The Economic Development Council under Taiwan's Executive Yuan held its first meeting on July 18, addressing three key policy themes: the trillion-dollar National Development Investment Plan, transforming Taiwan into an Asian asset management hub, and boosting national talent competitiveness.
A second meeting is scheduled for September to outline the latest policy directions for the semiconductor, AI, defense, security, and compound semiconductor industries.
Insurance investment in public infrastructure
Officials noted that Taiwan's insurance industry can legally allocate up to 10% of project and public investment funds, totaling around NT$ 3.27 trillion (US$ 104.64 billion), but currently, only NT$ 609.2 billion has been invested.
Given the high hedging costs of NT$ 360.2 billion for overseas investments, the government aims to provide low-risk domestic investment options to attract life insurance funds. This strategy would mitigate exchange rate risks and ease fiscal pressure.
Potential public infrastructure investments include water pipelines, parking facilities, electrolysis plants, wastewater treatment facilities, and social housing. In the long-term care sector, legal issues are being addressed with assistance from the National Development Council (NDC). Currently, Taiwan's life insurance industry holds approximately NT$ 22 trillion in overseas investments.
Asian asset management hub
The establishment of Taiwan as an Asian asset management hub has been in development for years. The government has finally outlined its action plans, which include expanding private banking and wealth management services, attracting multinational corporations to list in Taiwan, increasing real estate investment trust (REIT) products, and introducing foreign asset management companies.
This effort follows Hong Kong's declining status as a financial center due to political factors, with Singapore gaining significant influence in Asian asset management.
Talent shortfall solution: AI and foreign workers
The third policy theme addresses the promotion of national talent competitiveness. Taiwan's labor supply in 2024 is expected to be 12.35 million, nearly matching the demand of 12.39 million. However, from 2025, labor demand is projected to rise rapidly, reaching 12.9 million by 2030, while the country can only supply around 12.42 million workers.
The Executive Yuan aims to mitigate this gap by advancing AI in industries to reduce labor demand and attract key foreign and expatriate workers to Taiwan. By 2028, the Executive Yuan aims to train 200,000 local AI and digital talents, leveraging AI to reduce labor demands and enhance worker productivity.
Additionally, the plan seeks to attract 100,000 international students to Taiwan and recruit 120,000 foreign professionals and 80,000 foreign technical workers. Officials emphasize that this initiative will not threaten local employment or exacerbate low-wage issues.
The three arms of Economic Development Council
The Executive Yuan also unveiled the structure of the newly founded Economic Development Council, comprising three groups:
The Innovation Economy Group, led by Wu Cheng-wen, Minister of the National Science and Technology Council (NSTC), will focus on strengthening Taiwan's role in the democratic supply chain, developing the Five Trusted Industry sectors, nurturing local talent, industrializing AI, and achieving digital and net-zero transformations.
The Balanced Taiwan Group, led by Paul Liu, Minister of the NDC, will develop a smart technology industry ecosystem, including the Keelung River Valley Golden Corridor, the Greater Silicon Valley in Taoyuan-Hsinchu-Miaoli, central technology clusters, and the southern semiconductor industry S corridor. The group will assess essential resources like land, water, and electricity, and invest in necessary policies.
The Inclusive Growth Group, led by Kung Ming-hsin, Secretary-General of the Executive Yuan, will focus on the diverse revitalization and development of small and medium enterprises (SMEs), upgrading traditional industries and services, promoting diverse youth development and wage increases, and expanding social investments in education, dual employment, and dual care.
