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Policy Goals and Guiding Principles

In the early 1950s, the government promoted an import substitution policy, laying the foundation for the development of basic consumer industries. In the 1960s, Taiwan established its first export processing zones to encourage exports and build capital. In the 70s, the government carried out 10 major infrastructure projects to support the development of heavy industries. With the arrival of the 1980s, Taiwan shifted focus to capital- and technology-intensive industries. The Hsinchu Science Park has played an especially important role in the rise of Taiwan's IT industry.

Over the past half-century, Taiwan has smoothly upgraded its industrial structure and joined the ranks of developed nations. Taiwan has a GDP of 379 billion US dollars; and a per capita income of 16,400 dollars.

In March 2008, Taiwan witnessed its second change of governing political parties. On May 20, the new administration came into office, led by President Ma Ying-jeou. Under new leadership, the government is now moving forward with 12 major infrastructure projects to further accelerate growth. These projects include improved transport systems, intelligent broadband networks, industrial innovation corridors, urban and industrial zone renewal, reforestation, and flood control systems. Marked by strong industrial linkages, the projects aim to attract domestic and foreign investment, create jobs, and improve the quality of life in Taiwan.

MOEA Operations and Future Course

MOEA Operations

The Ministry of Economic Affairs is in charge of formulating and implementing economic policy. Its operational scope embraces trade, industrial development, water resources, investment, energy, mining, national corporations, commercial affairs, small and medium enterprises, intellectual property, standards and measurements.

Trade and Investment
Taiwan is an island with few natural resources and limited market scale. The government therefore has carried out an export-driven trade policy to fuel growth and accumulates foreign exchange. Taiwan's external trade has grown to 378 billion US dollars. Taiwan is now the 17th largest exporter and 18th biggest importer, making it an important economic and trade partner.

Taiwan has a convenient international sea and air transportation system and tightly knit commercial and investment networks. To attract transnational enterprises, the government offers generous tax and land incentives. It also has established an investment promotion office to help international companies secure capital and establish operations in Taiwan. With its high-quality and barrier-free investment and business environment, Taiwan is an attractive base for companies to develop linkages with the Asian and global markets.

Industrial Development
In recent years, the government has been developing science parks and refurbishing industrial parks to promote regional sci-tech development and grow key industries. It is also promoting sci-tech industry clusters in northern, central and southern Taiwan, strengthening vertical integration of industries, and establishing innovation corridors. Industrial policy today emphasizes industrial innovation, emerging industries and deregulation. To this end, the government is improving the environment for financial, tourism, medical and logistics services. It has also identified several emerging industries for focal development, including the cultural and creative, digital content, energy conservation, alternative energy, intelligent life, biotech and pharmaceutical sectors. In all of these areas, the government is encouraging R&D and innovation to achieve high added value.

Sustainable Growth

Taiwan is committed to fighting global warming through the reduction of greenhouse gases. The government's strategy includes energy conservation and carbon reduction; energy efficiency; new and renewable energy sources; and water recycling. These efforts are putting Taiwan on a path to sustainable and environmentally responsible growth.

Small and Medium Enterprises

Small and medium enterprises account for nearly 98% of all businesses and 76% of all jobs in Taiwan. The government has created an excellent environment in which SMEs can thrive. Support for SMEs includes providing credit guarantees; strengthening financing sources; and assisting the creation of innovative enterprises with high growth potential. The government also provides guidance to unique local industries; supports the development of industrial clusters; and helps enterprises to improve quality and upgrade operations.

IPR Protection, R&D and Innovation

Taiwan is deeply committed to protecting intellectual property rights. In addition to bolstering legal protections for IPR, the government has created a special IPR enforcement task force. In 2008, an IP Court was established to expedite review of IP cases. These measures are further strengthening IPR protection and making Taiwan an even more attractive investment site for transnational enterprises.

Encouraging innovation and R&D is a key part of Taiwan's economic policy. Taiwan ranks fourth among all nations in number of patents registered in the US.

The Economist Intelligence Unit also ranks Taiwan second globally in IT industry competitiveness.

Globalization

Connecting with the World

As a central player in the global economy, Taiwan fully participates in the activities of the WTO, APEC, OECD and other international organizations. It is also integrating with the regional and global economies through the signing of FTAs and comprehensive economic cooperation agreements.

Under a global strategy rooted in Taiwan, the government is also pragmatically adjusting economic and trade relations across the Taiwan Strait. Taiwan is also gradually easing restrictions on China-bound investment to promote industrial specialization across the Strait, ushering in a new era of cross-strait economic and trade cooperation.

International Competitiveness

IMD ranks Taiwan 8th globally and fourth in Asia on its international competitiveness index. Taiwan also scores high on BERI's investment environment index, which ranks Taiwan fourth globally and second in Asia.

High Value Services, Brand Taiwan

In the knowledge economy, intangible assets are steadily gaining in value, while profits from manufacturing are falling. Taiwan is therefore shifting from a production-based economy to an economy driven by innovation and branding. Through the Brand Taiwan project, the MOEA has been encouraging local enterprises to build international, high-margin brands. This project is positioning Taiwan to become a center for high added-value products and services.

Global Vision

Globalization, regional economic integration and rising energy and raw material prices pose new challenges for Taiwan. To overcome these challenges, the MOEA will continue to promote an economic and trade policy rooted in innovation. The ministry is also committed to building a business-friendly environment. Regulatory loosening, long-term energy and water resource development strategies, and participation in international economic and trade activities are all part of the ministry's plan to move Taiwan's economy forward.


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Update: 2017-08-17
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