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ECCT 2022 Position Papers: Taiwan's Time to Shine

ECCT 2022 Position Papers: Taiwan's Time to Shine

The European Chamber of Commerce Taiwan (ECCT) today released its 2022 Position Papers. Through the theme "Taiwan's Time to Shine", the chamber urged the government to take action to speed up Taiwan's energy transformation, attract and retain talent, and enhance the conditions for developing innovative technologies and future industry stars.

The launch was held at an ECCT Premium Event lunch today, where ECCT Chairman H Henry Chang officially handed over a copy of the chamber's annual publication to the Taiwan government, represented by Dr Kung Ming-hsin, Minister of the National Development Council (NDC). This year's publication includes separate submissions from 25 of the ECCT's 29 industry and support committees and raises 170 issues, 118 from previous years and 52 new issues.

In his presentation to NDC Minister Kung and ECCT members at the launch, Chairman Henry Chang thanked the government for efforts on making progress on 26 issues from the previous year. He went on to give a summary of the Position Paper Overview and highlight some of the major issues facing ECCT members. He noted that the number and complexity of issues has increased over the years. While the focus in previous years tended to be on examples where Taiwan was not following international standards, there are now fewer cases of this than in the past. Now much more focus is on following the best international practices in order to spur innovation and economic development.

Summary of the 2022 Position Paper Overview
Taiwan has navigated the global coronavirus pandemic relatively well and been a net beneficiary of the acceleration of digitalisation and the shift to remote working necessitated by the pandemic. Now is truly Taiwan's time to shine.

However, it should not be overlooked that Taiwan's success is also thanks to its unique circumstances, both geographically and economically, which have insulated it from the worst impacts of the pandemic. Now that the threat level of the pandemic is receding, Taiwan can no longer count on these advantages to keep the economy ticking over. Taiwan's current strategy will need to be adapted to the evolving situation in recognition that Taiwan's hitherto success has been thanks to its connection and integration with the world. Border restrictions should be phased out gradually, starting with a pathway in for business-critical positions. Rather than a case-by-case review process, the government should establish clear entry criteria to allow businesses to sustain business operations and talent circulation.

The Overview goes on to list actions in specific areas that the government could take to keep Taiwan shining.

Taiwan's Energy Transformation
The ECCT has welcomed Taiwan's commitment to a net zero target by 2050 to address climate change as well as the impact that pending measures like the EU's Carbon Border Adjustment Mechanism (CBAM) will have on Taiwanese manufacturers. But to reach net zero, Taiwan will need to develop and implement a comprehensive roadmap for energy transformation in collaboration with all stakeholders that address the issues outlined below.

Effective leadership in energy matters: At present, too often ministries and their subordinate agencies operate in silos without due consideration of the big picture and how their actions may hamper those of others. Effective cross-ministerial leadership and coordination is essential to ensure a smooth energy transformation.

Decarbonisation roadmap by sector: To ensure that Taiwan's decarbonisation efforts are coordinated, Taiwan's net zero roadmap should include much more ambitious annual targets for the power sector, industry, mobility, and buildings. The government should actively help traditional industries to decarbonise through subsidies and incentives and implement a roadmap with annual targets towards battery-based electrification of city-based vehicles, with a national recharging station strategy.

Speeding up the renewable energy roll-out: Taiwan boasts some of the world's best conditions for both wind and solar energy. Yet progress towards tapping into both sources has been slow owing to local content requirements and red tape. Authorities are advised not to add to already tough-to-meet local content requirements and to streamline procedures for renewable energy projects.

Grid & energy storage infrastructure: To ensure energy security and grid stability, Taiwan needs to implement a holistic and forward-looking grid and energy storage plan.

Talent & Education
Taiwan was seen as relative safe haven during the pandemic which helped to attract a number of talented Taiwanese to return home from overseas and to keep talented foreigners in Taiwan who were due for repatriation or rotation. Now that the pandemic threat is receding, Taiwan's advantage in this regard will soon be gone. If Taiwan is to become a lasting bright spot for global talent, it will have to address the following issues:

Modernising labour laws: Taiwan's labour laws require reforms that take into account the complexities of both modern workplaces and remote working. This should include exempting remote workers from the strict requirements to record working hours and attendance records and creating a new category of worker under Taiwan's labour laws that is neither an employee nor an independent contractor.

Childcare friendly policies: The lack of childcare facilities, the expensive cost of childcare where it is available, and the lack of flexibility in labour regulations have increased the economic and social costs of raising children. This could be alleviated by allowing employees to choose to work from home as an alternative to unpaid parental leave, and by providing incentives to encourage enterprises to provide childcare spaces and facilities in their workplaces.

Improving incentives for foreign talent: The qualifications for Taiwan's Employment Gold Card scheme need to be relaxed to make Taiwan attractive to foreign talent.

More flexible visa, work permit and immigration requirements: The current complex application process for visas and work permits for foreign nationals should be streamlined to make it easier for foreign nationals to change their status without leaving Taiwan after finding employment. Authorities should also grant three-year work permits to all qualified foreign professionals and introduce 90-day business visas for foreign professionals rather than requiring them to go through the lengthy and formal process of applying for a formal work permit.

Ensuring equal treatment: The coronavirus pandemic gave foreign residents renewed appreciation of the benefits of living and working in Taiwan. However, it also exposed some of the areas where foreign residents are treated differently from citizens. The government would make them feel welcome by changing the necessary laws and ending all forms of unequal treatment, especially for permanent residents.

Improving the English language environment: The ECCT has welcomed the government's aim to become a bilingual nation by 2030 and steps taken so far, such as translating policies, legislation, regulations, rulings, public announcements into English. However, more could be done towards increasing the scope and improving the quality of government websites as well as offline resources, achieving a greater level of bilingualism in government agencies and enhancing English fluency in education, government, and the private sector.

Enhancing education: To address the lack of qualified teachers in public schools, the government could create a one-year English-language accreditation programme in Taiwan. In addition, the Private Schools Act should be amended to attract prestigious schools to set up branches in Taiwan. Taiwan's education system would also be boosted by higher utilisation of internationally recognised education programmes, such as the International Baccalaureate (IB).

Technology & Future Industries
The global pandemic shone a light on the essential role that semiconductors play in multiple supply chains while the electronic devices and components made by Taiwanese companies were crucial in enabling the shift to digitalisation and remote working that was necessitated by global lockdowns and related restrictions. However, elements of Taiwan's regulatory system are making it difficult to take advantage of modern technologies to conduct business and innovate.

Digitalisation: The pending Ministry of Digital Development is advised to revise existing laws and regulations to boost the development of the digital economy and help to improve coordination across all government agencies in this regard. The government should lead by example by digitalising aspects of its own services that remain analogue and allow financial institutions to adopt an electronic signature platforms and other digital solutions. In addition, authorities should follow the global trend and expand the use of digital solutions for inspections and processing documents to more industry categories.

Smart, remote, and precision healthcare: The global pandemic highlighted the usefulness and potential of using digital technology, such as 5G, artificial intelligence (AI), and big data to enable smart and remote healthcare. To enable the development of innovative healthcare solutions, the government should open access to the national health insurance database to the domestic biomedical industry and international companies by following best practices adopted in European countries.

Upgrading communications infrastructure: Advanced telecommunications infrastructure is essential for the development of innovative industries and services of the future. However, various impediments and a lack of incentives are holding back telecom infrastructure development. To expedite development, rules need to be simplified, government agency cooperation should be improved to encourage the installation of equipment, including small cells, on public land and buildings. In addition, more financial incentives are needed for telecom operators to keep upgrading infrastructure in order to create an ideal environment for digital innovation.

Internationalisation and global integration
While Taiwan authorities continue to make progress towards aligning the local regulatory system with international standards and best practices, there are examples where they deviate from the best international examples. International alignment will help to make it easier both for existing market participants and new entrants from abroad and local start-ups to get up and running. In addition, the ECCT continues to support the government's efforts to pursue international trade deals, especially an EU-Taiwan Bilateral Investment Agreement (BIA).

The Overview concludes that in addition to its handling of the pandemic, the government has demonstrated a will to tackle other difficult problems and made progress in resolving some of the challenging issues facing business over the past year. However, at this stage of the pandemic, a different strategy is needed. When other countries are opening up, continued isolation risks leaving Taiwan behind in the contest for international talent, trade, and investment. Taiwan should therefore prepare for the post-pandemic era in recognition that the foundation of its success to date has been its open society and integration with the world. As Taiwan emerges from the pandemic, it should re-embrace this winning formula.

Following the recommendations in the 2022 Position Papers would help Taiwan to overcome diverse challenges, advance the energy transformation, enhance Taiwan's attractiveness for talent and investment in innovative technologies and industries of the future and capitalise on the great economic opportunities available in the post-pandemic era. The ECCT therefore urges the government to continue to engage in constructive and comprehensive consultations with the ECCT and work together to strengthen Taiwan's international image and attractiveness and make Taiwan shine even brighter.