Minister Wang Mei-Hua’s oral administrative report to the 2nd session of the 10th Legislative Yuan, the 2nd Plenary Meeting of the Economics Committee

September 28, 2020

The following content is a translation of excerpts from the Minister's report.

Dear Chairman and Legislators,

      It is such a pleasure for me to deliver the Administrative Report of the Ministry of Economic Affairs (MOEA) before the Economics Committee. I will briefly explain current internal and external economic circumstances and the focus of the MOEA’s administration. Please advise as necessary.

Current Economic Situation

      The continued rise of the COVID-19 global outbreak, coupled with intensifying US-China trade and technology disputes, escalating geopolitical risks, as well as fluctuations in exchange rates and international oil prices, are all factors that have increased global economic risks. According to the latest predictions from the global forecasting institution IHS Markit, global economic growth is expected to record a negative growth of 4.81% in 2020, far lower than the -1.72% recorded during the 2009 financial crisis. While a positive growth of 4.34% is expected for 2021, it is possible that it could take 2 to 3 years for the economy to return to pre-pandemic levels.

      Compared to most countries around the world affected by negative economic growth, Taiwan’s disease prevention efforts have been successful and relief measures have been put in place in a timely manner. Asian Development Bank (ADB) and IHS Markit estimate that Taiwan’s economic growth will rank highest among the Four Asian Tigers this year. In terms of exports, Taiwan was the only nation among the Four Asian Tigers to record a positive growth in the first half of the year. Challenges remain in the second half of the year due to the COVID-19 outbreak and the tense relationship between the U.S. and China that has resulted in limited global trade. In terms of domestic demand, the Triple Stimulus Vouchers successfully stimulated consumption. Domestic demand remains the primary driving force for economic growth with production capacity driven by enterprises returning to Taiwan, investment in advanced production processes by the semiconductor industry, and accelerated public construction by the government. The Directorate General of Budget, Accounting and Statistics (DGBAS) of the Executive Yuan projected that our economic growth in 2020 would be 1.56% and will rise to 3.92% in 2021.

Direction of the MOEA's Policies

      Although the pandemic is under effective control domestically, it remains severe on the international front. We will continue to provide relief in the short-term, while also pressing ahead to boost the economy and accelerate industry recovery. In addition, at this crucial juncture where we face the transformation of the international economic and trading environment and the increasingly rapid supply chain reorganization, the MOEA has committed itself to adjusting industry structure to assist companies in dispersing risks through global deployment. At the same time, the MOEA will seize opportunities to attract more domestic and foreign investments, thereby shaping Taiwan into a key player in the future global economy. We will also accelerate the implementation of energy transformation and take care of people’s livelihood to provide them with a good quality of life. The direction of the MOEA's policies will employ the following six strategies:

1. Economic relief and boost: Pushing forward Economic Relief 3.0 and speeding up industry recovery.
2. Strengthening industry resilience: Promote Six Core Strategic Industries and create four major centers.
3. Diversifying global deployment: Assist companies with global deployment, reinforce international connections and strengthen market expansion through virtual-physical advances.
4. Implementing investments in Taiwan: Accelerate the implementation of investments, attract foreign capital and talents, early execution of public infrastructure and strengthen the Forward-looking Infrastructure Development Program, refine the legal system, and reduce investment safety concerns.
5. Accelerating energy transformation: Ensure stable electricity supply and promote green energy development.
6. Comprehensive living for the public: Reasonable electricity prices, water leakage rate reduction, and installation of air conditioners in classrooms at elementary and junior high schools across Taiwan for the 2022 academic year.

Conclusions

      Dear Legislators, Taiwan’s economic fundamentals remain stable thanks to our successful disease prevention efforts, but the MOEA will continue to exert all efforts cautiously in the face of challenges such as economic recovery and transformation following the pandemic. The MOEA will seize the opportunities for remote application and supply chain reorganization and localization presented by the pandemic, leveraging on strengths to accelerate smartization and digital transformation, and assist companies in forming international connections and diversifying deployment. Meanwhile, the MOEA will attract capital and talents to transform and upgrade Taiwan's industries, thereby securing a critical presence in the global economy.