Premier Lin Chuan today directed ministries and agencies to exercise caution and be prepared for changes in the global and domestic economies. Although continued economic recovery is expected at home and abroad, he said, several potential variables and risk factors, including global central bank monetary policies and the new U.S. administration's economic and trade policies, will likely influence the pace of economic recovery in Taiwan and worldwide.
The premier spoke at today's Cabinet meeting following a briefing by the National Development Council (NDC) on current economic conditions and trends.
Once U.S. President-elect Donald Trump takes office on January 20, 2017, Lin said, ministries and agencies should keep a close watch on any adjustments or changes in the Trump administration's policies toward Taiwan, and respond appropriately. He also urged them to actively interact with the new administration based on existing ties, and continue to strengthen Taiwan-U.S. relations. As it remains to be seen what direction the new U.S. government will take, the premier urged ministries and agencies to be prepared in several areas:
1. To maintain the momentum driving domestic economic recovery, ministries and agencies should continue to fast-track budget implementation, and actively carry out investment expansion programs as well as the five innovative industries program. They should also institute legal reforms, removing barriers to innovation and entrepreneurship to spur domestic investment and demand.
2. To enhance integration within the Asia-Pacific region, ministries and agencies should employ diverse external economic and trade strategies, promote economic and trade exchanges with all of the countries in the region, and seek to forge substantive bilateral ties and ink free trade agreements with the countries targeted by the New Southbound Policy. They should also continue to deepen Taiwan-U.S. trade relations through the Trade and Investment Framework Agreement, and promote the signing of a bilateral investment agreement with the U.S.
According to the NDC, statistics show that domestic industrial production, retail and food services and export performance have begun to improve, with NDC monitoring indicators flashing a green light for the third consecutive month, signaling stable economic conditions. Looking ahead, foreign and domestic institutional forecasters expect Taiwan's economy to outperform 2016 and grow by 1.2 to 1.88 percent next year.
Initially there will be more uncertainty about U.S. policies under the new Trump administration, which will influence the stability of global financial markets, redraw the global economic and trade landscape, reconfigure industrial division of labor chains and have a profound impact on Taiwan's trade and economy, the NDC said. The government will make every effort to stabilize domestic financial markets, maintain the momentum of the current economic recovery, promote the "five plus two" innovative industries, establish a new, mutually beneficial division of labor model for Taiwan and U.S. industries, and strengthen diversified external trade strategies to provide comprehensive support to transform and upgrade the domestic economy.