Taiwan bids to stimulate spending, investment to boost economy

Island’s new premier outlines plans to reduce its reliance on trade and exports

PUBLISHED : Tuesday, 26 September, 2017, 12:36pm
UPDATED : Tuesday, 26 September, 2017, 10:32pm

Taiwan aims to stimulate consumer spending and spur private investment as part of measures to boost its trade reliant economy, Premier William Lai Ching-te said on Tuesday.

Lai, speaking in Taiwan’s parliament, or Legislative Yuan, for the first time since he took office this month, also said the government aimed to expand international cooperation and is looking to sign trade agreements overseas.

Beijing views democratic Taiwan as a breakaway Chinese province to be retaken with the use of force if necessary, and says other countries and international organisations should not recognise or treat it as a separate country.

“I will personally take charge of Taiwan investment expedition project meetings to display the government’s confidence in working diligently on the economy,” Lai said, adding that the government also aimed to encourage private participation in public construction.

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Lai acknowledged the island has many challenges to overcome, including removing obstacles to investment, but he said the government aimed to push forward construction to allow the economy to expand and Taiwan to become more competitive.

The export-oriented economy has benefited from a global tech boom and from cash inflows from abroad that have boosted its stock market and currency. But sluggish consumer spending and tensions with its key trading partner mainland China are trouble spots for its new premier and cabinet.

Taiwan’s central bank left its policy rate unchanged last week, saying inflation was expected to be mild against a backdrop of rising pressure on trade and the economy.

Lai said implementing a controversial infrastructure development plan that was approved in July and is aimed at bolstering domestic demand and rebalancing the island’s economy away from its reliance on exports would also be a priority.

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On taxes, the premier said he aimed to reduce them for small and medium-size enterprises as well as start-ups and would also seek to ease the tax burden for middle to low-income workers.

Lai, who took office after a cabinet reshuffle, also said the government would use energy saving, energy storage and energy creation to achieve the island’s non-nuclear and carbon emissions goal.

The government estimates the economy will grow 2.11 per cent this year and 2.27 per cent in 2018.