Alexa

Taiwan needs to upgrade, modernize service sector: official

Taiwan needs to upgrade, modernize service sector: official

Taipei, May 24 (CNA) Taiwan needs to upgrade its "modern service sector" and make it a more important part of its economy because the sector is not as strong as it appears to be, the country's top economic planner said Friday. Kuan Chung-ming, head of the Council for Economic Planning and Development, also urged Taiwan's service industry to find suitable niches that will enable it to participate in China's development projects. Speaking at a cross-strait service sector forum in Taipei, Kuan stressed the importance of the "modern" service sector compared with traditional service businesses.
The modern sector refers to knowledge-intensive fields such as the financial services, information and communication, and patent and trademark sectors, while the traditional side includes labor-intensive fields, such as the transportation, construction and tourism sectors. Global modern service exports surpassed traditional service exports in 2012, accounting for 51.6 percent of total service exports, a trend Taiwan must follow if the sector is to contribute more to the overall economy, Kuan said. He noted that Taiwan's US$49.05 billion in service exports accounted for 12.9 percent of the country's total exports last year, lagging behind major rivals in Asia such as Hong Kong, Singapore and South Korea. China's service exports totaled US$190.94 billion in 2012 and accounted for only 8.79 percent of its total exports, but Kuan said China has clear plans for upgrading its service industry in its 12th five-year development plan (2011-2015). As a result, traditional services remain more important than modern services in China, but modern services are rising in importance. "In Taiwan, the situation is just the opposite," Kuan said. He stressed that although the modern service sector's importance in Taiwan is higher than in China, it mostly covers professional services and triangular trade rather than financial or information and communication services. The high proportion of triangular trade services (accepting orders in Taiwan and producing them overseas) in the overall modern sector mix is a sign that the modern service sector in Taiwan is not as robust as it needs to be, he argued. Kuan said Taiwan's advantages lie in talent, creativity, and information and communication technology, and it should make good use of these advantages to find opportunities in China. (By Huang Chiao-wen and Lilian Wu)