Taipei: Taiwan will spur domestic demand with a mid- to long-term infrastructure development plan, Taiwan President Tsai Ing-wen said, augmenting a more conservative spending proposal released this year.
“Next March, the cabinet will unveil a comprehensive, forward-looking infrastructure development plan as a blueprint,” Tsai, 60, said Saturday in a New Year’s Eve address and press briefing in Taipei.
Tsai’s cabinet, led by Premier Lin Chuan, earlier proposed a budget that only included moderate increases to overall spending and about $6 billion for public-works outlays. As the economy stagnated, central bank Governor Perng Fai-nan stressed the need for government investment in areas such as infrastructure while Lin was more focused on the deficit. The budget is still being debated in Taiwan’s legislature.
Tsai said Saturday that additional spending could be added to the budget for infrastructure development, or a special budget could be approved. The government will work to encourage private investment to follow suit, the president said.
“The most important mission in 2017 is to stimulate Taiwan’s economy by all means,” she said.
Taiwan’s economy was set to grow by 1.35 per cent in 2016 and 1.87 per cent in 2017, the government forecast in November. The central bank kept its benchmark interest rate unchanged in December and predicted mild economic growth in 2017. A new iPhone model may bolster Taiwanese electronics makers while rising oil prices will boost exports of petrochemical products, according to economists.
Relations with Taiwan’s biggest export destination, mainland China, became increasingly strained over the course of 2016 and in particular, after a Dec. 2 congratulatory phone call between US President-elect Donald Trump and Tsai, which broke with protocol under the U.S.’s One-China policy. Trump’s subsequent comments about the policy being contingent on better trade-deal terms fuelled uncertainty over world-power relations. In the meantime, Taiwan lost a West African ally to China, as Beijing continues to warn countries around the world not to challenge the One-China principle.
Tsai’s Vision
“The Republic of China is an independent, sovereign country,” Tsai said, referring to Taiwan’s formal name. “Cross-strait relations are a challenge. There is room for creativity.”
Tsai’s government doesn’t accept the One-China principle although she pledged to support Taiwan’s constitution, which claims its territory includes mainland China.
Amid global uncertainties — both geopolitical and economic — Tsai is returning to the economic vision she laid out in her campaign. It addresses longer-term issues that plague Taiwan’s economy, including the task of pushing its contract manufacturing industries higher up the value chain. She is also championing innovation in key industries such as the internet of Things, biotechnology and national defence. An office to promote Taiwan as Asia’s Silicon Valley opened this month.
Tsai said Saturday that her government remains committed to the elimination of nuclear power from energy sources as well as carbon reduction. Other types of infrastructure projects under review include integrating public transport, cloud infrastructure, drought and flood resistance, hardware and software for an ageing population, and basic science research.
