With continued demand from Taiwanese companies and a wave of relocation anticipated amid changes in the global trade and investment landscape, the Cabinet on Thursday extended the “Invest in Taiwan” initiative until 2024. The extension would provide an additional NT $ 430 billion (US $ 15.5 billion) in financing for participating companies, while requiring them to meet standards that would advance the country’s goal of net zero carbon emissions by 2050.
The initiative, which began in 2019 during trade tensions between the United States and China, includes three programs: one focuses on relocation, another helps companies deepen their roots in their country, and the third helps small and medium-sized businesses find favorable loan terms and tax incentives. . It also helps participants find stable land, water and electricity, as well as talent.
To be accepted, applicants must present investment projects with high added value, crucial for the international supply chain and aligned with national industry policies.
The programs have produced excellent results – much better than expected. According to the InvesTaiwan service center, 1,126 local business applications have so far been approved, with total investment pledges of NT $ 1.61 trillion. Broken down by program, the relocation program attracted 250 companies and NT $ 103.2 billion in investment with 80,651 jobs, the National Business Accelerated Investment Plan attracted NT $ 264.8 billion from 131 companies and 19,529 jobs, and the Small and Medium-Sized Enterprise Program Small-scale enterprises attracted NT $ 317.2 billion in investment and 28,208 jobs in 745 enterprises, the center reported on Friday.
The continuing conflict between the United States and China – from trade to tariffs and now to technology – has offered Taiwan unprecedented opportunities and has made Taiwanese companies think twice before channeling investments primarily into the country. China. Most Taiwanese companies have not stopped production in China, but have increased their investments in Taiwan or set up new production lines in Southeast Asia, adopting the so-called “China plus one” strategy to diversify the markets. risks.
The diversification of investments by Taiwanese companies is expected to continue given the lingering rivalry between Washington and Beijing. The “Invest in Taiwan” initiative had to be extended as their trade tensions continue to provide Taiwan with advantageous opportunities. Preferential lending terms might not be what some businesses need, which is why the extended initiative has adjusted interest rate subsidies and loan terms over the next three years.
The government must closely monitor the progress of pledged investments – to check whether companies are keeping their promises of increased investment and employment – but it must also ensure that it meets its own obligations, especially since it is faced with to the challenge of ensuring not only stable supplies of water, electricity and talent, but also industrial land.
Avoiding power shortages will likely be the biggest challenge, especially after the December 18 referendum rejected restarting construction on the fourth nuclear power plant.
Over the next four years, the Guosheng Nuclear Power Plant in the Wanli District of New Taipei City (萬里) and the Ma-anshan Nuclear Power Plant in Pingtung County are to be decommissioned, and it remains to be seen whether the construction of several liquefied natural gas generators can fill the void.
To encourage the reduction of carbon emissions and promote a circular economy, applicants should be screened to determine whether they plan to use energy efficient or low carbon equipment, recycling processes and green architecture.
However, the government has fallen behind in meeting its stated goal of producing electricity from renewables, so how the country catches up to the global net zero trend presents the government with another challenge – and requires increased collaboration between the public and private sectors.
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