CIECA News Letter

No. 8 / January, 2013 Index  Special Report Premier's Resignation Means New Cabinet in Taiwan...... P.2 China Airlines chair tapped to lead MOEA………………………... …P.3  Joint Meetings, Seminar and Trade & Investment Mission th The 13 Taiwan-India Joint Business Councils Meeting ………...... P.5 CIECA visits Myanmar……………………………………………..…..P.6

 Guests From Abroad

Greece Guests visit CIECA ……………….………...………....……...... P.7 Delegation of the Irish Parliament Visit CIECA….……...……….…….P.8 Mr. İsmet Erikan, Representative of Turkish Trade Office in Taipei visits CIECA……………………….……….……….………...………..…...…P.8 Panama Business Leader Delegation Luncheon…………………..……P.8 New Zealand Guest…………………………………………………..…P.9 Singing of MoU between CIECA and AWEX……………………….…P.10 Saudi Arabian Guests Visit CIECA………………………………..…....P.10

 Economic News ………………………….………...………...……...P.11

 Activity Report …………………………….………...………...…...P.20  Presentation of Republic of China…………………………………....P.22

虎 風

躍 調 雨 龍 騰 順 兆 生 紫 蛇 年 氣

CIECA wishes you a prosperous year of the little dragon! 1/23

Special Report cabinet, had been reappointed for

Premier's Resignation Means New another five-year term, while Cabinet in Taiwan Economic Minister Shih Yen-hsiang will be replaced by China Airlines TAIPEI—Taiwan's cabinet Ltd. 2610.TW -0.39%Chairman is expected to step down by Thursday, Chang Chia-juch, and that there a government spokesman said, would be further changes to the following the resignation Friday of cabinet. Premier Sean Chen for health and family reasons. At a press conference Friday, Mr. Chen said, "I need to A shuffling of the completely change my work- and 48-member cabinet is the practice lifestyle"—a medical checkup last following a change in president or month having "indicated that my premier, and President Ma Ying-jeou health has changed." He added: "My could take the opportunity to try to wife said I should devote my talent to improve his popularity. Re-elected in the economy, rather than devoting my January 2012 with 51% of the vote, health." He also said he was he now has an approval rating of discussing details of the handover 13%. with the president.

The Presidential Office in a Political analysts said any statement said that Mr. Chen, 63, will cabinet changes are unlikely to affect become a senior adviser to the the continuing economic cooperation president. He will be succeeded as and warming ties between Beijing premier by Jiang Yi-huah, currently and Taipei, as long as President Ma, vice premier, while Mao Chi-kuo, the who is considered China-friendly, minister of transport and remains at the helm. A shuffling communications, will become vice would let Mr. Ma respond to his premier, the statement said. It also declining popularity and doesn't announced that central bank Gov. suggest there will be drastic changes Perng Fai-nan, a member of the in domestic or diplomatic policies,

2/23 said Yang Tai-shuenn, a political economy and such issues as last science professor at Taiwan's Chinese year's power-price increase and Culture University. imposition of a tax on capital gains from stock trading. "Given Mr. Jiang doesn't have a strong background in handling The island's export-reliant cross-Strait relations, he is very likely market has been in doldrums since to follow his predecessor's track in the onset of the euro-zone crisis in maintaining a stable relationship with 2010. The slower-than-expected the U.S. and enhancing interaction recovery in the U.S., along with with China," Mr. Yang said. weakening China demand and stiff competition from South Korea's Mr. Jiang, 52, joined the booming tech industry, have stunted government in 2004 as an adviser to Taiwan's exports, which were down the Ministry of Education. The 2.3% in 2012 from the previous year. scholar-turned-politician was named The unemployment rate remains high vice premier last year. by Taiwan standards, above 4%, and The cabinet, also called the wages have been stagnant for a Executive Yuan, is the island's decade.(Feb. 1, The Wall Street highest decision-making body and is Journal) jointly appointed by the president and China Airlines chair tapped to lead the premier. The last shuffle took MOEA place when Mr. Ma was re-elected TAIPEI, Taiwan -- The and Mr. Wu Den-yih resigned as Executive Yuan yesterday named premier to become vice president. China Airlines Chairman Chang Chia-juch as the replacement for The president's sliding outgoing Economics Minister Shih popularity can be discerned from the Yen-shiang. streets of Taipei, where anti-administration demonstrations Having spent years in both have become frequent, expressing the private and public sectors, Chang public discontent over a deteriorating will utilize his experience and 3/23 expertise to map out policies to as the head of the economic bolster the country's economy, the ministry's Council for Economic Cabinet said in a statement. Planning and Development, the Cabinet said. Chang was recommended by several “heavyweight figures” Kuan proved his financial during the government's search for expertise by drafting the the next economics minister, the government's contingency plans in Cabinet said. Despite Chang's response to the fiscal cliff crisis in the relative lack of experience in the U.S. in December, the Cabinet said. economic sector, he has extensive Vice Premier Jiang Yi-huah, experience in running state-owned who is set to take over as head of the enterprises and excellent personal Cabinet, said earlier yesterday that he qualities, a Cabinet official was hopes to finalize the upcoming quoted by the Central News Agency Cabinet reshuffle before the Lunar as saying, pointing out that New Year holiday, which starts Feb. outstanding former Economics 9. Ministers Chao Yao-tung and Sun Yun-suan also came to their posts Not all of the Cabinet without prior experience. positions will be changed, Jiang said, adding that he expects consultations In addition to running the with possible candidates to be Republic of China's flag-carrier, completed soon. Chang served as vice minister of transportation and communications Premier Sean Chen is and chaired state-owned businesses scheduled to lead his Cabinet in an en including the China Steel Corp. and masse resignation Feb. 7. After Chunghwa Post Co., Ltd. President Ma Ying-jeou approves Chen's resignation, he will formally Meanwhile, Minister appoint Jiang as the new premier, without Portfolio Kuan Chung-ming government sources said. will take over Yiin Chii-ming's post

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Jiang said he has been discussing the The 13th Taiwan-India Joint Business new Cabinet lineup with Ma and that Councils Meeting he hopes the list can be finalized before the Lunar New Year break. The 13th Taiwan-India Joint Business Councils Meeting, jointly As part of the shakeup, the organized by Chinese International positions of economics minister, Economic Cooperation Association finance minister and head of the Council for Economic Planning and (CIECA) and the Federation of Development have received much Indian Chamber of Commerce and attention, although Jiang has Industry (FICCI) was held on remained tight-lipped about January 9 in Taipei. The meeting was individual appointments. co-chaired by Mr. C.Y. Wang, One day earlier, Chen stood Chairman of CIECA and Mr. K. K. up for Jiang, a former interior Modi, former president of FICCI. minister, and Transportation Minister More than 150 government officials, Mao Chi-kuo, who is set to become industrial experts and business the new vice premier. Jiang and Mao leaders from both sides participate in have faced accusations from some the conference. critics that they do not have backgrounds in economics and Several guests of honor were finance. invited to address the opening Jiang said he hopes the new ceremony, including Mr. Chun-fu lineup will coordinate their efforts Chang, Director General of Bureau of better than the existing one, so that Foreign Trade; Mr. Pradeep Kumar the Taiwanese public will have Rawat, Director General of the confidence in the new Cabinet, even India-Taipei Association; both current though it is not led by a person with much experience in economics and and former Ambassador of R.O.C. to finance. (Feb. 4, The China Post) India, Amb. Chung-Kwang Tien and Amb. Philip Wen-Chyi Ong.

Joint Meetings, Seminar and Trade In the Plenary Meeting, Ms. & Investment Mission Kristy Tsun Tzu Hsu, Associate

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Research Fellow, Chung-Hua Chairman C. Y. Wang and Institution for Economic Research, Dr. Myo Thet, Secretary General of expanded on “Moving Towards an the Union of Myanmar Federation India-Taiwan Economic Cooperation Chamber of Commerce and Industry, Agreement” ; Mr. Atul Shunglu, signed the Cooperation Agreement on Assistant Secretary General of FICCI, January 22. They also discussed delivered a presentation on issues of mutual concerns, including “Investment Opportunities for investment promotion and industry Taiwanese Companies in India” ; and cooperation. Mr. Tony Phoo, Economist of The 5-day visit not only Standard Chartered Bank (Taiwan) offered members of the delegation a Ltd., made a speech on “India: valuable opportunity to better Tomorrow’s Story”. understand the development of various industries, namely Trade, Banking, Energy and Manufacturing,

but also helped enhance friendly and cooperative relations between Myanmar and Taiwan.

CIECA visits Myanmar

CIECA Chairman C. Y. Wang and some Taiwanese businessmen joined CACCI

Presidential Visit to visit Yangon, Myanmar on January 21 to 25, 2013. A total of 46 delegates from 8 Chairman C. Y. Wang and Dr. Myo Thet , countries join the CACCI delegation Secretary General of UMFCCI signed the led by President Amb. Benedicto Cooperation Agreement. Yujuico.

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Chairman C. Y. Wang made remarks at signing ceremony.

Traditional blessing gift from Federation of Pakistan Chamber of Commerce and Industry

Group photo at Business Meeting and

Singing Ceremony on January 22, 2013 Greece Guests visit CIECA Mrs. Rodi Kratsa-Tsagaropoulou,

Member of the European Parliament and Mr. Apostolos Kratsa, President of ND’s Party Ethics Committee

called on Dr. Han-Sun Chien, Vice Chairman of CIECA on January 2, 2013. They discussed ways to

promote trade and investment

Bird’s-eye view of Yangon City relations between Taiwan and Greece, especially in the fields of tourism, hotel and agricultural products.

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Mr. John McGuinness led a delegation to meet with CIECA Chairman C.Y. Wang on

January 7, 2013

Mr. İsmet Erikan, Representative of Turkish Trade Office in Taipei visits CIECA

Mr. İsmet Erikan, Representative of Delegation of the Irish Parliament Turkish Trade Office in Taipei, called Visit CIECA on Mr. C. Y. Wang, Chairman of Mr. John McGuinness, Chairman of CIECA on January 11, 2013. They the Ireland-Taiwan Parliamentary exchanged views on direct flight, visa Friendship Society, led a delegation waiver program, health care, tourism, of 7 members of the Irish Parliament agricultural products and economic to pay a courtesy call on Mr. C.Y. issues of mutual concerns, hoping to Wang, Chairman of the CIECA on promote and strengthen trade and January 7, 2013 to exchange views investment cooperations between on ways to strengthen bilateral Taiwan and Turkey. economic cooperation between the two countries and to promote interaction between the two business communities.

Panama Business Leader Delegation Luncheon

At the invitation of ROC govement,

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Mr. Gabriel Diez, President of (Division of Latin American Studies) Consejo Nacional de la Empresa of Tam Kang University; Ms. Fennie Privada(CoNEP); Mr. Roberto Chen, Secretary General of New Troncoso, President of Asociacion Taipei City Computer Association; Panamena de Ejecutivos de Mr. Jeff Sun, General Manager of Empresas(APEDE); and Mr. Irvin Green Master International Freight Halman, President of Camata de Services Ltd.; and Mr. Allen Huang, Comercio, Industrias y Agricultura de Manager of DMP Electronic Inc. Panama (CCIAP), jointly formed a were invited to join the luncheon. high- level business delegation to visit Taiwan from January 13 to 18.

The aim of the visit is to enhance the cooperative relations between the ROC and Panama. CIECA Chairman Mr. C. Y. Wang hosted a luncheon at Taipei World Trade Center Club on January 14 to welcome all the distinguished guests New Zealand Guest from Panama. Several government officials and distinguished business Mr. Ivan Kinsella, Counsellor leaders, including Ambassador Jose (Investment) and Investment Director Antonio Perez, Embassy of Republic of the Greater China of New Zealand of Panama; Ambassador Carlos Liao, Trade & Enterprise, made a courtesy Executive Director of Central call on Mr. Leon Lee, Secretary American Trade Office; Mr. Antonio General of CIECA on Jan. 28, 2013 Yeh, Counselor of Department of to exchange views on the current Latin American and Caribbean trade relations and future prospects Affairs, MOFA; Mr. Leon C. L. Lee, between Taiwan and New Zealand. Secretary General of CIECA; Mr. Gregorio Huang, Assistant Professor of Graduate Institute of the Americas

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Singing of MoU between CIECA and AWEX

Mr. C. Y. Wang, Chairman of the Saudi Arabian Guests Visit CIECA Chinese International Economic Mr. Usama M. Al-Kurdi, Former Cooperation Association (CIECA) Member of Shura Council of The and Mr. Philippe Suinen, Chief Kingdom of Saudi Arabia, and Mrs. Executive Officer of the Wallonia Amal J. Fatani, General Supervisor Foreign Trade and Investment of Female Sections in all Sectors of Agency (AWEX) signed a Ministry of Higher Education, called Memorandum of Understanding in on Mr. Leon C.L. Lee, Secretary Taipei on January 30, 2013 so as to General of CIECA, on January 29, work jointly to promote and 2013. They exchanged views on strengthen economic relations various issues of mutual concerns, between the Kingdom of Belgium including facilitation of visa issuance, and Taiwan in the future. expansion of bilateral trade and investment, and promotion of industrial and technological

cooperation.

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25.20 billion in January, up 14.7% from the previous month, and also up

22.3% when compared with the same month last year. The gap between 2012 and 2013 is down to 12.6% when taking into consideration the Chinese New Year period.

(C) Trade surplus The trade surplus in January was Mr. Leon C.L. Lee, Secretary General of CIECA; Mr. Usama M. Al-Kurdi, Former US$ 0.47 billion, a decrease of 0.4% Member of Shura Council of The Kingdom over the same month last year. of Saudi Arabia; and Mrs. Amal J Fatani, General Supervisor of Female Sections in Major Economic Index all Sectors of Ministry of Higher Education % Change on 2011 2012 (from right to left) previous year Sep. Oct. Nov. Dec. GDP 4.03 -- 0.98 -- 2.4 Economic News CPI 1.42 2.96 2.36 1.59 1.61 Unemployme 4.39 4.32 4.33 4.27 4.18 nt rate Summary of Exports and Export 12.3 10.4 -1.9 0.9 9.0 Imports for January 2013 Imports 12.1 1.3 -1.8 0.1 1.6 (A) Exports Export orders 7.2 1.9 3.2 11.1 0.4 Industrial 4.6 3.0 4.6 5.9 2.4 Taiwan’s exports reached US$ production 25.6 billion in January, down 1.6% Monetary 5.8 3.96 3.29 3.26 3.67 aggregate from the previous month, and also up (M2) Stock 8,155 7,610 7,438 7,246 -- 21.8% when compared with the same Market* month last year. The gap between (Source: Ministry of Finance & Council for Economic Planning and 2012 and 2013 is down to 5.2% when Development) taking into consideration the Chinese

New Year period which was in January 2011. Taiwan Records Rise on Economic (B) Imports Freedom Index Taiwan’s imports reached US$ Reduced labor protection, fewer 11/23 restrictions for companies and lower According to the index, higher taxes for businesses boosted Taiwan’s economic freedom can bring higher overall score on economic freedom income growth, more entrepreneurial for a fourth straight year, according activities and greater job creation. to the 2013 Index of Economic The index is compiled from Freedom. several indicators, including freedom The 2013 index, released by the from corruption, business freedom, Heritage Foundation and the Wall labor freedom, monetary freedom, Street Journal on Jan. 10, showed that investment freedom, financial Taiwan’s overall score rose 0.8 points freedom and government spending. to 75.2 points from the previous year. This year’s report showed that Graded on a scale from 0 to 100, Taiwan’s labor freedom score rose the overall score is computed by from 46.6 points to 53.3 points. averaging scores of 10 sub-indices. However, this increase means Taiwan has a relatively lower minimum wage Despite its rising score, Taiwan and lower severance pay, and saw its ranking among the 177 business owners can adjust countries reviewed fall to 20th place employees’ working hours or fire from 18th place last year. It placed them more freely. fifth among 41 Asia-Pacific nations. Taiwan’s business freedom score, The average score of all which rises as restrictions for starting, countries surveyed increased to 59.6 operating and closing businesses ease, from 59.5 last year, with Hong Kong rose 5.8 points to 94.3 points from a remaining the freest economy in the year ago because of ongoing world, followed by Singapore, simplification of registration Australia and New Zealand. procedures, the report said.

South Korea was ranked 34th in “ Bankruptcy proceedings in the world, while China was ranked Taiwan are fairly easy and 136th and described as “unfree.” straightforward,” the index said, 12/23 adding that to start a company is also Taiwan’s score for monetary convenient and requires only a small freedom, which rises when inflation amount of capital. is lower and government price controls are rarer, decreased 0.2 Taiwan’s score for freedom from points to 82.9 points, a reflection of corruption increased 3 points to 61 rising inflation and increasing points this year. government intervention on prices. “ [However,] despite some More Flights to be Added on progress, corruption continues to be a Taiwan-China Routes cause for concern,” the report said. TAIPEI: The number of direct The score for fiscal freedom, flights between Taiwan and China which rises as the average tax rate will rise more than 10 percent this drops, was up 0.1 points to 80.5 year to 616 flights per week amid points for Taiwan this year. Taiwan’s ever-closer ties between the two average tax rate was reduced to 7.9 former rivals, an official said percent of total domestic income onMonday. after the corporate tax rate was cut from 20 percent to 17 percent in 2010, The two sides have agreed to according to the index. add 58 flights to the present 558 weekly flights, said Lee Wan-li, Increased government spending deputy director-general of Taiwan's played the most significant role in Civil Aeronautics Administration. dragging down the overall score by dropping 7.4 points to 84.9 points, "It is fair to expect the new while the amount of government flights no later than April, but in the spending increased to 22.4 percent of end it will be up to the carriers from GDP this year, the report said. the two sides which provide flight services on the routes," he told AFP. “The budget balance has fallen into deficit, and public debt is about China will put eight more 40 percent of GDP,” the report said. destinations on the map, including

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Lijiang, a popular scenic spot in the al) southwest, while Taiwan will add

Chiayi city in the island's south, Lee TIFA Talks to resume by the End of said. March

Direct chartered flights began in TAIPEI, Taiwan -- 2008 and scheduled flights the Long-suspended Taiwan-U.S. following year, amid rapidly bilateral trade talks under the Trade improving ties following the election and Investment Framework of Taiwan's China-friendly President Agreement (TIFA) will resume this Ma Ying-jeou five years ago. March, the Ministry of Foreign Affairs (MOFA) announced He was reelected last year for a yesterday. last and second four-year term. A new round of high-level TIFA Travel between Taiwan and the talks will be held by the end of next Chinese mainland stopped at the end month in Taipei, and will be of a civil war in 1949. A ban on solo co-chaired by Vice Economics Chinese travellers was lifted in June Minister Cho Shih-chao and Deputy 2011. U.S. Trade Representative Demetrios Previously, mainland tourists Marantis, MOFA said in a released had been allowed to visit Taiwan statement. only as part of official tour groups The exact date and the issues on due to fears they might overstay their the agenda of the upcoming talks visas to work illegally on the island. have not yet been finalized, the Mainland Chinese made a statement said. record 2.23 million visits to Taiwan The two sides are now working in 2012, marking growth of nearly 50 on the agenda for the meeting, which percent from the year before, is expected to help deepen two-way according to Taiwan's National trade and investment and usher in Immigration Agency.(Jan. 21, AFP/ new milestones in bilateral economic 14/23 relations and cooperation, MOFA TIFA talks as a vehicle to regain said. confidence in bilateral trade.

An unidentified local official But it is still too early to tell and told the Central News Agency that “premature” to talk about a Taiwan's major goals in the Taiwan-U.S. FTA or Taiwan's upcoming talks would be faster ultimate inclusion in the TPP, as they progress on a bilateral investment are “less urgent issues,” he said. agreement (BIA) and Taiwan's quick “Lets get the talks started and entry into the Trans-Pacific see how it goes,” he noted. Partnership (TPP). Asked to comment on whether Taiwan is hoping that, under a the U.S. will push Taiwan to open up building-block approach, it will its market to U.S. pork containing eventually sign a Taiwan-U.S. free leanness-enhancing drug ractopamine trade agreement (FTA), the official in the TIFA talks, the AIT chair did said. not give a direct answer. Speaking at a separate press The American official said only conference in Taipei yesterday, that there is an existing law in Taiwan visiting American Institute in Taiwan that forbids pork with ractopamine (AIT) Chairman Raymond Burghardt from entering the local market so also confirmed the news on behalf of American businessmen will not be the U.S. government. able to do so as long as the law Burghardt, however, refused to exists. name some of the top priority issues But he also noted that the U.S. for the U.S. in the upcoming talks, has never said that the pork will saying only that the two sides are still never be an issue in bilateral trade negotiating on the precise agenda. negotiations. The American official said the He reiterated that the U.S.' U.S. side hopes to make use of the

15/23 permanent position on issues resumption of U.S. beef imports. concerning any market around the Since then, there have been world has always been that policies numerous reports indicating that and regulations concerning food Taipei and Washington are expected additives should follow agreed to restart talks under TIFA soon. international standards and scientific rules. According to government's statistics, the U.S. is Taiwan's third That position is across the board largest trade partner and largest and applies to any product, and is not source of foreign investment, while a policy specifically targeting only Taiwan is the U.S.' 10th largest trade Taiwan, he added. partner, 15th largest export market Burghardt arrived Taipei Jan. 30 and 10th largest source of to bring messages from the White imports.(Feb. 1, The China Post) House and State Department concerning bilateral trade and MOEA approves NT$21.6 billion of New Investments security ties. He is scheduled to depart for the U.S. today. The Ministry of Economic TIFA was signed in 1994 as a Affairs (MOEA) said on Jan. 25 it framework for Taiwan-U.S. dialogue had approved applications by another on trade-related issues in the absence two China-based Taiwanese of official diplomatic ties. companies to invest NT$21.6 billion (US$737.13 million) in Taiwan, It has been suspended since which could lead to the creation of 2007 mainly because of controversies 1,500 jobs. over the import of U.S. beef containing ractopamine. The ministry said in a statement that the Industrial Development Bureau In July 2012, the Legislative (IDB) had approved applications Yuan passed amendments to a food submitted by home appliance safety act, paving the way for the manufacturer New Widetech 16/23

Industries Co Ltd and another firm Encouraged by government that the ministry declined to name. investment incentives, 16 China-based Taiwanese businesses IDB Director-General Lien have received investment approval Ching-chang said the bureau had from the bureau since last month, approved the two companies ’ totalling NT$150 billion of applications because they both have investment, which could lead to the been investing in overseas markets creation of 21,000 jobs, Lien said. for more than two years and met the ministry’s criteria as they produce Companies that have gained the high value-added products and bureau’s approval so far include represent crucial component metal casing supplier Catcher manufacturers in global supply Technology Co and handset lens chains. maker Largan Precision Co. ( Jan. 28, Taipei Times) During a telephone interview with the Taipei Times, Lien said that New Widetech planned to invest Taiwan’s Economy Flashes Green

NT$1 billion in building new plants Singal in December in Greater Tainan which would TAIPEI, Taiwan -- After 16 produce compressors and motors. months of sluggishness, Taiwan's economy last month finally shone a Lien said that another company green signal representing stability, planned to invest about NT$20 reported the Council for Economic billion, but stopped short of Planning and Development (CEPD) identifying the company, citing a yesterday. request from the firm to protect its interests. The agency uses a five-signal system to denote Taiwan's economy. The ministry did not specify The five signals are red, yellow-red, which industry the company is green, yellow-blue and blue, which involved in, or where it specifically represent an economy that is, plans to invest. 17/23 respectively, overheating, robust, the M1B monetary supply, direct and stable, sluggish and contracting. indirect financial activities, stocks, industrial output, employment in the Taiwan received an overall nonagricultural sector, sales by economic score of 23 for December, manufacturers, and sales in the which is in the green signal range, service sector. CEPD said. The economic leading indicator According to the agency, in stood at 134.7 in December, a rise of December banking, manufacturing 0.9 percent from November, CEPD and consumption remained robust. said, adding the six-month The labor market was stable, while annualized variation rate of the trade showed signs of improvement. indicator was 6.8 percent, a rise of

The 23 score was an increase 0.9 percent from 5.9 percent for from 21 for November. Of the nine November. Overall, the figure had categories that make up the score, risen five months in a row. two increased, lifting the overall The coincident indicator stood at score by two points. The two were 132.2 in December, a decline of 0.1 exports and machinery/electronic percent month-on-month.(Jan. 29, imports, both seeing their signals The China Post) changing from blue to yellow-blue.

In December, exports increased Asian Currencies Decline in Weeks as by 3.6 percent compared to the same Yen Tumble Threatens Exports period last year, due to a recovery in Asian currencies fell for a the global economy. Machinery second week, led by South Korea’s imports declined by 2.1 percent won and the Taiwan dollar, on year-on-year, narrowing from the 7.3 concern the yen’s slide to a 2 percent for November. 1/2-year low will hurt exports from Flat growth was seen for the the region’s emerging-market remaining seven categories, namely economies.

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The Bloomberg-JPMorgan Asia percent this week as of 4:15 p.m. in Dollar Index touched a two-month Hong Kong, following a 0.6 percent low today as a Bank of Korea board decline in the five days ended Jan. 25. member warned of a global currency The won fell 2.1 percent to 1,097.38 war. The yen weakened versus the per dollar, the biggest loss since May, dollar in each of the last four months according to data compiled by amid speculation Japanese Prime Bloomberg. Taiwan’s dollar dropped Minister Shinzo Abe will favor more 1.4 percent to 29.668. Japan, South aggressive stimulus measures. The Korea and Taiwan compete in the Federal Reserve said Jan. 30 it will world market for electronic products maintain its $85 billion of monthly and autos. debt purchases, a policy that spurs ‘Fear Factor’ the flow of funds to emerging markets. India’s rupee was headed for The won sank as much as 0.9 a weekly advance after the central percent to a three-month low of bank cut interest rates for the first 1,098.25 per dollar today as global time in nine months. funds cut holdings of Korean stocks for a seventh day, the longest run of “Major Asian economies are reductions since November. Net sales looking for ways, such as currency totaled $1.7 billion in January, the depreciation, to counter a sliding most since May. yen’s impact on competitiveness,” said Bruce Yam, a currency strategist A global currency war seems to at Sun Hung Kai Financial Ltd. in be breaking out as monetary easing in Hong Kong. “Yet, quantitative easing Japan drags the yen lower, Ha Sung in major economies means investors Keun, a Bank of Korea board will look to Asia for higher-yielding member, said on Jan. 28 in Seoul. assets.” South Korea’s government wants to cut the “vicious cycle” in which fast The Asia Dollar Index, which money inflows increase the won’s tracks the region’s 10 most-active volatility, Deputy Finance Minister currencies excluding the yen, lost 0.3

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Choi Jong Ku said Jan. 30. inflation provides some room for further policy easing, after reducing “The won’s drop this week was the repurchase rate to 7.75 percent largely due to fear stoked by the from 8 percent on Jan. 29. It reached expectation that the yen would erode 53.0650 yesterday, the strongest level the competitiveness of Korea,” said since Oct. 18. Wai Ho Leong, a Singapore-based economist at Barclays Plc. “The China’s yuan halted a two-day mention of a transaction tax on gain as the lowering of the central currency trading accentuated the fear bank’s daily fixing forced the factor in the market.” currency to weaken to stay within its 1 percent permitted trading range. Intervention Risk The spot rate fell 0.13 percent today

Taiwan’s dollar completed the to 6.2270 per dollar in Shanghai. It biggest weekly slide in 16 months on lost 0.1 percent this week. speculation the central bank will The world’s second-largest intervene to protect exports. Policy economy’s Purchasing makers warned on Jan. 29 they will Managers’Index was 50.4 in January, enter the currency market if the national statistics bureau said “irregular factors,” such as large fund today, lower than 50.6 in December flows, cause excessive volatility, and a median forecast of 51 in a “The central bank’s been Bloomberg News survey of carefully watching other Asian economists. A reading above 50 currencies,” said Samson Tu, a indicates expansion. Taipei-based fund manager at Elsewhere in Asia, Indonesia’s rupiah Uni-President Assets Management weakened 1 percent to 9,750 per Corp., which oversees $700 million. dollar, the Thai baht gained 0.3

The rupee advanced 0.7 percent percent to 29.82 and the Philippine this week to 53.33 per dollar as the peso lost 0.1 percent to 40.71. Reserve Bank of India said cooling Vietnam’s dong was little changed at

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20,845. Malaysia’s financial markets were closed today for a holiday. (Feb. 1, Bloomberg Businessweek)

Activity Reports

National Day in January

CIECA had already sent congratulatory message to several counterparts on their respective national days, namely, Haiti National Day on January 1, Australia National Day on January 26, India National Day on January 26, Nauru National Day on January 31.

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Republic of China

General Information Land Area 36,193 sq. km Population 23.3million (1/2013) Capital Taipei Population of 2.65 million (12/2011) Capital National Day October 10 Country Code 886 Currency New Taiwan Dollar Exchange Rate US$1=NT$29.44 (1/2013) per USD Languages Mandarin, Taiwanese, Hakka, Indigenous languages Religions Buddhism, Taoism, Christianity, Islam Participation Member: in IGOs 1. APEC (Asia-Pacific Economic Cooperation) since 1991 2. WTO (World Trade Organization) since 2002 3. ADB (Asian Development Bank) since 1966

Observer: 1. WHA (World Health Assembly of World Health Organization) since 2009 2. OECD (Organization for Economic Cooperation and Development) – Competition Committee since 2002, Steel Committee since 2005, Fisheries Committee since 2006

Government Head of State President MA Ying-Jeou Cabinet Premier Minister JIANG Yi-huah, Minister of Foreign Affairs David Y. L. LIN, Ministry of Economic Affairs Chang Chia-juch, Minister of Finance Sheng-Ford CHEN Structure The ROC government is divided into central, provincial and municipal, as well as county and city levels. The central government is consisted of the Office of the President and 5 branches (called “Yuan”) - the Executive Yuan (Cabinet), the Legislative Yuan, the Judicial Yuan, the Examination Yuan, and the Control Yuan. The Cabinet is headed by the Premier, who is appointed by the President of the R.O.C. Major Political Kuomingtan (KMT), Democratic Progressive Party (DPP), People First Parties Party (PFP)

Economic Statistics of 2012 GDP US$464 billion Economic Growth 1.25% Rate GDP per capita US$20,374 Consumer Price 1.93% US$20,006(2011) Inflation 1.42%(2011)

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Republic of China

Unemployment Rate 4.24% 4.39% (2011) Major Industries electronics, communications and information technology products, chemicals, textiles, iron and steel, machinery, cement, pharmaceuticals Exports US$301 billion (-2.3% of the same period of 2011) Taiwan is the 18th largest exporter among major countries. Major Export Electronic integrated circuits, Liquid crystal devices, Petroleum oils and Items oils obtained from bituminous minerals (non-crude), Telephone sets and other apparatus for transmission or reception of voice and images, Diodes, transistors and similar semiconductor devices, Printed circuit Major Export China, Hong Kong, U.S., Japan, Singapore, Korea, Vietnam, Malaysia, Markets Germany, Philippines Imports US$270 billion (-3.8% of the same periode of 2011) Taiwan is the 18th largest importer among major countries. Major Import Electronic integrated circuits, Petroleum oils and oils obtained from Items bituminous minerals (crude and non-crude), Machines and apparatus of a kind used solely or principally for the manufacture of semiconductor boules or wafers, semiconductor devices, electronic integrated circuits or flat panel displays; machines, Petroleum gases and other gaseous hydrocarbons, Coal; briquettes, ovoid and similar solid fuels manufactured from coal Major Import Japan, China, U.S., Korea, Saudi Arabia, Australia, Germany, Malaysia, Markets Singapore, Kuwait Foreign Reserve US$406.56 billion (until 1/2013) Outward FDI US$3.7 billion (2011) US$7.4 billion (2012) Inward US$4.9 billion (2011) Investment US$3.9 billion (1-9/2012) Foreign Direct Stock: US$59.8 billion (2012) Investment Inward Foreign Investment: US$3.68 billion (2012) FTAs signed with 1. FTA between the Republic of China (Taiwan) and the Republic of Trading Partners Panama – August 21, 2003 2. FTA between the Republic of China (Taiwan) and the Republic of Quatemala – September 22, 2005 3. FTA between the Republic of China (Taiwan) and the Republic of Nicaragua – June 16, 2006 4. FTA between the Republic of China (Taiwan), the Republic of El Salvador, and the Republic of Honduras – May 7, 2007 5. Economic Cooperation Framework Agreement (ECFA) – June 29, 2010 Sources: MOFA; Bureau of Foreign Trade, MOEA; Investment Commission, MOEA; EIU; National Statistics R.O.C; Dept. of Statistics, MOEA

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