Taiwan should seek to maintain its importance in regional geopolitical stability and adopt policy measures on immigration, pensionable age and low fertility to ensure its labor supply, visiting Japanese economic and financial academic Takehiko Nakao told local trade group the Third Wednesday Club yesterday.
Nakao is a former Asian Development Bank (ADB) president and chairs the Institute at Mizuho Research and Technologies.
He said Taiwan is an essential part of the global value chain with sophisticated semiconductor production, which is why it has been invited to invest in Japan, the US and other countries.
Photo: Reuters
Taiwan also has unique, deep and broad economic ties with China and Hong Kong through trade, investment and technologies, and has very sound fiscal and monetary policies and well-educated human resources, especially in the information technology sector, he said.
However, Taiwan needs to diversify its industrial sector away from semiconductors and reinforce entrepreneurship and innovation, Nakao said.
To maintain sustainable growth, Taiwan must also to address its aging population, as it has a birthrate of 0.87 per woman, lower than 1.26 in Japan and 1.09 in China, he said, adding that 2.1 births are considered necessary to maintain a stable population.
Low birthrates weigh on GDP showings, an unfavorable phenomenon that is also plaguing Japan and China, he said.
The government could help by easing immigration rules, postponing the retirement age and providing incentives for having children, Nakao said.
While China is losing its demographic bonus, it could avoid Japan’s economic situation by reducing bad debt, enhancing open trade and investment regimes, creating a conducive and safe business environment for foreign and private companies, maintaining an entrepreneurial spirit and increasing investment in technology, Nakao said.
China also needs to avoid decoupling by collaborating with other countries, improving communication and building trust with the international community, he said.
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