Chen calls for economic conference

The China Post staff

President Chen Shui-bian last Saturday reiterated that he will convene an economic conference after the Double Ten holiday in a bid to work out substantial solutions for solving the current major economic problems.

Chen revealed the plan when he received the winners of this year’s National High-tech Innovation Award last Saturday. The economic conference is scheduled to be held this month, and will include government officials, scholars, and business representatives. The government will review and compile all their opinions in November and work out feasible solutions by the year-end.

Chen confirmed that the proposal, raised by the Executive Yuan in early September, aims at developing a modern knowledge-driven economy on the island. Towards this goal, the government has raised the national R&D budget by NT$5 billion for next year.

“Currently, the islandwide R&D budget is nearly NT$200 billion per year, which is only a 10th or even a 100th of that in most industrialized countries,” Chen said. “The annual NT$200 billion R&D budget is even lower than that of a multinational company,” he said.

He said the government is very supportive of the development of high-tech industries. The favorable tax rates for high-tech companies, for example, constitute a major incentive to encourage investments in these fields. Chen cited a global survey by Georgia University of the U.S.. which found that the government in Taiwan is ranked as the world’s third most supportive government for the development of high-tech industries.

Currently, Taiwan is the world’s third largest manufacturer of IT (information technology) products and is the world’s largest supplier of over a dozen kinds of IT products. Meanwhile, Taiwan is the fourth largest IC producer in the world.

While the island is striving to develop its high-tech industries, some of its traditional industries such as textiles, chemicals and machinery still maintain strong international competitiveness.

Currently, the annual R&D budget accounts for only 2 percent of the island’s GDP. Last week, Chen revealed the government’s attempt to raise the ratio to 3 percent, worth around NT$300 billion, in the year 2010, but at least 70 percent of which should come from private companies themselves. Currently, private companies account for nearly 60 percent of the island’s total R&D budget of NT$200 billion per year.

Chen said that Taiwan used to be a “fast follower” in the international high-tech regime, but now should reposition itself as an innovator because only innovation can generate added value for products. In the past, he stressed, Taiwan generated profits mainly through manufacturing, but now it should gradually shift to make profits through R&D.