Monthly Archives: August 2012

Greek-style elementary school in Taitung

Local residents in Taitung City were surprised to see the Greek architectural motif of the new Fengyuan Elementary School, which opened this March. After news coverage on the building’s unique Mediterranean design, the school began getting an influx of visitors, becoming a popular destination for tourists and wedding parties wanting the right setting for their photographs.

Chang Yue-chao, principal of the school, said she insisted on the building’s distinctive design when planning the construction. She wanted to blend the romantic elements of the campus, taking advantage of the surrounding mountains and sea. Chang explained, “Different kinds of campuses may be able to motivate students to explore their different characteristics, to develop it and cherish it.”

The new school building was designed by Lin Kun-cheng, an avant-garde architect in this coastal city. He used the prevailing blue and white elements of Mediterranean architecture in accordance with the school’s natural surroundings. Lin expects to revolutionize the architectural model of Taiwan’s traditional elementary school buildings, so that everyone pays attention to their own design sense in creating a school’s architectual style.

The old school building, built when the school opened 50 years ago, was torn down to make way for the new building. A picture of the old school is also included at the end of the photo gallery below. The pictures below are provided by the school’s principal. If you would like to see more pictures of the school, please visit the following photo blog (only in Chinese).


Story of the Black Bat: From Pearl Harbor to Vietnam

This May, a memorial service was held marking the 70th anniversary of the Doolittle Raid on board the historic USS Hornet aircraft carrier docked in Alameda, California. Among those invited to attend was Chu Cheng, 86, a former pilot from Taiwan, who was there to receive a citation for saving the lives of the Doolittle crew during WW II. Until 1992, his story was relatively unknown.

Unsung heroes behind the film Pearl Harbor

Today, the history of the infamous Japanese attack on Pearl Harbor on December 7, 1941 is required reading in American schools and has been retold in various films. Yet much of what followed Pearl Harbor has not made it into the textbooks or onto the silver screen. On April 18, 1942, four months after the attack on Pearl Harbor, 16 B-25 bombers led by US Air Force Lieutenant Colonel James H. Doolittle flew from the USS Hornet, then at sea in the western Pacific Ocean, to bomb Tokyo and the main islands of Japan. Although the raid caused minimal damage, it was deemed a success for boosting American morale and for serving as a wake-up call for Japan’s military leaders and civilians.

Part of the raid was included in the Hollywood movie Pearl Harbor (2001) with Alec Baldwin playing Doolittle. Missing from the film was the fact that after completing their mission and, while flying over China’s coastal province of Zhejiang, Doolittle and his crew were forced to land when they ran out of fuel. They were rescued by the then 16-year-old Chu and other guerrillas from Chiang Kai-shek’s Nationalist forces. With the help provided by Chinese civilians, the Americans were able to escape the Japanese and eventually return to the US.

Chu’s ties with the US Air Force did not end there. Failing to capture Doolittle and his crew, the Japanese launched several attacks to crack down on Chinese guerrillas, killing tens of thousands of Zhejiang civilians. Chu fled the then Japanese occupied region and joined the Air Force in 1948. In 1949, Chu followed Chiang Kai-shek’s government to Taiwan and graduated from the Air Force Academy in 1952. He went on to study advance flight training on an air force base in Texas before becoming a pilot in the famous Black Bat Squadron.

Warriors of the Cold War

The end of the Korean War in 1953 saw East-West tensions evolve into the Cold War. The US was eager to collect military intelligence on the Chinese mainland while the government in Taiwan desperately needed American aid and military assistance. In order to maintain relations with the US, President Chiang Kai-shek sent his son Chiang Ching-kuo to Washington D.C. to sign a contract with the Central Intelligence Agency to set up an organization called the “Western Enterprise Company.” Under the cover of this company, the US provided military aircraft and surveillance equipment to Taiwan’s Air Force with the main purpose of gathering intelligence for the United States. Established in June 1953 and known as the 34th Squadron, it took part in air-drops of psychological warfare leaflets, relief supplies, and occasionally flew agents to the Chinese mainland.

The squadron was also responsible for the electronic intelligence (ELINT) missions over China. Just like bats, they few at night and rested during the day. And since their aircraft were painted black, they were given the nickname the “Black Bat Squadron.” This squadron was distinct from the subsequent establishment of the 35th Squadron in February 1961, which was nicknamed the “Black Cat Squadron.”

The Black Bat Squadron was responsible for gathering electronic intelligence in order to help plan US air defense strategies. The squadron’s main task was to fly at low altitude over mainland China in order to trigger the air defense radar system of the Chinese People’s Liberation Army (PLA) and to record the radar frequency positions of the air defense systems. The Black Cat Squadron was responsible for high altitude reconnaissance, flying to a height of about 70,000 feet, to take photographs of important military facilities. In the early period of the Cold War, the military intelligence gathered by the squadrons was extremely valuable to the US.

The Black Bats used mostly propeller-driven aircraft, including B-17 bombers and Lockheed P2V patrol aircraft with a 14-man crew. Other missions used B-26 bombers, C-123 and C-130E transport aircraft, while the Black Cat Squadron flew the single-seat U-2C and U-2R reconnaissance aircraft.

In the early days, the Black Bats flew into undefended air space because the PLA’s air defense systems were so outdated. In November 1957, a B-17 flew a nine-hour low altitude mission over nine Chinese provinces, dropping leaflets, clothing, and toys. The PLA launched 18 aircraft sorties, but were unable to intercept the B-17. Another Black Bat crew flew a reconnaissance P2V aircraft over nine Chinese provinces, and landed in South Korea, and exposed the defensive incompetence of the PLA forces.

Fu Jing-ping, an expert on Taiwan’s air force history, said Beijing began buying advanced Soviet Union-made air defense radar systems to counter a perceived threat from the squadrons. With the combination of Soviet Ilyushin IL-28 and MiG-17 fighter aircraft, the PLA developed night interception tactics, with the former launching projection flares as the Black Bats entered radar range and the latter trailing to intercept. Later, the Black Bats suffered severe losses of aircraft and personnel.

In the mid-1960s, the Black Bat Squadron halted electronic intelligence gathering operations over mainland China, and began operations over Vietnam. After the withdrawal of US troops from Vietnam in 1975, the Black Bats were disbanded.

Overall, the Squadron conducted 839 missions, with 15 aircraft shot down or crashed. A total of 148 crew members died performing their duties. Wang Li-jen, the author of several books on Taiwan’s air force history, points out that the Black Bat Squadron was the unit which suffered the highest causalities in Taiwan’s Air Force history.

Lives sacrificed for US aid

In an interview with the World Journal in San Francisco, Chu Cheng said the purpose of the Black Bat Squadron’s low level flying served to lure counterattack measures by the PLA’s anti-air artillery and so expose the enemy’s communication signals, to collect radar launch locations, and to analyze the ground command deployment of the PLA. “Each member of the Black Bat Squadron faced death without fear. In each mission, everyone was determined to live or die with their aircraft,” he said.

When Chu joined the squadron, he was only in his 30s. In the dozen years that followed, Chu flew more than 100 missions, among which 32 were over the mainland for the purpose of electronic surveillance. After retiring from the air force, Chu worked as a captain for Taiwan’s state-run airline, China Airlines, flying passengers around the world. He said he is really lucky to be alive. “Peace and tranquility are the greatest happiness in my life,” he said appreciatively.

Wang noted that the Black Cat Squadron first detected China’s development of nuclear energy equipment in Lop Nur, western Xinjiang in 1962. The US was shocked by the news that China had successfully conducted nuclear test explosions in Xinjiang in 1964. The United States then launched a secret action named “Heavy Tea Project” (code-named “Operation Magic Dragon” within Taiwan’s Air Force). In May 1969, a C-130E transport aircraft with pilots from the Black Bat Squadron took off from Thailand, via Burma, entering Chinese air space in Yunnan province, and dropping air analysis and earthquake sensing instruments in Gansu province (near the nuclear test site in Xinjiang). This was done in order to detect the raw materials and power of China’s nuclear test explosions. Wang stressed that Taiwan’s Air Force was key for Washington to understand China’s development of nuclear weapons.

Fu Jing-ping notes that after China successfully launched the first satellite in 1970, the second Operation Magic Dragon was canceled. Five years later, the Black Bat Squadron was officially disbanded when American troops withdrew from Vietnam in 1975.

During the Cold War, Taiwan sent elite Air Force personnel to work for the United States so that Washington was fully aware of China’s military deployment, while the United States gave economic aid and military assistance in return. The intelligence collected by the Black Bat Squadron and the Black Cat Squadron was far more important to the US than to Taiwan.

The home of the Black Bat Squadron was the Hsinchu Air Base, Hsinchu County (northern Taiwan). Each mission route was determined by the United States. Crew members always started their missions after sunset, and given the extreme confidentiality of their missions, they were not able to say good-bye to their families. On return from their missions, they were always met by American personnel at Hsinchu. Upon landing, the Americans would board the aircraft to remove the intelligence detection recorders, sending them directly back to the US for analysis.

In his memoirs, the director of Taiwan’s Air Force Intelligence, General I Fuen, pointed out that the Chiang Kai-shek government fleeing to Taiwan in 1949 felt particularly helpless, especially when President Harry Truman issued the White Paper setting out his intention to abandon the Nationalist government. But, with the sacrifice of the Black Bats and Black Cats, “Taiwan secured diplomatic support and economic assistance when the island’s survival was at stake. Without risking their lives to collect such intelligence information, the US would not have paid so much attention to Taiwan,” he said.

Keeping the memory alive

Taiwan’s government lifted the ban on traveling to China in 1987, turning a new page in relations with the mainland. However, until 1992 the missions of the two Black squadrons were kept a military secret by the Taiwan government, along with the nature of the missions and death of the pilots involved. That year, Fu Yi-ping, then deputy editor-in-chief of the United Evening News and the daughter of a Black Bat Squadron officer who died on duty, began researching the missions of the Black Bats and wrote an article about it. In it, she revealed the secret cooperation between Taiwan and US military intelligence for the first time. Subsequently, survivors of the squadron would join together in a visit to China to search for the remains of their fallen crew members. At the end of 1992, the first set of remains of the Black Bat Squadron members were sent from the mainland to be buried in Taiwan. They were welcomed at the airport with full military honors from the government, with a flag draped coffin as a symbol of glory.

In 2009, the popular Hong Kong singer Andy Lau released a CD entitled A Better Day, to commemorate the Black Bat Squadron. The stories of these heroes now live outside locked dusty confidential documents and have become household stories.

By the end of 2009, the Museum of the Black Bat Squadron was established in Hsinchu City, at the location of the military dormitory where the crew members stayed while on duty. One item on display is a washing basin made with melted aircraft fuselage wreckage, recycled since the local residents were so poor and lacked basic supplies.

On February 23, 2012, a gift exchanging ceremony was held at the Republic of China Air Force Academy in Kaohsiung (southern Taiwan), in which the U.S. Classic Aircraft Aviation Museum (near Portland, Oregon) donated a B-26 and P-2V used by the Black Bat Squadron in exchange for a F-5 E/F and J-85 engines no longer used by Taiwan’s Air Force.

Addressing the attendees, Roger Kelsay, founder of the Classic Aircraft Aviation Museum said, “The Black Bats’ job was to fly secret and extremely dangerous airborne missions. Not everyone returned to the safety of home. Many flight crews perished. Because these were highly secretive missions, in most cases, the losses were not publicized or even acknowledged. Families and friends would have been told that the crewmember was lost on a training mission or perhaps in a non-descript accident. That is simply the way it was.”

“After so many years, some of these facts have started to come to light. It is time now, to give these heroes, and their often forgotten families, recognition for the sacrifices they made and long endured. As an American and as a military veteran, I salute you. Your contributions to our freedom have not been forgotten and all of us here will endeavor to keep your memory alive.”

On hand was Major General Tien Tsai-mai (Mike), the former superintendent of the Republic of China Air Force Academy who worked to make the aircraft exchange possible. In speaking of the heroic sacrifice of the Black Bat and the Black Cat Squadrons, said he wanted to let “the spirit of the Republic of China Air Force live on forever, and that this historical Taiwan-US military cooperation won’t be covered by dust or forgotten over time.”

Taiwan seeks to revive economy through innovation, new markets

At the end of July, the Chung-Hua Institution for Economic Research (CIER) revised Taiwan’s economic growth rate down to 2.3 percent. This followed downgraded forecasts from the economic institute of Academia Sinica and the Taiwan Research Institute. Since the second quarter of this year, the effects of the European debt crisis have been spreading, slowing US recovery, cooling the Chinese economy, and further contributing to a general downturn in the global economy.

The United Daily News reported that Wu Chung-shu, CIER president, said exports account for more than 70 percent of Taiwan’s GDP. When the international economy weakened in the first half of this year, Taiwan’s exports registered negative growth which affected Taiwan’s overall economic growth.

The Commercial Times reported that China’s GDP growth rate dropped to 7.8 percent in the first half of this year. When the scale and speed of China’s market expansion slowed, Taiwanese-funded enterprises in China were faced with severe challenges in their business operations.

Taiwan’s shrinking competitive advantage on the mainland

Taiwan-made products used to be highly competitive in the cross-strait economic and trade area, not only in terms of total output, but also in terms of revenue generated. Taiwan led in categories of industrial products such as raw materials and chemical fibers and textiles, metal appliances, building materials, cables, and electronic components. Many items became the leading industrial commodities in China. Even in the service industry, Taiwan’s wedding photography, KTV (karaoke box), bowling, internet coffee shops were responsible for trend-setting in China’s service sector. However, relatively few Taiwanese businesses (including those operating on the mainland) occupy the top spots in the provision of such goods or services, with many suffering declining performance.

An important reason for this situation is that China’s manufacturers have learned the skills of production and marketing from their Taiwanese counterparts after working beside them for a number of years and through their own trial and error. Meanwhile, Taiwanese firms are finding it hard to keep pace with research and innovation, and have failed to upgrade the quality of their products and services sufficiently quickly. These days, Taiwanese companies are only able to maintain a competitive advantage in a few commodities such as food, auto parts and ICs (integrated circuits) in the mainland market.

Expanding Taiwan’s markets by lowering China-Taiwan trade hurdles

The Commercial Times pointed out that the most effective way for Taiwanese firms to reverse the decline and continue to operate in China is to make an effort to enhance industrial innovation and speed up the pace of upgrades in order to create forward-looking products. Some Taiwanese companies have found new business niches and emerged from the threat of weak economic growth in China. For example, some have made the transition from manufacturing to the import of luxury goods. Others have moved from downstream product assembly to the upper end of producing advanced materials.

Lin Chu-chia, a professor of economics at National Chengchi University, wrote an article in the United Daily News that noted, as Taiwan’s exports to the mainland account for nearly 42 percent of its total exports, China has become not only an important export market, but also the largest source of Taiwan’s trade surplus. Improving cross-strait economic and trade relations will play a key role in the recovery of Taiwan’s economy, said Lin.

The two sides signed the FTA-like Economic Cooperation Framework Agreement (ECFA) two years ago, but Taiwan only enjoys duty free on several hundred items included in the early harvest list. There are seven to eight thousand products that still need follow-up consultations on tariff reductions. However, subsequent tariff negotiations are still pending. Therefore, it is recommended that follow-up cross-strait ECFA goods tariff consultations should be completed soon in order to allow more Taiwanese exports to enter the mainland. Taiwan should strive for an early tariff reduction so that the island can maintain a competitive edge in its trade relations with China.

As for the weak domestic investment, Lin suggested that the government should accelerate the process of allowing Chinese capital investment in Taiwan. In April this year the Ministry of Economic Affairs announced that China’s capital would be permitted to invest in Taiwan on a large scale, including opening up 95 percent of the manufacturing sector, and over 50 percent of the services sector and government procurement. However, there exist many hurdles in other provisions which still make it difficult for Chinese businesses to invest in Taiwan.

As an example, there are restrictions on the amount of China’s capital that can be invested in Taiwan’s stock market, restrictions of Chinese participation in the shares of banks, and time limits on the period that Chinese investors can remain on the island. These many restrictions reduce the attractiveness of Taiwan to the mainland investment. As such, it is recommended that a comprehensive review of the policy regarding Chinese investment is undertaken to ensure continued Chinese investment in Taiwan.

Targeting the emerging middle class

The Economic Daily News reported that Kuan Chung-ming, Minister without Portfolio, said that advanced economies cannot keep expanding in the same way as before. Taiwan should explore consumer markets outside Europe and the US, and look for other new markets besides mainland China, he said.

Kuan pointed out that, geographically speaking, Taiwan should pursue emerging Asian countries such as Indonesia, Vietnam, as well as India and Brazil. A major characteristic of these economies is the rapid increase of the middle classes. It is predicted that the middle class in Asia will account for two thirds of the global middle class population by 2030, and that 43 percent of global consumption will come from developing countries in Asia. In the past, Taiwan treated these emerging economies in Asia as merely production bases, but now they should be treated as potential markets for Taiwanese goods and services, he said.

Taiwan wins baseball little league championship again

On August 9, Taiwan’s little league baseball team from Taitung County (Eastern Taiwan) won the 2012 Bronco League World Series championship, making it the second consecutive year that Taiwan has won the championship. They beat a team from El Dorado Hills, located more than an hour’s drive from San Francisco.

The Taiwanese team hit a three-point home run in the sixth inning to lead the game by 8 to 5. From then on, they extended their lead to win with a final score of 11 to 5.

Each year more than 5,000 players worldwide compete to win regionally in order to qualify for the Bronco World Series championships. Taiwan was a long standing champion winner before hitting an 11-year losing streak that was finally broken last year. Chang Kai-shiung, the pitcher who almost threw a perfect game at the semi-finals, won the award as the best pitcher of the tournament with a zero mistake rate.

In the final game, the Northern California team was supported by a large number of local fans due to the team’s proximity to the Bay Area. The Taitung team also had many supporters in the stands, with hundreds of Taiwanese-Americans cheering from the benches. Among them was Jack K.C. Chiang, the director general of the Taipei Economic and Cultural Office in San Francisco, who read a congratulatory message from President Ma Ying-jeou to the team after they won the game.

After lifting US beef imports, Taiwan hopes to resume trade talks with Washington

In an August 6 meeting with US Assistant Secretary of State for Economic, Energy and Business Affairs, Jose W. Fernandez, President Ma Ying-jeou stressed that after the Legislative Yuan passes the bill allowing US beef imports, Taiwan hopes to resume talks with Washington on inking a Trade and Investment Framework Agreement (TIFA). Delayed and stagnated for the last five years, the TIFA’s passage would create an appropriate environment for Taiwan to join the Trans-Pacific Strategic Economic Partnership Agreement (TPP) in eight years, further advancing the island’s integration into the Asian regional economy.

President Ma pointed out that for the past four years he has actively improved US-Taiwan relations with concrete results. Taiwan’s air defenses have been bolstered with the US government’s approval to upgrade Taiwan’s F-16 A/B fighters for US$18.3 billion. Furthermore, at the Asia Pacific Economic Cooperation (APEC) in 2011, US Secretary of State Hillary Clinton publicly acknowledged Taiwan as an important economic and security partner of the US, cementing the friendly and cooperative relations between the two sides. By the end of this year, President Ma hopes that Taiwan will be added to the list of US visa waiver program (VWP) countries as well.

President Ma told Fernandez that the US is Taiwan’s third largest trading partner, the third largest export market and source of imports, and Taiwan is America’s 10th largest trading partner. In 2011, Taiwan-US bilateral trade amounted to US$67.2 billion, an 8.6 percent growth rate compared with 2010. This further shows the close trade relations between the two countries.

The president said that Taiwan has already signed an FTA-like Economic Cooperation Framework Agreement (ECFA) with mainland China, Taiwan’s largest trading partner. The island has also signed an investment and protection agreement with Japan, Taiwan’s second largest trading partner, and now, it is looking very likely that talks on the TIFA will move forward again, giving Taiwan a chance to resume talks with its third largest trading partner after resolving the issue of American beef imports.

The President stressed that since Taiwan has already allowed imports of American beef, it is hoped that both sides can resume the TIFA negotiations as soon as possible, so that bilateral economic and trade negotiations can get back on track in order to benefit the business community and the people of the two countries.

On July 25, the Legislature passed three revisions and one additional binding resolution to the Act Governing Food Sanitation, which conditionally eased Taiwan’s zero-tolerance policy against US beef imports with traces of ractopamine, a disputed leanness-enhancing drug. The amendments are based on a maximum residue level (MRL) of 10 parts per billion for beef, dictated by the United Nations’ Codex Alimentarius Commission.

Assistant Secretary of State Fernandez is one of the highest ranking American officials to have visited Taiwan in recent years. During their conversation, Fernandez proved himself to be a Jeremy Lin fan, expressing his hope that Lin returns to play for the New York Knicks one day. The Taiwanese-American NBA player also visited Taiwan in early August.

Taiwan wins at 2012 Microsoft championship

On July 27, an eight-person Taiwanese team arrived in Las Vegas to participate in the finals of the Certiport 2012 Worldwide Competition on Microsoft Office. The event opened on July 29 and pitted participants from more than 70 countries against each other. Taiwan’s team qualified for the finals and ultimately came away with two winners among the various categories.

Yeh Chih-chang of Tamkang University won the championship of PowerPoint 2007, making it Taiwan’s fourth consecutive win in this category. Chen Man-ying of the Taiwan University of Science and Technology won the second runner-up for PowerPoint 2010. The two students carried Taiwan’s national flag up to the podium upon receiving their awards, and received resounding applause and cheers from their fellow participants.

The two Taiwan winners also received congratulations from Wang Jie, representing the Taipei Economic and Cultural Office in San Francisco. Wang read a congratulatory message from President Ma Ying-jeou immediately after the final results were announced.

The 2012 Worldwide Competition of Microsoft Operating Specialist (MOS) was organized by Certiport for professional experts around the world to demonstrate their skills. Established in 1997, Certiport validates computer skills and knowledge through performance-based testing on Microsoft Office.

EVA Air aims to be Asia’s top airline

As EVA Air sets its sights on becoming Asia’s leading airline, no one could accuse the company’s president, Chang Kuo-wei of taking a back seat. Earlier this month, dressed in the uniform of a flight engineer, Chang took his place alongside the crew of a Boeing 777-300ER at Taoyuan International Airport and prepared to co-pilot the plane to Beijing, according to Commonwealth monthly.

“I am going for full captain qualifications,” said Chang, who assumed the title of EVA Airways president two years ago. When time allows, he flies to advance his certification in the cockpit.

Under his leadership, EVA Air has performed exceedingly well. In Commonwealth’s Golden Service Awards survey, EVA Air beat Singapore Airlines, and was frequently heralded as “the world’s best airline,” taking first place in the airline category.

According to Economics Daily, Chang took over operations at EVA Airways in 2010. At that time, global airline companies were shifting their focus, either catering to top tier customers or maximizing the number of clients in economy class. EVA Air decided to take the former approach with the goal of joining the ranks of exceptional service-oriented airlines like Cathay Pacific and Singapore Airlines.

Chang, 40, majored in economics at the University of Southern California and received his master’s degree in economics from the University of California at Long Beach, California. He has loved flying since childhood and is a certified captain for the Boeing 777. He shares many personality traits with his father, Chang Yung-fa, the chairman of one of the world’s largest shipping and transportation conglomerates, the Evergreen Group. While his father’s passion is focused on shipping and the sea, the younger Chang’s affections lie with planes and in the sky. Both father and son are hard working, and both have an eye for innovation and creativity.

Commonwealth points out that the transition from business class to Royal Laurel Class, decorating EVA planes with Hello Kitty, and joining the Star Alliance were all spearheaded by the younger Chang. He knows that container ships primarily move commodities while airlines primarily move people, but to succeed EVA Air has to promote its brand name and presence through marketing.

This past May, EVA Air announced that it would undertake a US$100 million refitting project of its fleet of 15 Boeing 777-300ER aircraft. In place of the Evergreen Laurel Class, the cabins now contain fully reclining seats in the renamed Royal Laurel Class, which EVA Air is marketing as a First Class service at Business Class prices. The introduction of the Royal Laurel class between Taipei and New York turned heads in the industry, winning fans and rave reviews.

Late last year, under Chang’s direction, EVA Air teamed up again with Japan’s Sanrio on its second round of Hello Kitty planes. This time, the Hello Kitty theme dominated almost all exterior surfaces of the planes. At first the airline only intended to paint three planes in the Kitty motif, but the market response was so enthusiastic that they added two more in May on cross-strait routes to and from mainland China.

In March this year EVA Air was accepted as a future member of the Star Alliance, one of the world’s top three airline consortiums, which includes such airlines as Lufthansa, United Airlines, Singapore Airlines, and Air China. EVA Air expects to qualify for formal membership in 2013.

Chang explained. “Joining the alliance gives EVA Air access to places we could not access before. We can use the alliance membership network to get travelers to their destination each step of the way.” Chang has repeatedly stressed that Taiwan should become a worldwide airline transit hub. Given its geographic position, Taiwan just happens to sit right at the outside limit for one-way, non-stop services to and from North America.

Last quarter, Commonwealth reported that EVA Air’s revenue reached NT$2.6 billion (US$87 million), an increase of 5.7 percent over the same period last year. Despite this, it suffered an after-tax net loss of nearly NT$1.1 billion (US$37 million) due to higher fuel costs, joining the Star Alliance, and Royal Laurel Class cabin refitting. The sum is even more burdensome than the NT$900 million (US$30 million) loss suffered by China Airlines.

Despite the losses, Chang looks for ways to provide quality service while saving money. EVA Air does this through innovation. “As I always tell my colleagues, the highest form of ‘savings’ is imperceptible to customers,” he related. “As an airline, we represent Taiwan, and we want to show people that Taiwanese airlines can be world class,” stated Chang emphatically.

President Ma proposes East China Sea initiative

On August 5, President Ma Ying-jeou proposed a peace initiative to address territorial disputes over the Diaoyutai Islands, urging neighboring countries to show restraint and settle the issue peacefully, according to the Taipei Times. Taiwan, Japan and mainland China have been involved in acrimonious disputes over the sovereignty over the Diaoyutais for several years.

“We hope to use the East China Sea Peace Initiative to urge all sides to seriously face the possible impact of this territorial dispute on peace and security in the East China Sea,” President Ma said.

President Ma called on all parties to refrain from aggression, to shelve their differences, maintain dialogue, to observe international law and resolve the dispute by peaceful means. All sides should also seek consensus on a code of conduct for the East China Sea, and establish a mechanism for cooperation in exploring and developing resources in the region, he said. President Ma was speaking during the opening ceremony at an exhibition marking the 60th anniversary of the peace treaty signed between the Republic of China and Japan following WW II.

Known as the Senkaku Islands in Japan, the Diaoyutais are located in the East China Sea, which is an important air and sea transportation hub in the western Pacific, and is therefore also important for the peace and security in the entire Asia-Pacific region. Taiwan’s government has reiterated sovereignty over the Diaoyutais, which Taiwan considers to be under the jurisdiction of Yilan County in northeastern Taiwan.

In response to President Ma’s initiative, Japanese Foreign Minister Koichiro Gemba said on August 7 that the Japanese government cannot accept the idea expressed by Taiwan because the Senkaku Islands are Japan’s inherent territory. However, he stressed, this will not affect the current good relations between Taiwan and Japan, according to the Central News Agency. It is important to promote concrete cooperation to maintain peace, stability and order in the East China Sea, stressed Minister Gemba. Japan has no concrete proposals with regard to the type of cooperation, but there is room for brainstorming, he said.

In response to Koichiro’s remarks, Timothy Chin-Tien Yang, Taiwan’s Minister of Foreign Affairs, reiterated that the Diaoyutai Islands are an inherent territory of the Republic of China (Taiwan) and that will not change. Minister Yang said that the distance from the Diaoyutai Islands to Taiwan is the shortest, being only 102 nautical miles from Keelung in northern Taiwan. Traditionally, this is where Taiwanese fishermen cruise and fish. The islands have been in Taiwan’s territorial waters historically, geographically and geologically, said Yang.

Minister Yang also stressed that there are some precedents in the international arena in line with President Ma’s initiative, such as the North Sea dispute in Europe. The area is now a sea of peace and cooperation for bordering countries to share the resources and peaceful development, noted Yang. Taiwan’s government is hoping that the situation in the East China Sea will emulate the North Sea model. Minister Yang pointed out that President Ma’s peace initiative for the East China Sea is a positive and practical proposal. Taiwan will enter into dialogue with Japan based on this initiative, according to the Central News Agency.

Despite closer cross-strait exchanges, barriers still exist

Even though cross-strait exchanges between Taiwan and mainland China are intensive and increasing, Taiwanese people still understand little about China, according to a recent survey commissioned by the Taiwan-based Want Daily. The survey found that only 27 percent of respondents said they understand China, 2 percent fewer than recorded in last year’s survey. The figure for those stating they do not understand China grew 2 percent to 73 percent. The poll results indicate that despite closer cross-strait exchanges, Taiwanese people still do not believe they have a better understanding of mainland Chinese.

Most survey respondents think they do not receive sufficient information about China. While 27 percent of respondents believe that there is enough information about China in Taiwan’s media, 51 percent feel there is inadequate coverage. The survey also found that only 17 percent have a good impression of the Chinese government, with 32 percent having positive feelings towards the Chinese people.

In the survey, 63 percent of the respondents acknowledged that mainland China is important to Taiwan’s development, 67 percent understand that the situation on the mainland will impact the economic development in Taiwan, and 44 percent feel that Taiwan’s economy is overly dependent on China.

The Want Daily found that 45 percent of respondents have been to the Chinese mainland, among them 13 percent have visited more than five times. Another finding was that 4 percent of respondents have family members studying in China, 2 percent more than last year. Meanwhile 14 percent said they have family members working permanently or doing business on the mainland, 3 percent less than last year’s figure. The percentage of cross-strait marriages slightly increased from 9 percent last year to 10 percent now.

The survey also revealed that 45 percent thought that the Taiwan government should take a stricter approach to Chinese students studying on the island. In all, 68 percent do not believe that mainland Chinese people should be allowed to buy real estate in Taiwan, while 48 percent are worried about the level of Chinese investment in Taiwan.

Graduate degree holders face increased unemployment

A recent survey by Taiwan’s Directorate General of Budget, Accounting and Statistics (DGBAS) shows that the number of PhD and masters degree holders is expected to top one million this summer. However, the demand for employees with PhDs and masters degrees has not kept pace with supply and the unemployment figures for these degree holders surpassed the number of unemployed college graduates for the first time in the first half of 2012. In the Commercial Times, Hu Sheng-cheng of Academia Sinica said that unless Taiwan’s businesses increase the demand for research and development professionals, the unemployment rate among graduate degree holders will continue to rise.

The paper reported that in recent years the number of graduates with a PhD or masters degree surpassed 60,000 a year. In early 2011, the number of higher degree holders reached 909,000 in the civilian population, and this figure jumped to 970,000 by July 2011. With this past graduation season, the number by June 2012 will easily have surpassed one million.

With the rapid increase in the number of graduate degree holders in Taiwan, the chances of them finding suitable employment becomes ever more difficult. The statistics recently compiled by the DGBAS indicate that in the first half of this year, the unemployment rate of PhD and masters degree holders, who previously enjoyed better job prospects, now stands at 3.32 percent. Although this figure is lower than the 5.66 percent unemployment for university graduates, 4.29 percent for high school and vocational school graduates, and 3.45 percent for middle school and elementary school graduates, it is higher than the 3.17 percent unemployment among junior college graduates.

As a result of nearly a decade of restructuring, the number of junior college graduates has fallen year on year, according to DGBAS statistics. Trained in vocational fields, junior college graduates enjoy an advantage when it comes to finding employment. As such, the unemployment rate of this category of graduate is much lower than for people with other types of degree.

The Commercial Times reported that the reason why PhD and masters degree holders were previously more employable was because of a boom in R&D departments in both the private and public sector, combined with greater research demand at public and private universities, according to Hu Sheng-cheng. With the current saturation in private sector and university R&D, the unemployment rate of graduate degree holders has inevitably increased.

The rising unemployment rate for graduate degree holders is caused by an over supply of such degrees and by the widening gap between graduate school disciplines and the business world, according to analysis conducted by Lin San-kuei, director general of Employment and Vocational Training at the Council of Labor Affairs. While people with PhDs and masters degrees have received academic training, they are not necessarily equipped with transferable skills that employers are looking for. This mismatch needs to be addressed by restructuring the educational system, according to Lin.

Lin’s recommendations are that the government should carefully review whether the distribution of educational resources is properly balanced, and take action such as reducing enrollment or increasing the threshold required for students to graduate.

Hsin Ping-lung, a professor at National Taiwan University, warns that the high unemployment rate of advanced degree holders will only get worse in the future if there is no structural review of Taiwan’s higher education system, the Commercial Times reported. It does not cost much for universities to set up graduate schools, especially in the arts, humanities, law and business. With lower operating costs, these faculties are seen as money making centers. In contrast, these graduates have less competition to enter graduate school in comparison with the fierce competition required to enter university. The government should respect the natural adjustment of the market mechanism, but should not take measures such as “subsidizing the salaries of those with higher degrees”, which will distort the market, according to Hsin.

The Commercial Times noted that the government funds invested in higher education in 2007, 2008 and 2009 accounted for 4.47 percent, 4.49 percent, and 4.26 percent of Taiwan’s annual budget, respectively. However, 2007 spending was higher than for South Korea (2.1 percent), Japan (1.7 percent), the US (3.3 percent) and Germany (2.6 percent).

Taiwan’s government invests vast sums of money into higher education each year, which has yielded impressive results in terms of the quantity of graduate degree holders, but due to a severe imbalance between the supply and demand in the workplace, and a severe gap between university training research institutes, and industry demands, it is imperative that Taiwan reforms its higher education policy. If this issue is ignored, not only will talented young people suffer, but Taiwan’s economic competitiveness will also be negatively impacted, according to the paper.