The government’s NT$210 billion (US$7.12 billion) Stimulus 3.0 program is to provide more relief to Taiwanese businesses affected by the COVID-19 pandemic, Minister of Economic Affairs Wang Mei-hua (王美花) told a news conference yesterday.
While the service industry has recovered, non-semiconductor-related manufacturing industries are still hurting badly, Wang said.
Exports have been growing year-on-year over the past four months, but most of the gains came from strong demand for telecommunications equipment due to more people working from home and learning remotely, she said.
Photo: Tu Chien-jung, Taipei Times
“While the semiconductor industries have been growing by double digits, traditional manufacturing has been contracting by double digits. With a second wave of coronavirus likely to hit demand worldwide, we need to support our traditional manufacturers,” Wang said.
The government has already spent NT$200 billion on relief loans to help firms combat the COVID-19-induced slowdown, and a company would only be eligible for the new relief loans if they are able to show that their monthly revenue has contracted 50 percent year-on-year or that their earnings per share for the first half of the year were in the negative, she said.
There would be no more stimulus support for the service industry, Wang added.
“Luckily we have done very well with COVID-19 prevention and now our internal demand is on track,” she said. “As the Triple Stimulus Vouchers are expected to boost sales, more stimulus for the service industry is not necessary.”
Asked if the ministry plans to help the economy beyond Stimulus 3.0 if the global COVID-19 situation continues to affect economies worldwide, Wang said: “Frankly, compared with the stimulus efforts of other countries ... Stimulus 3.0 is very small. So we will keep asking our businesses what support they need. Our exports actually grew in June, but we know there are a lot of winners and losers.”
The amount of stimulus so far has been modest, said Dachrahn Wu (吳大任), director of National Central University’s Research Center for Taiwan Economic Development.
“Compared with the US, our stimulus efforts are relatively conservative,” Wu said.
Industries in Taiwan’s traditional manufacturing sector, such as textile and mechanical parts manufacturers, are competitive, he said, adding: “They are in need of help because of a global emergency, not because of a lack of competitiveness.”
Separately, young entrepreneurs are going to get loan assistance from the government, Wang said, adding that NT$60 billion in loans would be made available to young entrepreneurs interest-free for five years.
“We have heard from young entrepreneurs that they are having difficulty obtaining loans from local lenders. This government program will fill that need and create 100,000 job opportunities,” Wang said.
The initiative came at the behest of President Tsai Ing-wen (蔡英文) and has already been approved by the Executive Yuan, she said.
The government would subsidize the loans’ interest for five years and back loans under NT$1 million with a 100 percent guarantee, Wang said.
The ministry is working with state-run Taiwan Business Bank (台灣企銀) so that the loan application would be a one-stop process, she said, adding that unlike previous loan programs for young entrepreneurs, the application would be multiple choice and would not require a business plan.
“This is a boon for young people who want to start businesses, but do not own any property as collateral,” Wang said.
The program is slated to launch on Saturday and to qualify, young entrepreneurs need to be aged 20 to 45, the ministry said.
In related news, the ministry yesterday announced that more small and medium-sized enterprises (SMEs) would be participating in the Small Business Investment Innovation Research program. Thus far, SMEs have invested NT$115 million in 77 research and development projects, aiming to advance Taiwan’s manufacturing environment, the ministry said.
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