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Premier Chen Chien-jen's oral policy report to 8th session of 10th Legislature


The following is a translation of select portions of the premier's report.

Speaker You, Deputy Speaker Tsai, esteemed members of the Legislature:

I am deeply honored to be invited to present this policy report on behalf of my team at the Executive Yuan and would be delighted to answer interpellations from members of the Legislature.

Since the beginning of this year, the global political and economic environment has undergone rapid change. Taiwan is situated on one of the world's most volatile geopolitical fault lines. In order to respond to a continuously changing international environment, Taiwan must act cautiously and prepare thoroughly, while also proactively safeguarding its national security and enhancing its strength, so that the nation can attain a more important position in world affairs.

It has been more than three years since the outbreak of the COVID-19 pandemic in 2019. The pandemic has brought enormous changes that have impacted people's lives and affected the growth and development of industries.

The special act and associated special budget to boost economic and social resilience and share the proceeds of growth in the post-pandemic era are enabling the public to resume their daily lives as soon as possible and my team is grateful for the Legislature's support. The act is revitalizing the economy in the short term and galvanizing the transformation and upgrade of industries with the NT$380 billion (US$11.8 billion) of surplus government tax revenues allocated by the special budget.

Taiwan's resilience during the epidemic not only impressed the rest of the world, but also served as a model for other nations to emulate. We have won many admirers around the world for our democracy, clean government, economic freedom and promotion of gender equality. In February this year, Britain's Economist Intelligence Unit published the Democracy Index 2022, which rated Taiwan highest in Asia and ranked Taiwan 10th out of 167 countries and regions globally.

In January 2023, Transparency International published the 2022 Corruption Perceptions Index, placing Taiwan 25th out of 180 surveyed countries and territories, and sixth out of 31 in the Asia-Pacific region. In the 2023 Index of Economic Freedom, published in February by U.S. think tank The Heritage Foundation, Taiwan ranked No. 4 globally, marking the nation's best performance to date.

In March, Freedom House gave Taiwan a "Free" rating for the sixth consecutive year in its Freedom in the World 2023 survey. In the same month, international human rights organization CIVICUS released its People Power Under Attack 2022 report, which named Taiwan the only country in Asia with an open civic space for the fourth consecutive year. In May, Reporters Without Borders published the 2023 World Press Freedom Index, which scored Taiwan 35th globally for press freedom, rising 16 places from 51st place in 2015.

In addition, this year Taiwan was included in the Organisation for Economic Co-operation and Development's Social Institutions and Gender Index for the first time. In the latest version of the index, published in August, Taiwan ranked sixth globally out of 179 countries and regions, and the index praised Taiwan as a global top performer in eliminating laws, social norms and practices related to discrimination in the family.

I would like to pause here to give special thanks to the Legislative Yuan for its support and guidance during the previous legislative session, and for passing 140 laws relating to important issues of national security, social stability, public well-being and environmental sustainability. Each of these laws concerns people's lives and has influenced the economic development of the nation. It is also the largest number of bills passed in a single legislative session for two decades, 112 of which were sent by the Executive Yuan.

Now I would like to provide my report on recent key policy achievements and the future outlook for three major areas of national development: bolstering economic strength, building a harmonious homeland, and protecting Taiwan's democracy.

Bolstering economic strength

Despite a weak global economic situation and the numerous changes and challenges faced by the nation, this administration has continued to energize Taiwan's economic growth by promoting the Six Core Strategic Industries plan and the "five plus two" innovative industries plan.

In its 2023 World Competitiveness Yearbook, the Swiss-based International Institute for Management Development ranked Taiwan sixth overall out of 64 surveyed countries in the nation's strongest performance since 2012. Within the government efficiency category, Taiwan moved up to sixth place, rising from 12th place in 2018; and in the infrastructure category, Taiwan ranked 12th, rising from 22nd place in 2018. This shows that the nation is already reaping the benefits of the Forward-looking Infrastructure Development Program. The government's optimization of the industrial investment environment has also borne fruit, with Taiwan jumping to fourth place in the Yearbook's business efficiency category, up from 20th place in 2018.

To drive forward economic development, the government continues to implement the Three Major Programs for Investing in Taiwan. Since 2019, the three programs have successfully attracted more than 1,400 enterprises and a total of over NT$2.1 trillion (US$65.2 billion) of investment, while fostering more than 147,000 job opportunities. Moreover, investment by overseas Taiwanese and foreign entities into Taiwan last year exceeded US$13.3 billion: the highest amount in 15 years and the third highest historically, demonstrating that international investors have deep confidence in Taiwan's economy.

Last year, the total trade volume between Taiwan and New Southbound Policy countries exceeded US$180.3 billion, with exports to the 18 targeted countries reaching a record high of US$96.9 billion—the best result since the policy was launched in 2016. In terms of investment, Taiwan's investment into New Southbound countries last year amounted to US$5.3 billion, exceeding investment into China for the first time since 1993. The government will continue to foster a new model of mutually beneficial cooperation with New Southbound Policy partner countries through resource sharing and talent cultivation.

Taiwan's economic development has long prioritized the north over the south. To redress this imbalance, the Executive Yuan has committed to building a southern Taiwan science and technology corridor, which includes the newly-established Chiayi Science Park and Pingtung Science Park, and the Pingtung Technology Industrial Park expansion, all of which have already broken ground.

Additionally, the Executive Yuan in May approved a development plan for Asia's New Bay Area 2.0 smart technology innovation park. The government will invest NT$17 billion (US$527.5 million) over seven years to build the innovation park, which is expected to generate NT$55 billion (US$1.7 billion) of domestic and international investment and more than 4,000 job opportunities.

With Taiwan predicted to experience a worker and talent shortfall of 400,000 people by the year 2030, recruiting foreign talent has become a most urgent issue for the government. To respond to a short-term labor shortage arising from Taiwan's post-pandemic industrial recovery, the Ministry of Labor has invested NT$1 billion (US$31 million) to promote a post-pandemic plan to improve labor shortages and expand employment, which is proactively assisting businesses to solve their labor shortfalls.

As regards high-level talent, the Ministry of Education has approved the establishment of 12 specialized colleges for research in fields related to national key industries to accelerate the cultivation of skills needed by Taiwanese industries. In addition, since the Act for the Recruitment and Employment of Foreign Professionals came into effect in 2018, Taiwan has granted over 8,100 Employment Gold Cards to foreign nationals. At present there are approximately 50,000 foreign professionals working in Taiwan making great contributions in a number of fields including high tech, semiconductors, offshore wind power and finance.

This year has seen the exponential rise of the artificial intelligence (AI) chatbot ChatGPT, causing a rush of interest in AI in countries around the world. The AI Taiwan Action Plan 2.0 was approved by the Executive Yuan on April 7, with the aim of leveraging Taiwan's existing strengths to realize the government's vision of using AI to energize the transformation and upgrade of industries, help improve social well-being and turn Taiwan into a global AI powerhouse.

The semiconductor industry is a truly national industry and is the cornerstone of the government's "five plus two" innovative industries plan. In response to the recent trend toward the rapid development of generative AI, global memory manufacturer Micron Technology announced it will invest in research and development and manufacturing facilities in Taiwan.

During the past two years, Taiwan Semiconductor Manufacturing Company (TSMC) has established new factories in Tainan and Kaohsiung, and in July announced it will set up an advanced packaging fab in Hsinchu's Tongluo Science Park with a projected investment of nearly NT$90 billion (US$2.8 billion), creating approximately 1,500 jobs. Furthermore, TSMC's Global R&D Center was inaugurated in Hsinchu on July 28th.

The COVID-19 pandemic has demonstrated the indispensability of the biomedical industry to the nation's development and security. The Executive Yuan has proposed a regenerative medicine bill and regenerative pharmaceuticals bill for the Legislature's consideration.

To deal with the many complex issues arising from the globalized world in which we live, the Executive Yuan plans to invest more than NT$11.1 billion (US$344.4 million) between this year and 2026 to continue optimizing the nation's social innovation ecosystem using public-private partnerships and according to the four strategies of realizing social values, accelerating the pace of innovation, linking different resources, and expanding global influence.

Global warming presents the nation with a number of challenges. The Executive Yuan last year announced a plan for Taiwan's Pathway to Net-Zero Emissions in 2050, followed by an action plan for 12 key strategies for net-zero transition. On January 31 this year, the Executive Yuan further approved a plan covering the period 2023-2026, which outlines various carbon reduction methods and adjustments to bring the nation closer to net zero. The plan aims to invest NT$74.3 billion (US$2.3 billion) in four years to establish a comprehensive carbon emissions management mechanism for the entire industrial supply chain. In addition, on March 28, the Executive Yuan approved phase one (2023-2026) of the Net-zero Science and Technology Program. The program will invest NT$15 billion (US$465.4 million) annually into sustainable, future-oriented energy sources and four other main development areas, to promote research and development into net-zero technology and accelerate its real-world implementation.

The space industry is one of the nation's Six Core Strategic Industries and the Triton weather satellite will be the first satellite to be launched under the third phase of the National Space Technology Long-term Development Program. Triton is scheduled for launch into the Earth's orbit on October 5 and will contribute to future meteorological forecasting and scientific research.

Building a harmonious homeland

As part of the government's commitment to take care of low-paid workers, on September 11 I approved an adjustment to the national minimum wage. Starting January 1, 2024 the monthly minimum wage will rise from the current NT$26,400 (US$819) to NT$27,470 (US$852), and the hourly minimum wage will increase from NT$176 (US$5.46) to NT$183 (US$5.68). This marks the eighth consecutive year that the minimum wage has been raised since 2016. In addition, I have also approved a 4% pay increase to the salaries of military personnel, civil servants and public school teachers, effective January 1 next year.

To address the declining birth rate, the Executive Yuan has substantially increased investment into child care from more than NT$15 billion (US$465.4 million) in 2016 to NT$107.2 billion (US$3.3 billion) this year. The government has raised childrearing allowances from NT$3,500 (US$109) to NT$5,000 (US$155) per month and increased child care subsidies for children ages 0-2 to NT$8,500 (US$264) per month—and we will raise them again next year to NT$13,000 (US$403) per month. In addition, fees for children aged 2-6 attending public or quasi-public preschools have been reduced across the board to less than NT$3,000 (US$93) per month.

The government has expanded fertility treatment subsidies from only covering low income and lower-middle income households, to cover all couples where at least one spouse is of Taiwanese nationality, so as to provide a supportive and friendly environment for pregnancy.

To create a school environment where children can learn happily and grow freely, last year the government invested NT$32.3 billion (US$1 billion) to ensure air-conditioning in every classroom and power generation at every school, and NT$20 billion (US$620.6 million) to provide internet access for every classroom and tablet access for every student.

In order to achieve educational equality, the government has allocated NT$22.1 billion (US$685.7 million) for a plan and supporting measures to reduce the disparity between the costs of attending public versus private schools. Starting from February next year, students attending private universities or colleges will be eligible for a fixed-sum waiver to narrow the public-private tuition and fees gap, and students attending senior and vocational high schools will receive free tuition.

The government is taking care of vulnerable groups by using the post-pandemic recovery special budget to provide additional monthly per capita living allowances to low income and lower-middle income households, as well as the elderly, physically and mentally disabled, and children from disadvantaged backgrounds.

In addition, starting January next year, the government will increase "eight plus one" social welfare benefits, including living subsidies to disadvantaged households, national pension benefits and the monthly welfare allowance for elderly farmers.

The government has been promoting the Long-term Care Plan 2.0 for over six years to reduce the burden of families caring for older generations. The plan's allocated budget has jumped from less than NT$5 billion (US$155.1 million) in 2016 up to NT$87.6 billion (US$2.7 billion) in 2024, and the number of care centers has significantly increased from over 700 to more than 12,000. In 2021 and 2022, the Executive Yuan updated its white paper on aged society and approved a 2023-2026 strategic program to respond to a super-aged society, and will invest NT$120 billion (US$3.7 billion) over the coming four years to foster friendlier environments and promote healthy independent living for older people.

To lower the hurdles faced by households caring for elderly people with disabilities or impairments, the government is also adopting new methods to determine the eligibility of families applying for foreign caregiver employment permits, bypassing the current requirement that individuals must be assessed by the Barthel Index.

The Executive Yuan in 2021 approved the second phase of a program to strengthen Taiwan's social safety net, building a happier nation by providing people with peace of mind. The second phase allocates NT$40.7 billion (US$1.3 billion) over a five-year period, and makes available nearly 10,000 specialized social workers and mental health professionals. The government will also subsidize a salary increase of 8.16% for private sector social workers next year to boost the long-term retention of specialized personnel.

The government is proactively pursuing housing justice. On January 10 the Legislature passed its third and final reading of draft amendments to the Equalization of Land Rights Act, which took effect in July. The new amendments ban the reselling and swapping of sales and purchase agreements for presold houses or new buildings. They also establish a whistleblower reward scheme and impose heavy penalties on real estate speculation. On September 21 the Executive Yuan also submitted to the Legislature for deliberation draft amendments to the House Tax Act, which would encourage more housing to be put on the market and institute more equitable differential tax rates on housing.

To assist renter households, last year's NT$30 billion (US$930.9 million) expanded rent subsidy program was reopened to applications this year with wider eligibility than ever before. Since 2017, the government has been directly involved in the construction of over 85,000 units of social housing, and facilitated the signing of rental contracts for nearly 60,000 units through a subleasing and management program. Together, this exceeds over 140,000 housing units, and we expect to reach our policy target of 200,000 units by the end of next year.

To assist homebuyers, the Executive Yuan utilized the post-pandemic special budget to launch a program providing personal housing loan support for households of middle-class incomes and below. The government has also implemented a program to provide preferential housing loans for young homebuyers which raises loan limits, increases loan interest subsidies, and extends loan repayment and loan forbearance periods. We hope these measures will help to meet the practical needs of the homebuying public.

Many of Taiwan's local languages are at risk of falling into disuse or even vanishing altogether, with some having suffered disruptions in their teaching and transmission. The Executive Yuan thus advanced a 2022-2026 plan for the comprehensive development of national languages, which aims to create friendlier environments for the use of all national languages. In addition, the Executive Yuan has approved a draft act for the establishment of a national languages research and development center and submitted it to the Legislature for deliberation.

Taiwan's diverse cultures deserve vigorous promotion. I would like to thank the Legislature for in May passing the third and final reading of amendments to the Development of the Cultural and Creative Industries Act. In the future, cultural and creative industries focused on audiovisual content will be categorized as national strategic industries and be eligible for investment tax credits. The government sincerely invites business partners to become important advocates in this endeavor, allowing the unique qualities of Taiwan's cultures to be seen by wider audiences.

To ensure the preservation and passing on of indigenous languages and indigenous rights, the budget allocated to indigenous peoples' issues has risen significantly from NT$8.8 billion (US$273.1 million) in 2016 to nearly NT$13.5 billion (NT$418.9 million) this year. The Council of Indigenous Peoples is actively promoting the learning and use of indigenous languages. An act promoting indigenous health care was also promulgated and took force this year on June 21.

Hakka culture is rich and diverse. The 2023 Hakka Expo, the first international expo centered on Hakka culture, is now being held in Taoyuan from August 11 to October 15. The expo brings together a vast array of Hakka cultural experiences from around the world, and showcases the special features of Taiwan's Hakka culture.

Taiwan has been severely impacted by disinformation and ranks as one of the world's largest targets of cybersecurity attacks. The government has rolled out version 2.0 of its comprehensive "cybersecurity is national security" strategy, and, following the inauguration of the Ministry of Digital Affairs, the National Institute of Cyber Security was also officially unveiled on February 10 this year.

To protect the public from damaging breaches of personal data, the Executive Yuan has made government agencies and their affiliated entities responsible for reporting serious data leaks and conducting routine security checks. Through recent amendments to the Personal Data Protection Act, penalties have increased for leaks of personal data by businesses, which will motivate the private sector to assume more responsibility for protecting the public's personal data.

In recent months, several cases of sexual harassment from across society have come to light. Draft amendments to three gender equality laws were quickly proposed, placing the protection of victims front and center. The amendments are intended to strengthen effective penalties for perpetrators; extend comprehensive, victim-friendly rights protections; and establish dependable, professional systems to combat sexual harassment. I would like to thank the Legislature for passing the third and final readings of the amendments in succession on July 28 and July 31.

A recent dramatic rise in scams has caused enormous financial damage to many people's lives. The Executive Yuan has published version 1.5 of the government's next-generation anti-fraud strategy guidelines, focusing on three strategies of reducing exposure, reducing deception and reducing harm caused by scams, in order to lower the overall number of incidents. Furthermore, amendments to five laws, including the Criminal Code and the Money Laundering Control Act, will authorize harsher penalties for deepfake scams, unauthorized custody of individuals, and human trafficking, thereby deterring such criminal behavior and increasing punishments for related fraudulent activities.

Due to factors including climate change and global outbreaks of avian flu, there was a shortage of eggs on the market earlier this year. The Executive Yuan employed an egg import program to supplement domestic production and supplies and maintain reasonable prices, in addition to conducting strict investigations of illegal stockpiling and price gouging. The government also delivered measures to upgrade poultry farm facilities and equipment; provided subsidies for culling infected chickens; and launched an avian flu insurance program, in order to make up for egg farmers' losses to the disease and incentivize continued poultry farming.

Taiwan is currently one of only two nations in East Asia free of African swine fever. After 24 years of dedicated effort, we have also succeeded in eradicating foot-and-mouth disease, and on July 1 we began ending classical swine fever vaccinations nationwide. We expect to apply to the World Organisation for Animal Health next year for Taiwan to be classified as a classical swine fever-free zone. At the same time, we are advancing a program to comprehensively transform and upgrade the pork industry, which will elevate the quality of Taiwanese pork.

The government has been working to open up lucrative new markets and diversify sales channels for agricultural product exports. Last year the total value of Taiwan's agricultural product exports surpassed US$5.2 billion, of which over US$900 million were exports to the U.S. The U.S. and Japan have now become Taiwan's two largest agricultural export markets.

I would like to thank the Legislature for supporting the Executive Yuan's draft amendments to the Marine Pollution Control Act as well as a draft bill to govern the development of marine industries. These laws help maintain a balance between marine conservation and the growth of marine industries.

After the lifting of pandemic restrictions, the government launched the Accelerated and Expanded Inbound Tourism Promotion Program to welcome an abundance of international tourists to Taiwan. Independent travelers visiting Taiwan are eligible to enter a lucky draw at the airport to win prizes. On September 13, we saw the four millionth arrival by a foreign tourist in Taiwan this year, meaning we are over two-thirds of the way toward achieving our goal of six million arrivals by the end of the year.

The government is dedicated to creating a road traffic environment that puts people first and prioritizes pedestrian right of way. The Executive Yuan has created a set of strategies for protecting pedestrians, approved its policy guidelines (2023-2027) for pedestrian traffic safety and approved a draft bill for a basic act for road traffic safety. This latter bill is designed to comprehensively improve nationwide road traffic safety and was submitted August 18 to the Legislature for deliberation. The Executive Yuan has also greenlighted a plan to sustainably increase pedestrian safety, which will allocate an estimated NT$40 billion (US$1.2 billion) over four years to improve pedestrian environments.

To reduce the costs of commuting for workers and students, the Executive Yuan allocated NT$20 billion (US$620.6 million) through the post-pandemic special budget to promote TPASS, a new monthly commuter card allowing unlimited journeys within a specific region across multiple modes of transport, including Taiwan Railways, MRT, light rail, public city buses and intercity buses. The TPASS is available in three regional variants covering northern, central and southern Taiwan. The card enables the public to enjoy discounted travel while at the same time lowering carbon emissions and promoting sustainable, green transportation.

The Port of Kaohsiung is Taiwan's largest port and a major Asian shipping hub. It hosts the Kaohsiung Port Cruise Terminal, which was built with a government investment of NT$4.5 billion (US$139.6 million) and officially opened on March 6 this year. The new terminal can accommodate the world's largest 250,000 metric-ton cruise ships and signifies Taiwan's official comeback in the global cruise market.

Protecting Taiwan's democracy

Taiwan holds a critical position in international supply chains. Faced with China's hostile and aggressive ambitions to annex Taiwan, more and more nations around the world are realizing the important fact that peace in the Taiwan Strait is in the interests of the entire world. These nations have become willing to speak out on Taiwan's behalf in various international settings, and are keen to strengthen cooperation with Taiwan.

Since the beginning of this year, many international delegations have visited Taiwan, including from the U.S., U.K., France, Belgium, Czech Republic, Italy, Japan and the EU Parliament. Each delegation has expressed their deep concern over the shifting situation in the Taiwan Strait and supported the need for Taiwan to bravely defend its freedom and democracy, while also actively deepening cooperation with likeminded international partners. Indeed, our government has recently announced the opening of representative offices in Montreal and Mumbai to enhance cooperative exchanges with Canada and India. Taiwan is also set to open a new representative office in the Italian city of Milan this October.

Economic and trade relations between Taiwan and the U.S. achieved an important and substantial breakthrough this year. On June 1, we signed the first agreement under the U.S.-Taiwan Initiative on 21st Century Trade, our largest-scale and most comprehensive pact with the U.S. since 1979, which was passed with unanimous consent by the Legislature. Taiwan and the U.S. have concluded early negotiating rounds on five topics including trade facilitation, which will serve as a foundation for talks on a further range of issues and bring us closer to the goal of signing a bilateral free trade agreement.

Taiwan is an important participant in international security systems. Faced with incessant military threats and intimidation from China, Taiwan must bolster its defensive capabilities and manpower. The Executive Yuan last year passed a plan to realign Taiwan's military force structure to strengthen all-out national defense. Beginning 2024, the length of compulsory military service will be reinstated to one year. In addition, the government's overall budget for national defense reached a historic high this year. With the military's restructuring into a main combat force, garrison force, civil defense system and reserve system, we will forge a stronger and more effective all-out national defense.

Self-reliance in national defense is an important administrative policy at this time. Regarding domestic aircraft production, a total of 19 new-model advanced jet trainers have been delivered, which will enable incoming pilots to train more effectively and improve their skills. Regarding domestic ship construction, the ROC Navy's auxiliary rescue and salvage ship launched at the end of March, enhancing the Navy's maritime rescue capabilities. Several Tuo Chiang-class corvettes have been launched or delivered this year, substantially increasing the Navy's offshore anti-aircraft and anti-ship defense capabilities.

The government has also purchased munitions and related equipment for F-16 fighter jets, which will substantially enhance the ability of our F-16V forces to maintain long-range air, sea and land superiority.

We would also like to give special thanks to the U.S. government for including the Taiwan Enhanced Resilience Act (TERA) in its 2023 National Defense Authorization Act, which fast-tracks military sales to Taiwan and further enhances the Taiwan-U.S. defense partnership. At the end of July, U.S. President Biden for the first time utilized the Presidential Drawdown Authority (PDA) to announce the provision of a US$345 million military aid package to Taiwan, demonstrating continued support for Taiwan's growing self-defense capabilities.

Taiwan still faces many serious challenges in the future. The Executive Yuan's administrative team will continue striving to create a happy, united, resilient and compassionate Taiwan, and do our utmost to build a Taiwan that we can all be proud of. Thank you!

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