Premier Jiang Yi-huah today announced the government's decision to replenish the Small and Medium Enterprise Credit Guarantee Fund of Taiwan back to the level of NT$5 billion (US$167 million) starting in 2015 to demonstrate the government's concern and support for the country's small and medium-sized enterprises (SMEs) and ensure they can access sufficient financing.
The premier made this announcement during his address at the closing ceremony of the 2014 Small and Medium Enterprises Conference held October 28-29. He explained that this fund had been nearly halved over the last two years due to fiscal difficulties, but following inter-ministerial discussion on industrial and business groups' suggestions, the government will now restore the fund to its previous size.
Moreover, to help domestic industries transform, the government will continue to strive to adjust laws and regulations governing subsidies for research and development (R&D), encouragement of critical technology breakthroughs, business intelligence, branding and marketing, tax breaks or exemptions for R&D spending, tax exemptions for stocks in exchange for intellectual property rights transfers, and tax breaks for expanding hiring and raising salaries, the premier pledged.
In his address, Jiang noted that economic growth for the whole year is expected to reach at least 3.41 percent, while the average unemployment for the first nine months of this year stayed below 3.9 percent.
Moreover, the National Development Council's monitoring indicators have flashed "green," meaning stable growth, for the past eight consecutive months from February to September. The premier hopes that the momentum of this steady revival will continue to propel Taiwan's economy forward. Meanwhile the government will continue to strive to turn the fruits of economic growth into actual job opportunities, help raise the average salary and transform Taiwan into a truly rich and courteous society with equitable prosperity.
The premier pointed out that although various economic indicators show that Taiwan's economic fundamentals are steady, the nation must still face the challenges of the global environment and its numerous uncertainties. For example, Taiwan's main competitor, South Korea, has already signed a free trade agreement (FTA) with Canada which took effect in late September. Moreover, it is expected to sign an FTA with mainland China by this year's end, and once it does so Taiwan will be in a disadvantageous position in terms of export trade and economic growth.
The administration is very anxious about this trend, and that is why over the year and a half it has been calling on the ruling and opposition parties to accelerate the passage of the Cross-Strait Agreement on Trade in Services and its future sister pact (which has yet to be signed), an agreement on trade in goods, the premier explained. Doing so will pave the way for the ROC to join the Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership, he affirmed.
Aside from deployment in global trade, the island's enterprises must also undergo industrial transformation, Jiang emphasized. Whether they are SMEs, advanced high-tech businesses or the competitive industries of the future, they must all press ahead and maintain their competitive edge. In addition, the nation must work to develop future key industries that can spur vast economic and job growth.
Taiwan is an economy founded on numerous resilient and diverse SMEs. The proportion of these companies among all enterprises and the share of the workforce SMEs employ are at levels rarely seen in the world, Jiang stressed. The government will work to maintain Taiwan' economic versatility and sustain SMEs' values, such as adaptation to and close ties with local communities. "This is Taiwan's specialty, and it is what has made the deepest impression on me during my trips all over the island," he said.
In closing, Jiang thanked all the participants for their opinions and suggestions and expressed hope that through effective communication channels, the government can listen to industries' feedback and adjust relevant regulations and measures. He also promised that the administration will endeavor to provide assistance in response to the proposals made at the meeting and expressed hope that everyone will work together to further manifest Taiwan's vitality and uniqueness and bring brighter economic prospects to the country.