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Conference on Sustaining Taiwan's Economic Development: Industry panel sets high economic growth targets

Taiwan has set a target of becoming a "green value-added island" with an annual average economic growth rate of 5 percent, per capita GDP of US$30,000 and an unemployment rate of below 4 percent by 2015, according to a consensus reached at the industry panel of the Conference on Sustaining Taiwan's Economic Development yesterday.

To achieve these goals, industries should employ world-class talent, form a global network and establish global brands, Ho Mei-yueh (何美玥), a minister without portfolio and convener of the panel, said.

Last year, Taiwan reported an economic growth rate of 4.09 percent, per capita GDP of US$15,271 and a jobless rate of 4.13 percent, according to government statistics.

The government will also continue to promote industrial restructuring, with the service sector accounting for 76.5 percent of the nation's GDP in 2015, up from 73.56 percent last year, Ho said.

Although the goals set by the panel seem to paint a bright future for the economy, participants failed to resolve disputes on key issues.

"We are not satisfied with the conference, but there is nothing we can do but accept it," said Gary Wang (王令麟), chairman of the General Chamber of Commerce.

One major issue that was discussed intensively during the meeting is whether the Statute for Upgrading Industries (促進產業升級條例), which offers tax breaks for investments, should be extended after it expires in 2009.

Some representatives suggested that the statute be extended as it was a vital tool for encouraging investment, while some advocated that it be terminated to maintain an equitable taxation system.

Opponents of the statute's extension noted in particular that the tax break should be canceled for projects that are deemed harmful to the environment, such as Formosa Petrochemical Corp's eighth naphtha cracker and the new Kuo Kuang Petrochemical Technology Corp.

The participants also failed to reach an agreement on the tax on companies' undistributed surplus earnings. In preparatory meetings, the industry panel favored giving a grace period of two years before a 10 percent business income tax is levied on companies' undistributed surplus earnings, but some industry representatives yesterday urged that the tax be waived.

With no consensus on the two disputes, Vincent Siew (蕭萬長), head of the Chung-Hua Institution for Economic Research (中經院) who chaired the meeting, ruled that the two issues be listed under "other opinions," leaving the policy to government authorities.

As for environmental issues, the participants agreed to control green- house gas emissions, but failed to set a target volume for reduction or propose any concrete measure to achieve this goal.

"The conference is useless, as all the key issues we hope to sort out here were either not put into the agenda or ended up in disagreement," a participant said on condition of anonymity.
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