A free and innovative economy is the key to Taiwan's economic future, and the government will continue moving toward this direction to improve the economy, Premier Jiang Yi-huah told business leaders today.
Speaking at a forum for business and service sector representatives organized by the General Chamber of Commerce of the Republic of China, the premier said economic indicators in the past half year have shown that the economy is turning for the better. In June, Taiwan's monitoring indicator flashed a green light (for steady economic growth) for the fourth month in a row. Export orders for the first six months of the year have also surged to set a record for the best six-month period in recent years.
"Although international research institutions have lowered their global economic growth forecasts to 2.5 percent on average for this year, we are confident that Taiwan will attain more than 3 percent."
According to statistics released today by the Directorate-General of Budget, Accounting and Statistics, the average unemployment rate for the first half of the year dropped to a six-year low of 3.97 percent. The unemployment rate for individual months has also remained below 4 percent for several months with June marking a 14-year low. In addition, average monthly salaries from January to May rose to NT$51,906 (US$1,720), the highest for that period in recent years. Jiang added that the TAIEX, the benchmark index of Taiwan's stock market, also climbed to 9,500 points with single-day trading value surpassing NT$130 billion (US$4.3 billion) on several occasions.
The premier then described the administration's policies for a free and innovative economy. Regarding a free economy, Jiang said Taiwan should not shy away from liberalization but should instead open up more to international markets. It can seize greater business opportunities in overseas markets by aligning its regulations with global standards. With the United States, Japan and Southeast Asian countries forming regional economic partnerships, Taiwan might become marginalized in just 10 years' time if it does not integrate with the regional economy as well.
Premier Jiang asked the industry leaders at the forum to support the government's economic liberalization policies and hoped that legislators, especially those of opposition parties, can shelf partisan differences and focus on national economic development. Ensuring economic growth and vitality can protect Taiwan's independence, autonomy and political dignity. If the economy were to falter, Taiwan would have less and less control over the development of cross-strait relations, he cautioned.
As for an innovative economy, the premier said that liberalization is not a cure-all solution for Taiwan's economy, but if the nation opens its markets to the world without being fully prepared, local industries would lose out to other countries rather than compete with them for business opportunities. The only way to turn Taiwan's economy around is to upgrade the industrial structure, improve business technologies and break through marketing bottlenecks. Such a transformation requires active participation from the business sector and regulatory support from the government, and the administration will not shirk its responsibilities, Jiang promised.
The premier said that he has directed various ministries to focus their administrative efforts on promoting innovative entrepreneurialism. The Financial Supervisory Commission will help innovative startups to acquire loans more easily; the National Development Council will use its Business Angel Fund and the Executive Yuan's National Development Fund to augment private-sector investments in new businesses; the Ministry of Economic Affairs and the Ministry of Labor will cultivate talent through subsidies and vocational training; and the Ministry of Education will promote teaching and curriculum reforms to produce more graduates capable of starting companies and transforming industries.
These tasks cannot be accomplished by any single ministry alone, which is why the government spent over a year consolidating the innovative economy and the free economic pilot zones. It deregulated financial services, established innovative education systems and enhanced medical services—all areas where Taiwan boasts competitive advantages. In addition, many great ideas for the services sector, the cultural and creative industries, and social enterprises are coming from the young people of Taiwan. If this generation can realize its dreams, the nation will have a bright future to look forward to.
Having spoken with young people islandwide, the premier said he is not worried about this generation losing competitiveness because he has met many people in their 20s and 30s full of business creativity and imagination, constantly thinking up new ideas and eager to connect with the world. However, they lack basic support such as startup capital, business experience, brand marketing, and other training and assistance. They also need a helping hand from the business community—so long as venture capitals or large corporations invest in these young startups, they will have a chance to succeed. Not everyone will succeed, but at least they will have gained invaluable business experiences and laid a sound foundation for the next phase of their endeavors.
The premier also shared his views on the service and business sectors. Taiwan's industries are highly reliant on exports and foreign sales, and the proportion of that attributable to services is growing more significant. In 2013, the service sector played a vital role in the economy when it contributed to 68 percent of the gross domestic product and employed 58 percent of all workers in the country. The government will hence be especially mindful of companies' needs when formulating policies for this type of industrial structure.
Taiwan's business sector, meanwhile, has been able to establish a global foothold due to its diverse, dynamic and nimble qualities, Jiang continued. Over the past years, the government has mapped out many important industrial policies and economic visions such as the six emerging industries, the four intelligent services sectors and the "Three Industries, Four Reforms" program (a service-oriented manufacturing industry, an internationalized and high-tech services industry, and a specialty-oriented traditional industry).
Since becoming premier, Jiang has been pushing for business deregulation, taking bold action to lift the economy, and implementing policies crafted by past premiers. These efforts have earned widespread support from the business community and are delivering positive results as seen in economic improvements in the top half of the year. Strong stock market performances, last year's changes in the capital gains tax, and other financial reforms have all boosted public confidence in investment.
Finally, Premier Jiang shared his outlook on Taiwan's current economic development. The Taiwan he sees is not apprehensive or discouraged but rather is hopeful for opportunities presented by future challenges. He pledged the government's commitment to firming up businesses for the middle generation and resolving employment problems for the next generation—not only helping young people find jobs but enabling them to fulfill their career aspirations and entrepreneurial dreams. No matter how grand the challenge or how volatile the international situation, Taiwan will always find a way to succeed, Jiang added.