The following is a translation of the main portions of the premier's report.
The COVID-19 pandemic has ravaged the world, from the global economy to everyday activities, upending normal life as people know it. Fortunately for Taiwan, our government and citizenry rallied together at the onset of the outbreak and have been able to keep the coronavirus at bay. Even as many countries have shut their borders, locked down regions, closed schools, restricted people's movements and cancelled large gatherings, life in Taiwan continues much as before. We are truly an oasis in the midst of global chaos, and the pandemic has revealed the resilience and fortitude of the people of this island.
I'd like to take this opportunity to thank all legislators for your efforts last session to pass into law many bills relating to the nation's welfare, particularly the Special Act for Prevention, Relief and Revitalization Measures for Severe Pneumonia with Novel Pathogens and its accompanying special budget. These actions paved the way for the immediate and simultaneous launch of the government's disease prevention, industrial relief and economic stimulus programs, which rendered much needed assistance to individuals and businesses affected by the pandemic. The Legislature also approved a follow-up, four-year special budget for the Forward-looking Infrastructure Development Program, which will allow Taiwan to accelerate the work of building the nation and spurring the economy, even amid the stresses of the ongoing pandemic. I am deeply grateful for your assistance.
While major world economies have seen dramatic declines in their GDPs this year, Taiwan just announced an economic growth rate of 3.33 percent for the third quarter and 1.66 percent for the past three quarters, making us the only one of Asia's four tigers to post positive growth so far this year. Export values also broke the US$30 billion mark for three consecutive months in August, September and October, representing the highest levels in more than three decades. And while stock markets around the world have been trending downward, the TAIEX, the major index of the country's stock market, has seen steady growth, closing above 10,000 on more than 1,000 occasions. The TAIEX, and the proportion of foreign investor shares to total market value, have also set new records time and again, signaling the growing confidence that foreigners have in Taiwan's investment environment. Even U.S.-based Business Environment Risk Intelligence in its first and second reports this year ranked Taiwan as the best investment destination in Asia and third-best worldwide—after only Switzerland and Norway—underscoring the stability of Taiwan's investment climate.
As the Cabinet endeavors to protect public health and expedite the economy's revival, we will also continue to push important national policies ranging from care for all ages to industrial upgrading and balanced regional development. We want Taiwan to get through this pandemic safely so that it can emerge a stronger and better nation ready to engage the world.
Please allow me now to make a report of the Executive Yuan's recent administrative policy achievements and our visions for the future.
Seize opportunities and push for transformation
With COVID-19 overturning the global economic and trade order, Taiwan has an opportunity to occupy a key position on the world's industrial supply chain. From the outset of the trade conflict between the U.S. and China, Taiwan acted early on to improve the domestic investment environment by tackling shortages of water, electricity, land, manpower and talent needed by industries. The government also helped businesses with their transformation and competitiveness, and actively guided the development of a new generation of strategic industries.
Since the 2019 launch of three major programs for boosting investment in Taiwan, more and more high-end product manufacturers are choosing to return to Taiwan. They have so far obtained government approval for over NT$1.1 trillion (US$38.2 billion) worth of investment projects, and are expected to commit more than NT$620 billion (US$21.5 billion) to actual projects by the end of the year. Also, since the Management, Utilization, and Taxation of Repatriated Offshore Funds Act took effect a year ago, overseas Taiwanese individuals and businesses have repatriated NT$220 billion (US$7.6 billion) in capital back to Taiwan, which increases tax revenues and helps stimulate the economy with real investments.
President Tsai Ing-wen has also pledged to develop the Six Core Strategic Industries by building on the foundations of the "five plus two" innovative industries and integrating applications across multiple disciplines.
Last year, the value of Taiwan's semiconductor industry reached NT$2.7 trillion (US$87.3 billion), the second highest in the world. This August, the Taiwan Semiconductor Industry Association revised its 2020 forecast for Taiwan's integrated chip industry to top the NT$3 trillion (US$104.1 billion) mark for the first time. The government also plans to devote NT$7.6 billion (US$263.8 million) over the next two years to encourage big international tech names in artificial intelligence, the internet of things, cloud-based services and semiconductor facilities to expand their investments in Taiwan. By collaborating with these corporations and complementing each other's industrial advantages, Taiwan hopes to boost the domestic materials and equipment supply chain at the up-, mid- and downstream levels and create a thriving semiconductor industrial cluster at home. In addition to turning Taiwan into a high-end manufacturing, high-tech R&D and advanced semiconductor processes hub for Asia, these efforts will lay the groundwork for Taiwan's economic and industrial development for the next 30 years.
Taiwan's well-developed corporate governance, high degree of regulatory transparency, and robust capital markets are the main reasons international capital continues to flock to our markets. In the "CG Watch" 2020 report published Wednesday by the Asian Corporate Governance Association, Taiwan achieved its best ranking ever, at fourth place out of 12 markets surveyed.
To make Taiwan a corporate financial center for Asia, the government has introduced the Corporate Governance 3.0 plan designed to strengthen the duties and function of boards of directors, improve corporate social responsibility, and step up disclosures of non-financial information. These strategies will encourage companies to direct funds into environmental and social causes.
The digital economy has become an important component of Taiwan's economic development, with output value accounting for a quarter of the nation's GDP. Under the Forward-looking Infrastructure Development Program 2.0, we will inject nearly NT$100 billion (US$3.5 billion) into digital infrastructure over the coming four years. As Taiwan officially launched 5G commercial services this June, more industries are expected to join with applications and services. The government will thus act quickly in building related infrastructure and easing regulations to enable 5G technology to drive Taiwan's digital transformation. Additionally, a dedicated digital development agency will be established to oversee information, cybersecurity, digital networks and broadcasting, thereby boosting the nation's digital governance capabilities.
In the area of startup support, the Ministry of Economic Affairs' Startup Terrace and the Ministry of Science and Technology's Taiwan Tech Arena continue to draw world-class accelerators and foreign venture capital investors to Taiwan while offering links to different markets worldwide. To date, the two facilities have served over 560 startup teams and helped raise more than NT$7 billion (US$243 million) in funding. The Financial Supervisory Commission's FinTechSpace is also forming an international team of select, high-potential financial institutions and financial tech businesses to go abroad and develop new markets with assistance from the government. The Shalun Startup Terrace is expected to open next June. The National Development Council's business angel investment fund will be gradually expanded in coming years to NT$10 billion (US$347.1 million), while other ministries and agencies will provide NT$60 billion (US$2.1 billion) in youth entrepreneurship loans in the hopes of nurturing outstanding startups to lead Taiwan's development.
In the transformation of the nation's energy portfolio, several years of endeavor have steadily raised the capacity of renewable energy installations, from 9.5 percent of total energy generating installations in 2016 to 14.9 percent currently. The cumulative capacity of solar power installations, in particular, increased fourfold, from 1.2 gigawatts in 2016 to 4.8 gigawatts now.
Regarding wind power installations, the government is working hard to build up the basic infrastructure required. This includes wind power industrial zones and heavy cargo terminals at Taipei Port, Taichung Port and Kaohsiung's Xingda Port. This August, construction began on an offshore wind farm service port near the Changhua Coastal Industrial Park, which will become the Asia-Pacific's first port specializing in the operation and maintenance of offshore wind farms after phase one construction wraps up in mid-2021. The Marine Technology Industry Innovation Zone situated at Xingda Port will also be completed by year-end, and is expected to help train the talent and personnel needed for offshore wind technology.
Many big-name international companies that have invested in Taiwan have committed to 100 percent renewable energy and announced their participation in green power purchasing plans. Google, for one, declared recently that it will build a third local data processing center—following those at the Changhua Coastal Industrial Park and Tainan Technology Industrial Park—with investments of at least NT$20 billion (US$694.2 million). This shows that these firms have confidence in Taiwan's investment environment and think well of the government's support for green energy. It also indicates that green energy will not only contribute tangibly to domestic supplies but also boost energy exchanges in the future.
As for the railway industry, the Railway Technology Research and Certification Center will be established at the end of the year as a national-level agency in charge of railway technology, with an R&D training building to be completed next January. The center will be responsible for establishing technologies relating to railway product R&D, testing, inspection and certification. Additional objectives include integrating the domestic railway industry's technologies and capacities, improving the ability to develop key technologies indigenously, promoting domestic manufacturing of rolling stock, and localizing electromechanical systems, all of which will promote the development of railway technology and related industries.
In the areas of agriculture and fisheries, this June after 24 years of hard work, Taiwan was finally recognized by the World Organisation for Animal Health as a country free of foot-and-mouth disease where vaccination is not practiced. Now that Taiwan can resume exports of quality pork products, we have begun steady exports of fresh pork meat to Macau, and are in talks with Malaysia, the Philippines, Singapore and Vietnam. The government is also injecting over NT$5 billion (US$173.5 million) into the two largest fishing harbors in the country to raise fishery output value and boost tourism.
Care for all ages and peace of mind
In terms of child care, more than 90 percent of nannies and nurseries have signed contracts with the government as of July to care for infants and toddlers ages 0-2 under the quasi-public child care scheme. The government has also added more than 1,550 public preschool classes over the past four years to provide more education and care services for children ages 2-5. With the establishment of the quasi-public system, nearly 60 percent of all preschools offered affordable tuition for the 2020 school year, an increase of over 20 percent since 2016.
The government is vigorously promoting the long-term care 2.0 policy for the elderly and people with disabilities, with nearly 10,000 community service stations set up across Taiwan to date. Under the policy of "one residential care facility in every town" and "one daytime care center in every middle school district," the government has set up 50 care facilities and 500 daytime care centers.
As for social housing, the government is expected to construct 42,000 social housing units by the end of this year, representing 106 percent of the first phase target. To achieve the second phase target, the central government will undertake an initial 50 social housing developments in 18 cities and counties across Taiwan next year in a bid to make more than 15,000 homes available. In the years ahead, the central government will also work with local authorities, the National Housing and Urban Regeneration Center, and state-owned enterprises to provide more social housing units to those in need. Newly constructed social housing communities will be connected to such social welfare institutions as public child care centers, long-term care facilities and nongovernmental organizations. This policy to promote care for all ages whether young or old will also improve the quality of life for residents.
Regarding air pollution control, numerous central government agencies are working with local governments to create different policies for different causes of air pollution. The results so far have been tangible: The number of PM2.5 alerts nationwide plunged from 997 in 2015 to only 146 last year, an improvement of 85 percent.
Illicit drugs lie at the root of many crime issues. Since the Executive Yuan launched the New Generation Anti-drug Strategy in 2017, more than NT$11 billion (US$381.8 million) has been poured into the war against narcotics. Law enforcement has since set new records in the amount of drug hauls, the value of drug seizures, and the number of drug manufacturers, dealers and traffickers taken into in custody. The number of new drug users has also declined noticeably. To continue the fight, the government will devote an additional NT$15 billion (US$520.6 million) on a three-pronged strategy aimed at reducing the supply, demand and harms of illegal drugs. This is to be achieved by tightening border controls, curbing drug production within Taiwan, and strengthening testing for new and emerging drugs. It is hoped these efforts will more effectively lower recidivism rates and the number of new drug users.
Balanced development and a sustainable homeland
Improving the basic infrastructure of daily living and industry creates a better life for all. More importantly, it is key to achieving balanced regional development. Both the extension of Taoyuan's Metro Green Line to Zhongli and the project to move the Taoyuan metropolitan area railway underground—approved in February and September, respectively—are essential in the formation of a rail network loop around Taoyuan and will link the cities of Taipei, New Taipei and Taoyuan into a single community all within an hour's journey. A project to elevate railway in Yilan County to reduce transportation bottlenecks and stimulate regional development was also given the go-ahead in October.
In Taichung, construction and testing have been completed on the metro system's Green Line, which is connected to the Taiwan High Speed Rail and Taiwan Railway stations. Electrification of the nationwide round-the-island railway system is also nearly finished. Along the South Link Line, the stretch between Chaozhou and Fangliao townships is already open to train traffic. Work on track between Fangliao and Zhiben will also be completed by the close of this year, which will play a driving role in the development of tourism in eastern Taiwan.
In the past science park construction has largely been concentrated in the north. Now with returning Taiwanese enterprises seeking to invest in all regions, southern and central Taiwan will be given priority consideration for the development of new industrial parks. This will spur balanced regional development as well as benefit existing industrial clusters. A new science park in Kaohsiung's Qiaotou District received approval in December 2019, and businesses expect to begin construction of facilities there at the end of 2021. This year in April we approved plans for the third-phase expansion of the Southern Taiwan Science Park, while the Hsinchu Science Park X project was greenlighted in July. Both expansions will allow for new manufacturers to move in and thereby create an important research and development hub for the next generation of semiconductors, artificial intelligence and software. The government will also continue with its investment of NT$12 billion (US$416.5 million) in helping smaller towns and villages develop unique local attractions, with the aim of accelerating the revitalization of local communities, drawing the return of young people to their hometowns and stimulating the economy.
The government is engaged in a renewed push to develop water resource infrastructure in response to the effects of extreme climate change, which has driven reservoir levels in Taiwan to a 17-year low. To make the most of supplies, plans have been approved to update water processing and distribution facilities by investing greater resources and reducing water leakage rates. This includes addressing issues with aging distribution systems in older upland communities.
Taiwan is blessed with rich scenic beauty. Surrounded by the ocean and home to majestic mountain ranges, the country boasts 268 peaks topping 3,000 meters and 2,000 kilometers of continuous coastline featuring dramatic seaside cliffs and beautiful beaches. Following up 2019's "salute to the mountains" policy of lifting access restrictions on Taiwan's mountain and forest areas, this year we announced a "salute to the seas" policy guided by the same principles of openness, transparency, service, education and responsibility, with the goals of encouraging the people of Taiwan to understand the ocean, embrace the ocean, engage with the ocean and keep the ocean clean. Additionally, in commemoration of World Oceans Day on June 8, I approved an inaugural National Ocean Policy White Paper to serve as a policy blueprint for government ocean administration and a basis to promote ocean affairs.
Research is a key objective of this policy. The research ship New Ocean Researcher 1 was delivered in July, the first such vessel conceptualized, designed and constructed exclusively in Taiwan, and a testament to the prowess of the nation's shipbuilding industry. The New Ocean Researcher 1 will join three existing vessels—Legend, New Ocean Researcher 2 and New Ocean Researcher 3—that have been brought into service over the past two years. This renewed fleet greatly enhances Taiwan's ocean research capabilities and is creating new possibilities for the development of the nation's maritime industries.
A problem frequently faced by authorities is Chinese vessels dredging and stealing sand from Taiwan waters, which damages the environment and threatens the nation's territory. Between January and October this year, Taiwan coast guard patrols expelled Chinese sand dredging and transport vessels on nearly 4,000 occasions. The Executive Yuan approved draft amendments to both the Law on the Exclusive Economic Zone and the Continental Shelf of the Republic of China and the Sand and Gravel Excavation Act on October 29, which have been sent to this body for review and discussion. The amendments will stiffen penalties for unauthorized removal of sand and gravel from our territorial waters, protect the safety of maritime navigation, and ensure the sustainable development of ocean resources.
Deepening democracy and cultivating culture
August saw the promulgation of a citizen judges act that will help move Taiwan forward into a new era of ordinary citizens and professional judges sitting together to hear cases and pass judgment. This important step in judicial reform will go into formal effect in 2023. Because the new process will open the bench to a broader range of life experiences and improve transparency, public confidence in the resultant verdicts will likewise increase. The changes will also narrow the gap between the judiciary and the people.
We also want to inspire greater independence and autonomy among young people, encourage them to engage in public affairs, further protect their rights and interests, and balance rights with responsibilities. To meet this objective the Executive Yuan approved in mid-August a package of 38 draft amendments to the Civil Code and other laws that would lower the age of majority in Taiwan to 18. This package has been passed to the Legislature for review and debate.
Just as culture represents the spirit of a nation, so too does it reflect that nation's standards. To help shape Taiwan's unique appeal and build a cultural brand, the government has steadily increased its annual budget for such efforts. The old focus in favor of physical manifestations over content and ideas has also been reversed. Resources have been redirected toward nurturing domestic talent and supporting the creative spirit.
At the end of 2019 the Taiwan Film Institute was given a foundation in law as an administrative public body, and on May 19, 2020 was formally relaunched as the Taiwan Film and Audiovisual Institute, with a mission to enhance audiovisual culture through archival restoration, research, promotion and education. The institute will also structure a historical audiovisual overview of Taiwan in the modern era, and present to the world the classic and abundant intricacies of Taiwan's national culture.
Asia welcomed a major pop music center with the opening of the Taipei Music Center in August, after 17 years of planning and design. Meanwhile, the Kaohsiung Music Center is nearing completion and is scheduled to open in the first half of 2021. Together the two centers will act as twin cores—north and south—to drive audiovisual industry development, not only providing top-class performance venues but also serving as hubs for new musical talent, international exchanges, tourism and more.
This year we budgeted about NT$5.3 billion (US$184 million), more than four times the 2016 figure, to promote cultural resource preservation, cultural revitalization and the transmission of our cultural heritage. The government has also advocated the interagency management of public cultural assets, encouraging administrators to budget for preservation, meld rural and urban styles, and add more value and vitality to cultural venues. For example, Taipower's installation of monument lighting to illuminate the ruins of the "13-story" Shuinandong Smelter in New Taipei City not only boosted tourism but also won German design competition Red Dot's 2020 Best of the Best award.
We are also promoting the Taiwan Cultural Memory Bank as a systematically and thematically organized repository for cultural materials and related stories. This will open a window into the tales and memories that encapsulate Taiwan's culture, enabling open access and countless retellings.
Past failures to acknowledge the subjectivity of Taiwan's indigenous groups and the violation of their traditional rights and interests have led to an erosion of culture. To address such issues, the government has taken the initiative over the past four-plus years to provide logging ban compensation for lands reserved for indigenous peoples. Also to ensure that reparations extend to all deserving claimants, we have entered into partnerships and strategic alliances that rely on traditional indigenous knowledge and ecofriendly lifestyles to restore customary indigenous rights and interests in natural resources, and promote workable shared management. This achieves the twin goals of preserving tribal traditions and protecting the environment, while also properly securing the future of Taiwan's land and culture for generations to come.
Strengthening security and extending connections
Taiwan's success in countering COVID-19 has won praise worldwide, and the "Taiwan model" serves as a standard for global efforts. In response to this performance, U.S. Secretary of Health and Human Services Alex Azar visited Taiwan in early August to share experiences with disease prevention and discuss cooperation on developing vaccines. Taiwan and the U.S. also signed a memorandum of understanding on health cooperation. At the end of August Czech Republic Senate President Miloš Vystrčil visited Taiwan at the head of a prodigious delegation of over 90 senators, business leaders, academics, cultural luminaries and other dignitaries. The trip marked a historic milestone in bilateral relations and yielded numerous tangible accomplishments in 22 areas of cooperation, including democratic values, trade and economics, culture, academia and technology.
U.S. Under Secretary of State for Economic Growth, Energy, and the Environment Keith Krach visited Taiwan in mid-September, making him the highest-level serving U.S. State Department official to visit Taiwan since the Taiwan Relations Act took effect in 1979. The two sides exchanged views on bilateral economic cooperation at all levels, as well as on strengthening the collaborative economic relationship. Taiwan and the U.S. also signed a Framework to Strengthen Infrastructure Finance and Market Building Cooperation and announced a Joint Declaration on 5G Security. November 20 saw the inaugural meeting of the Taiwan-U.S. Economic Prosperity Partnership Dialogue and the signing of a five-year memorandum of understanding—renewable for a further five years—that will establish working groups on seven issues. These recent developments demonstrate that deepening Taiwan-U.S. economic cooperation will not be affected by the results of U.S. elections; rather, collaboration in all areas will continue on a sound foundation of mutual trust.
Under the leadership of President Tsai Ing-wen, Taiwan is pursuing a pragmatic course of steadfast diplomacy, uncowed in the face of suppression, seeking to work together with partners internationally that share our values and ideals. In recent months, we have continued to expand our role globally, reopening the Taipei Economic and Cultural Office in the U.S. territory of Guam, engineering the mutual establishment of representative offices with the Republic of Somaliland, and announcing the imminent opening of a representative office in the southern French city of Aix-en-Provence, an important center for tourism. In October, meanwhile, the European Parliament overwhelmingly approved its 2018 annual report on the implementation of the EU's common commercial policy, in which it reiterated its call for the swift opening of investment negotiations with Taiwan in the context of a bilateral free trade agreement.
In dealing with conditions across the Taiwan Strait and China's actions toward Taiwan, we have always acted in accordance with the ROC Constitution and the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, continuously pursuing a policy of non-provocation and careful consideration in cross-strait affairs. Abiding by President Tsai's principles of "peace, parity, democracy, and dialogue" in cross-strait interactions should serve to ensure peace and stability between the two sides.
As for the changing situation in Hong Kong and Macau, our government is taking a careful and prudent approach in showing humanitarian compassion for the people of the two areas. The Taiwan-Hong Kong Office for Exchanges and Services officially opened in July, through which the government and private sector can work together to provide substantive assistance to those in Hong Kong.
Recently we have frequently seen Chinese military forces circumnavigate Taiwan, again and again violating Taiwan's air defense identification zone, also intentionally crossing the midway line dividing the two sides of the strait, and even conducting live-fire military drills in the waters near Taiwan. Such actions repeatedly prove that a strong national defense is the best and only guarantee of national security. Only if a country can establish the conditions for its own defense can it truly be independent and strong. The government is demonstrating its resolve through action. We are accelerating at every step initiatives for the indigenous design and construction of military aircraft and naval vessels in line with national defense policy, as well as vigorously promoting the development of Taiwan's strategic aerospace industry.
Here I would like to thank the Legislature for your support of last year's special budget to procure new fighter aircraft. Taiwan's purchase of 66 American F-16V Block 70 fighters has been approved by the U.S. This marks the first time since Taiwan acquired 150 American F-16A/B jets in 1992 that the U.S. has agreed to sell advanced fighters to our military. The new weapons will strengthen Taiwan's air defenses and maintain adequate self-defense capabilities. In addition, an F-16 maintenance center was established at the end of August. This facility represents an important milestone in the development of Taiwan's defense industry and will create over 600 job opportunities per year while bringing overall industry benefits of up to NT$200 billion (US$6.9 billion).
In view of the increasing complexity and varied nature of threats to our national security, the government is actively engaged in preparations, taking stock of the infrastructure and assets requiring protection. The growing menace of hostile powers abroad has also prompted action to secure Taiwan's national defense in cyberspace. We have already mapped out plans for a cybersecurity complex that will build proactive system defenses and offensive capabilities, foster cybersecurity talent, draw together private-sector resources and international partners, and enhance the effectiveness of coordinated regional defenses. The goal is to block malicious attacks and protect both critical national infrastructure and core strategic industries.
United in writing a history of even greater success for Taiwan
Taiwan is a small but strong and resolute country. With our success in the fight against COVID-19, we are ready to face the world. We will take advantage of the opportunities now presented to completely transform our nation, and in this critical moment of political and economic reordering, continue to claim a spot for Taiwan on the global stage.