The following is a translation of the main portions of the premier's report.
Speaker Yu, Deputy Speaker Tsai, members of the Legislature:
Today marks the opening of the first session of the 10th Legislature. I'd like to begin by offering special congratulations to the entire legislative body for having passed the test of public opinion and earning the people's mandate. Over the next four years, you will be representing the entire nation and the latest will of the people as you exercise the powers of the Legislature according to law.
The people of Taiwan expect strong communication and interaction between the executive and legislative branches of government, as these are important forces that drive the country's development. For the work ahead of us, I sincerely hope that our two branches can move beyond political partisanship and put the well-being of the people and the nation's interests above all else. Let us join hands and work together with the singular purpose of building a better and more beautiful Taiwan.
In late 2019, a rapidly spreading novel coronavirus disease (COVID-19) emerged in the Chinese city of Wuhan. And because of the high volume of people-to-people interactions between Taiwan and China, we found ourselves on the world's first line of defense against the disease. Confronted with such daunting and pressing challenges, our government has deployed an aggressive regime of policies to combat and contain COVID-19.
We formulated a three-part master plan focusing on infection prevention, economic relief and industrial stimulus: Resources will be devoted to infection control as a priority, while economic relief will be provided to businesses and industries affected by the virus scare. We'll also take this opportunity to reinforce our foundations and stimulate the upgrading of industries. With the backing of the Legislature and the undivided support of the people, I am confident that we can turn these threats into opportunities and weather the crisis successfully. Taiwan will come through stronger and more resilient than ever before.
Now, I'd like to report on the recent achievements as well as the outlook of policies implemented by the Executive Yuan.
Lifting the economy and showing tangible results
In the Global Competitiveness Report 2019 released by the World Economic Forum last October, Taiwan ranked 12th among 141 countries for overall competitiveness, and shared the top spot with 32 other countries in the macroeconomic stability category. During the last quarter of 2019, the nation's economy grew 3.31 percent year-on-year, marking the fourth consecutive quarter of rising growth and the highest rate in six quarters. Taiwan's growth rate for the entire year has also been revised upward to 2.71 percent, the fastest clip among the Four Asian Tigers.
Companies listed on Taiwan's stock exchange and over-the-counter market topped NT$34 trillion (US$1.1 trillion) in aggregate operating revenue in 2019, the second highest total ever recorded. In tourism, our strategy to diversify and develop new source markets attracted 11.86 million tourist arrivals last year—even after China suspended individual travel to Taiwan in August—for a 7 percent growth over 2018.
To dampen the impacts of the trade war between the U.S. and China, we introduced three major programs last year to boost investment in Taiwan. So far, projects worth NT$870 billion (US$28.6 billion) have been approved, and funds of more than NT$240 billion (US$7.9 billion) are now in place for investing; these projects are expected to create in excess of 72,000 jobs. It is estimated that the three major programs will generate more than NT$1.1 trillion (US$36.2 billion) in investments by 2022.
The government provides generous tax incentives to encourage and guide individuals and for-profit companies to move offshore funds back home to Taiwan. Since the implementation of the Management, Utilization, and Taxation of Repatriated Offshore Funds Act on August 15, more than NT$50 billion (US$1.6 billion) has been approved for repatriation, of which NT$18 billion (US$592 million) is marked for investment in tangible assets. These funds not only increase tax revenues but inject fresh life into the domestic economy as well.
In January the government completed the first stage of a competitive auction for 5G telecommunication licenses, raising a total of NT$138 billion (US$4.5 billion) from winning bids. Taiwan officially enters the 5G era this year as more innovative applications emerge for use in industries, everyday life and public services.
As part of our policy to promote energy transformation and ensure power supply reliability, a vigorous campaign to construct solar energy and offshore wind systems is already yielding concrete results. After the nation's operating reserve fell to its lowest point at 1.64 percent of peak load in May 2016, we worked very hard to expand capacity to where we've now been able to maintain a 10 percent operating reserve and 15 percent reserve margin every day since June 2019. These levels ensure steady and reliable supplies of electricity for consumers.
Taiwan's first large-scale offshore wind farm, Formosa I, was inaugurated off the coast of Miaoli and entered into commercial operation in November 2019. Its 22 wind turbines will generate enough electricity annually to power 128,000 homes and businesses, or more than half the customers in Miaoli County. Now that renewable energy development projects have progressed from the planning to the implementation stage, we can develop clean, homegrown resources that are expected to generate over NT$1 trillion (US$32.9 billion) in investments and 20,000 job opportunities.
In fishery and agricultural competitiveness, last year Taiwan was removed from the European Union's illegal fishery watch list, and became a participating fishing entity of the Southern Indian Ocean Fisheries Agreement. Taiwan also established a regulatory structure for organic farming and now boasts the highest percentage of farmland dedicated to organic farming in Asia.
Taiwan is the only East Asian nation aside from Japan to have successfully blocked African swine fever at its borders, even as the disease has spread to 11 countries across Asia over the past 13 months. Our disease prevention efforts have ensured that the Taiwanese public has pork to eat and our NT$200 billion (US$6.6 billion) pork industry remains safe.
We are in the process of applying to the World Organisation for Animal Health for recognition as a country free of foot-and-mouth disease where vaccination is not practiced. If the application is approved in May at the earliest, Taiwan will be able to resume exports of pork products to markets worldwide. Beyond that, the government will take this opportunity to help make Taiwan's livestock industry more efficient with the capacity for higher output value.
Last year Taiwan's agricultural and fishery exporters set two highs by exporting some 2.3 million metric tons of goods and surpassing NT$170 billion (US$5.5 billion) in total export value. Among these products, fresh fruit exports grew by 42 percent. The government is also investing over NT$1 billion (US$32.9 million) in cold chain logistics systems. After a cold chain logistics center in southern Taiwan is completed in 2021, the volume of agricultural and fishery exports is expected to rise along with benefits for farming and fishing workers.
To boost tourism in Taiwan, we've been developing and diversifying our tourist source markets while spurring business opportunities in the travel market at home. Last year we provided funding through a series of domestic travel incentive programs that in turn generated roughly NT$50 billion (US$1.6 billion) in economic benefits. We also introduced a "salute to mountains" policy in October 2019 to open up all national mountains and forests to public recreation. This was followed by the designation of 2020 as the Year of Mountain Tourism to spotlight Taiwan's mountain ranges as an alluring travel destination.
Protecting livelihoods while caring for the vulnerable
To ease the burden of childrearing and encourage young couples to marry and start families, the government has tripled the nation's child care policy budget from over NT$15 billion (US$464.1 million) in 2016 to more than NT$45 billion (US$1.5 billion) this year. Last August we expanded childrearing allowances to cover kids ages 0-4, which raised the cumulative number of benefiting children from 260,000 in 2016 to nearly 920,000, a three-and-a-half-fold increase. The number of slots for children ages 0-4 at public and quasi-public day care centers and preschools has also reached 400,000. All of these efforts helped lift the labor participation rate for women ages 35-39 from 76.19 percent in 2016 to a historic high of 81 percent in 2019. We will continue striving to raise this rate by expanding the coverage and amount of childrearing subsidies, making children's education more affordable, and increasing enrollment rates at preschools and day care centers.
The government has been implementing the long-term care 2.0 program since 2017 as part of broad-reaching efforts to build a senior-friendly environment in Taiwan. The program operates on a budget that has grown eightfold from under NT$5 billion (US$154.7 million) in 2016 to more than NT$40 billion (US$1.3 billion) this year, and has currently set up 7,000-plus community care stations with more than 280,000 people served. Last October the government began providing annual subsidies of up to NT$60,000 (US$1,940) for each patient living in a long-term care institution, alleviating burdens on over 50,000 families.
For the upcoming tax season in May, a special deduction of NT$120,000 (US$3,947) for long-term care—as provided by caregivers, long-term care institutions, or family members—will be available for the first time to help 290,000 households. The government will continue increasing long-term care spending and setting up day care and affordable residential facilities to provide more patients with quality, affordable services close to home. In November 2019, the Legislature approved an employment promotion act for the middle-aged and elderly, to encourage greater social participation by healthy older individuals and to make use of this valuable human resource.
As for the housing needs of young people and the disadvantaged, the number of social housing units provided by the government will exceed 40,000 this year. Starting in 2020, the government will also encourage universities to convert idle campus dormitories into social housing for students and young people. This is expected to provide an additional 25,000 beds over the next four years, and graduates may apply to continue residence in these units as they seek jobs in the workplace. A rent subsidy program introduced last September for young singles, newlywed couples, and families with minor children attracted applications from nearly 20,000 households, prompting the government to expand eligibility requirements to accommodate 120,000 households this year. For disadvantaged students, off-campus housing subsidies are available to help more than 30,000 students.
This past January, more than 2.31 million workers benefited from another raise in the national minimum wage as the monthly rate was hiked to NT$23,800 (US$783) and the hourly rate from NT$120 (US$3.95) to NT$158 (US$5.20). In addition, government benefits under a large number of social welfare programs were all raised by at least 3.97 percent, benefiting more than 3.4 million recipients. These include elderly farmer allowances, national pension payments, disability pension payments, as well as welfare subsidies for low and lower-middle income families, people with disabilities, and children and youth from disadvantaged households.
Over the past year the government has implemented a raft of measures to take better care of Taiwan's agricultural and fishery workers. The farmers health insurance program was expanded to allow every person engaged in actual farming to join the program. An occupational injury and disease insurance program was launched, providing agricultural workers with four major types of insurance protection for only NT$15 (US$0.49) in monthly premiums. The crop insurance scheme continues to expand with the government covering up to half of premiums to protect farmers' livelihoods. Several subsidies have been rolled out to help reduce production costs for agricultural and fishery workers. Educational scholarships for children of farmers and fishermen have been increased.
We also launched a series of new policies this January to help small farmers to produce high value-added goods for higher incomes. These measures include payments for farmers who use land for agricultural purposes, incentives for participating in product traceability systems, and an oversight system for early stage processing of agricultural products.
Building out infrastructure and pursuing balanced development
After 13 years of work, the second phase of the Banxin area water supply improvement project was completed in October last year, allowing the Feicui Reservoir to supply both Taipei and New Taipei cities. The end of 2020 will see the completion of an auxiliary water pipeline connecting Taoyuan to Hsinchu, as well as a second raw water pipeline for Hushan Reservoir in Yunlin County. Work continues on the Amuping desilting tunnel at Shimen Reservoir, the Niaozuitan Artificial Lake in the Wu River in Nantou County, and a raw water pipeline at Feicui Reservoir, among other major projects. This new infrastructure will increase flexibility in the management of Taiwan's water resources, and allow for more reliable water provision to homes and industry.
With respect to land for industrial parks, the Executive Yuan approved the Dalinpu Village relocation project and a planned science park in Kaohsiung's Qiaotou District last October and December, respectively, allocating NT$150 billion (US$4.9 billion) in investments to make nearly 500 hectares of industrial land available. Together they will generate NT$250 billion (US$8.2 billion) in production value and 28,000 job opportunities. In addition, the third-phase expansion of the Southern Taiwan Science Park will be accelerated to attract more high-tech businesses up and down the value stream and improve the competitiveness of the semiconductor hub there. Finally, a second-phase project for the Machouhou Industrial Park in Chiayi County began last December, which when completed is expected to generate NT$80 billion (US$2.6 billion) in production value every year.
Road transportation is also a priority. The West Coast Expressway's final section (Xinfeng to Fengbi exits) opened to traffic in January this year. Work to widen the South Link Highway and improve the Suhua Highway were completed at the end of last year and this January, respectively, making the trip home safer for residents of Hualien and Taitung counties. A follow-up road safety enhancement project for other stretches of the Suhua Highway will continue as part of overall efforts to improve the safety and convenience of routes linking eastern Taiwan with the rest of the country.
As for railway construction, electrification of the final stretch (Chaozhou to Taitung stations in southern Taiwan) of the nationwide railway system is close to completion: The section of track between Chaozhou and Fangliao townships was opened to train traffic at the end of last year, and the section between Fangliao and Taitung will be opened by the close of this year. The Taichung coastal railway line and the entire Hualien-Taitung line will be upgraded to a double-track system, while high-speed rail service will be extended southward to Pingtung, creating a comprehensive round-the-island rail network with high-speed trains running the length of the island's western side and a speedy railway line serving the east. This will further increase the number of destinations within the reach of day-trippers.
New rapid transit construction also continues in metropolitan areas. In northern Taiwan, the first phase of the Circular Line in the Taipei metro system officially opened to riders at the end of this January. Funding for the next phase of construction—the northern and southern sections of the Circular Line—was approved by the Executive Yuan last year, with work scheduled to start in 2021. A feasibility study for an eastern section has also been approved. Once all sections are finished, the line will form a ring around Taiwan's capital metropolis. In Taichung City, meanwhile, residents are looking forward to more convenient transportation with the completion of the green line in the Taichung metro system, likely by the end of 2020.
On the health front, we approved a plan to raise the overall standard of medical care in remote areas and ensure the health of residents in mountainous areas and outlying islands. This effort includes encouraging more than 600 doctors educated at public expense to continue serving in local communities once their required terms expire. The government is also spending NT$370 million (US$12.2 million) annually to station emergency medical air evacuation teams on three outlying islands, a service that began in August 2019. A growing number of remote hospitals are establishing electronic patient histories and digitizing treatment information, and collaborating with major medical centers to introduce telemedicine services over ubiquitous broadband connections. Starting in January this year, telemedicine services have improved the immediacy and quality of care available at hospitals in such areas as Hualien, Hengchun, Penghu and Kinmen.
Nurturing culture and fostering talent
This year we set aside a culture budget of NT$40.3 billion (US$1.3 billion)—including Forward-looking Infrastructure Development Program special budget items—with the goal of consolidating Taiwan's universal values, promoting culture and revitalizing the nation. This represents a nearly 40 percent increase over 2016 spending. Integrating the nation's soft tech power with the creative works of private businesses will allow Taiwan to tell its story to the world, and the world to learn about Taiwan through its culture.
Last November witnessed the launch of the Taiwan Creative Content Agency, which is assembling a "national team" of cultural talent from such sectors as the audiovisual and musical arts, traditional and digital publishers, fashion designers, the art world, and producers of animation, cartoons and games. The agency will execute two five-year projects approved by the Executive Yuan with a combined budget of NT$20 billion (US$657.8 million) to produce content, provide funding, expand distribution channels and raise brand recognition. These measures will provide solid support for the development and application of cultural content while adding greater value.
A national center for film and audiovisual heritage will be established to step up restoration of Taiwan's audiovisual culture and assets, providing both the people of Taiwan and the world a deeper view of our history in this field. Additionally, after many years of preparation and construction, the Taipei Music Center is scheduled to begin operations in June while the Kaohsiung Music Center is expected to be constructed by the end of the year. The centers will serve as engines in the north and south to foster upcoming musical talent and promote the popular music industry.
Upwards of NT$500 million (US$16.4 million) has been budgeted under the Indigenous Languages Development Act to revive the native tongues of Taiwan. The funds will support local government efforts to install indigenous language promotion personnel in strategic locations, promote the use of bilingual government documents, put up indigenous-language signage for place names and public facilities, and hire professional language instructors. Money will also be used to assist Taiwan's 16 indigenous peoples found organizations for spreading native languages. The Foundation for the Research and Development of Indigenous Languages will launch on February 22, with a mandate to promote and develop indigenous languages.
To ensure the transmission and ongoing development of Hakka culture, the government this year will formulate a four-year national plan to guide the development of Hakka communities and culture through cross-agency cooperation on diversity and ethnic equality. NT$140 million (US$4.6 million) will be invested to draw people back to Hakka communities, while business loans of NT$10 million (US$328,915) along with interest payment subsidies will be made available. We are also guiding merchants on innovative technology applications like the internet of things, and establishing a certification mechanism for Hakka goods to build brand quality. These measures enable Hakka producers to increase the value of production and rejuvenate their communities.
Taiwan is the world's first nation to see a government-led initiative for a Hakka-language corpus. To preserve precious linguistic resources, we are in the process of digitizing written and spoken source material, which will be integrated with artificial intelligence for translation between Hakka and other languages like English and Japanese. This will open the door to communication and understanding for more researchers and users from other countries.
Defending democracy and upholding sovereignty
In recent years China has engaged in relentless threats, aggression and infiltration campaigns with the aim of forcing Taiwan to make concessions on sovereignty. The deteriorating situation in Hong Kong over the last half of 2019 only affirms that we are right in our resolute rejection of China's "one country, two systems" framework. The presidential election of January 11 further stands as an important milestone in the development and solidification of the nation's democratic system, showing to the world Taiwan's commitment to democratic values and the decision made by the great people of this nation.
As we look forward, it is my sincere hope that the two sides of the Taiwan Strait can work together to bring about positive interactions on the basis of peace, parity, democracy and dialogue. On the international front, we will continue asserting our policies of soft power, "warm power," and steadfast diplomacy in our collaborations with other countries in order to make ourselves an integrated member and indispensable partner of the global community.
In a report published last December by CIVICUS Monitor, a human rights organization tracking civic space and fundamental freedoms around the world, Taiwan was the only nation accorded the highest rating of "open" among 25 countries evaluated in Asia. In January we created a mechanism to defend our democracy by enacting an anti-infiltration law designed to prevent hostile foreign forces from influencing Taiwan's political and electoral systems. The law specifies that individuals in Taiwan may not make political donations or illegally engage in election activities at the instruction or with the financial support of an infiltration source. It also prohibits such individuals from lobbying in areas relating to national security or state secrets, including national defense, foreign affairs and cross-strait affairs. These measures are intended to maintain Taiwan's free democracy and constitutional order.
Under our defense policy of indigenous aircraft and vessel building, a prototype of the first domestically developed advanced jet trainer, the Brave Eagle, was unveiled last year and will make its first flight in June. The military is aiming to produce 66 of these jets by 2026. The navy has plans to construct 71 military vessels of seven different types, for delivery by 2029. The coast guard will begin construction this year on a 4,000-metric-ton patrol vessel with helicopter carrier capability, the largest ever built in Taiwan. The research vessels New Ocean Researcher 2 and New Ocean Researcher 3 were inaugurated last November to strengthen Taiwan's oceanography research capabilities as part of a fleet that includes the 1,000-metric-ton New Ocean Researcher 1 to be launched next quarter, and the Legend already in service.
The Legislature passed the Special Act for New Fighters Acquisition and a special budget in October and November last year, allowing Taiwan to purchase 66 new F-16V Block 70 jet fighters from the U.S. as part of efforts to bolster our air defense and combat abilities. This collaboration with the U.S. also provides opportunities for transferring key technologies and enhancing domestic industrial technological capabilities. Last December, Taiwan's Aerospace Industrial Development Corp. signed a strategic alliance agreement with U.S.-based Lockheed Martin Corp., the largest defense contractor in the world, to establish an F-16 fighter jet maintenance center in Taiwan serving the Asia-Pacific.
Last year marked the 40th anniversary of the passage of the Taiwan Relations Act by the U.S. government. Ties between Taiwan and the United States have grown steadily closer to reach perhaps a new peak. In addition to encouraging visits between high-level officials from both sides, the U.S. has passed many laws favorable to Taiwan and engaged in numerous instances of substantive collaboration, all of which have contributed to joint efforts in maintaining peace and stability in the Taiwan Strait and the greater region. In late October last year, the U.S. Senate unanimously passed the Taiwan Allies International Protection and Enhancement Initiative Act, or TAIPEI Act, which supports Taiwan in strengthening official diplomatic relationships with countries in the Indo-Pacific region and around the world, highlighting the importance of Taiwan as a partner in the U.S.'s Indo-Pacific strategy.
The government is actively pushing for Taiwan's membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and other trade blocs by negotiating and lobbying support from members of the Asia-Pacific Economic Cooperation forum and other platforms. Taiwan also continues to pursue the New Southbound Policy to forge closer bilateral relationships with targeted countries. In 2019, our total trade volume with New Southbound nations surpassed US$100 billion as we welcomed more than 2.5 million tourist arrivals from those countries (about 1 million more than in 2016). Taiwanese banks operating in New Southbound markets also reaped NT$12.2 billion (US$394.5 million) in profits last year, the highest total ever and a jump of 80 percent over the 2018 figure.
Charging ahead and leading the nation forward
We have only one country, and we must come together in solidarity if we are to build a stronger and better Taiwan. I will continue to demand that my Cabinet work at the highest level of diligence, with the nation's interests ever in mind, simplifying administrative processes and seeking what's best for Taiwan and its people. In so doing, we can build a more prosperous economy, create a more equitable society, and bring about a greater sense of well-being to the people. We must solidify Taiwan's advantages and defend our democratic homeland. I respectfully ask everyone here, regardless of political affiliation, to continue supporting our nation's administrative policies and programs. Thank you!