Office of the President Republic of China(Taiwan)

On the morning of March 23 President Tsai Ing-wen met with a visiting delegation from the Asia Taiwanese Chambers of Commerce. The president addressed volatility in global markets following US President Donald Trump's recent signing of a memorandum adopting trade sanctions against mainland China under section 301 of the US Trade Act.

Explaining Taiwan's attitude and position, President Tsai emphasized that the government will respond to changes in global market conditions with strategies to: ensure that a higher proportion of R&D and production take place in Taiwan; accelerate investments designed to boost domestic demand; enhance Taiwan's capacity for innovation; and increase economic diversification.

The following is a translation of President Tsai's remarks:

I'm sure you're all aware that US President Donald Trump recently signed a memorandum imposing trade sanctions on mainland China under section 301 of the US Trade Act, which has caused some volatility in global markets. I want to take this opportunity to explain the government's attitude about this situation, and our response strategies.

First, it looks like a US-China trade war could erupt at any time. Our national security and administrative teams have been following the situation closely for a long time, and the government will carefully monitor subsequent developments and respond as necessary.

Second, Taiwan is an important trading nation. So we'll continue to conduct the necessary trade talks and communication with the US to ensure that our trade interests are not affected or harmed.

Third, trade talks are the best way to resolve conflicts. We call on the US and other relevant parties to actively engage in talks to avoid an all-out trade war.

Fourth, the improvement in Taiwan's economic fundamentals over the past two years is a key reason our stock markets have performed so well. Our Executive Yuan also has special ad hoc teams working on the "five shortages" (land, electricity, water, labor, and talent), deregulation, and accelerating investment in Taiwan. So you should be confident about Taiwan's economy.

We've also adopted the following strategies to respond to changing conditions:

First, we will ensure that a higher proportion of R&D and production take place in Taiwan. We'll continue to strengthen Taiwan as a trade base for manufacturing and technological development. We will expand technological development and the manufacturing of key parts and components, and raise added value and improve management skills. These measures will increase the domestic content of our exports to the US so that they are classified as "Made in Taiwan."

Second, we're accelerating investment to boost domestic demand. Over the past two years, the transformation of Taiwan's economy has begun, and domestic economic growth has gained momentum. In addition to exports, domestic demand also continues to expand. So we will accelerate Forward-looking Infrastructure Development Program implementation, and continue to promote transformation of the energy industry, urban renewal, social housing, long-term care, and other development projects to expand domestic demand and make it a key driver of economic growth.

Third, we will increase Taiwan's capacity for innovation. Technological development and the protection of intellectual property rights are key success factors in international trade. So we'll redouble our efforts, increase investment, and accelerate implementation of our "5+2 industrial innovation program" and other high-tech industry development programs.

Fourth, we will diversify. We'll actively promote diversification of our trade and manufacturing bases, and make a point to accelerate economic deployment in countries targeted by our New Southbound Policy.

Everyone here has spent many years cultivating markets in Southeast Asia, so you understand the economic and social conditions there. So I'm confident that your support and assistance will help us implement Taiwan's New Southbound Policy smoothly and successfully.

The regional economy in Asia is developing rapidly, and Taiwan presents many opportunities. So I want to encourage overseas Taiwanese businesspeople to come back and invest in Taiwan, and even introduce your local business partners to investment opportunities here.

Things are looking good in Taiwan right now. Over the past year we've seen over 400 foreign direct investment deals of NT$500 million or more. That includes a 13% jump in investments by overseas Taiwanese and foreign nationals.

It's worth noting that a lot of trend-setting international corporations like Microsoft and Amazon are getting ready to set up new R&D or innovation centers in Taiwan, and Google is beginning to recruit more talent here. More and more innovative capital is flowing into Taiwan, and our economic restructuring will give us even more momentum.

We've also heard that a lot of overseas Taiwanese businesspeople are eager to get in on the action, and don't want to miss out on the important opportunities generated by Taiwan's economic transformation and development.

I want to emphasize again that our government is doing everything possible to create a better investment climate. Taiwan's economic fundamentals are sound, and we'll continue to work with all of you to get Taiwan's economy back on the fast track. So once again, we welcome you to return to Taiwan, and wish you every success in your business endeavors.