In order to boost the economy, the government should take active measures to restore Taiwan's appeal as an investment destination and minimize capital outflows. In order to make local businesspeople more willing to repatriate their money, the government should create a beneficial investment environment that allows businesses to turn a profit.
The deteriorating investment environment, the government's lack of administrative efficiency, a long period without major infrastructure projects and excessive deregulation of investments in China by Taiwanese businesspeople have caused a massive outflow of domestic industry. All these conditions are negative to Taiwan's domestic economic development.
Following are some suggestions of ways to improve the domestic economic environment and create more local investment opportunities.
First, improve the country's investment environment. This can be achieved by providing an ample supply of water, electricity, land and fundamental infrastructure facilities. And in order to encourage businesses to invest and reinvest their revenues in Taiwan, the government could give partial tax reductions or grant preferential tax treatment to help investors cut costs.
For example, the government could establish an industrial park on land belonging to the state-run Taiwan Sugar Corp. It could lease the land rather than sell it in order to help investors cut the costs of land acquisition and attract investment in Taiwan by domestic and foreign businesses.
Second, the government should encourage and direct business innovation. It should stimulate private innovation and the development of new products and technologies and provide a competitive environment. It should also give appropriate rewards to businesses that achieve good results in research and development.
Third, cultivate and strengthen the superiority of core technologies. Such technologies are the source of a nation's competitive advantages. The government should establish a sound system of laws and regulations to safeguard intellectual property rights and shorten the application and handling process for such rights. It should also help businesses prevent and punish piracy and other copyright infringements to encourage businesses to invest in research and development.
Fourth, give systematic subsidies to facilitate the transformation or upgrading of traditional industries and help them move toward industrial automation and the creation of high value-added products.
Fifth, establish a manpower training mechanism to provide businesses with trained professionals. College education should be oriented toward meeting industrial needs, by training sufficient and suitable candidates according to need. In this way, businesses will be able to continue developing and expanding investments without worrying about manpower availability.
Sixth, develop the nation's tourism industry. Tourism is an industry that is rooted in Taiwan. With its beautiful landscape of mountains, forests and sea, Taiwan is a good place to develop tourism. With appropriate planning and development, the government can help create a large number of opportunities for employment and investment, thereby creating an important Taiwan-based service industry.
Seventh, encourage the development of local industries. Different parts of Taiwan have their respective industries for local specialities. Developing these local industries would offer local investment opportunities. It would also underline the local characteristics of industries around Taiwan and create more employment opportunities.