The following is a translation of select portions of the premier's report.
Speaker You, Deputy Speaker Tsai, esteemed members of the Legislature:
2020 was an extremely difficult year for nations all around the world. More than 110 million people have been infected with COVID-19, and 2.5 million have died so far. Here in Taiwan, the government responded swiftly, making the correct policy decisions, enacting many disease prevention measures early in the outbreak, and doing things the right way. Public confidence in the government increased as a result, and citizens complied willingly with disease prevention procedures and measures. As the nation rallied together, we transformed Taiwan into an oasis among chaos, and it has become one of the safest places in the world.
At a time when nearly all major world economies were declining, Taiwan posted more than 3 percent GDP growth last year. Moreover, our manufacturing sector is still exporting critical products ranging from small semiconductors to large computer servers, meeting the needs of industries and private sectors worldwide during the pandemic and making significant global contributions.
In the new year ahead, my Cabinet team will take a three-pronged administrative approach to safeguard Taiwan: ensuring security, boosting the economy and creating opportunity.
Ensuring security
The government is committed to safeguarding Taiwan, from national security to home security, from people's basic everyday needs to the nation's long-term stability.
National security means everything, and so the administration will do all it can to defend Taiwan's sovereignty. In recent years Chinese military aircraft have been circumnavigating our adjacent airspace with increasing intensity. We will abide by the principles of peace, parity, democracy and dialogue, and we will not act provocatively or rashly. Nevertheless, the best guarantee of Taiwan's security is through a solid national defense and international support.
To shore up Taiwan's indigenous defense capabilities, our military is expediting the construction of our own aircraft and maritime vessels. Last year saw many important milestones: the maiden flight of our "Brave Eagle" new advanced jet trainer, the start of work on a submarine prototype, and the delivery and launch of our first high-speed minelayer vessel and a Tuo Chiang-class missile corvette. These developments demonstrate our determination to comprehensively defend our airspace and territorial waters as we gradually build up our national defense capabilities.
Aside from national security, the COVID-19 pandemic brings its own warnings. We have therefore incorporated strategic stockpile industries and critical infrastructure as important elements in our national security strategy.
In terms of disease-prevention supplies, our "national face mask team" already ramped up production capacity to 24 million masks per day last year. The government is also securing vaccines through a variety of channels, including through overseas procurements and domestic vaccine development. Personal protective equipment and respirators are in ample supply.
As for food security, the government has introduced response measures to address bulk import crops for which Taiwan is less self-reliant, such as soybean, wheat and corn. We are planning ahead for the production of these types of grains to make sure we have our own secure stocks of key agricultural products.
To ensure our energy security and self-reliance, we've kicked off a string of green energy projects: The nation's solar energy installation capacity has grown nearly five times, and wind turbines are cropping up one by one in the Taiwan Strait. Earlier this year we inaugurated the Marine Technology Industry Innovation Zone at Xingda Port in southern Taiwan, and later this year we will wrap up construction on an offshore wind farm service port near the Changhua Coastal Industrial Park. Both of these facilities are expected to contribute to the formation of a wind energy industrial chain in Taiwan. As well, the government continues to strengthen electricity supply resiliency, and is actively building natural gas storage facilities as a precautionary measure.
Reliable water supplies are also an important factor in protecting our industries and livelihoods. In recent years the government has made a big push to build water infrastructure, with a fourfold focus on developing new water sources, conserving water, reallocating water supplies, and expanding reserve capacity. Last year Taiwan confronted its most severe drought in 56 years, but thanks to the many large water conservancy projects that were completed on time and put into use, the impacts of the water shortage were effectively mitigated.
In terms of the social safety net, the government hiked national minimum wages five years in a row and raised the basic living expense allowance per person for income tax purposes four years in a row as part of efforts to narrow the wealth gap. These actions benefited 2 million workers and eased the tax burden on more than 2 million households.
This year, we finished setting up three insurance schemes and a pension system for agricultural workers. This shows our determination to take care of the nation's farmers and make agricultural careers more attractive to young people.
Public safety is the foundation of a safe society. The government provides full support to law enforcement agencies so they can do their jobs. We've increased budgets, expanded the police force, updated tools and equipment, amended laws and regulations, and improved mechanisms. We're also asking law enforcement to demonstrate higher efficiency in case handling. We will continue to guard our borders and crack down on organized crimes such as illicit drug and fraud operations to ensure public safety for all.
Boosting the economy
Taiwan's economy grew by an impressive 3.11 percent last year, the highest among the Four Asian Tigers and the rest of the world's developed countries.
Owing to the Legislature's support, the government was able to deliver disease prevention, financial relief and economic stimulus measures in a timely manner. We also responded early to global changes and industrial trends, and relied on the three pillars of consumption, exports and investments to put out the best economic performance amid one of the darkest times in recent world history.
The administration used a very limited relief budget to great effect, keeping 120,000 businesses from going under and saving the jobs of 1.15 million workers. The nation's unemployment rate for January 2021 dropped to a 12-month low. Our "triple stimulus" voucher program succeeded in boosting consumption and helped retailers, wholesalers, and food and beverage businesses reverse revenue declines to post monthly highs in the second half of 2020. Notwithstanding the impact of the pandemic worldwide, Taiwan set the highest records for both export value and export orders last year.
Despite Taiwan's limited influence as a small nation on the overall trade war between the U.S. and China, we took stock of the situation and decided to go all out on three large programs to boost investment in Taiwan. So far the government has approved more than NT$1.2 trillion (US$42.4 billion) in investment projects. Last year, public construction projects received more than NT$500 billion (US$16.9 billion) in funding from the government, which, when combined with public-private partnership infrastructure projects, comes to a total of NT$650 billion (US$22 billion). These initiatives have had a clear and positive effect on growth in domestic demand industries and the creation of job opportunities.
All of these achievements were possible thanks to the forward-thinking plans we crafted over the past four years to address the lack of investment momentum. We were able to cope with the impact of the COVID-19 pandemic and the changing international landscape, and even stand out from the crowd to create another "Taiwan miracle."
In the area of green energy, Taiwan leads Asia with the most ambitious plan for transformation. In fact, many large domestic and foreign enterprises currently procure green energy from producers in Taiwan. The government has dedicated considerable effort to developing the wind and solar power sectors here, enhancing indigenous R&D and production capabilities, and accelerating Taiwan toward its future as Asia's green power development hub.
On the formerly barren and deserted fields of Tainan's Shalun District now rise new clusters of research building, where the Southern Campus of Academia Sinica and National Yang Ming Chiao Tung University's Tainan campus will build superior R&D capabilities geared toward green energy. Both complement the Shalun Smart Green Energy Science City, which includes on-site or adjacent facilities such as the Taiwan CAR Lab, the Tainan Conference and Exhibition Center, and a bilingual school to ensure full functional support.
With respect to national defense industries, the full range of defensive weapons R&D and manufacturing last year generated over NT$130 billion (US$4.4 billion) in production value. Furthermore, transdisciplinary cooperation among industry and academia are opening rich new fields of opportunity to advance the domestic aerospace and shipbuilding sectors and encouraging the development of periphery industrial chains.
Recent years have seen heavy investment by the government in space technology. This has yielded indigenously produced satellites and sounding rockets, as well as spurred the establishment of several domestic space-focused commercial ventures, further priming a nascent related industrial supply chain. In addition, the Cabinet two weeks ago proposed draft legislation to develop the space industry, in the hopes of promoting the growth of the sector and launching space-oriented economic activity.
To decisively steer the economy in innovative new directions, the government has provided a NT$10 billion (US$353.1 million) business angel fund and made available up to NT$60 billion (US$2.1 billion) in young entrepreneur loans to develop innovative and high-potential startups engaged in such areas as the internet of things, artificial intelligence and big data.
An obvious factor in the success and rapid growth of so many famous global startups like Google and Facebook was ready access to capital markets. The government is therefore proposing the creation in the second half of this year of two new equity boards for the listing of suitable enterprises: the Taiwan Innovation Board on the Taiwan Stock Exchange and an innovative strategy board on the Taipei Exchange. This will encourage startup enterprises with development potential and companies working in the Six Core Strategic Industries to seek listings in order to access capital that will help boost growth and development.
The Directorate-General of Budget, Accounting and Statistics forecasts that Taiwan's economy will grow by 4.64 percent in 2021. This marks not only the first time in seven years that annual GDP growth will break 4 percent, but also the first time ever that the total size of our economy will exceed NT$20 trillion (US$706.2 billion).
The government will take full advantage of the key opportunities presented by the post-pandemic reordering of global supply chains to continue drawing investment into domestic projects, stimulating private-sector consumption, advancing exports, and opening the way to even greater economic success.
Creating opportunity
Fortune now favors Taiwan thanks to the struggles of eras past, just as a nation's power and influence accrue generation upon generation. The government seeks to develop policy and provide infrastructure that will create opportunities for young people who make up the backbone of the country's future, so that generations of Taiwanese yet to come will be able to bring change to this land and effect new miracles.
Taiwan continues to raise subsidies, lighten burdens and create more space at affordable schools as part of the nation's child care policy for children ages 0-6, with the goal of creating an environment where young adults can live and work in contentment and with greater confidence to enter marriage, have kids and raise families. This year alone, government investment is more than NT$40 billion (US$1.4 billion) above what was allocated in 2016.
In addition, the government is moving forward with the "salute to the mountains" and "salute to the seas" policies, encouraging people to venture and explore the beauty of Taiwan's mountains and forests, and the grand majesty of sea and sky that surround their homeland. The policies also aim to turn the country's mountains and sea into classrooms for teaching the values of individual independence and taking on risks, where the next generation can learn to bravely accept challenges, face down fears and develop the broad vision and expansive ambition that characterize the spirit of a great nation.
Human capital is essential to building up national strength, and the government has launched a "bilingual nation" campaign to enhance the international competitiveness of the next generation. We've also pushed for special legislation to loosen restrictions in the higher education system to begin training a steady stream of high-level technical talent to meet demand in sectors of national importance. Measures to actively attract high-quality international talent to Taiwan are also being taken, including the issuance of over 2,100 Taiwan Employment Gold Cards. We will bring together world-class talent to build the country into an island of startups.
Last December, the Executive Yuan launched a project to strengthen the housing market to help ensure affordable homes are available for hardworking people. The project is aimed at making real estate transaction information more transparent, timely and accurate, as well as curbing tax evasion maneuvers. Also included are steps to accelerate social housing construction, expand rent subsidies, promote subleased or managed rental homes, and extend mortgage payment deadlines for young homebuyers. We hope anyone wishing to do so will be able to find a home where they can start a family and settle down.
In creating investment opportunities, President Tsai Ing-wen has removed long-standing trade barriers between Taiwan and the U.S., a move widely welcomed and commended in the U.S. The government will continue to step up bilateral cooperation in strategic supply chains and strengthen ties built under the Taiwan-U.S. Economic Prosperity Partnership Dialogue.
Ushering in a new future
Taiwan boasts a unique strategic position in the global semiconductor industry chain. Its expertise is greatly valued and needed worldwide. Recently, German Federal Minister for Economic Affairs and Energy Peter Altmaier and U.S. National Economic Council Director Brian Deese have separately sought assistance from Taiwan and expressed gratitude for our help in resolving shortages of automobile chips in their countries.
On February 24, Moody's Investors Service affirmed our government's Aa3 long-term issuer and senior unsecured ratings, and upgraded Taiwan's outlook from stable to positive. The outlook upgrade is the first since Moody's began covering Taiwan in 1994. Moody's applauded Taiwan's extraordinary fiscal discipline in the face of the coronavirus pandemic, and praised the country's effectiveness in rapidly restoring economic normalcy while successfully negotiating the pressures of the U.S.-China trade conflict. The report also said Taiwan's management of shocks points to stronger governance than previously assessed.
World nations are now learning of the importance and significance of Taiwan. Our ability to keep COVID-19 at bay has earned us widespread recognition as one of the safest places on the planet. Our outstanding economic performance has impressed countries the world over, while our technological advantages and leading technologies have made us an essential global hub. And of course, our respect for freedom, democracy, human rights and rule of law have boosted confidence in Taiwan as a reliable collaboration partner for other nations.
This moment, right now, belongs to Taiwan. Let us pick up the pace, come together in solidarity, and stride forward to build a better and brighter future for all!