President William Lai (賴清德) yesterday announced plans to set up a sovereign wealth fund for foreign investment “to connect with the world.”
“The government will set up a sovereign wealth fund to build a national-level investment platform,” Lai said in his one-year anniversary speech at the Presidential Office in Taipei.
The fund would “take advantage of the strengths of Taiwanese businesses and be led by the government, while harnessing the power of the private sector to build a global presence and connect with major target markets in the AI [artificial intelligence] era,” he said, without elaborating.
Photo: Ann Wang, Reuters
During a question-and-answer session following his speech, Lai was asked why his government thought it was the right time to set up a sovereign wealth fund and if it would focus on investing in the US.
Lai said the proposal was raised as part of the government’s strategy to deal with challenges in the global economy.
The government would propose legislation to create the fund, which would be used mainly for foreign investment, while at the same time help local businesses expand their international presence, he said.
Sovereign wealth funds are “government-owned investment funds, set up for a variety of macroeconomic purposes,” according to the IMF. “They are commonly funded by the transfer of foreign exchange assets that are invested long term, overseas.”
The proposal has been debated in the past few months, with the Ministry of Finance last month saying that more discussion was needed before a consensus could be reached.
In his speech, Lai also mentioned ongoing trade talks with Washington over US President Donald Trump’s threats to levy heavy duties on Taiwanese goods.
Taiwan has not issued details on its interaction with the Trump administration, and Lai’s speech was no different.
He said it was not uncommon for friends like Taiwan and the US to have some friction, but that ultimately the two sides would find common ground.
Aside from continuing to expand economic and trade cooperation with the US, Taiwan has also been expanding such relations with the UK by signing the Enhanced Trade Partnership, Lai said.
It is in talks with other countries to sign more bilateral trade deals and double-taxation avoidance agreements, and hopes to gain access to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, he said.
According to the Office of Trade Negotiations, Taipei and Washington concluded a first in-person meeting on tariffs on May 3, which followed an initial round of talks held via videoconference on April 11.
Trump on April 2 announced sweeping “reciprocal” tariffs, including a 32 percent import duty on goods from Taiwan. A week later, he announced a 90-day pause to allow for negotiations.
Lai also addressed concerns about the nation’s energy supply following the closure on Saturday of the last nuclear reactor and proposed subsidies for Taiwan Power Co (Taipower, 台電), which have remained stalled in the legislature.
“In our discussions across different industries, all sectors advocated against raising electricity prices and were in support of government subsidies for Taipower,” Lai said, urging lawmakers to pass the Cabinet’s special budget.
“As energy security is national security, ensuring a stable power supply, while developing more forms of green energy, is, whether now or in the future, one of the government’s most important tasks,” he said.
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