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First Privatization Proposal of Taiwan Chung Hsing Paper Corp.

Tags: documents | Taiwan Chung Hsing Paper Corp

The Taiwan Chung Hsing Paper Corp. was run jointly by the national and provincial governments. It was under the jurisdiction of the Ministry of Economic Affairs of the Executive Yuan, Taiwan Provincial Government, and Taiwan Provincial Assembly. The running of the company, therefore, was constrained by regulations of these government agencies and hindered by the national policy to supply cheap newsprint paper. As a result, the company suffered poor management and long-term losses. In 1972, Der-Shen Chen, a shareholder, proposed at the shareholder meeting to push for the privatization of the company. His proposal was based on three main reasons: 1. Chung Hsing was originally a private company when Taiwan was under the Japanese colonial period. It became government-owned after World War II but kept losing money and suffered huge losses in 1971.  2.  The Government had recently intended to change it to a private-owned company in order to avoid the constraints of laws and decrees. These prevented sound business management, resulting in losses. 3. Chung Hwa Pulp Corporation had been made money after it was privatized and could be used as an example. Mr. Chen also proposed four options for the Government to choose one to adopt: 1. Sell the government-owned shares and change the company to private-owned; 2. Let the government and private shareholders manage the paper mill and mountain forest, respectively; 3. Increase capital to buy back privately owned shares so as to change the company to purely government-owned; 4. Merge with Chung Hwa Pulp Corporation and run the new company like a private business. This privatization proposal was discussed by the company and related government personnel. However, the proposal was shelved and the pace of privatization was thus stalled due to the consideration that the government still needed to help with the supply of newsprint paper. Nevertheless, the proposal became a prelude towards the privatization of Chung Hsing Paper Corp., and its suggestions were later gradually adopted. The case holds special meaning of that era and the preservation of the documents are imperative. 



National Archives Administration
Taiwan Industrial and Economic Documents Digital Archives Program I. Taiwan Chung Hsing Paper Corp.