The Republic of China is stepping up its trade relations with Australia. A Chinese economic goodwill mission has just concluded an extensive tour of the continent "down under" and more than 100 Taiwan companies are participating in the third international trade fair at Sydney.
The economic goodwill mission, led by Minister of Economic Affairs K. T. Li, toured Australia in mid-September. The 12-member group traveled more than 5,500 miles to cover two-thirds of Australia and met with more than 1,500 government officials and business leaders. Major cities visited include Canberra, Melbourne, Perth, Brisbane, and Sydney.
The mission concluded a US$5.5 million contract for trade. The Republic of China will purchase 1,450,000 pounds of wool, 23,000 tons of wheat, 13,000 tons of scrap iron, and 300 sheep. Australia will buy 6,000,000 yards of cotton textiles, 2,000,000 cubic feet of lumber, and 24,000 cases of canned mushrooms.
Negotiations are under way for purchase of such other Australian goods as 20,000 tons of gypsum, 20,000 tons of bauxite, and 200 cows. Taiwan may export more textiles and canned mushrooms.
The Australian government expects to send a trade commissioner to Taiwan soon. At present, Australian interests are handled by a representative who has to contact the trade commissioner in Manila on important matters.
The Australian government has indicated interest in concluding a trade pact with the Republic of China.
Minister Li said Australia is rich in natural resources and agricultural products. Taiwan may buy such commodities as ores, wool, Wheat, cows, and sheep, and sell such goods as canned foods, textiles, and handicrafts.
He said the Chinese government decision to approve transactions in Australian pounds has helped promote trade. The Central Bank of China has set the exchange rate for buying Australian pounds at NT$89.60 and the selling rate at NT$89.83.
Minster Li reported Australia will send experts to Taiwan in a few months to advise the wool processing industry. Taiwan has built two wooltop plants and a large portion of the wool will be imported from Australia.
Li also said Australia will help the Republic of China develop its livestock industry. There is a plan to establish a demonstration dairy farm in Taichung with Australians as advisers. Two scholarships in animal husbandry will be given to Chinese students by the University of Queensland.
The Chinese government is planning to build a large integrated steel mill, and Li said iron are from Australia may be used as the raw material. Taiwan now imports 500,000 to 600,000 tons of iron ore annually. Other ores that can be bought from Australia include bauxite, copper, and zinc.
Minister Li said he was impressed by the long-term development plans of Australia. The cultivation of oysters in Australian waters is interesting, Li said. The Chinese will send people to study the techniques.
Unfavorable Balance
For the first half of 1965, the Republic of China suffered a deficit of US$15 million in its foreign trade. Exports totaled US$259 million and imports US$274 million.
The unfavorable balance does not mean a decline in exports. The dominant cause is reduced income from sugar. As a result of the drastic drop in the international price, sugar earned only US$49 million in the first six months of this year compared with US$90 million in the same period of 1964. There was little difference in the quantity.
Despite the sugar income loss, the value of Taiwan exports increased by US$7 million in the first half of 1965. This means that exports other than sugar increased by US$48 million. In total, export volume for January-June was 2.7 per cent larger than January-June, 1964. Major items included sugar, bananas, textiles, rice, timber and products, ores, metals and products, canned mushrooms, chemicals, canned pineapple, cement and other building materials, vegetables, tea, preserved fruits, citronella oil, paper and pulp, fresh fruits, and handicrafts.
The biggest increase was for bananas, which shot up from US$18 million to almost US$40 million. In fact bananas supplanted textiles as the island's second largest export. At a price of US$8 per basket, Taiwan had sold 7,500,000 baskets of bananas by the end of September for earnings of US$60 million. Most went to Japan.
The second largest export increase was that of rice, which went up from US$5.4 million to US$21.6 million. Taiwan is producing more rice because of more scientific farming. Planted area of rice has not been expanded.
Canned mushrooms and pineapple and chemicals enjoyed brisk sales. Cement and other building materials were down because Southeast Asian countries that formerly bought large amounts have built their own plants.
Export gains also were registered for metal products, mostly iron and steel manufactures for the Vietnam war effort.
On the import side, the 1965 volume was up 53.4 per cent. Major items included: ores, metals and products, machinery and tools, cotton, vessels, vehicles and parts, wheat and flour, beans and peas, crude oil and fuel, electrical materials, chemical raw materials, synthetic fibers and products, timber, pharmaceuticals, chemical fertilizers, wool and products, oil and waxes, plastics and products, paper and pulp, milk and products, and scientific instruments.
Especially noteworthy was the large increase in industrial raw materials and machinery. Taiwan is building up its industries and many plants have been established. The largest increase was ores, metals, and products with a gain of US$21 million, followed by machinery and tools, US$18 million; vessels, vehicles, and parts, US$9 million; and electrical materials, US$6 million.
In the category of industrial raw materials, substantial gains were recorded in the import of synthetic fibers, metals, chemicals, crude oil, plastics, pulp, and rubber. The government is encouraging industries using imported materials in production of goods for export.
Because of arrivals of U.S. agricultural surpluses, the import volume of such commodities as wheat, beans, and peas was increasing. Other items that showed a rise included pharmaceuticals, dairy products, and scientific instruments.
Record Banana Sales
Taiwan has sold 7,500,000 baskets of bananas to Japan this year, earning US$60 million in foreign exchange, the Foreign Exchange and Trade Commission reported in September.
FETC said the 1965 sales were the highest in history. Sales in 1955 were 562,466 baskets, earning US$4,218,000.
The big increase was attributed to Japanese liberalization of banana imports, the raising of the unit export price from US$7 to US$8 per basket, and the expansion of production.
FETC said the income of banana farmers has risen more than 10 times in four years. The income of farmers in 1962 was NT$135 million, while in 1964 the figure went up to NT$1,522 million.
The government has enforced fair distribution of income from banana sales. In 1962, a farmer got NT$104 from the sale of a basket of banana, Now the figure is NT$257.
FETC said farmers get 80 per cent of the proceeds. This is the breakdown:
Directly or indirectly to farmers: NT$257, or 80 per cent. Of this amount, the part paid directly to farmers is NT$198, or 62 per cent. The indirect portion, amounting to NT$59, or 18 per cent, finances an emergency fund to pay for damage from natural calamities, a cooperative fund for expanding production, and operational funds to finance farmers' cooperatives.
Ocean freight from Taiwan to Japan: NT$40, or 12.5 per cent.
Traders' expenses, including cables and postage, taxes and others, as well as profit: NT$23, or 7 per cent.
The Sino-Japanese Banana Trade Council, which has handled Taiwan banana sales for the last year, held its third joint session in Tokyo in September. For next year, the Japanese side asked for sales of not more than 7,800,000 baskets but the Chinese side proposed 10,000,000.
No conclusion was reached. The Japanese government has asked importers to organize a joint association to compel a price cut.
Many farmers have expanded their planted areas. A report from Kaohsiung said that for southern Taiwan only, the planted area has been enlarged from 7,240 to 12,028 hectares, an increase of 66 per cent.
Fearing that Japan may reduce purchases, authorities have asked farmers to establish processing plants for banana powder or paste. Search for markets other than Japan also has been urged.
Thai Highway Contract
The Thai government has granted a US$2.3 million contract to the BES Engineering Corporation of Taiwan for the construction of a 66-kilometer highway south of Bangkok.
This is the third Thai highway project undertaken by the government-operated enterprise. The previous contracts totaled US$4 million. BES also has won contracts elsewhere in Southeast Asia and Okinawa.
The Taiwan Shipbuilding Corporation, another government enterprise, has won a Thai contract for construction of three railway bridges. In opening bidding on five bridges, TSBC won three and a Japanese company two.
The China Wire and Cable Company, a private enterprise, won a bid for supply of US$300,000 worth of PVC cable to Thailand. Some US$650,000 worth of cable had been sold to Thailand previously.
The Wei Chuan Foods Corporation and Tsin Tsin Weisu Company, monosodium glutamate producers, have made investments in Thailand. In cooperation with the Safa Provision Industries Company of Bangkok, Wei Chuan is completing a plant to make 1,200 tons of monosodium glutamate annually. Production eventually will be 2,600 tons. Tsin Tsin is cooperating with the Thai Chemical Industrial Company for a plant with annual capacity of 960 tons in the initial stage and 1,800 tons subsequently. In addition to monosodium glutamate, the two plants will produce glutamic acid and hydrochloric acid.
A report from Osaka said Taiwan-made sewing machines are outselling Japanese products in Thailand and other Southeast Asian countries. The Japanese Sewing Machine Promotion Association has warned its members against Taiwan competition. It also said German importers and retailers are increasingly inclined to choose cheaper sewing machines from Taiwan instead of Japan.
A report by the customs authorities of Thailand shows that Sino-Thai trade is coming closer to balance.
For 1964, the ratio of trade favored Taiwan by 2.6 to 1 as compared with 5 to 1 in 1963. In 1964, Taiwan sold 354,764,818 baht worth of goods to Thailand and bought 139,503,167 worth.
Taiwan formerly exported sugar to Thailand, but that country has banned sugar imports since 1960. Now the leading items are textiles, chemicals, machinery, rolling stock, and canned foods. Major imports from Thailand are rice, tapioca, and corn.
U.S. Shipping Service
A large foreign shipping agency announces increased shipping availability between the United States and Taiwan as a result of the island's growing industry and trade.
Jardine, Matheson & Co. Ltd. of Taipei says one of the major lines it handles, the United States Lines (American Pioneer Line), is planning to add new cargo ships to its already large Pacific fleet.
The United States Lines at present offers some 40 cargo sailings a year to the United States. The frequency of sailings will be increased to a weekly basis.
Four new Challenger-class ships will be added to the present fleet of 9 Mariner-class vessels. The Mariners have of 20-knot speed and Challengers a speed of 21 knots or more. Mariners are of 13,000 tons with cargo capacity of 736,400 cubic feet.
For the benefit of exporters and importers in ports with insufficient heavy-lift facilities, the Mariners provide 60-ton booms, while Challengers have booms to handle 70 tons. Calls are made at New York, Boston, Philadelphia, Baltimore, Atlantic Coast and at Manila, Hongkong, Kaohsiung, Keelung, Inchon, Pusan, Kobe, Nagoya, Shimizu, and Yokohama in the Far East.
Jardine, Matheson & Co. also announces its cargo service between Taiwan and Australia has been strengthened. The company now represents H. C. Sleigh Ltd. of Melbourne and its Dominion Far East Line, and the Eastern & Australian S. S. Co., both of which provide monthly passenger and cargo service to and from Keelung.
Under the banner of the Dominion Far East Line are two sister ships—the Francis Drake and George Anson—calling at Keelung alternately each month. Their ports of call are Melbourne, Sydney, Brisbane, Townsville, Cairns, Manila, Hongkong, Keelung, Kobe, Yokohama, Guam, Rabaul, and back to Sydney and Melbourne. The round trip takes about eight weeks and each vessel carries 130 first-class passengers. Cargo capacity is of 301,530 cubic feet.
The Eastern & Australian S. S. Co. also has two ships—Aramac and Nellore—but tonnage is larger. The 13,600-ton Aramac is the biggest passenger liner on a regular Far East/Australia run. The round voyage from Keelung—with calls at Hongkong, Manila, Brisbane, Sydney, Melbourne, Yokkaichi, Nagoya, Tokyo, and Kobe—takes about two months. Cargo holds have a capacity of 333,480 cubic feet, almost a third of it refrigerated.
Nellore also makes two monthly calls at Keelung. This 10,000-ton vessel carries 12 passengers and is fitted with 53,000 cubic feet of refrigerated cargo space and 502,000 cubic feet of general cargo space. The ship's heavy lift gear handles 80-ton loads.