Q: A question of much concern both at home and abroad is that of just exactly when we will be lifting martial law. Some have said that according to signs it will be in February or March of this year. Mr. Premier, could you tell us whether or not these estimates are correct? Also, many people are worried that the National Security Law will amount to changing the cover of martial law without changing the content. May we ask the Premier to give us some explanation of this law in order to clear up the apprehensions of the public?

A: As everyone knows, the draft of the National Security Law is currently being deliberated in the Legislative Yuan. As soon as the legislative procedures have been completed and the law has been promulgated and put into effect, the Executive Yuan will act with all speed to remove martial law according to the provisions of the new law.

Everyone is also aware that the peace and prosperity of the people are built on the foundation of the security of the country and the stability of society. Although today we no longer hear the sounds of artillery, we cannot deny the existence of the threat the enemy holds for us. This is to say that we are still living under a state of emergency. Therefore, in order to insure the continued security of the nation and stability of society, the government cannot neglect the establishment of the National Security Law. As the Executive Yuan initiated this National Security Law, there was on the one hand extensive referencing of the laws of developed nations, and on the other hand as much safeguarding as possible of the people's freedoms and rights. Therefore, it was sought to make the content as concise as possible, the main points being concentrated only in the control of the entrance and exit of people to and from the territory; the inspection of articles and transportation facilities; and the assigning of coastal areas and important military installations as restricted areas. Regardless of the law's legislative intent, timing, or scope; it is entirely different from martial law, this is known to everyone with open eyes.

Q: The government is in the midst of research to rectify laws in order to prepare for the opening of new political parties, while oppositionists have already declared the formation of a new party. In the future the Executive Yuan will be facing a doubling of the seats held by oppositionists as well as the setting in motion of party organizations by political opponents, so countervailing pressure will certainly be increased. Does the Executive Yuan have any plans for dealing with this? How will a stable and smooth line of communication be established with political opponents?

A: The Executive Yuan is the highest administrative organization in our country. According to article fifty-seven of the Constitution, we are responsible to the Legislative Yuan, and the Legislative Yuan in turn exercises its authority according to the rules set down in the constitution. So the relationships between the Executive and Legislative branches relationship are founded in the Constitution. The results of the recent legislative elections will not influence the usual state of the implementation of government orders in executive departments. The Executive Yuan will naturally follow the principles of democratic government in the ordinary course of events, with additional strengthening of liaison and communication with the Legislative Yuan.

Q: The R.O.C national elections were concluded last December 6, and during the next three years no new elections will be held. During these three years the government will have plenty of time to adopt various measures in areas needing reform. Mr. Premier, have you any plans for changes in your cabinet in order to pursue an atmosphere conducive to reform?

A: Administrative work in seeking reform and improvement should be of a frequent and never-ending nature, which in principle has no necessary connection with popular elections. However, during election periods, candidates make public many truly representative, popular political views of the people, possessing value which should be taken into consideration by the administration, which the government should humbly adopt and actively promote. As to whether or not the cabinet at the Executive Yuan will be undergoing changes, I think this must depend on whether or not there is in reality such a need. If the members of the cabinet are not suited for the affairs at hand then there can be no positive reform in government. Therefore the cabinet may be adjusted or renewed at any time, without regard as to whether or not elections are being held.

Q: During the National Assembly and Legislative Yuan elections which were held at the end of last year, some of the political views put forth by many candidates reflected fully the opinions of the people. Will the Executive Yuan be weighing the relative degree of urgency in these suggestions, showing the government's sincerity in its view of the importance of the people's opinions? Will some of these opinions be included in future administrative reports of the Legislative Yuan, and how many of these ideas have already entered administrative policy?

A: During the National Assembly and Legislative Yuan elections which were held at the end of last year, many candidates put forth a number of significant political views. I would like to thank every newspaper for the summary of ten major election issues they provided after much well-considered analytical work. These ten major issues are at the present stage all problems which we are paying close attention to, and have already been completely adopted into the administrative plans for the next year.

Q: The third plenary session of the Kuomintang passed six major topics for reform, one of which was "How to enrich the central parliamentary representation of the people," which is at present being researched. Mr. Premier, what is the most likely program to be adopted? Is it possible that there will be adoption of across-the-board elections?

A: This problem is at present under study by Kuomintang officials. I have come here today to answer your questions in my capacity as the Premier of the Executive Yuan, so as concerns this particular question, please forgive my not answering. I can, however, clarify for you the nature of this problem. The Republic of China does not cover the area of Taiwan alone; the central parliamentary representation of the Republic of China must at the same time represent the enemy-occupied areas on mainland China as well as overseas Chinese. The parliamentary representation for the Taiwan area may be decided by the electoral process; this is in fact already the case, and should not present difficulties in the future. However, the representation of every province on the enemy-occupied mainland and of overseas Chinese, the determination of the numbers of representatives and methods of selection, is precisely the problem which the Kuomintang is now considering.

Q: The ruling party is at present actively and positively pursuing political renovation. Mr. Premier, at this turning point in the forging ahead of the democratic constitutional development of our country, what kind of attitude and action do you feel would be appropriate on the part of citizens related to the administration of public affairs in facing and adapting to the evolution of the new political situation?

A: I think that in the development of a constitutional democracy, the government and the people need to keep three principles firmly in mind:

First, the propagation of democratic government comes from the pursual of "national security, social stability, and the peace and prosperity of the people" as its unchanging goals.

Second, the perpetuation of democratic government has as its basic conditions "the respect for the minority of the majority and the obedience of the minority to the majority."

Third, democratic society must depend absolutely on the safeguard of the "rule of law." Everyone must be proud of abiding by the law and ashamed of breaking it.

I hope that all of our compatriots and public administrators will keep these three principles always in mind, and our democratic system of government will be even further enhanced and glorified.

Q: During the past year, the government has tried to solve the R.O.C -- U.S. trade problem with moderate, step-by-step economic reform measures, but last year the trade imbalance continued to grow, to US$15 billion. Under these circumstances, is the government considering adopting a more active method of solving this problem?

A: The existence of a trade imbalance between the two countries has an intimate connection with the countries' economic structures and comparative production costs, and is not a problem that can be completely ameliorated in a short period. We know that international trade should not be a one-way street, and we know the danger of a large trade imbalance. Thus, the government has already set about thinking of ways to improve, and will actively strive to curtail, the ROC--U.S. trade imbalance.

On the one hand, we will spare no effort to diversify our export markets, to increase our exports to Europe and South-east Asia, and to avoid over-reliance on the U.S. market; while on the other, we have adopted measures to reduce tariffs on a large scale, have greatly opened up imports, and have strengthened anti-counterfeiting efforts and the protection of intellectual property rights.

In addition, we will continue to send purchasing groups to the U.S. to buy goods and materials and to give priority consideration to buying machines and equipment related to technology and production from the U.S.

Q: The government has set eight percent as a goal for this year's economic growth. Mr. Premier, what concrete measures will the government take to reach this goal? At present, under the pressure of the continuing appreciation of the NT dollar, does the government have improved countermeasures to protect our country's export trade?

A: Economic growth forecasts are determined by using planned models combining many subjective and objective factors, and a number of measures and policies are naturally included as a means of attaining these goals. The 1987 Taiwan economic construction plan approved by the Executive Yuan, which foresees the attainment of an eight percent growth rate, includes many policies and measures, among which particularly to be stressed is that, besides maintaining an appropriate increase in exports, domestic demand must also be expanded, including raising the private willingness to invest and expanding public investment, thereby making domestic demand and export trade the two main forces for economic growth.

Expanding domestic demand can substitute for a portion of exports, while expanding imports helps to achieve economic growth at the same time that it shrinks surplus savings and relieves the trade imbalance. This naturally can alleviate the pressure of the NT dollar's appreciation.

Q: What kind of pressure has been exerted by the United States on the ROC in regard to our policy toward the exchange rate of the New Taiwan dollar? What are the fundamental principles of the future direction of our country's exchange rate policy? As to our huge reserves of foreign exchange, is the government considering opening up the management of foreign exchange on a large scale to reduce the pressure of the accumulation of reserves?

A: The ROC and the U.S. had a formal exchange of ideas last year. Basically, foreign exchange is determined by market supply and demand, so the Central Bank's responsibility is not to interfere in the foreign exchange market but only to maintain an orderly market.

In substance, whether in the aspect of international trade or invisible expenditures, controls have been relaxed as much as possible and will continue to be relaxed. The current increase in foreign exchange reserves stems mainly from our huge surplus in international trade. If we can accelerate the improvement of the economic structure, speed up steps toward liberalization and internationalization, and expand demand on the domestic market, then the pressure of foreign reserves accumulation can be reduced naturally.

Q: Mr. Premier, could you clarify any adjustments in the salaries of government employees for the year of 1988? Mr. Premier, could you give us a detailed explanation of the situation concerning foreign reserves and the salaries of government employees, and is there an interdependent relationship between the two?

A: The Executive Yuan has always seen the improvement of military, public servant, and teacher salaries as an issue of importance, and adjustment will be made in fiscal 1988. The rate of adjustment will be matched by the Executive Yuan with the total calculated budget for fiscal 1988. These adjustments must take into account the factors of price fluctuations, financial liability capabilities, and the general salary levels of the people. They have no relation whatsoever to the level of foreign exchange reserves. Here there are some points which I would like to make clear:

First, the foreign reserves held by the Central Bank of China are not a part of the income of the national treasury.

Second, the foreign exchange reserves held by the Central Bank of China are equal in value to the NT dollars paid out by the Central Bank of China.

Third, as the Central Bank of China serves as an agent to safeguard foreign reserves, it does not simply store the money away in a safe, it deposits it in foreign banks in order to earn interest. This interest then passes through the Central Bank of China and into the national treasury as surplus income, and in this way earns money for every citizen.

In short, if any people's or government organizations wish to make use of the foreign reserves, they must first produce an equal amount of NT dollars, pass through the established requisition procedures, and exchange the NT dollars for the foreign currencies. Otherwise, they may take the foreign currencies as a loan, which will also require that they pass through the requisition procedures, with the further stipulation that they must pay interest at the standard international rate of interest.

Q: Mr. Premier, how is construction advancing on the 14 major development projects, which have successively got under way since September 1984?

A: The plan for the 14 major development projects, which is our most important public construction program at the present stage, actually consists of 30 individual projects. To date, except for the fourth nuclear power plant, on which work has temporarily been stopped, for the Tai-chung coal-fired power plant, the number two northern highway, and the Taipei metropolitan rapid transit system, for which preparatory work is being undertaken, and for the Ssuchunghsi reservoir and the Mingtan electric power peaking facility, the plans for which are now being examined, the other 24 projects are all under way and from 20 to 70 percent completed, so that in general things can be considered to be running smoothly.

The length of time required for the 14 major development projects varies according to their nature. For example, China Steel's third expansion project can be completed this year, yet only about five kilometers a year can be completed of the Taipei municipal rapid transit system, which will reach 100 kilometers in length, while the urban waste disposal project is an ongoing one. According to plans as scheduled, probably some 22 projects can be completed by 1991, while the rest will need to continue.

Q: The annexation of Kaohsiung City and Kaohsiung Harbor has been an unsolvable problem for many years. Due to the fact that the Harbor Bureau is under the jurisdiction of the Taiwan Provincial Government, it is nearly impossible to unify the rights of administration under the umbrella of the city government. The Kaohsiung Municipal Council has expressed to the Central Government on many occasions hopes for clear and precise instructions, in order to bring about an integrated administration of public affairs and promote the welfare of the citizens of the city. Could Mr. Premier please give us a response to the problem of the annexation of Kaohsiung City and Kaohsiung Harbor?

A: Kaohsiung Harbor is the biggest international commercial port on Taiwan. Its capacity for shipping traffic influences the import and export trade of the whole of Taiwan; the effect is not strictly limited to Kaohsiung City. The sphere of the Kaohsiung Harbor industry straddles the administrative areas of both Kaohsiung City and Kaohsiung County. At the same time, the scope of the shipping administration and of Kaohsiung Harbor includes ports and harbors all along the coastal region such as Kaohsiung, Pingtung, Tainan, Chiayi, Yunlin, and Penghu. Therefore, if we hand the management of the Kaohsiung Harbor over to the Kaohsiung City Government, there will arise many problems relating to administration. As regards construction projects which affect both Kaohsiung Harbor and Kaohsiung City, representatives of both areas may at any time coordinate to manage related affairs. When major problems arise the Provincial Government and the Kaohsiung City Government have a coordinating council which consult to solve the problems; everyone has been cooperating very well.

Q: Due to the gradual spread of the concept of environmental protection, the Liwuhsi generating station, the fourth nuclear power plant, DuPont, and the north weather radar station have all met more or less with setbacks over the past year. Mr. Premier, in the difficult resolution of environmental protection and economic development, what methods will you adopt with regard to construction plans concerning the people's welfare?

A: Each of us demands a good "quality of life" as well as "environmental quality." When a country is poor, it is necessary to develop its economy first, before raising its quality of life, and to wait until after the economy has developed to a certain degree before further demanding to protect its environmental quality. Only then do the government and the public have the power to make improvements.

Since we are still a middle-income nation, we must continue to develop our economy, yet at the same time, the affect of our dense population and the concentrated development of industry makes environmental questions extremely worthy of attention. Thus, our present policy is for economic growth and environmental protection to be simultaneously planned and considered and to be developed in balance.

But in speaking of environmental protection, we must stress two fundamental concepts:

The first is to rely on science. Due to scientific developments, traditional industries that many of us consider to be polluting can generally utilize modern scientific methods to prevent pollution and keep it from affecting the environment. Of course, those that experts evaluate as absolutely polluting will not be permitted to be established.

The second is that environmental protection is everyone's responsibility. Everyone must be public-spirited rather than solely considering his own interests or advantages and carelessly polluting the environment. At the same time, the costs of antipollution management should be paid for by its beneficiaries as well as by the government. Not only would relying completely on the government cause its financial burden to be excessive, affecting other administrative measures, but paying for construction that benefits only a minority with tax receipts from the whole country is unfair in principle.

Q: Up until present, the implementation of consumer protection programs has yet to become a reality. Mr. Premier, when will such programs be officially introduced?

A: First I'd like to clarify one point: the government has always seen the protection of consumer benefits as a problem of much importance. In reality we are at present fully equipped with measures for consumer protection; however, these measures have been dispersed among every various area of law.

The government wants to institute in its policies consumer protection laws. However, because this involves at the same time the revision of many other laws, there is a period of time needed to accomplish this. Therefore we have first set up and implemented a consumer protection program; in this way experience is gained which will be helpful in establishing consumer protection laws. A consumer protection program was discussed and passed at a January 15 meeting of the Executive Yuan, and has already been implemented.

Q: Over the course of the past year, there have been initiated many measures in the field of education which have been beneficial to literally thousands of youths. But in the reality of everyday life the relative proportion of youth-oriented problems has risen. Mr. Premier, what methods might you have for solving these recurring problems?

A: Although many people suppose that youth problems arise at the time when a societal and economic system undergoes a certain amount of change, what have actually occurred have been temporary phenomena. For example, the American hippies of the 1960's were for a time a popular trend, whereas now they are already nonexistent. As a society becomes more prosperous, the population becomes more highly centralized, the allure of materialism is increased, and every type of stimulation and excitement is multiplied, so that it becomes impossible to completely avoid the arisal of youth problems. Therefore youth problems become everyone's concern. In order to solve these problems, my personal hopes are:

First, that much importance be attached to home education, the personal example of the parents being extremely important.

Second, that the moral education in our schools will be strengthened, with an especially strong foundation being laid at the levels of compulsory education; that teachers will with loving and patient hearts, setting examples by their own actions, teach our students and help them to cultivate their personalities.

Third, as far as the ethics of our society are concerned, we must promote the concept of filial piety. Ordinarily, the behavior of a child who is filial to his parents will be beyond reproach, while he will be loyal to his country and his friends.

Fourth, I wish to ask for the support of all of our friends in the media; that in your commentaries, reports, advertisements, and all other facets you will show, as pertains to the conduct of youth, more of the bright side of culture, and lead society in the correct practices.

In addition to these, the government must construct more leisure facilities for youths, assisting and guiding them to take part in the proper kinds of leisure activities, to help them to vent their excess energy. Of course, if youths are involved in criminal behavior, disrupting the order of society, we must rectify the situation according to our laws.

Q: The establishment of a university in the eastern region has always been an ardent hope of the local population. What is the possibility of its coming true?

A: The balanced development of education is a fixed policy of the government. But in view of the eastern region's current environment and conditions, the time is not yet ripe to set up a comprehensive university there. To run a comprehensive university well requires not only adequate student resources but also excellent professors, and the eastern region does not yet completely possess these two factors at present. However, the changing this year of Taitung Junior Teachers College and Hualien Junior Teachers College into normal universities will be of positive help toward the development of education in the region.

Q: Mr. Premier, despite the world trend of "physical strength is national strength," many disputes and disturbances (such as coaches boycotting supervisors) have occurred in our preparation and training program for the 1988 Olympics. What remedial measures does the government have?

A: We are now actively training athletes to compete in the 1988 Olympics, and we hope that our athletes can make a good showing there. Besides the Tso Ying Training Center, another training center will be set up at the Linkou Chung Cheng Athletic Park, dedicated solely to training athletic competitors. At the same time, we want to hire more outstanding coaches, strengthen facilities, advance training, improve athletes' living conditions, raise prizes, and lift the athletes' competitive spirit.

More important, however, is to promote athletics and exercise among the whole people.

The Executive Yuan has ratified a plan to promote athletics among the whole people, which is currently being implemented. The ever greater accomplishments achieved at successive Taiwan Area Games prove that the athletic abilities of our youth are advancing year by year. That is a gratifying phenomenon.

Q: Over the past year many major criminal cases have occurred in the country, such as the Lin Tzung-ch'eng case, the tachialo gambling craze, and even the mass incident at the airport during the elections, showing that a part of the public lacks a conception of reason and the rule of law. Mr. Premier, what ideas and methods does the government have to strengthen education in the rule of law to maintain social order?

A: Our country is a democratic nation ruled by law, and the democracy that the whole country desires is a democracy founded on the rule of law.

From now on, besides continuing to strengthen criminal prosecution to strike at crime, we must, even more, actively clean up social mores and strengthen education in the rule of law. However, our society has a bright side as well as a dark one. Since the news media is both the voice of the people and a social teacher, I especially hope that each of you journalists will attack those people and events in society that violate the law as well as publicizing the bright side, educating the public, and correcting social mores.

Q: Generally speaking, the characteristics of a developed country include a prosperous society with a high income, a high quality of life, a high level of trained personnel, and high mobility, goals which we are engaged in striving to reach. Mr. Premier, would you please discuss for a moment your individual evaluations and expectations?

A: As to the several characteristics you mentioned of a developed country, my individual evaluation is that I have deep confidence in our becoming a developed country by the end of this century. Although at present we are still a middle-income country, our income is growing rapidly, and in fact we already have a quite prosperous society and quite comfortable lives.

As we are, at the same time, advancing democratic constitutional government politically and accelerating the pace of liberalization and internationalization economically, we in fact already possess all the necessary conditions for a modern-day nation, so I think it will not be difficult for us to join the ranks of the developed countries soon.

Q: Mr. Premier, would you give a forecast appraisal of domestic political, economic, and social developments for the new year?

A: We had great accomplishments on all aspects last year; this year we must increase our efforts and strive for further advances.

Politically, the draft of the National Security Law is already being considered by the Legislative Yuan, and the Statute for the Organization of Civic Groups and the Public Officials Election and Recall Law are in the process of being drawn up and revised; these laws mark a turning point in the history of our nation's constitutional government.

Economically, under the lead of liberalization and internationalization, we must improve the industrial structure, reform the tax system, expand domestic demand, and continue to strive for growth and stability.

Socially, we must strengthen the maintenance of law and order, rectify social mores, vigorously carry out environmental protection policies, and thoroughly examine and revise the existing welfare policy and system as well as studying how to enlarge its results.

Of course, this year, the same as in past years, it will be difficult to avoid running up against unforeseeable problems. However, we have the confidence and the ability to overcome them. So I am very optimistic about the political, economic, and social trends for the new year.

[Picture Caption]

Reporters from every media jump at the chance to ask questions of Premier Yu at the annual year-end press conference.

With the gradual awakening of consumer consciousness, the implementation of consumer protection acts has become a pressing concern.

ROC athletes train for battle as they look forward to active duty in the 1988 Olympics.

With foreign reserves of US$47 billion, limits on foreign exchange have been substantially raised.

Workers from the Bureau of Environmental Protection check the exhaust of motor vehicles in order to preserve the purity of the air.

Protecting the income of farmers and improving their living environment is one of the ROC's foremost policies.

After the press conference, Premier Yu warmly greets reporters at a tea party sponsored by the Government Information Office.

With the gradual awakening of consumer consciousness, the implementation of consumer protection acts has become a pressing concern.

ROC athletes train for battle as they look forward to active duty in the 1988 Olympics.