The government should help local firms boost competitiveness, while building Taiwan into a hub for high-end technology patents, research and development, and corporate operating facilities, a trade group said in a paper released yesterday.
The Chinese National Federation of Industries’ (CNFI, 全國工業總會) annual position paper said that the COVID-19 pandemic challenges globalization and realigns electronics supply chains, which would benefit Taiwan and bolster its importance on the world stage, it said.
The group, which consists of 159 associations and represents a majority of local manufacturing firms, said the government should monitor an imbalance in growth between large corporations and small and medium-sized enterprises.
Photo: Lee Ya-wen, Taipei Times
Large corporations can help smaller businesses expand in the US and European markets, and create clusters that can benefit all, the paper said, adding that overconcentration in a few sectors would deepen the imbalance and be unfavorable for talent recruitment, the development of renewable energy sources and other economic issues.
Petrochemical and metal manufacturers, for instance, could pursue digital transformation, aided by artificial intelligence and Internet of Things solutions, it said.
Policymakers can support the process by offering favorable tax rates and other incentives to encourage industrial upgrades and innovation.
The government should also adopt forward-looking positions to tackle issues linked to climate change in light of the nation’s worst water shortage in 50 years in the first half of this year, it added.
A stable water supply is crucial for chipmakers and other manufacturers, it said, adding that the manufacturing industry accounts for only 10 percent of Taiwan’s water usage.
The government should also take bold steps to make water management policies supported by scientific feasibility, it said.
The trade group said that Taiwan should be pragmatic and equally cordial in its dealings with the US and China as the world’s two largest economies cut economic dependence on each other.
Electronics shipments to China last year amounted to US$63.5 billion, greater than the US$47 billion in shipments destined to the US, the group said.
Although China-bound investment declined, local firms based in the Chinese market grew more profitable, meriting the need to pursue cross-strait peace, it said.
The government must also take quick and effective action to address the nation’s low fertility rate, which would soon evolve into a national security problem after the number of deaths surpassed births last year, it said.
The trend is worrying, as financial burdens are growing for middle-aged people who have to raise children while caring for their ailing parents, it added.
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