Taiwans cabinet will formally propose measures to bolster the islands fragile economic growth after President Tsai Ing-wen said relying on traditional monetary and fiscal policies wouldnt be enough to resolve structural issues.
Premier Lin Chuan may unveil a package of measures before Aug. 12, the Liberty Times reported. Cabinet spokesman Tung Chen-yuan, in a text message, declined to comment on the policies before an official announcement.
With demand for its exported goods in decline for nearly 18 months, Taiwan is looking for ways to expand trade relationships and encourage private investment and innovation. Gross domestic product expanded 0.69 percent in the second quarter after the longest period of contraction since the global financial crisis.
Tsai, who took office in May, said her administration will spend in order to turn excessively high levels of savings into investment. The National Development Council last week established a NT$100 billion ($3.15 billion) fund that will invest in businesses seeking to acquire new technologies and in innovative new companies.
Budget Proposal
Lin is also planning to allocate a bigger budget of about NT$200 billion to infrastructure projects next year, TVBS television reported this week. The cabinet plans to submit its budget proposal for 2017 to the legislature by the end of this month.
Lins proposed package would follow Japanese Prime Minister Shinzo Abes plan to spend 6.2 trillion yen ($61 billion) on tourism-boosting infrastructure — including the construction of a magnetic levitation line — and on building projects overseas.
In its own bid for more tourism, Taiwan waived visa requirements for citizens of Thailand and Brunei, dovetailing with Tsais plan to focus on increasing trade and commercial ties with southeast Asia.
Tsai also said last month she plans to turn Taiwan into “Asias Silicon Valley” by amending corporate law, capital raising rules and immigration policy to attract would-be startups and foreign professionals to the island.
Taiwans benchmark interest rate is already near an all-time low after four decreases since the third quarter of last year, prompting the central bank in June to warn against any government spending cuts in 2017.
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