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Tsai: Taiwan’s economic predicament is unsolvable by short term stimulus

Tsai: Taiwan’s economic predicament is unsolvable by short term stimulus

Taiwan economy needs systematic change

Taiwan’s economy poses great challenges for both incumbent and future governments. Taiwan’s export has fallen for five consecutive months and the situation is not expected to turn around in the short term. Moreover, the rise of red supply chain in China will threaten Taiwan’s semi-conductor industry, the backbone of the nation’s economy. As the presidential candidate of the Democratic Progressive Party, Tsai Ing-wen said the economic predicament of Taiwan cannot be resolved by short term stimulus.

Directorate-General of Budget, Accounting and Statistics said that it is difficult to keep GDP of 2016 above 1%. Tsai pointed out at 2015 Taiwan Investment Conference that Taiwan’s economic predicament will need systematic and structural changes to make balanced development.

At the 2015 Taiwan Investment Conference, the organizer said that 2015 has been a stirring year. Taiwan’s economy stagnancy, which reflects Taiwan’s industries are slowly losing their competitiveness. To combat the consecutive drop in exports and potential threats from China’s red supply chain, the industries in Taiwan need a makeover. Tsai said there are three main reasons that created the economic stagnation:

1. Scission in the industries: The government needs to embrace opportunity. They need to promote innovation in various industries or develop industries with proactive insights. However, we have missed the opportunity thus creating slow transformation in our industries and scission in the industries
2. Scission with the international community: Our industries need innovation and development. In order to do that, they need to exchange contacts with countries with progressive technologies. In the recent years, Taiwan only concentrated on expanding market share and reduction in cost; therefore, Taiwan has lagged behind in industrial technical knowledge. The connectivity between developed countries and Taiwan has lowered thus creating low innovation in the industries.
3. Scission in the regulations and economic structures: To be more innovative and supportive, the government needs to modernize its laws and regulations. The regulations of Taiwan’s government are outdated, which result in brain drainage, lack of investment, and decrease in companies’ willingness and ability in introducing innovation and development.

Tsai proposed first to plan and develop strategies for industries’ development. Second, the government will assist in cooperation of cross borders investments. Third, obtain advanced technology. Fourth, update all obsolete regulations. Fifth, discuss and improve education and scientific research system. Tsai said the government must form strategies to address the current structural and basic problems in our system. The current predicament must be addressed from the roots, not the surface. The government should integrate its resources and create a balanced development.

Tsai stressed that the key to good governance is a government which possesses good communication skills. She acknowledges that the roads ahead will not be easy so the government needs to communicate with the society in order to unite the people.