Former US secretary of the Treasury Lawrence Summers yesterday said the great challenges for the US, China and Taiwan are to shape a world transformed by technology and progress in a way that assures prosperity for people everywhere
In a speech delivered at the Grand Hotel in Taipei, Summers said there are three great challenges facing people in the US, China and Taiwan.
The first challenge is to manage the business cycle and global finance. He said there is about one major financial crisis in every three years.
Photo: Pichi Chuang, Reuters
“The European crisis stems from having one money and many countries. A country cannot pay its debt without growth. For the eurozone, its growth strategy is essential, but it is not in place yet,” he said.
If the world’s economy is to function well, the European debt crisis would have to be settled, he said.
The second challenge, a long-term structural challenge, is to create prosperity for everyone in the face of fewer working opportunities and income inequity, he said.
The top 1 percent of people in the US are earning 25 percent of all income in the US, he added.
Summers also raised the issue that one out of every six people aged between 25 and 54 in the US and Europe is not working, but stressed that he took pride in the fact that the US had succeeded in generating creative people such as Steve Jobs, Mark Zuckerberg and Bill Gates.
The third great challenge is for different countries to cooperate together because there is only one world, he said.
“We could continue with the current pace of consuming fossil fuel and other energies, but it would not be sustainable, and we have to change course. Prosperity did not solve every problem,” he said.
During a panel discussion following the speech, Morris Chang (張忠謀), chairman and CEO of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), said the US should play a big role in stabilizing world finances.
On the issue of US’, China’s and Taiwan’s economic relations, Chang said he thinks the US plays the role of innovator and marketer, while China and Taiwan play the role of the supply chain.
The US gets a big part of added value being an innovator and marketer.
He thinks the roles played by these three countries are not going to change much, but China and Taiwan would have more bargaining power to have a greater share of value because supply is getting more essential.
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