Chinese National Federation of Industries (CNFI, 工總) yesterday urged the government to draw up effective measures to improve the deteriorating investment environment, including infrastructure issues, to save plunging private investments and declining exports.
“Taiwan’s investment environment is worsening rapidly. Local companies are facing imminent shortage of water, electricity, labor, land and talent,” CNFI secretary-general Tsai Lien-sheng (蔡練生) said after the release of the group’s annual white paper.
“A deteriorating investment environment is forcing some companies to seek new investments outside Taiwan,” Tsai said.
Formosa Plastics Group (FPG, 台塑集團) is an example, he said.
The conglomerate has significantly raised its overseas investments, reaching 80 percent of the group’s total investments from 25 percent previously, he said.
Labor costs are climbing quickly, Tsai said. Labor insurance payments have risen to about 20 percent of FPG’s total labor salary per worker. That does not include the upcoming outlays for insurance payments for elderly workers.
The white paper said that interruptions to electricity supply is an important issue for the nation’s 159 industrial associations.
In April, the government imposed water restriction measures on manufacturers in some industrial areas and households due to insufficient rainfall. Taiwan Power Co (台電) last month also warned of potential power outages, as it was close to the limit on its capacity to generate power.
The government should present an extensive energy policy if it decides to abandon nuclear and coal, which represent 65 percent of the nation’s energy sources, Tsai said.
To avoid water shortages that might disrupt factory operations, CNFI said the government should cap total water usage for industrial users, rather than cutting supplies for days when droughts worsen, the paper said.
CNFI chairman Rock Hsu (許勝雄) said the government should develop an industrial upgrade policy along with detailed measures, as most countries including the US, Japan and Germany have made bids to revive their manufacturing sectors based on the “Industrial 4.0” concept.
The Cabinet unveiled its version of “Industrial 4.0,” dubbed “Production 4.0,” early last month, but has not released details of the program.
“Companies need a clearer picture of what Production 4.0 is. They need to know the government’s goal,” Tsai said.
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