Minister of Economic Affairs Mr. Woody Tyzz-Jiun Duh (杜紫軍);
Deputy Secretary-General to the President Mr. Hsiung Kuang-hua (熊光華);
Economic representatives from many countries and the Taiwan-based companies;
Distinguished guests, ladies and gentlemen:
Welcome and good morning!
I am very honored to be here at the 2014 Taiwan Business Alliance Conference. This marks the fourth time I've attended this conference since taking office as president, and I can assure you that my administration is very serious about attracting direct foreign investment. So, let me start off by extending a very sincere welcome to the foreign business leaders in the audience, as well as those of you who are here representing Taiwan-invested firms based overseas. You've made a long trip to be here, and we really appreciate it.
Investment, as you know, is a major component of a country's GDP. It facilitates the formation of capital, and spurs economic development. Foreign companies, for their part, have contributed in a big way to managerial know-how and professional expertise. I would therefore like to take this opportunity to thank the many foreign companies that have invested in Taiwan.
This is the 11th year that our Ministry of Economic Affairs has held this conference, and the cumulative number of domestic and foreign participants has now exceeded 6,000 persons. Moreover, as a direct result of the conference, more than 500 multinational firms have invested in Taiwan, making this event a flagship of Taiwan's efforts to attract international investment. That would explain, of course, why it has received such extensive domestic and foreign media coverage. I hope that all of our esteemed guests at this conference today will gain an even better understanding of Taiwan's investment environment, and its strengths in specific areas of industry.
Taiwan is strategically located in the heart of East Asia, about half way between Korea in the north and Singapore in the south. I always say that Korea can claim that it is located in the center of Northeast Asia. Singapore can claim that it is located in the center of Southeast Asia. But only Taiwan can claim that it is located in the center of East Asia. This is one reason why foreign companies often decide to invest here, but I believe there are four other key factors that also deserve special attention. The first is our outstanding capacity for innovative R&D. The second is our high-quality workforce. The third is the presence of highly efficient industry clusters. And the fourth is stable cross-strait relations.
First, the Taiwan government has made a tremendous effort in recent years to support innovative R&D. The idea is to upgrade from an "efficiency-driven economy" to an "innovation-driven economy," and to transform Taiwan into a major global center of innovation. The effort has attracted numerous multinational firms to establish R&D centers on the island, including Hewlett-Packard, DuPont, and Sony.
Second, Taiwan has spent many, many years cultivating high-level professional talent across a wide range of fields, and these people are available to foreign corporations that wish to locate in Taiwan and carry out manufacturing, R&D, or international marketing operations here. According to the Global Competitiveness Report 2014-2015, published by the World Economic Forum, Taiwan ranked 12th in the world in the area of "higher education and training." This shows that the quality of our professional workforce is internationally recognized.
Third, Taiwan offers powerful and highly efficient industry clusters. For nine straight years, beginning in 2006, the Global Competitiveness Report has ranked Taiwan among the best in the world in the category of "state of cluster development." Taiwan's industry clusters include the Hsinchu Science Park, Central Taiwan Science Park, and Southern Taiwan Science Park. In the future, with the establishment of free economic pilot zones, Taiwan's industry clusters will be even stronger international competitors.
Fourth, the stable relationship with mainland China. Ever since I took office six years ago, we have tried very hard to improve relations with mainland China, particularly the institutionalization of rapprochement. And that gave many multinational firms the confidence to increase their investments in Taiwan or establish new enterprises here so that they can use our nation as a regional headquarters for their operations in the Chinese and Asian markets.
In the Asia Business Sentiment Survey released in June 2014 by INSEAD, a graduate business school based in France, business sentiment in Taiwan rose to 67 on the index for the second quarter of 2014, as compared to just 56 in Japan and 50 in Korea. In addition, in the Business Risk Service report released in January 2014 by Business Environment Risk Intelligence, Taiwan was assigned the world's third highest Profit Opportunity Recommendation, behind only Singapore and Switzerland. It is very clear that these international bodies have a very positive opinion of Taiwan's overall competitiveness and investment environment.
To provide foreign corporations with a better investment climate, our government launched several free economic pilot zones in August 2013. At the same time, through a combination of deregulatory and market opening measures, we have been seeking to significantly liberalize and internationalize our economy. The idea is to turn all of Taiwan into a "free economic island" that is fully in step with international practices.
Seven years ago, when I first began to run for president, I travelled the island meeting with business leaders. And I actually rode a bike from the southernmost part of Taiwan to the northernmost part. Before I reached my destination, I stayed in a ranch in northern Taiwan, talking to a very successful businessman who invested in mainland China and Taiwan. The question I asked him was: what can I do for you if I get elected as president? He smiled and said: Just leave us alone. That is exactly what I am doing.
Also, to make Taiwan's economy more competitive, my government has been pursuing an all-out effort in recent years to sign free trade agreements with its main trading partners. From 2010 through 2012, we reached an economic cooperation agreement with mainland China, an investment agreement with Japan, an economic cooperation partnership agreement with Singapore, and an economic cooperation agreement with New Zealand. And we are now talking to the United States on the conclusion of a bilateral investment agreement. And we are also reaching out to members of ASEAN and other countries, even in the European Union, hoping one day we can successfully join the regional economic integration taking place in many parts of the world. In the future, we will continue with our efforts to get admitted to the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP). These two alliances are very important to Taiwan. The former, the TPP, accounts for 35% of our bilateral trade. It is about US$200 billion. For RCEP, it's even more. It's 57% of our bilateral trade and the nominal figure is US$325 billion. So we are trying our best to get admitted. We understand this is not an easy job and we will mobilize all our ministries to draw a roadmap to get to the destination.
Thanks to the efforts of our government and people, Taiwan has built an excellent investment environment over the past few years. Figures from our Ministry of Economic Affairs indicate that investments by overseas Chinese and foreign firms have risen from US$3.8 billion in 2010 to US$4.9 billion in 2013, which represents an increase of 29%. These figures show that foreign entities think very highly of our investment climate. In the future, we will keep working to attract direct investments from around the world.
Taiwan will offer many investment opportunities over the next few years, so I would like to encourage everyone here today to take full advantage of my country's unique investment advantages I just mentioned. Seize upon this golden opportunity to reap profits. Continue investing in Taiwan, and it will be a win-win situation for all of us. In closing, I wish all of you the best of health and success in all your endeavors. I know you have a very busy schedule in the next couple of days. But even so, please try your best to squeeze some time out of your busy schedule to enjoy the very rich life in this city and this country. If you are interested in art, please go the National Palace Museum. You will see the collections of at least 25 emperors from the last 3,000 years. But if you are interested in Taiwanese life, please go to a night market. You will have more than 100 different delicious snacks to choose from. Last but not least, do as much shopping as possible to help our economy. Thank you very much for joining us. Thank you!