The revocation of the General System of Preferences for the Republic of China, South Korea, Singapore, and Hong Kong, which U.S. President Reagan has asked Congress to make effective January 2, 1989, will produce a major transformation in the future development of the R.O.C.'s industries. In addition to striving toward high technology, it is especially important that we opportunely select those technologies that most conform to market demand for the development of new products.

Although the R.O.C. is ahead of other newly industrialized countries in the development of science and technology, it still has a long way to go compared with the advanced countries. The reasons are mainly as follows:

1) Difficulties in the international transfer of science and technology.

Because of increasing international competition, enterprises in recent years have attached more importance to technological property than in the past, and governments have adopted more vigorous measures to protect it, the most apparent examples being the U.S., Japan, and West Germany. This trend has made it more difficult for our country to obtain technology for our high-tech and defense industries, and has affected their development.

2) Insufficient investment in research and development.

Investment in R&D in the R.O.C. is inadequate. The nation's annual R&D expenditures (excepting national defense) represent a mere one percent of the gross national product, and effective organization and utilization of R&D resources is lacking.

3) A lack of trained scientific, technical, and management personnel.

Of the 2.3 million workers employed in manufacturing industries in the R.O.C., only five percent are engineers, and most of them work in production rather than R&D. This compares with a figure of 20 to 35 percent for the advanced industrial nations. Unless we further accelerate the training of technical personnel, it will be difficult for us to join the ranks of the industrialized nations.

4) Sluggish renovation of technology by private enterprise.

The most fundamental reason why the nation's industrial structure is weak and its speed of adjustment is slow is that the level of creativity in products and production processes is inadequate and technological renovation by private enterprise is sluggish. Unless new technologies are constantly brought in from overseas, adapted, improved, and allowed to take root and develop, the health of our domestic industries will not fundamentally improve.

The most important points of our nation's future industrial development include:

1) Promoting high-tech industries to accelerate the improvement of the nation's industrial structure.

2) Accelerating the upgrading of traditional industries and improving their economic health.

3) Strengthening the synthesis of technical and service industries to satisfy the needs of the future.

4) Attracting domestic investment by world-renowned high-tech companies to lower costs, reduce risks, and create new technologies.

5) Strengthening the training and hiring of technical personnel.

The most important areas of technological development for our nation at present are energy, materials, information sciences and Chinese-language computers, automation, and biotechnology. We must come to realize that technological advancement and creation are the motive forces that spur growth. Promoting high-tech and tech-intensive industries in line with the world technological revolution, strengthening the collection of key information, promoting comprehensive technological planning, and training experts in important fields have become the most important goals for the future development of our nation's high-tech industries.