Liberty Times (LT): What is the government’s response to the nation’s worsening demography?
Chen Mei-ling (陳美伶): According to the National Development Council’s [NDC] latest population projection from this year to 2065, which was published last month, the nation’s long-term demographic trends have not changed much from previous projections.
However, population decline is setting in two years earlier than previously forecast. Taiwan’s population will start declining in 2021 at the earliest as the result of the declining birth rate.
Photo: Liu Hsin-de, Taipei Times
There were 5,800 fewer births in the first seven months this year from a year earlier. The situation is worsening. We must anticipate the crisis and implement a solution in a timely manner.
Premier William Lai (賴清德) understands the seriousness of the low birth rate and has introduced the “Lasting Increase” and “Balancing Taiwan” initiatives, but policies take time to take effect.
Large-scale changes to the nation’s demographic structure is more than just the government’s problem. It will affect each individual.
In response to Japan’s aging society, Japanese Prime Minister Shinzo Abe has encouraged immigration and migrant workers, and he has said his administration will dedicate itself to reforming labor regulations and the welfare system over the next three years.
The Japanese government will discuss raising the retirement age to 65 and delaying pension payouts until 70 or older.
Taiwan should treat the problem seriously. In response to the declining birth rate and aging demography, the government has to maximize resource distribution. It has to take the challenges of changing business models and market trends head on.
Premier Lai has instructed the NDC to research and consider raising the retirement age to 65 or higher.
Additionally, the government has to start preparing for the digital economy’s effects on the labor force and the way people live. What kind of jobs will be replaced by the rise of artificial intelligence? What new jobs will be created? What kind of talent will be needed in the next 20 or 30 years? We have to start preparing now and adjust our education system and methods.
Taiwan also has to strategically approach the issue of planning state-owned land. Beyond land utilization, we should think about addressing the concentration of population in the nation’s northern regions. This is one of the reasons for the promotion of placemaking.
LT: What is the difference between placemaking and community development?
Chen: Past administrations promoted community development and related projects, such as encouraging young people to take up farming. We cannot say they achieved nothing.
However, those projects created isolated spikes that lacked sustainability. The main shortfall was that they were not backed by entrepreneurial activities. Without providing a stable means of livelihood, the projects were not able to retain their participants.
The NDC’s five innovative strategies will leverage corporate-academic research, influential local figures and the creation of communal consensus to develop enterprises that have unique local characteristics.
The goal is to make local jobs available for young people and allow retirees to return to the workforce.
The five innovative strategies are replacing state subsidies with private investments, introducing new technology, integrating projects of similar purposes, facilitating corporate-academic collaboration on a local level and building brands.
Government subsidies tend to be sporadic, due to the fiscal cycle, which makes them unsustainable as a funding source.
Investments by private enterprises are more reliable, due to the profit motive. The council will be able to make better use of its funding in joint private-public ventures.
Some people have said that Taiwan should emulate the Japanese hometown tax system, which would give corporations tax credits for making contributions to designated rural areas.
The Ministry of Finance has said the nation cannot directly copy the Japanese system because of the differences in the two country’s tax codes.
However, we do not rule out developing some kind of incentive that would achieve a similar effect.
Introduction of new technology is important to the youth market. Young people rely on the Internet and they have requirements for hardware and software. Digitalization of commerce will enable the international marketing of our products. Because of that, we need to pay attention to brand-building and marketing strategies.
Most importantly, communities have to discover what is unique about themselves and not rely on imitation. Genuine vitality of the local community is essential to placemaking and balancing Taiwan.
LT: The preview of the draft new economic immigration act is about to close. Which sections will be revised?
Chen: Taiwan’s labor force began to decline after it peaked in 2015, and the demographic dividend will disappear in 2027 at the earliest. To maintain Taiwan’s competitiveness, and under circumstances where slow action would not help the situation, we must take the immigration issue seriously and change the unfriendly attitudes we have had toward immigrants.
The purpose of the draft act is not to import low-skilled, labor-intensive workers, but rather to fill the mid-level skilled jobs the industry is lacking. If we do not fill this demand, the industry chain would be incomplete, and this would be disadvantageous for the long-term development of Taiwan’s industries.
Originally, the bill targeted four major groups of people: foreign professionals, foreign mid-level skilled workers, overseas nationals and investor immigrants.
However, during the preview period, the Financial Supervisory Commission, the central bank and other government agencies said that it would be difficult to manage the distribution of funds if investor immigrants were included, and that Taiwan is not short of investment channels.
In the end, the investor immigrants were not included in the bill.
Nevertheless, we have not canceled the investment immigration program. The regulations regarding investment immigration are primarily included in the Immigration Act (入出國及移民法) and the Employment Service Act (就業服務法).
Business associations have several times said that Taiwan needs a more open investment immigration policy.
The National Development Council is assessing the situation and has not ruled out the possibility of adding investor immigrants back into the bill.
After all, the point of the bill is not to attract investments, but to solve the population and labor force problems. Our goal is to attract foreigners to become Taiwanese.
However, I want to emphasize that if we were to relax the investment immigration rules to not be restricted to government bonds, it must fulfill two major principles: First, the investments must create employment opportunities, and second, the investments must be made in key industries. We do not want to open up an opportunity to investor immigrants for real-estate speculation.
LT: How will the NDC balance the introduction of economic immigration and the employment of Taiwanese?
Chen: The mid-level skilled workers to whom we are opening our doors for the first time include foreign-born Taiwanese students and foreign students in high school or vocational school with the ability to perform mid-level skilled jobs; blue-collar foreign workers who have been working in Taiwan for more than six years; and a third group of people for which a “sunrise clause” has been inserted.
Under the precondition of not affecting the employment opportunities of Taiwanese and not lowering the average salary, the NDC will maintain its threshold at the 70th percentile of the average total salary for employees.
In other words, mid-level skilled workers must earn at least NT$41,393 per month, and mid-level skilled social workers must earn at least NT$31,696 per month.
This threshold would apply whether the employee is a foreign-born Taiwanese or foreign student in high school or vocational school, or a foreign worker who has been working in Taiwan for at least six years.
The NDC is also to set a total amount control and quotas by industry category to reduce the effects of the policy on the labor market.
Although some people in the industry have said that salary thresholds as high as these might end up not being met, this depends on the industry’s willingness.
What kind of talent is it lacking? If there really is a demand for talent, the thresholds will be met.
Since it began its preview of the draft act on Aug. 6, the NDC has hosted four forums, at which it has seen the attendance of 142 people and collected more than 100 suggestions.
There has been a strong consensus regarding the bill and few issues have drawn serious controversy. Some words in the text need to be adjusted, but we are making the text simple and easy to understand.
Translated by staff writers Jonathan Chin and Sherry Hsiao
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