AmCham Taipei recently released the results of its sixth annual Business Climate Survey soliciting the views of key executives at its member companies (a report on the major findings can be found within this issue of TOPICS). The survey is always conducted at the end of the calendar year and made public in mid-January after the data has been collated and analyzed.
The release date this year followed the landmark presidential and legislative elections by just a few days. Although the timing was coincidental, the contents of the survey may provide some useful reference for the incoming administration and new legislature.
The major conclusion emerging from the opinion poll is that while foreign-invested companies in Taiwan are enthusiastic about many aspects of the business climate – especially the quality of the workforce and the excellent living conditions – they consider that Taiwan’s economic performance has not lived up to its potential, and that even more difficult challenges lie ahead.
Several specific recommendations can be extrapolated from the survey data. One of the most important of them is for the government to inject greater efficiency and transparency into the regulatory process by carrying out a thorough revision of current laws and regulations that are outdated, inconsistent, or out of alignment with standard international practices. Looking to the future, institutional changes in the rules-making process are needed as well.
AmCham Taipei urges the creation of a “second-generation Administrative Procedures Act (APA)” that would provide sufficient time and opportunity for all stakeholders and the public at large to comment on proposed new regulations – and require government agencies to take those comments into serious consideration. Such changes would buttress President-elect Tsai Ing-wen’s stated commitment to improve communication among government agencies and between government and the public.
Deep-seated regulatory reform would also facilitate the implementation of a second recommendation: vigorous promotion of Taiwan’s candidacy for membership in regional trade pacts such as the Trans-Pacific Partnership (TPP). The 2016 Business Climate Survey, while indicating continued support for cross-Strait economic ties under the Economic Cooperation Framework Agreement (ECFA), also reflected respondents’ desire to see Taiwan diversify its trade and investment to avoid economic overdependence on any one market.
A high level of support was shown for Taiwan’s participation in the TPP and for broadened economic cooperation with the United States through the annual TIFA talks and negotiation of a Bilateral Investment Agreement. Ensuring that Taiwan’s regulations follow international norms would be a crucial step in removing potential barriers to Taiwan’s entry into bilateral and multilateral agreements.
The search for means to reenergize Taiwan’s economy is certain to be high on the agenda of the new Democratic Progressive Party-led administration, and the key to that revitalization will inevitably be finding ways to stimulate new, job-creating investments from both domestic and foreign sources. The above-mentioned suggestions would go a long way in generating a more favorable investment environment by eliminating regulatory uncertainties and assuaging concerns that unresolved issues with major trading partners could marginalize Taiwan by keeping it outside the TPP.
The path to economic resurgence must also include increased emphasis on innovation. In this respect as well, AmCham Taipei and its member companies have ideas and experience to share as Taiwan sets new policies to reignite its economic engine.