On the morning of January 7, President Ma Ying-jeou attended the opening ceremony of the 2013 CommonWealth Economic Forum. In an address entitled "Retooling in Taiwan, Creating a New Presence in Asia," the president introduced the government's three-pronged initiative to strengthen economic growth momentum and further enhance Taiwan's economic status in Asia and throughout the world. These three policy efforts include enhancing the domestic business environment, solidifying Taiwan's core competitive advantages, and promoting regional economic cooperation.
In remarks, the president stated that many unknowns continue to cloud the economic situation. For instance, the eurozone debt crisis has yet to be resolved, while the recovery in the United States is moving forward at an extremely slow pace. These situations, he said, present a formidable challenge to Asian nations in general, and especially to Taiwan, which is so heavily reliant on exports. President Ma noted that Taiwan's economic performance last year clearly declined, and certain sectors slipped into mild recession. It was not until the fourth quarter of last year that the economy again began showing signs of recovery, he said. Global economic growth last year was quite weak, the president remarked, adding that most economic forecasts predict an upturn this year. Taiwan should also experience stronger growth this year than last year, he said. Nonetheless, he cautioned, we cannot be overly optimistic, for the International Monetary Fund has lowered its global economic growth forecast for this year to 3.6% from 3.9%.
President Ma pointed out that in the post-financial tsunami era, quite a few multinational companies around the world have begun changing their strategies with regard to their global presence. One clear trend has seen companies move production lines for critical products back home from such areas as mainland China. This has increased employment and exports in their home countries, but at the same time has considerably upset the global deployment strategies of Asian nations, and thus bears watching, he said. However, the president opined, this development cannot reverse the long-term shift in the global center of economic gravity toward Asia. He mentioned that Global Trends 2030, a report issued by the US National Intelligence Council in December of last year, predicts that by 2030 Asia will have surpassed North America and Europe combined in terms of global power, based upon GDP, population size, military spending, and technological investment. It is thus quite clear, said President Ma, that Asia will continue to emerge as the engine driving global economic development.
The president emphasized that the Asian era has arrived, and that in this era—fraught though it be with challenges—the ROC should be able to play a more important and proactive role. Firstly, he explained, Taiwan is a key hub within industrial value chains in Asia. The 2012 Knowledge Economy Index released by the World Bank, he said, ranked Taiwan 13th among 146 countries, and first in Asia, even surpassing Japan, Korea, Hong Kong, and Singapore. This demonstrates that Taiwan has clear advantages in many areas, especially in the field of information and communication technology, the president said. Secondly, Taiwan is situated at the heart of East Asia, so it is closest to many important Asian markets, and is especially close to mainland China, with which it shares a common geographic and cultural background. In other words, he noted, Taiwan has very close ties to Asia's center of growth. President Ma stated that nearly five years ago when he took office in 2008, a key part of his administrative agenda was to immediately improve relations between Taiwan and mainland China and restore and institutionalize a negotiation mechanism between the two. Over these years, he said, the two sides have signed 18 agreements and reached two points of consensus. One of these agreements, the Cross-Straits Economic Cooperation Framework Agreement (ECFA), has helped expand the cross-strait economic and trade relationship, while also providing increased incentives for foreigners to invest here, he remarked. President Ma specifically pointed to the 2013 Position Papers released by the European Chamber of Commerce Taipei, which clearly indicate that enterprises operating in Taiwan have been the beneficiaries of the Cross-Strait Bilateral Investment Protection and Promotion Agreement and a Memorandum on Currency Clearing Cooperation Across the Straits .
The aforementioned trends show that a fresh start for Taiwan is giving the nation an opportunity to create a new presence for itself in Asia, the president stated. We must be watchful of weak global economic growth and the new trend toward reindustrialization in Europe and America, but we needn't be overly worried, he commented; as long as we diligently pursue our own path and boldly proceed with reform, we will certainly be able to forge momentum and create a new world. President Ma stated that the government in the first half of this year will be implementing the Economic Power-Up Plan, a three-pronged initiative intended to restore Taiwan's economic vitality. The first prong is to enhance Taiwan's business environment, the second is to solidify Taiwan's core competitive advantages, and the third is to promote regional economic cooperation, he said.
First, with respect to enhancing Taiwan's business environment, President Ma mentioned, the World Bank in October of last year released its Doing Business 2013 report. Taiwan was ranked 16th among the 185 economic entities, moving up by nine places from the previous year, he said. This is an extremely important development, he said. The president pointed out that over the past four-plus years, the government's most important policy has been to promote deregulation in order to increase the level of freedom in Taiwan's business sector. Nonetheless, what has been achieved still isn't enough, he commented, adding that a protectionist attitude still exists in some government sectors, companies, and even among the public. President Ma emphasized that if Taiwan does not change its business climate, it will be difficult to expect the economy to achieve strong growth. He noted that quite a few multinational companies have left mainland China and other areas, and that many Taiwan companies have also decided to leave mainland China due to changes in the operating climate there. At this juncture, he mentioned, the government is promoting an initiative to encourage Taiwan companies to come back and invest in Taiwan, hoping that many of the local firms that ventured to mainland China over the past two decades will move a portion of their competitive businesses back to Taiwan and invest here. President Ma said that the response to this policy to this point has been quite strong, pointing out that over 20 heavyweight companies have come back here to invest a total of nearly NT$40 billion. In addition, these numbers continue to increase, he said. The president also mentioned that the institution of "free economic demonstration zones" was strongly promoted by former Vice President Vincent C. Siew (蕭萬長). Under this vision, investment restrictions would be relaxed in designated areas. Rules will continue to be liberalized in order to attract foreign investment, he said. At the same time, this policy will help Taiwan to prepare to participate in regional economic integration in the future. This demonstration zone, he noted, is aimed at integrating industrial technology from throughout Asia-Pacific region, engaging in international logistics, attracting international talent, and training executives at Taiwan enterprises. This is also part of the broader effort to turn Taiwan into an Asian hub and a center for medical tourism, along with a value-added transportation and sales center for agricultural products, he said.
President Ma then discussed the second prong, which is to solidify Taiwan's core competitive advantages. The government, he remarked, has therefore introduced the so-called "three industries and four reformations" policy, which seeks to push for incorporation of a service element by manufacturing firms, incorporation of advanced technology and an international reach by service firms, and achievement of greater distinctiveness by firms in traditional sectors. It is hoped that Taiwan's industrial sector will increase its overall value-added output. To achieve this we hope to get manufacturing firms increasingly involved in distribution logistics and branding, and on the service end, we will also encourage firms to strengthen their utilization of information and communications technology, the president stated. Meanwhile, we are putting special emphasis on promoting the transformation of Taiwan's industrial structure because, within the international economic and trade system, Taiwan absolutely needs to act as a provider of key components and precision equipment. Making itself irreplaceable is the only way Taiwan can be competitive, the only way its companies can increase profits, and the only way its workers can see higher salaries, President Ma stated. As for small- and medium-sized enterprises, the government is also implementing a "backbone enterprises project" to find companies with considerable international competitiveness in relatively small niches, he remarked, also noting that such enterprises are sometimes referred to as "hidden champions."
Commenting on the third prong, President Ma explained that Taiwan needs to continue promoting regional economic cooperation. He stated that since he took office in 2008, Taiwan has signed the ECFA with mainland China, its largest trading partner, followed by the signing of the Taiwan-Japan Bilateral Investment Arrangement with its second largest trading partner. The president said these two pacts were inked to help Taiwan liberalize its economy, an area where it lags far behind other nations. And in a bid to further enhance its cooperative economic and trade relationships, Taiwan will work this year to complete the portions of the ECFA having to deal with trade in goods and trade in services, and also will seek to sign an agreement with Japan that will address other areas of economic and trade cooperation, he said. The president added that Taiwan will also work to enter into economic cooperation agreements or economic partnership arrangements with Singapore and New Zealand, both of which are important trading partners. At the same time, Taiwan will continue to exchange opinions with ASEAN and European nations on related topics with the hope of enhancing its degree of economic and trade liberalization, he said. President Ma also mentioned that Taiwan wants to participate in multilateral economic and trade liberalization systems, including the US-led Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership that was launched by ASEAN, mainland China, Japan, and Korea. The president emphasized that Taiwan needs to address various political and economic problems, and that the government, the corporate sector, and the public should work to embrace liberalization and free trade as soon as possible. He said that Taiwan should look upon signing trade and economic cooperation accords with mainland China, Singapore, and New Zealand as part of preparations to open its doors and promote liberalization. Once the nation adapts to these changes, it will have the momentum to move full force ahead, he added.
President Ma emphasized that the ROC has always been an important part of the Asia-Pacific region. It possesses a strong industrial foundation and excellent creative ability. In addition, Taiwan is home to thriving enterprises and outstanding human capital, he said. President Ma stated that the "Golden Decade" program includes "a robust economy" as one of his visions for the nation. The point of this vision is to "establish a strong home base in Taiwan, network throughout the Asia-Pacific region , and create a global presence." Consequently, how to speed technological innovation in order to generate innovation-driven added value, while harnessing Taiwan's existing efficiencies to enhance industrial competitiveness, are both objectives that the government is actively seeking to achieve, he said.
The president stated that in order to further enhance the nation's competitiveness, the pace of work needs to be faster, the scope of the push needs to be expanded, market access needs to be pursued more broadly, and deregulation needs to be broadened. He expressed his hopes that all sectors will work together to enable Taiwan to undergo a broad-based transformation and move toward excellence.
Among those attending the event were former Vice President Vincent C. Siew and CommonWealth Magazine Group chairperson Diane Ying (殷允芃).