The following is a translation of select portions of the premier's report.
Speaker You, Deputy Speaker Tsai, esteemed members of the Legislature:
Last year, Taiwan had its best economic performance in the past 11 years. This year, we continued to win recognition from authoritative international organizations in global rankings based on criteria such as clean government, democracy and economic freedom. In April, S&P Global Ratings raised Taiwan's sovereign credit rating to AA+, our highest rating in 21 years. In June, Taiwan placed No. 7 in the World Competitiveness Yearbook 2022 published by the Swiss-based International Institute for Management Development, rising for the fourth straight year to achieve our best ranking in nine years, while maintaining our No. 1 spot worldwide among economic entities with a population of over 20 million.
This past year has seen persistent proliferation of new COVID-19 variants, the outbreak and continuation of Russia's invasion of Ukraine, and China's deliberate escalation of military threats and harassment against Taiwan. The international situation is tense and we face ongoing challenges at home and abroad. In response, our administrative team has redoubled its efforts—we'll continue to cultivate our economic strengths and boost national competitiveness, expand citizen care services and reassure the public, uphold democratic freedoms, progress toward sustainable development, and do everything in our power to make Taiwan an island of resilience.
I would now like to deliver my report on the Executive Yuan's recent policy implementation efforts, centered on three major themes: strengthening the economy, supporting the people's wellbeing and protecting Taiwan.
Strengthening the economy
Since the outbreak of the pandemic more than two years ago, the government has been flexible in adjusting public health measures to steer a trajectory toward normal life, active disease prevention, and steady lifting of restrictions, all while sustaining the national economy and people's livelihoods.
The government continues to encourage vaccinations for all age groups to boost protection against infection. Taiwan ranks No. 8 in the world for vaccine doses administered per 100 people. Our reserves are now sufficiently stocked with multiple vaccines to choose from, including for adults and children.
Our supply of antiviral drugs is also fully stocked. Taiwan was the first country in Asia to have two brands of oral antivirals, Merck and Pfizer, at the ready, and our usage rate for antivirals among confirmed cases is the second highest in the world behind only the United States.
Countries around the world are now easing or announcing an end to pandemic restrictions and reopening their national borders. To boost the economy and international exchanges, our government has thus announced that, starting September 29, the "3+4" quarantine scheme (three days of isolation followed by four days of self-initiated epidemic prevention) for arriving travelers will allow the "one person per room" rule for the entire seven-day period, on-arrival saliva PCR testing at the airport will be canceled, and visa-exempt status will be restored to countries previously afforded that privilege. If the situation proceeds as expected and remains under control, then a second phase of measures will be implemented, including a "0+7" quarantine scheme (seven days of self-initiated epidemic prevention) for arriving travelers as well as the full reopening of Taiwan's borders.
Since President Tsai Ing-wen took office, the government has striven to promote the "five plus two" innovative industries plan and six core strategic industries, as well as fund forward-looking infrastructure to improve basic infrastructure and the investment environment. In response to the U.S.-China trade conflict, the government has promoted the Three Major Programs for Investing in Taiwan, attracting more than 1,250 companies and total investments exceeding NT$1.79 trillion (US$56.5 billion) in a little over three years.
The government is actively working to meet industry needs. To provide land for development, we have approved the construction or expansion of seven science parks over the past three years, comprising a total area of over 700 hectares. We have upgraded export processing zones to technology industrial parks, adding or renovating space for industrial development. We have also revitalized industrial zones through vertical expansion of buildings and facilities, and breathed new life into unused land in industrial zones. All these efforts have substantially increased the land available for use by companies, enhancing industrial cluster effects.
In water and energy supplies, the government has invested over NT$130 billion (US$4.1 billion) in forward-looking infrastructure for water environments over the past five years. Every drop of our water resources will be put to proper use by employing four major strategies—expanding new sources of water, economizing water, deploying water supplies and creating backup networks.
The government will devote more than NT$560 billion (US$17.7 billion) within the next 10 years to strengthen the resilience and security of the national power grid—heightening our ability to respond to sudden disruptions, lowering the probability of large-scale power outages, and establishing a favorable foundation for the achievement of net-zero emissions by 2050.
To cultivate and recruit talent, the government has set up 11 colleges in Taiwan for research in the fields of key national industries, directly fostering the highly skilled workforce needed by those industries. The government has also issued nearly 5,800 Employment Gold Cards to facilitate the hiring of outstanding skilled professionals from foreign countries. At the end of April, we launched a program for long-term retention of migrant workers, designed to keep a pool of experienced and high-quality foreign skilled talent in Taiwan. The government also promoted a program to enhance the cultivation and retention of overseas compatriot students, attracting more star pupils to come and stay in Taiwan.
Last September the government officially applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to advance more favorable trade ties and opportunities for Taiwan. We're now continuing to utilize bilateral, regional and multilateral channels to actively seek the support of CPTPP member countries.
On August 18, Taiwan and the U.S. commenced formal negotiations on the U.S.-Taiwan Initiative on 21st-Century Trade, signifying a breakthrough in bilateral economic and trade relations. This initiative will help our two countries develop a more comprehensive, substantive and long-lasting partnership. Taiwan will also continue to petition the U.S. to join the Indo-Pacific Economic Framework for Prosperity, as well as develop deeper and more extensive multilevel cooperation with the U.S. through Trade and Investment Framework Agreement talks and other existing mechanisms.
Under the New Southbound Policy, Taiwan's export and overall trade value with the 18 New Southbound countries both broke record highs last year. In the first half of this year, Taiwan's imports from New Southbound countries reached about US$40.9 billion, jumping 38.3% over the same period last year, and exports reached about US$50 billion, growing more than 28.5% over the same period last year, both historic same-period highs.
Capitalizing on the reorganization of global supply chains, the government is strategically encouraging foreign firms to come to Taiwan to co-invest with domestic businesses in forward-looking technology fields. About 30 major international firms have set up R&D centers in Taiwan, investing a total of about NT$60 billion (US$1.9 billion). Among those R&D facilities, Google's data center is the largest in Asia, Microsoft's AI R&D center is the first of its kind in Asia, and Micron's high-end memory R&D center is developing the world's most advanced manufacturing processes. The major automotive semiconductor manufacturer NXP has also established an R&D center in Taiwan to test new products for the international automotive market.
Science and technology strengthen our nation. As more and more foreign cutting-edge R&D centers migrate to Taiwan, they increase the autonomy and resilience of our domestic industry chains and, at the same time, help build a preventive "silicon shield" that bolsters Taiwan's national security.
The Ministry of Digital Affairs was officially inaugurated on August 27. This new ministry will consolidate five major fields: telecommunications, information, cyber security, internet and communications, and actively work to ensure national cybersecurity, promote the digital transformation of industries, and build digital resilience for all.
Supporting the people's wellbeing
The government continues to share the fruits of economic growth with the people by raising salaries, cutting taxes and increasing welfare benefits. Next year, the monthly minimum wage will be raised to NT$26,400 (US$834) and the hourly minimum wage to NT$176 (US$5.56), benefitting more than 2.3 million workers. Compared with 2016, the monthly minimum wage will have risen nearly 32% and the hourly minimum wage nearly 47%. In addition, this year's tax-deductible allowance for basic living expenses is expected to grow to NT$196,000 (US$6,190) per person, benefiting about 2.3 million households. This marks the seventh consecutive year that the minimum wage has been raised and the sixth consecutive year that the tax-deductible allowance for basic living expenses has increased.
To reduce domestic inflationary pressure and stabilize commodity prices, the government has implemented five rounds of tax-reduction measures for key raw materials from the start of last December to the end of this December. These measures have included waiving sales taxes on imports of soybeans, wheat and corn; reducing import duties on wheat, beef, butter and baking-purpose milk powder; and lowering commodity taxes on gasoline, diesel fuel and cement.
According to the latest announcement from the Directorate-General of Budget, Accounting and Statistics, the consumer price index for August rose 2.66% from a year ago, the lowest year-over-year increase in six months, and the rate of increase is expected to slow in the second half of this year.
The central bank has hiked interest rates in consideration of the overall economic and financial situation at home and abroad, and specifically to stabilize domestic commodity prices. The government will continue to maintain certain loan interest subsidies to lighten the financial burdens of specific groups.
The government has also been issuing additional monthly living allowances of NT$500 (US$15.79) per person to lower-middle income households and NT$750 (US$23.67) per person to low income households from March to December of this year to give economically vulnerable households greater financial stability.
The government has substantially increased funding for response policies to declining birth rates to encourage the younger generations to marry, have children and raise families. This funding has grown from NT$15 billion (US$464.1 million) in 2016 to NT$80 billion (US$2.5 billion) this year, and it's anticipated to exceed NT$100 billion (US$3.2 billion) next year.
The government has also passed amendments to 15 regulations to build a friendlier environment for childbirth and childrearing, including increases to the number of subsidized prenatal exams, number of paid leave days for prenatal exams, number of paid leave days for accompanying a spouse to prenatal exams and birth, stipend amounts for parental leave without pay, flexibility of applying for parental leave without pay, and access to fertility treatment subsidies.
These fertility treatment subsidies have successfully supported the birth of around 4,600 babies since July last year, and we hope to raise that total to nearly 10,000 births by the end of this year. We hiked monthly childrearing allowances again this August to NT$5,000 (US$158), with additional allowances of NT$6,000 (US$189) for the second child and NT$7,000 (US$221) for the third child. We also increased monthly child care subsidies to up to NT$8,500 (US$268), capped monthly tuition fees at NT$3,000 (US$95) for children attending public or quasi-public preschools, and raised available enrollment slots to a total of 560,000 at affordable child care facilities and preschools.
The government has promoted three major school environment programs to close the resource gap between urban and rural areas. First, we provided funding of over NT$32 billion (US$1.1 billion) to install air conditioning in every classroom, with activation in over 3,500 schools nationwide by the end of this past April.
Second, this month we officially launched a centralized kitchen program to deliver piping hot lunches right on time for remote schools. The government has built or expanded 123 central kitchens, established a joint food procurement mechanism, and increased the subsidy rewards for school lunches that use ingredients certified for quality, traceability and organic farming. This program enables 240,000 children at over 1,300 rural schools to enjoy high-quality meals on par with their urban peers.
Third, the government has devoted funding of over NT$35 billion (US$1.1 billion) to provide internet access for every classroom and tablet access for every student to keep pace with the trend toward digital learning. This program has set up over 60,000 smart classrooms and supplied one tablet computer to every student attending a rural school in time for the start of the school semester this month.
In the five years since the government began promoting Long-term Care Plan 2.0, the allocated budget has gradually increased from less than NT$5 billion (US$157.9 million) in 2016 to over NT$60 billion (US$1.9 billion) this year, with almost NT$65 billion (US$2 billion) allocated for next year. The number of service sites has increased dramatically from just over 700 to more than 11,000, as has the number of care personnel from 25,000 to over 90,000, and the number of beneficiaries from 100,000 to over 410,000. In response to the overall aging of Taiwan's population, last week we also proposed countermeasures to address a super-aged society with a planned investment of more than NT$120 billion (US$3.8 billion) over four years, which will promote innovative initiatives such as a plan to integrate hospitalization and care under national health insurance, as well as set up a national-level research center for geriatric medicine, health and wellbeing.
The government is actively promoting the construction of social housing and a subleasing and management program that currently includes over 110,000 units. We are also continuing to expand rent subsidies. In July the central government launched an NT$30 billion (US$4947.4 million) expanded rent subsidy program, the largest such program in history.
Over the past few years the government has established three insurance schemes and a pension scheme to benefit farmers and fishermen; implemented a rice insurance program beginning from this year's first crop, providing rice farmers with a basic guarantee and stabilizing their incomes; and invested NT$40 billion (US$1.3 billion) to continue implementing the second stage of the Green Environmental Payment Program, spurring structural adjustments to the agriculture industry and ensuring food security.
Beginning this year the government will invest NT$9.2 billion (US$290.5 million) over four years to implement a program to mechanize and modernize agriculture while also promoting a nationwide cold chain program to raise the overall competitiveness of the nation's agricultural industries.
The Labor Occupational Accident Insurance and Protection Act, which combines occupational accident protection, compensation and rehabilitation, entered into force on May 1 this year, providing more comprehensive safeguards and work reinstatement requirements when occupational accidents occur.
The government is dedicated to eliminating gender-based violence. On June 1 this year, the Stalking and Harassment Prevention Act became effective, providing victims with more comprehensive protections. In March, we also proposed amendments to four laws to strengthen protections against gender-based violent crimes, and sent them to the Legislature for deliberation.
Taiwan is in a seismically active zone. Since President Tsai took office, the government has already invested nearly NT$53 billion (US$1.7 billion) to demolish, rebuild and seismically retrofit over 4,200 school buildings, spent more than NT$26 billion (US$821.1 million) to seismically retrofit or rebuild provincial highways and bridges, and helped county and city governments accelerate renovation on aging bridges, making improvements to over 300 bridges.
Taiwan is an indispensable force for good in the international community and an important component in the international security system. Japan's former prime minister Abe Shinzo once said that Taiwan's emergency is Japan's emergency, and therefore an emergency for the Japan-U.S. alliance. Security in the Taiwan Strait is the common denominator of regional peace and prosperity.
We will do everything we can to strengthen our self-defense capabilities. The government has allocated a record high of over NT$580 billion (US$18.3 billion) for next year's national defense budget, reflecting our determination to defend our national sovereignty and ensure national security.
We are continuing our efforts to produce aircraft and naval vessels domestically, and have already taken delivery of six Brave Eagle advanced jet trainers and proceeded to the mass production stage. At the end of this month the ROC Navy will take delivery of its first 10,000-ton class landing platform dock with anti-aircraft missile capabilities, the Yushan, and will take delivery of five corvettes meeting Ta Chiang model specifications next year.
In addition to domestically produced defensive weapons, the ROC Armed Forces have also strengthened combat capabilities through military arms purchases from the U.S. including 66 F-16V C/D Block 70 fighter jets and upgrades to 141 F-16 A/B Block 20 fighter jets, as well as plans to acquire precision strike systems including MQ-9B unmanned aerial vehicles, Sidewinder missiles and Harpoon anti-ship missiles. We are extremely grateful to the Biden administration, which has approved six arms sales to Taiwan since taking office, boosting the nation's overall defensive combat capabilities.
Thanks to our nation's commitment to freedom, democracy and human rights, our indispensable role in international supply chains, and our key position in regional security, more and more countries and international organizations are expressing staunch support for Taiwan through concrete action.
The Taiwanese Representative Office in Lithuania, the first representative office in Europe to bear the name "Taiwan," began formal operations in November last year, and Lithuania's trade office in Taiwan began operations this month.
On September 14 the German government formally passed its 2022 progress report on the implementation of its policy guidelines on the Indo-Pacific region. The report mentioned Taiwan for the first time, clearly expressing concern about peace and security in the Taiwan Strait as well as opposition to any change in the status quo across the Taiwan Strait by other than peaceful means.
On September 15 European Parliament (EP) members from a wide spectrum of political parties overwhelmingly passed a resolution on the situation in the Taiwan Strait, strongly condemning China's irresponsible military provocations and reiterating opposition to any unilateral change to the status quo in the Taiwan Strait or threat of force. The resolution also underlines that on the democratic island of Taiwan, it is up to the people to decide how they want to live, and clearly states that the EP will continue to strengthen reciprocal visits and interaction with Taiwan's Legislative Yuan.
That was the eighth Taiwan-friendly resolution passed by the EP this year, and the twenty-first since last year. The latest resolution followed the first-ever Taiwan-EU political relations and cooperation report passed by the EP in October of 2021, and reiterates suggestions to strengthen bilateral Taiwan-EU relations including deepening institutionalized cooperation in economics, trade, culture and politics, and encouraging EU member states who have yet to set up representative offices in Taiwan to follow in Lithuania's footsteps and do so.
In June the Japanese government passed its 2022 Basic Policy on Economic and Fiscal Management and Reform, which mentioned Taiwan for the first time and emphasized the importance of peace and stability in the Taiwan Strait. In August a joint statement was issued by the G7 foreign ministers, followed by a joint statement by the foreign ministers of the U.S., Australia and Japan, both expressing concern about actions taken by China that undermine the status quo in the Taiwan Strait, and reiterating their commitment to maintaining peace and stability across the Taiwan Strait.
Over the past year the U.S., Japan, France, Sweden, the Czech Republic, Slovakia, and the EP have all sent heavyweight delegations to Taiwan, with the French Parliament sending four delegations and the U.S. Congress sending nine delegations including 39 congresspeople on a succession of visits. In July, EP Vice President Nicola Beer led the EP's first high-ranking delegation to visit Taiwan. In August, Speaker of the U.S. House of Representatives Nancy Pelosi became the first house speaker to visit Taiwan in 25 years.
Democracy is Taiwan's greatest strength, and human rights are our common language with the world. Although Taiwan is not a member of the United Nations, the government has taken the initiative to commit to the obligations laid out in international human rights conventions. This year we have already completed international reviews of our national reports on the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights, and the Convention on the Rights of Persons with Disabilities. International reviews of our reports regarding the Convention on the Rights of the Child and the Convention on the Elimination of All Forms of Discrimination against Women will follow.
In May the Cabinet approved the Action Plan for Fisheries and Human Rights and the National Human Rights Action Plan, the first such plans in Taiwan. The government will promote each rights initiative based on the criteria of the UN's nine major human rights covenants and the principles of the National Human Rights Action Plan.
Resilient Taiwan: Forward together
To address an ever-changing world, we will continue to do our utmost to build strong self-defense capabilities, uphold democracy and human rights, safeguard our free way of life, forge connections with the global community, deepen cooperation and exchanges with democratic partners worldwide, and provide mutual assistance for mutual benefit so that Taiwan can continue to shine on the international stage and take our rightful place in the world.