"The Prime Minister of Papua New Guinea expressed interest in forming some kind of cooperation with Taiwan concerning its liquefied natural gas [LNG] production," said Lee Cher-jean, the spokeswoman for Taiwan's APEC delegation.

Somare told Lee Yuan-tseh that Papua New Guinea had proposed a NT$200 million deal. Somare said he hoped Taiwan would take part in its LNG project.

Vice Minister of Economic Affairs Yiin Chii-ming, who accompanied Lee Yuan-tseh during the talks, said that he would convey Papua New Guinea's interest to the state-run Chinese Petroleum Corp (CPC).

Somare also said he hoped Taiwan could help his country's health system by providing medicine and establishing information technology schools under an APEC program to cultivate high-tech talent.

Under the "IT school" program, Taiwan in August donated 20 computers to a school in Thailand.

Seeking to attract tourists, both parties agreed to promote each other's tourism. No information was available from the Taiwanese delegation of what Thaksin and the delegation discussed.

Lee was to hold bilateral talks with Thaksin and with Singapore later yesterday, sources said. Both talks were being held secretly and were not mentioned on the delegation's official schedule.

Bush turns talks around to question of terrorism

AP , BANGKOK

US President George W. Bush yesterday pushed for Asian support on a new overture to end a North Korean nuclear standoff that has cast a shadow over the region for more than a year. Asia-Pacific leaders prepared to announce a new crackdown on terrorists and a bid to restart stalled trade talks.

North Korea was not on the official agenda of the 21-nation APEC forum's agenda, but Bush raised the issue in hopes of gaining support for a new proposal to end the crisis. US officials worked behind the scenes to get a mention of the matter in the summit's final declaration.

But hopes of ending the standoff were tempered as South Korea reported that the North tested a short-range land-to-ship missile in the Japan Sea yesterday.

Bush rode to the summit on Bangkok streets that had been cleared of the city's normally heavy traffic. The president's motorcade slowed to allow Russian President Vladimir Putin to speed by so he could arrive ahead of Bush, under protocol rules requiring leaders to show up in alphabetical order by name of their country.

The leaders were greeted in a large foyer at Government House by Thai Prime Minister Thaksin Shin-awatra and then walked to a nearby building for their talks. They took their seats in a cavernous ivory colored room.

Security surrounding the meeting in the Thai capital was tight. Fighter jets escorted the planes of arriving VIPs and helicopters flew over motorcades as they moved through Bangkok's unusually empty streets.

The APEC leaders will promise to intensify an effort to dismantle terror groups, according to a draft communique.

They will also promise to more tightly control production of weapons that can be used to down commercial aircraft -- but stop short of calling for an outright ban.

But Australian Prime Minister John Howard, a close US ally in the war on terror, said he believes that action is more important than words.

"It's what you do that counts," he said.

APEC will also call on the WTO to restart talks for a new global commerce deal following the collapse of negotiations last month in the Mexican resort of Cancun. And leaders will pledge to be better prepared for any future outbreaks of SARS, other infectious diseases or bioterrorist attacks, according to the draft declaration.

For the Americans, North Korea remained the most compelling issue.

"We have a common goal to make sure that the Korean Peninsula is nuclear weapons free," Bush told South Korean President Roh Moo-hyun at a breakfast meeting.

He met with Chinese President Hu Jintao the day before.

Bush is promoting a plan in which five nations -- the US, China, Russia, Japan and South Korea -- would jointly give North Korea written assurances it wouldn't be attacked in exchange for its promise to dismantle its nuclear program.

For his part, Roh supported and praised the US efforts.

"This issue is very critical for ... the further progress of Korea," Roh said.

US National Security Adviser Condoleezza Rice told reporters there had not been any feedback yet -- either directly or indirectly -- from Pyongyang.

Still, she said, "Whatever we come up with will be more enduring that what we've had in the past."

Matsu, Kinmen residents sending money to China

CNA , TAIPEI

Residents of the frontline islands of Matsu and Kinmen have been active investors in China, with their total investment there reaching between NT$1.5 billion and NT$4 billion (US$44.25 million and US$118 million), Mainland Affairs Council (MAC) Chairwoman Tsai Ing-wen said yesterday.

Tsai said Kinmen and Matsu residents have been investing lavishly, particularly in buying homes and real estate.

The investment has basically been one-way, with very little money from China being invested in the two offshore islands, Tsai said.

Tsai made the remarks at a meeting of the legislature's Home and Nation Committee.

During the meeting, Democratic Progressive Party (DPP) Legislator Hsieh Ming-yuan asked Tsai why business on Kinmen and Matsu has continued to suffer since the government initiated the "small three links" two years.

The links, which went into effect in January 2001, refer to direct trade, postal and shipping links between Kinmen and Matsu, and Fujian Province's port cities of Xiamen and Fuzhou.

Tsai said the MAC is in charge of formulating Taiwan's policies toward China but is not responsible for economic development of the two island groups.

She attributed the decline to the reduction in the number of military personnel stationed there and to the outflow of capital.

Lien Chan on tour isa cause for real shame

By Liu Kuan-teh

On his recent trip to Britain, Chinese Nationalist Party (KMT) Chairman Lien Chan lashed out at three adverse tendencies that he said had emerged since the Democratic Progressive Party (DPP) took power in May 2000. According to Lien, these are China's intensified military buildup, the nation's prolonged economic stagnation and what he called the DPP administration's failure to adopt a more prudent and moderate approach in dealing with cross-strait affairs.

Lien's statements remind us of the criticisms he made two years ago on a visit to Washington. On that trip, Lien emphasized that the world would be confronted with a potentially explosive crisis if President Chen Shui-bian were re-elected. The only way to defuse such a crisis, he said, would be for the KMT to win next year's presidential election.

Without specifying how he would accommodate Beijing in regard to the so-called "one China" principle, Lien pledged in Cambridge that if he wins next year's election, his administration, while countering Beijing's military threat and political pressure, will avoid provoking China in order to maintain regional stability.

Lien's comments also recall the week before the 2000 election, when the KMT launched a series of attacks on Chen. The KMT portrayed Chen as the only candidate who would ignite a war across the Taiwan Strait. In one campaign ad, it warned people not to vote for Chen, otherwise they would have to send their sons to war.

The KMT's incorporation of the so-called "stability card" proved invalid not only because Lien lost the election but also because of the relatively stable situation between Taiwan and China that Chen has been able to maintain since he took office.

The accusation that Chen failed to adopt a more prudent and moderate policy toward China is incorrect. The "five nos" Chen pledged in his inaugural speech opened up a fresh opportunity for Taipei and Beijing to resume dialogue. Chen's later call for both sides to jointly pursue political integration in 2001 should have been treated seriously by the Chinese leaders as a good-will gesture. His administration's gradual opening of the "small three links" was another manifest olive branch. Were these moves not prudent and moderate?

Lien should not overlook the efforts that Chen has made to normalize cross-strait relations. Instead, he should take a close look at how Beijing has sabotaged Taiwan in international arenas such as the World Health Organization and its attempts to downgrade Taiwan's status by buying out Taipei's diplomatic allies.

In a mature democracy, it is often odd to witness a former vice president criticizing the incumbent president so harshly, as if he himself were not a citizen. Former US president Bill Clinton never attacks President George W. Bush over his handling of domestic and foreign affairs. Even former US vice president Al Gore, who lost to Bush by a slight margin, did not point his finger at Bush during his recent trip to Taipei.

Lien's denigration of the Chen administration displays a lack of democratic morality.

Moreover, in any democracy, checks and balances between political parties are normal. A dutiful opposition certainly may criticize the administration and articulate its opinions in order to win the next election. The truth and fairness of its criticisms are open to public judgement. How-ever, it is inappropriate to exaggerate or misinterpret the principle of inter-party checks and balances, let alone attack the government while abroad.

To win public respect and support, the KMT should show the international community the extent to which it can improve on the DPP rather than simply defame the party and Chen. It is therefore shameful to see Lien's loose-cannon behavior amounting to nothing but political trickery.

Liu Kuan-teh is a Taipei-based political commentator.

Self-pity obstructs recovery

Taiwan's economy is recovering. News came out on the first day of the 2003 Taiwan Business Alliance Conference that foreign and domestic companies have decided to invest NT$138.39 billion in 186 projects here, exceeding the Ministry of Economic Affairs' original target of NT$110 billion. This better-than-expected result has made government officials happier than ever.

The success of the conference shows that international businesses are still positive about Taiwan's investment environment as well as its economic outlook. This, despite the fact that the economic performance of and investment input in Taiwan have slumped over the last three years due to the global economic downturn and political instability. Taiwan should get out of self-pity mode and more confidently promote itself across the international community.

Over the last few years, China has copied Taiwan's successful business model and created a magnetic effect, drawing foreign investment into its market on the strength of its cheap labor, enormous size and investment incentives. Taiwan's success in attracting investment this time has again eroded the myth of the Chinese market.

Tempting as it is, China's market is only one part of the global market. As long as Taiwan maintains its competitive edge in technological innovation, marketing and a suitable investment environment, the future of investment in Taiwan remains bright. Many media commentators and China-based Taiwanese businesspeople contend that Taiwan's economy would wither if the country did not open up direct links with China. This belief is spurious. Hong Kong, Japan and Singapore have enjoyed direct links with China for a long time, yet their economies have still performed poorly over the last couple of years. Their recovery was made even more difficult because China has drained capital and technology from them.

International trade holds the key to Taiwan's economic future. In order to maintain the country's competitiveness, the investment environment must be improved by eradicating trade barriers to the free movement of capital, people and goods and to enable businesses to deploy globally.

In spite of a consensus on improving the country's economy, the ruling and opposition parties have devoted most of their efforts to unnecessary political gain. In the best interests of Taiwan's economy, they should put aside their differences, resist electoral intrigue and make an all-out effort to formulate strategies that maximize Taiwan's competitiveness and business development.

As a member of the global economy, Taiwan must abide by international trade regulations. The biggest complaint from foreign companies is Taiwan's violations of intellectual property rights (IPR). Certainly, we do not have to accept all the rules, given the existing disputes over some Internet technologies. The government, however, must demonstrate its commitment to cracking down on piracy to ease the concerns of foreign investors about IPR violations.

The decision by foreign firms to invest in Taiwan indicates confidence in the country's economy. Climbing out of economic recession, Taiwan has to work even harder to remove investment obstacles and create another economic miracle. After all, such good opportunities do not come around very often.

Business leaders predict bright high-tech future

DEVELOPMENT: Foreign businessmen say Taiwan’s competitiveness stems from its human and financial capital, high-tech industries and proximity to China

BY JESSIE HO

STAFF REPORTER

Taiwan’s concentration of high-tech industries and quality human resources make the nation competitive and appealing to foreign investors, despite the fact that China has emerged to take the lion’s share in the sector, chief executives of multionational companies said yesterday.

“Clearly, Taiwan has built a strong base of human capital. Combined with the nation’s financial capital it is one of the crucial keys driving the high-tech secotr,” said Richard Hill, chairman and chief executive officer for Novellus Systems Inc, a California-based semiconductor upstream supplier, at the first summit of the Taiwan Business Alliance Conference.

While many Taiwanese manufacturers are building and expanding factories in China to take advantage of the lower wage and land costs, Taiwan’s advantage lies in its high-tech talents and clustering of global players, Roger Seager, vice president for GE Aircraft Engines’ sales division, said at the meeting.

GE views Taiwan as a springboard to enter the massive Chinese market, Seager said, urging cooperation on both sides of the Taiwan Strait.

NEC Corp, Japan’s biggest maker of telecommunications equipment, suggested that Taiwan develop knowledge-based industries based on its unique scheme of vertical specialization between design and foundry businesses.

“It is inevitable that labor-intensive industries will gradually move to China because of its low-cost labor,” said NEC’s chairman of the board, Hajime Sasaki.

Despite big business’ optimism about Taiwan’s economy, Lam Research Corp chief executive officer James Bagley urged the government to open direct cross-strait traffic.

Local and foreign business groups such as Lam Research, a supplier of wafer fabrication equipment based in California which established its Taiwan branch in 1993, have long expressed concern about the cross-strait transport links issue.

“It’s going to be hard for Taiwanese businessmen to manage the semiconductor industry if they can’t easily get into China,” Bagley said. “It will be to Taiwan’s benefit [if a direct link is opened].”

In response, Minster of Economic Affairs Lin Yi-fu said the government is actively working on the project to facilitate cross-strait trading activities in view of the increasing investment and trading between China and Taiwan.

Panelists attending yesterday’s forum painted a bright picture of the world’s semiconductor industry for the upcoming quarters.

“The overall environment is better, and thus I believe the sector will grow at least 20 percent in 2004,” Sasaki said.

This will no doubt benefit Taiwan, as the nation is home to the world’s largest manufacturers of custom-make computer chips—Taiwan Semiconductor Manufacturing Co and United Microelectronics Corp.