Friday 12 October 2012

Taiwan's Ma Ying-jeou pledges greater effort to fix economy

President aims to woo overseas investors by loosening restrictions on foreign workers
By Lee Seok Hwai, The Straits Times, 11 Oct 2012

TAIPEI - President Ma Ying-jeou pledged to reinvigorate Taiwan's economy as the island celebrated the 101st anniversary of the Republic of China amid an economic slump and widespread discontent.

His new economic strategy includes opening up Taiwan's economy to foreign investors by loosening current restrictions, including those on foreign workers, to reduce labour costs.

Mr Ma said: "The government will further loosen regulations to foster a friendlier and conducive investment environment... In order to draw new investments and increase job opportunities for Taiwanese workers, our restrictions on the market have to strike a balance between labour rights and promoting investments."

The government is expected to delink wages of foreign labour from those of local workers at a new free trade zone in Kaohsiung when it outlines plans for the development next month. This is despite fears among the Taiwanese that this would make foreign workers cheaper to hire and more attractive even as jobless rates hover above 4 per cent.

In a speech yesterday at the Double Ten parade in front of the presidential office in Taipei, Mr Ma acknowledged the people's unhappiness over a decade-long stagnation in wages and a slew of unpopular policies, including an electricity rate hike introduced after his re-election in January.

The average annual income was NT$611,134 (S$26,000) last year, NT$3,882 less than in 2010 and the same as in 1998, according to government data. The export-led, high-tech economy, hit by slowing demand in the United States, Europe and China, is expected to grow by just 1.66 per cent this year, down from 4.03 per cent last year.

The way forward, said Mr Ma, is for the island's industries to add more value and improve labour productivity. He vowed to help manufacturers develop new technology and products for export.

"Taiwan should become a provider of critical components and precision facilities for the international economic and trade system.

"We have to help companies develop key technologies to produce critical components and smart precision equipment with unique advantages."

He also promised to grow the service industry as another engine of the economy. Tourism is a bright spark in the general gloom, as tourist arrivals are expected to hit a record high of seven million this year.

On relations with China, Mr Ma said the government will embark on a "comprehensive review and revision" of the cross-strait relations Act - which spells out what can or cannot be done with regard to ties with the mainland - so that both sides could set up representative offices in the other's territory at the earliest possible time.

The offices were proposed by China-friendly Mr Ma during his election campaign last year. They are seen as another step forward in cross-strait ties following the signing of a free trade deal and more than a dozen cooperation pacts in Mr Ma's first four-year term.


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