Minister Without Portfolio Kung Ming-hsin (龔明鑫) yesterday unveiled a plan to turn Taiwan into Asia’s research, development and manufacturing hub for high-end products on the back of a successful program to boost investment amid the US-China trade dispute.
Since January, when the government unveiled the first program to encourage Taiwanese companies operating in China to invest back home, local firms have pledged NT$700 billion (US$22.94 billion), with NT$225.5 billion expected to be realized this year, Kung told a news conference at the Executive Yuan.
Thanks to this newfound investment momentum and local firms bringing back production of higher-end products — including servers, laptops and bicycles — President Tsai Ing-wen (蔡英文) has put forward a plan to make the nation a high-end research, development and manufacturing hub, he said.
Photo: CNA
To realize the plan, the government is identifying underused or unused land in industrial zones, particularly those in central and southern Taiwan, where returning companies could operate, he added.
The government expects to free up at least 600 hectares of land in industrial zones nationwide for use by returning firms, he said, adding that part of the space would come from the planned Ciaotou Science Park (橋頭科學園區) in Kaohsiung and the third-phase expansion of Tainan’s Southern Taiwan Science Park (南部科學工業園區).
As manufacturing practices used by Taiwanese companies in China are unlikely to apply to Taiwan, the government expects to use artificial intelligence and smart machinery from its “five plus two” innovative industries plan on new production lines, he said, adding that this would facilitate a total solution, rather than the nation just being a manufacturing hub of components.
The government has drafted a “corporate innovation refinement program” and aims to engage in forward-looking collaborations with local and foreign companies ready to make a sizeable investment or create a substantial number of job opportunities in Taiwan, Kung said.
The government is willing to subsidize these collaborations, he added.
The international trend is toward sustainability, so nations that do not power their production lines with renewable energy might see their goods boycotted by nations that have provisions on dealing only with environmentally friendly businesses, which would negatively affect exports and competitiveness, he said.
Taiwan needs to establish green supply chains and realize its goal of making renewables 20 percent of its energy mix by 2025, he said.
As of Thursday, investments by small and medium-sized enterprises (SME) had reached NT$32.9 billion, far exceeding the government’s estimate of NT$20 billion, so the Cabinet plans to increase subsidies to SMEs by more than doubling the government’s SME development fund, which is currently NT$20 billion, Kung said.
From 2000 to 2008, when Chen Shui-bian (陳水扁) was the president, foreign investment averaged US$7 billion annually, before slumping to US$5.3 billion during Ma Ying-jeou’s (馬英九) presidency and then rebounding to US$10 billion in 2016, and remaining at about that level since then, Kung said.
By contrast, investment in China by Taiwanese companies has fallen from an annual average of at least US$10 billion to about US$3 billion so far this year, a difference of more than US$7 billion, he added.
The trend of local companies redirecting investments from China to Taiwan matches the expected NT$255.2 billion to be repatriated by firms this year, Kung added.
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