Ladies and Gentlemen:

News reporters are coming to play an increasingly vital role in the current phase of our development in the Republic of China on Taiwan. As ROC society in general and our news media in particular become more and more open, both the domestic and international media are able to provide better and more meaningful service to all.

Since the lifting of the Emergency Decree on July 15 of last year, we have passed the National Security Law and the Law on Assembly and Parades, opened up registrations for new newspapers, begun the legislative process of opening up the formation of new political parties, and are drawing up a program to rejuvenate the National Assembly, Legislative Yuan, and Control Yuan. All of these have changed our political landscape. There has been a tremendous response, for example, to the opening of new newspaper registrations: 122 new newspapers have been registered, of which 77 have begun publication. There are now over 3,600 magazines in circulation, 188 radio stations, and three television stations. Freedom of the mass media in the ROC now compares favorably with that in Western countries.

A preliminary consensus has been reached by the Legislative Yuan regarding the organization of new political parties and the program for rejuvenating parliamentary organs. I am confident that together these acts will mark a new milestone in the history of constitutional democracy in the Republic of China. And the more our democracy matures, the greater the Republic of China on Taiwan will stand out in contrast to the Chinese mainland.

In the area of economic liberalization and internationalization, we have opened our market wide to foreign products by slashing import tariffs, breaking down other barriers to imports, and streamlining customs procedures. We have implemented a floating exchange rate, relaxed controls on foreign exchange, and are encouraging foreign investment. Tariffs have been cut on 3,500 categories of items, lowering the average effective tariff rate from 7.8 to approximately 5 percent, comparable to the rates in industrialized countries. Moreover, the New Taiwan dollar has been allowed to appreciate by more than 40 percent against the U.S. dollar since 1985; and private individuals can now buy as much as US$5 million for outward remittances.

In addition, we have recently established an Overseas Economic Cooperation and Development Fund, with an initial capitalization target of NT$30 billion, to be used in assisting friendly developing nations. Through this fund, we hope to share our economic developmental experiences and resources with countries who can benefit from such assistance.

Our unofficial contact with the Chinese mainland is based on two major considerations: first, humanitarianism, in view of families that have faced decades of separation; and second, our goal of sharing the story of Taiwan's success with our mainland compatriots. Over the past year, nearly 230,000 people have visited the Chinese mainland. Initial reviews have confirmed that this policy has indeed resulted in people all over the Chinese mainland learning about the "Taiwan Experience."

Moreover, several categories of people from the mainland may now come to Taiwan for short stays, including those wishing to visit critically ill relatives or attend their funerals, mainland Chinese students or scholars who are now studying in foreign countries, and mainland personalities who have made outstanding contributions to the advancement of either their profession or Chinese culture. Finally, soldiers originally from Taiwan who served in the Nationalist army and remained on the mainland after 1945 will be allowed to return to Taiwan and take up residence.

We must, however, proceed with extreme caution in our mainland policy. For obvious reasons, our first concern must continue to be our national security. And our policy of no official contact with the Chinese Communist regime will remain unchanged. President Lee Teng-hui summed it up well when he declared that our mainland policy cannot be based on a romantic longing, but is a serious task that must be carefully undertaken. So we will insist on our policy of gradually expanding contacts with the mainland Chinese on an indirect, nonofficial basis.

While these policies are in themselves big news stories, they hardly begin to tell the story of the chain reaction of fundamental and multifaceted change that they have set into motion.

Being in the midst of such far-reaching change, it is difficult to make a full assessment of all that is happening. Most of the changes are clearly positive; however, some have caused us to take a second look at where we are going. Our government and people are now in the position of having to come up with quick answers to a wide range of new and challenging questions. Unlike many nations of the West that have had well over a century to gradually adjust to political and economic modernization, the Republic of China is having to compact this development into the short span of a few decades.

So, your role in informing the world of new developments is a crucial one. And the more accurate an understanding the rest of the world has of us, the better our relations in all areas can proceed. I sincerely thank you for the indispensable role you play in promoting international communication.

On the other hand, we hope that the longer you stay in the Republic of China, the better you come to truly understand what the average ROC citizen thinks, how he reacts to major events, and what his assumptions are about his country and the world. We look forward to seeing more reports on all aspects of our society--which seems to be absorbing the many new changes remarkably smoothly.

It may be difficult for some of you to be away from home on a holiday as important as Christmas--which happens to be the anniversary of the implementation of our constitution some 40 years ago. However, we hope that the warmth of friendship of our people will provide you with ample cheer to make this a joyous and memorable holiday season and new year.

A very Merry Christmas4and Happy New Year to you all!

Thank you! Editor's note: The above is the complete text of Premier Yu Kuo-hwa's remarks at a press conference for foreign reporters held on December 20, 1988.