Vice Premier Paul Chiu (邱正雄) said yesterday that establishing a sovereign wealth fund might be an effective way to boost the economy.
“Many countries have established sovereign wealth funds. Of course the measure would be helpful [in reviving the economy],” Chiu said when approached by reporters yesterday morning.
“But it also comes with management and transparency issues,” Chiu said, adding that the Council for Economic Planning and Development would hold meetings to deliberate over the issue.
Chiu’s remarks came after Tuesday’s meeting of an economic advisory task force, during which Vice President Vincent Siew (蕭萬長) broached the subject of a sovereign fund.
But the council said yesterday afternoon that it was not the government’s priority to create a sovereign wealth fund, because such funds are intended for investment abroad, while the government needs money to finance public works at home.
Council Vice Chairman San Gee (單驥) said the most urgent task facing the country was to stimulate economic growth, and to that end the government should seek to integrate idle funds and channel them into domestic construction projects.
“A sovereign fund, even if desirable, will not provide an immediate or short-term remedy to bolster financial markets,” San told a press briefing after a 90-minute meeting to discuss the necessity and feasibility of the fund.
A sovereign fund, or sovereign wealth fund, is a state-owned investment fund composed of financial assets such as stocks, bonds, property or other financial instruments. National assets are typically held in both domestic and foreign reserve currencies.
San acknowledged that an increasing number of countries have set up sovereign wealth funds with their current account surpluses to obtain resources from other nations.
More than 20 countries have these funds and half a dozen others have expressed interest in establishing one.
“The council will take note of the global trend,” San said. “But it needs to … do more research before reaching a conclusion.”
While the council would not rule out creating a sovereign fund, San painted the measure as a medium-term national investment option that would require legislation over which the executive branch does not have a final say.
He said the National Stabilization Fund and other instruments offer more effective measures in stabilizing financial markets.
“[Economic and financial] officials attending the meeting agreed that the government should remained focused on boosting the economy,” he said.
Earlier in the day, the central bank issued a statement denying reports it supported the idea of using interest from the nation’s foreign reserves to set up a sovereign fund.
Central bank Governor Perng Fai-nan (彭淮南) said he met administration officials twice on Tuesday but made no mention of foreign exchange interest.
The sovereign fund proposal, however, received mixed reviews from across party lines in the Legislative Yuan yesterday.
“This [sovereign fund] is a form of public goods. It can make investments around the world. I believe it is a good measure [to boost the economy],” KMT Legislator Lin Te-fu (林德福) told a press conference held by the KMT caucus.
But KMT Legislator Lai Shyh-bao (賴士葆), a member of the legislature’s Finance Committee, said he was concerned about the risk, adding that the government needed to carefully deliberate over this issue and that the legislature needed to pass regulations on supervising such a fund.
Saying that such funds often exist in countries that are ruled by dictators, DPP Legislator Wang Sing-nan (王幸男) criticized the idea of setting up a sovereign wealth fund as “illogical.”
The KMT should use its party assets to establish the sovereign fund if the government is determined to do it, he added.
KMT caucus deputy secretary-general Yang Chiung-ying (楊瓊櫻) said the KMT “legitimately” owns its assets.
In related news, Premier Liu Chao-shiuan (劉兆玄) yesterday said the government was expected to relax some 100 investment regulations by the end of this year, but he did not elaborate.
During an address to an assembly of the Chinese International Economic Cooperation Association in Taipei, Liu said the government had eased 44 regulations related to cross-strait trade and the finance and tax systems.
He said the government hoped to create a more open investment environment in a bid to lure foreign investment.
MAKING WAVES: China’s maritime militia could become a nontraditional threat in war, clogging up shipping lanes to prevent US or Japanese intervention, a report said About 1,900 Chinese ships flying flags of convenience and fishing vessels that participated in China’s military exercises around Taiwan last month and in January last year have been listed for monitoring, Coast Guard Administration (CGA) Deputy Director-General Hsieh Ching-chin (謝慶欽) said yesterday. Following amendments to the Commercial Port Act (商港法) and the Law of Ships (船舶法) last month, the CGA can designate possible berthing areas or deny ports of call for vessels suspected of loitering around areas where undersea cables can be accessed, Oceans Affairs Council Minister Kuan Bi-ling (管碧玲) said. The list of suspected ships, originally 300, had risen to about
DAREDEVIL: Honnold said it had always been a dream of his to climb Taipei 101, while a Netflix producer said the skyscraper was ‘a real icon of this country’ US climber Alex Honnold yesterday took on Taiwan’s tallest building, becoming the first person to scale Taipei 101 without a rope, harness or safety net. Hundreds of spectators gathered at the base of the 101-story skyscraper to watch Honnold, 40, embark on his daredevil feat, which was also broadcast live on Netflix. Dressed in a red T-shirt and yellow custom-made climbing shoes, Honnold swiftly moved up the southeast face of the glass and steel building. At one point, he stepped onto a platform midway up to wave down at fans and onlookers who were taking photos. People watching from inside
Japan’s strategic alliance with the US would collapse if Tokyo were to turn away from a conflict in Taiwan, Japanese Prime Minister Sanae Takaichi said yesterday, but distanced herself from previous comments that suggested a possible military response in such an event. Takaichi expressed her latest views on a nationally broadcast TV program late on Monday, where an opposition party leader criticized her for igniting tensions with China with the earlier remarks. Ties between Japan and China have sunk to the worst level in years after Takaichi said in November that a hypothetical Chinese attack on Taiwan could bring about a Japanese
The WHO ignored early COVID-19 warnings from Taiwan, US Deputy Secretary of Health and Human Services Jim O’Neill said on Friday, as part of justification for Washington withdrawing from the global health body. US Secretary of State Marco Rubio on Thursday said that the US was pulling out of the UN agency, as it failed to fulfill its responsibilities during the COVID-19 pandemic. The WHO “ignored early COVID warnings from Taiwan in 2019 by pretending Taiwan did not exist, O’Neill wrote on X on Friday, Taiwan time. “It ignored rigorous science and promoted lockdowns.” The US will “continue international coordination on infectious
RSS