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Lai's measures to boost industrial sector draw mixed responses

2017/11/11 17:55:34

Premier Lai Ching-te

Taipei, Nov. 11 (CNA) Premier Lai Ching-te's (賴清德) efforts to come up with measures this week to take on "five shortages" in Taiwan's industrial development are drawing mixed responses, while many in the industry praised him as a pragmatic official who was willing seriously to address thorny issues the country has faced for some time.

Taiwan's investment environment has been long haunted by the so-called "five shortages" -- land, water, power, skilled workers, and manpower -- which have hampered the willingness of many local and foreign investors to pour funds into the country, slowing down the pace of the country's economic growth.

This week, Premier Lai held a series of news conferences to lay out the government's policies on how to resolve the five shortages.

Among the measures, the government is aiming to raise land supply for industrial use by 1,442 hectares by the end of 2022 through measures such as establishing new industrial parks and imposing fines against land hoarding by private land owners.

In addition, Lai has pledged to ensure Taiwan's power supply will be stable, starting by 2019 as natural gas, coal and renewable power sources will be installed to boost electricity reserve margins, while the government will stick to its goal to end the use of nuclear power by 2025.

Addressing the problem of labor and talent shortages, the measures also aim to attract foreign talent to work in Taiwan by enacting the Act for the Recruitment and Employment of Foreign Professional Talent, which extends the work and residence permits for foreign white-collar professionals from three years to five years.

Lai's measures, however, were criticized by some, including local prestigious media, which said the Democratic Progressive Party (DPP)'s aim to build Taiwan into a nuclear power free homeland by 2025 by increasing other power generation methods, including coal-fired electricity, will increase carbon emissions in the country.

In an editorial on Friday, the United Daily News said a plan for the government to raise coal-fired power generation to boost power supply and end the use of nuclear power by 2025 has harmed public health.

The editorial said Taiwan's carbon emissions so far this year hit a new high in almost 10 years due to higher coal-fired power generation at a time when three of Taiwan's six nuclear power reactors have not been in operation as part of the longer term plan to phase out nuclear power. The increased generation of coal-fired power has hurt air quality in the country, in particular in central and southern Taiwan, the editorial said.

It said increasing the weighting of thermal power plants in Taiwan's power supply system is expected to make the situation even worse and it is unwise for the government to damage citizens' lungs in exchange for power supply.

The premier did not comment on carbon emission concerns during a news conference on Wednesday.

But Lai has said by adopting more natural gas and renewable energy power generation, Taiwan is expected to make up the reduced electricity supply caused by the no-nuclear power goal and will raise electricity rates by only NT$1 (US$0.033) per kilowatt/hour over the next 10 years.

However, the editorial said the government needs to dole out large subsidies on renewable energy development, and that electricity rates are expected to soar by about 40 percent. Moreover, renewable energy such as solar power, supply remains unstable since it will depend on weather conditions, it said.

At the same time, Lai's measures won praise from some groups that said they would promote domestic and foreign investment and stimulate the local economy.

"God Lai (a nickname for the premier given by the local media to praise his achievements during his tenure as Tainan Mayor) is doing right to take on the five shortage problems" after he took the helms in September, Ray Chen (陳瑞聰), president of Taiwan-based contract notebook computer maker Compal Electronics Inc. (仁寶), told the press.

"Lai's measures showed his determination to solve problems the previous government had not tackled yet. After he took office, he simply is moving toward the goals he has set to resolve the five shortages," Chen said.

The American Chamber of Commerce in Taipei (AmCham Taipei) has also expressed optimism toward the newly implemented law to attract more foreign white collar talent for Taiwan's industrial innovations.

"This is indeed an important breakthrough -- and something AmCham Taipei has been recommending for many years through its annual White Paper and the Topics magazine," Andrea Wu, president of AmCham Taipei, said in a statement.

To further attract foreign professional and skilled workers, Lai Cheng-i (賴正鎰), head of the General Chamber of Commerce of the Republic of China, suggested that the government adopt immigration policies modeled on other countries such as Hong Kong, Singapore and Germany, which already have successful immigration policies in place. He also urged the government to cut the maximum personal income tax rate to 35 percent instead of a planned 40 percent, a reduction from the current 45 percent.

In addition to the measures, Premier Lai has even urged enterprises, especially listed companies and Taiwan-based multinational corporations, to raise the starting salary for newly recruited employees, workers to NT$30,000 (US$993) or even higher, a move which is expected to help employers expand their workforces.

Chinese National Federation of Industries Chairman Rock Hsu (許勝雄) admitted the current starting salaries are not high enough, but he said how to pay employees varies in different industries and should be decided based on a market mechanism.

On his company's annual sports day on Nov. 4, Morris Chang (張忠謀), chairman of contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), said the government has assured the company there will be no problem in supplying water and electricity to a new sophisticated 3 nanometer process fab TSMC announced in late September it will build in Tainan.

But since construction of the new facility will not begin until 2020, Chang said he hoped the government will give more guarantees to TSMC and further strengthen the company's faith in the country's ability to supply water and power to the Tainan plant.

(By Shih Hsiu-chuan, Christie Chen, Liao Yu-yang, Wu Hsin-yun, and
Frances Huang)