our three nations.

Boosting investment creates job opportunities, which in turn increases personal income. These are fundamental principles for invigorating the economy and improving people's lives. Since China launched economic reforms and began opening up to the world [in the late 1970s], vast amounts of foreign investment have been sucked into China. As a result, investor countries are suffering from the relocation and hollowing-out of businesses, decreasing numbers of middle- and high-income jobs, long-term wage stagnation, and a continued slump for domestic-oriented industries. This has led to a shrinking of the middle-class and the creation of "M-shaped societies," in which income distribution is polarized. Be it Japan, South Korea, or Taiwan, we are all confronted with the same challenges.

We should not mistake effect for cause because of political ideology. Unrestricted, unsupervised investment in China over the years has been the main factor in the appearance of an M-shaped society in Taiwan. Continued intensive investment in China will not help ease the impacts and predicaments suffered by this M-shaped society; instead, it will only exacerbate this trend.

At the Conference on Sustaining Taiwan's Economic Development in July 2006, I proposed four major goals for government action. These were: Increase investment in Taiwan; create more job opportunities; close the urban-rural divide; and narrow the gap between rich and poor.

Today, we can see that the policy decisions I made then were appropriate. These four major administrative goals are not only the key to transforming Taiwan's M-shaped society, but are also the most important indicators by which policies regarding economic and trade relations with China can be assessed. All measures that conform to these four policy indicators can be considered and adjusted as required. We will continue to be vigilant in identifying those that do not, so that we can concretely implement our policy of "proactive management and effective liberalization" on Taiwan-China economic relations.

Though China is a vast and very important market, it most certainly is not Taiwan's only market or ultimate market. In this era of liberalization and globalization, when competition is becoming ever fiercer, only by standing tall and strengthening itself can Taiwan maintain its competitive edge. To wishfully imagine that reliance on China's market can resolve the problems besetting Taiwan's industrial development is like "looking for fish up a tree" or "asking a tiger to hand over its skin."

If Taiwan wishes to achieve balanced and sustainable growth, apart from developing its competitive edge, we must also help those who are disadvantaged and unable to keep up and lift themselves up. This is the objective underlying this administration's three-pronged push to give attention to the needs of Taiwan's central and southern regions, of the nation's middle- and low-income groups, and of small and medium-sized enterprises.

In line with this policy direction, under the leadership of Premier Chang Chun-hsiung, the various departments of government have joined forces to brainstorm and implement numerous innovative strategies under the rubric "one incentive per week." In the process, concerned government agencies have been closely monitored in order to facilitate liberalization of regulations and formulation of new measures, and to ensure that the aforementioned three goals are pursued with effective policies, planning, and programs resulting in concrete progress.

With regard to developing central and southern Taiwan, we have pushed programs to further develop the Central Taiwan Science Park and Southern Taiwan Science Park, to attract businesses to set up operations there, and to expand the transport capacity of the eastern coastal railway. In addition, we have taken important steps to rectify development imbalances caused under previous governments, which led to the perception that "when the north received the lion's share of attention, the south was slighted, the central region neglected, and the east treated almost as non-existent." These steps include:

relocation of the Fishery Agency of the Council of Agriculture to the South;

formulation of a NT$100 billion [approximately US$3 billion] farm village development program;
evaluation and relaxation of restrictions on use of farm land;

establishment of an agricultural technology venture capital fund;

boosting the guaranteed price for rice;

acceleration of urban renewal; and
establishment of national exhibition and performance centers in central and southern Taiwan.

To improve the livelihoods of people in middle and lower income brackets, we have launched a new labor pension scheme and increased the minimum wage. We also boosted elderly farmers' monthly subsidies to NT$6,000 as of July 1, 2007, and are prepared to formally launch the new national pension system on October 1, 2008. These accomplishments place Taiwan in the ranks of advanced welfare states.

Moreover, we have implemented a series of subsidy programs for disadvantaged groups focusing on education, job placement, and general welfare. And we have formalized a policy to earmark an anticipated NT$200 billion [approx. US$6.2 billion] of recovered illegitimate party assets, plus matching government funds¡XNT$400 billion [approx. US$12.4 billion] in all¡Xto fund five important investments in education and in the future:

free preschool education for all five-year-olds;
free lunch and free textbooks for primary and junior high school students;
tuition-free senior high school and senior vocational school education;
college loans; and
interest-free loans for young entrepreneurs.

As for protecting small and medium-sized enterprises, the government has put in place a host of programs and measures to provide guidance and assistance in improving their research and development capabilities, upgrading and transforming themselves, expanding their marketing opportunities, and promoting incubator programs to launch innovative startups. Further, for the first time, we are utilizing the National Development Fund to boost investment in small and medium-sized enterprises. We plan to invest in some 1,000 enterprises over the next ten years, thereby creating 20,000 job opportunities. Our investments are expected to catalyze follow-up investment from the private sector amounting to more than NT$50 billion [US$1.5 billion].

Last year, the government and the banking sector contributed some NT$7 billion [approx. US$215 million] to the Small & Medium Business Credit Guarantee Fund. The fund will provide about NT$320 billion [approx. US$10 billion] to underwrite more than NT$500 billion approx. [US$15.5 billion] in loans aimed at strengthening businesses' modes of operation and competitiveness, with the aim of helping small and medium-sized enterprises once again become a major force for social stability and economic development in Taiwan.

Twenty years ago, Taiwan was liberated from the shackles of martial law. And today, we can proclaim that the edifice commemorating the dictator responsible for martial law has been renamed [from Chiang Kai-shek Memorial Hall to]
"Taiwan Democracy Memorial Hall." The inscription Da Jhong Jhih Jheng* on the entrance gate in praise of this dictator has been changed to "Liberty Square." We have finally managed to do what should have been done two decades ago.

[* Translatable as "Rooted in the Great Equilibrium with perfect rectitude," this dictum includes the two characters of Chiang Kai-shek's sobriquet, Jhong Jheng.]

This democratic era simply cannot countenance a feudal emperor or lifelong president, much less an "eternal leader." Regular elections and a limited term of office are the most precious elements of democracy. Due to the self-interest of one man and one political party, however, these fundamental principles of democracy were continuously trampled upon and obliterated for over half a century. The virtues and faults of historical figures are open to debate. But any image or symbol that glorifies violation of democratic principles and oppression of human rights must be disposed of, in order to demonstrate our firm belief in the universal values of freedom, democracy, human rights, and peace, as well as our resolute determination to establish a nation of justice.

Thanks to the trust the public has placed in me, I have had the good fortune to serve the 23 million people of Taiwan over the last seven-plus years. Through the collective efforts of my fellow countrymen, we have nationalized the military [rendering it subordinate to the government, rather than subservient to a particular person or political group], prevented the outbreak of domestic financial crises, and withstood the grave test of the SARS epidemic. Moreover, we succeeded in holding our first national referendum, and we mothballed the National Unification Council and Guidelines for National Unification, thereby returning to the people their right to decide our nation's future. 

We are constantly writing new history, having successfully accomplished a number of "missions impossible." The Hsuehshan Tunnel [Asia's longest tunnel] has been completed, and the Taiwan High Speed Rail has begun operations. The Central Taiwan Science Park has helped build the semiconductor and flat panel industries into trillion-dollar industries [with annual production valued at over 1 trillion New Taiwan dollars]. More importantly, in strengthening Taiwan-centric consciousness, we have ensured peace and stability in the Taiwan Strait and created a greater space and more solid foundation for the nation's survival and growth.

My time as President is fast coming to a close. For me, it has been a rare opportunity [to make a difference] and is the completion of one stage [in my life's] mission. For Taiwan, these past eight years, though just a small stretch in the endless stream of history, have been an important stage in its history that has enabled us to reach a higher plateau as we continuously strive to strengthen and deepen democracy, create a more prosperous, advanced society, and realize social equity and justice.

This stage of our great journey will soon come to a close. This administration will work hard to the very end, but there remains much to be done by my successor. I believe that the torch of democracy and progress will be passed on smoothly. As it is passed on from one administration to the next, its flame will burn with ever-greater brilliance and continue to guide Taiwan towards a new era of wellbeing and renewal that will create unlimited possibilities for future generations.

In closing, may our nation enjoy good fortune in 2008! And a Happy New Year to you all! Thank you!