Free economic pilot zones (FEPZs) will start a new wave of economic liberalization in Taiwan, Premier Sean Chen said today after hearing a briefing on the subject by the Council for Economic Planning and Development (CEPD).
The creation of these areas is one initiative of the "robust economy" component of President Ma Ying-jeou's "Golden Decade, National Vision" program. Chen said FEPZs will help integrate Taiwan into the regional economy, raise national competitiveness and unleash entrepreneurial energy.
"This is a unique policy innovation without precedent in other countries," said Premier Chen, and the CEPD has held 31 working meetings over the last 10 months along with nine consultations with relevant ministries and commissions to flesh out the plans, which he says are rich in content.
Within the FEPZs, limitations on domestic investment will be relaxed and regulations concerning land, labor and taxation will be adjusted with a view to attract investment, increase production value, create jobs and foster new international connections.
Open markets, amended regulations and upgraded administrative efficiency are among the development-friendly features of the FEPZs, and their two underlying principles are liberalization (of investment, trade and regulations) and facilitation (of capital, goods, personnel and technology flows), the CEPD explained.
"The creation of such excellent and attractive investment environments will expedite the long-term reform of the country's industry structure," added the agency.
The premier hopes the FEPZs will clear the way for the signing of bilateral economic cooperation pacts as well as the Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership, integrating Taiwan further into regional economic activity and making the country more globally competitive.
In order to fully realize FEPZs' potential, the CEPD and other agencies have factored Taiwan's advantages in industry and innovation, its strategic location and its cultural uniqueness into their plans. They want the zones to be next-generation free trade ports as well as centers for industry research and development, international medical services, global personnel development and value-added agricultural product sales and shipping. The agency plans to iron out the details in the near future.
There is a high degree of consensus about opening the domestic market for investors, Premier Chen said, and he instructed Minister without Portfolio Yiin Chii-ming to oversee inter-ministerial consultation about related regulatory adjustments. He cited labor rule changes as an example, saying they should be considered from the perspective of supply and demand, and that further analysis should be done on questions like connecting tax expenditures with the creation of employment opportunities.
The premier asked relevant government agencies to think carefully about the reasons for each component of the FEPZ program and about what things would only be possible inside these areas. This brainstorming would help them provide the CEPD more opinions for reference and assist the council in writing more comprehensive laws to govern FEPZs, he said.
"The establishment of FEPZs is a milestone for Taiwan's economic liberalization and will have a profound influence on Taiwan's global competitiveness and economic development," Chen emphasized. He said there was widespread consensus about most elements of the project among those who attended the briefing, and the disagreements, which were on certain minor topics, would be discussed again later on.
Chen requested that a concrete proposal be ready for the Executive Yuan to review soon after the CEPD's inter-ministerial consultations conclude and that the drafting of related legislation begin at the same time. He asked relevant ministries to do everything in their power to coordinate with the regulation and implementation efforts to follow in order to begin Taiwan's next wave of economic liberalization.