Premier Sean Chen announced an economic stimulus plan today to strengthen the country's responses to external influences like the European debt crisis and to improve prospects for long-term growth. The plan will address internal issues such as an imbalanced industry structure, maladjustment between labor supply and demand, and declining exports.
This February, the Executive Yuan assigned Kuan Chung-ming, minister without portfolio in charge of economic affairs, to establish a task force on policy responses to global economic issues. Since then, several cross-ministry meetings have been convened to plan the contents of the economic stimulus plan. Premier Chen also hosted five symposiums on economic and financial topics in August and September to gather the input of industrial and commercial groups, which was incorporated into the stimulus plan.
The plan's five major initiatives are summarized as follows:
1. Create innovative and diverse industries
- Promote the "three industries, four reforms" program (referring to the creation of a service-oriented manufacturing industry, an internationalized and high-tech services industry and a specialty oriented traditional industry). Select 50 products over five years for reinvigorating Taiwan's traditional industries.
- Over the next three years, develop over 150 high-potential small and medium-sized businesses into "backbone enterprises."
- Speed up industrial application of R&D results, strengthen industry-academia collaboration, and focus on 10 fundamental industrial technologies for further development.
- Create a "Taiwan tourism calendar" that would be a comprehensive marketing tool for tourism in Taiwan. Drive the growth of tourism-related industries and improve both the quality and quantity of tourism. Aim to attract 10 million visitors annually by 2016.
- Spark sustainable growth for Taiwan's financial sector. Develop cross-strait financial services and build a Taiwan-centric wealth management platform for residents of Taiwan.
- Develop safe, stable, efficient, clean and sustainable energy resources for industrial development. Upgrade Taiwan's green energy industry, promote green energy use and expand green jobs.
- Integrate the resources of the Council of Agriculture, the Ministry of Economic Affairs, the Ministry of Transportation and Communications and local governments to create a "golden corridor" featuring LOHAS agricultural tours. Strengthen assistance to farmers, marketing teams and agribusinesses and provide incentives for agricultural production. Allocate water conservation areas for agricultural production.
2. Develop new export markets
- Increase value-added exports and explore emerging markets. Select leading manufacturers to guide others in developing emerging markets. Promote 12 models of success in these respects.
- Augment the competitiveness of service exports by expanding overseas marketing of globally competitive services. Host 1,000 international conferences and 1,000 exhibitions (including tourism promotions) in Taiwan to generate NT$90 billion (US$3 billion) in business opportunities for the exhibition and peripheral industries.
- Strive to participate in regional economic integration. Raise the rank of the Cabinet-level task force on promoting free trade agreements, making the premier its convener. Promote the signing of economic cooperation agreements with major trade partners. Expedite negotiations on pacts following up on the Cross-Straits Economic Cooperation Framework Agreement (ECFA).
- Strengthen intellectual property rights strategies. Formulate Strategic Guidelines for Intellectual Property Rights.
3. Cultivate industry talents
- Continue the second phase of technical and vocational education reform to meet industry demands through the incorporation of industry resources. Have industries co-plan curricula as well as teaching methods and personnel exchanges with schools. Develop model universities of science and technology.
- Smooth the transition between academia and industry and actively promote the Council for Economic Planning and Development's plan to bridge the gap between training offered in school and the knowledge and skills employers require.
- Promote the strategic distribution of human resources, foster talents for tapping into emerging markets, and cultivate global marketing managers. Strategically select students from important emerging markets; attract outstanding foreign students to study Chinese or further their education in Taiwan.
- Adjust labor laws and regulations to respond to industrial and social trends. Create a work-friendly environment for overseas professionals, and continue to examine labor policies and regulations that apply to them. Increase manufacturers' foreign laborer quotas on the precondition that the businesses increase employment opportunities for domestic workers. Improve regulations concerning work hours and wages so as to increase the flexibility of the labor market and industry.
4. Spur investments in public construction
- Expand bids to attract private investments of at least NT$1 trillion (US$33.3 billion) per annum; bring in foreign investments of NT$33.5 billion (US$1.1 billion) in 2013. Encourage overseas Taiwanese businesses—especially those that occupy key supply chain positions and produce high value-added commodities—to direct their investments back to Taiwan and build international brands. Attract these firms by easing foreign labor quotas, expanding job training programs, offering assistance on lease or acquisition of land, reducing tariffs on equipment imports and favoring advantageous items in ECFA negotiations.
- Find creative ways to finance public construction works such as the cross-regional integrated infrastructure projects. Alleviate the government's burden by tapping into new investment resources from home and abroad, including mainland China.
- Research the feasibility of relaxing regulations to facilitate more medium and long-term investment for public works. Also study the feasibility of injecting government funds or insurance capital.
- Adjust investment regulations in time with industrial trends. Study factors that put off overseas Taiwanese, foreigners or mainland Chinese from investing in Taiwan; analyze which businesses they are attracted to and restrictions that keep them from doing so. Amend regulations pertaining to investments by foreigners or overseas Taiwanese. Simplify application procedures and formulate a private investment stimulus plan.
- Design a model free economic zone. Open up Taiwan's market to support regional economic integration and facilitate Taiwan's entry into the Trans-Pacific Partnership. Relax investment regulations to boost Taiwan's competitiveness and create an attractive business environment by improving land, labor and capital conditions.
5. Enhance government efficacy
- Improve procurement mechanisms and amend the Government Procurement Act. Promote projects that raise the quality of public construction works. Award contracts to the most advantageous tenders, adopt "turnkey contracts" (in which contractors provide all materials and labor), and have senior civil servants evaluate procurement cases. Build quality public structures that are sustainable, eco-friendly and energy efficient.
- Implement government budget review mechanisms. Cross-ministry or interdisciplinary issues should be reviewed by the Directorate-General of Budget, Accounting and Statistics and the agencies concerned.
- Strengthen regulatory reviews and revise laws to meet changing needs. Use regulatory impact analyses as the basis for implementing international law and negotiating trade. Bolster Taiwan's regulatory competitiveness in global trade.
- Put undeveloped or underused public properties to full use. Combine public and private land and the resources of local governments and state-run enterprises to promote select projects.
- State-owned enterprises, including China Steel, Taiwan Sugar, Taiwan International Ports Corp. and Taoyuan International Airport Corp., will launch major investment projects over the next few years.
The premier directed agencies to implement these measures promptly so that citizens can see the government's efforts.
"This stimulus plan will be critical to boosting Taiwan's economy and maintaining its competitiveness," underscored the premier.
Minister Kuan was assigned to oversee implementation of the plan and to review it on a rolling basis.