Minister vows to address the real needs of business

The new Minister of Economic Affairs Steve Chen (陳瑞隆) acknowledged that cross-strait trade and economic issues were "sensitive and difficult" and could not be solved by his ministry alone, but his staff would work to find out businesses' "real needs" before coming up with possible solutions.

During an interview with the CNA, Chen said that lifting the investment cap on Taiwanese companies investing in China would be "oversimplifying" the issue.

Current regulations dictate that investments in China should not exceed 40 percent of a Taiwanese company's net worth -- a restriction that businesses have long complained limits their leverage to win greater access to the market.

Real problems

"What are their real problems? Are there any alternatives to investing in China? What would be the impact on Taiwan if other alternatives were to be adopted? " he asked, adding that he was still thinking about the precise measures to be adopted.

Another concern of the business community is that quite a number of the country's world-leading products have dropped to second, third, or even lower in ranking, with critics wondering if Taiwan's competitiveness has fallen as well.

To this, Chen said that if "made by Taiwan" products were counted alongside those "made in Taiwan," the nation would still rank well in several industries.

For example, Chen noted that although many of the country's notebook computer manufacturing lines have moved to China or elsewhere, Taiwanese companies still have control over them and remain influential in this industry.

He said that "we need not make everything ourselves. If we could keep R&D and design, marketing and capital in Taiwan, we would not have to worry too much about moving manufacturing lines to other countries."

Chen suggested that Taiwanese corporations devote more human resources to enhancing competitiveness for items with high added value, since securing competitive edges for low value-added products would not be cost-effective.

Optimism

He said he was optimistic about the future of Taiwan's high-tech and service industries, particularly in combining domestic manufacturing capabilities with services or high technologies -- an area that he said Taiwan should invest in.

On the overall economy, Chen was upbeat about prospects for the second half of the year, in which he said he expected performance to be "at least as good as the first half."

He cited the export orders and export volumes of recent months, such as June's record export orders of US$24.9 billion and last month's exports of US$19.6 billion, both of which represent monthly highs.

Since export orders are a leading indicator of the trend in coming months, Taiwan's exports and industrial production should be quite impressive in the second half of this year, he said.

The only variables would be rising international oil prices and interest rates in major economies such as the US, Japan and Europe, as oil prices and interest rates will affect the domestic economy, he said.