As Taiwan grapples with demographic changes, experts and policymakers are turning to increased immigration to address worker shortages – a solution with recurrent historic precedent.
Taiwan is set to become a super-aged society by 2025, meaning 20% or more of the population will be 65 years or older. This number could possibly reach 41% by 2060. Such a drastic demographic change inevitably leads to a lack of working-age individuals to care for the elderly and infirm and power the economy. In the long term, it could also affect the country’s ability to defend itself (see the article on Taiwan’s shrinking military in this issue).
The situation is not unique to Taiwan – many Western societies and highly developed countries like Japan and Korea have been struggling with falling birthrates for decades. Meanwhile, China could become the first nation in the world to grow old before it grows rich.
Many experts and policymakers, along with Taiwan’s ruling Democratic Progressive Party (DPP) leadership, argue that without an inflow of “human capital” from other countries, Taiwan will face a severe worker shortage.
“We need foreign workers a lot – we need their contributions, their skills, and languages because they are a huge source of human capital in Taiwan,” says Alfred J.P. Lin, a researcher at Academia Sinica.
Since the 1600s, if not earlier, Taiwan has been a nation of migrants. This idea may be somewhat surprising, as it has often been referred to as a “zero-migration country.” In some quarters, there is even an assumption that Taiwan is not much more than a Chinese-influenced monoculture. But this is historically incorrect, according to Lin.
He notes that Taiwan has been a nation of migration, just like the United States, since the early 17th century. Lin notes that the Dutch first tried to colonize Taiwan in 1624, and their need for foreign labor saw the arrival of thousands of Chinese people. Portuguese, English, Spanish, and Arabic traders, other Europeans, and Americans followed.
Lin adds that the only times Taiwan was not a nation of immigration was during Japanese colonial rule (1895-1945) and after an influx of around 1.2 million Kuomintang (KMT) soldiers and supporters saw martial law and the closing up of the country from 1949 until the late 1980s.
A population boom and industrial revolution after World War II saw an “economic miracle” and a concomitant increase of 360% in the gross national product between 1965 and 1986. This growth led to expansion but also a shortage of cheap domestic labor. As a result, migrants started moving in again during Taiwan’s modern period.
But later in the 1990s, Taiwan had a relatively young population, and immigrants were widely seen as interlopers taking jobs – even if Taiwanese people didn’t always want to do dirty and dangerous work for the low salaries offered.
According to Wang Hong-zen, professor and chair of the sociology department at National Sun Yat-sen University, Taiwan’s immigration policy at this stage was based on three ideologies. Firstly, the jus sanguinis principle of nationality as being determined by “blood” and the nationality or ethnicity of one’s parents. Secondly, population quality and the categorization of migrants in terms of quality, with the aim of ensuring a “high-quality population.” Finally, the principle of national security, as Taiwan’s uncertain international position and the threat of an invasion by China, was seen as necessitating population control to prevent infiltration.
In 2002, Taiwan’s first democratic transfer of power saw the accession of the DPP’s Chen Shui-bian. Chen promoted identity politics to prevent the further Sinicization of Taiwan, notes Joanna Zylinska, a former undergraduate student at SOAS University of London. In practical terms, Chen’s views led to a slowdown in the pace of immigration, mainly from China but also from Southeast Asia, despite a 2002 “Go South” policy that aimed to deepen economic cooperation with South and Southeast Asian countries. As for people from other countries, including the West, onerous visa restrictions deterred many from settling in Taiwan.
When former President Ma Ying-jeou took power in 2008, immigration policies were to some extent reversed, and migrant workers were once again welcomed to keep the wheels of industry turning. More Chinese citizens also started marrying into Taiwan, partly due to a male-to-female population imbalance that meant fewer women for Taiwanese men.
Fear of Chinese influence and the Sunflower Movement in 2014, in which students and civic groups protested the passing of the Cross-Strait Service Trade Agreement by the then-ruling KMT, saw the end of Ma’s era. Since the DPP’s Tsai Ing-wen took office in 2016, she has moved the dial on migration for both practical and political reasons.
In addition to responding to a growing need for talent, an international, multicultural, and open-minded Taiwan starkly contrasts with China’s protective policies, notes Lin. China’s inability to cope with its current demographic transition, having been hurt by the former one-child policy and its failure to row back on ethnic nationalism that would open the doors to migration, will put the country at an economic disadvantage, he says.
“The Chinese Communist Party won’t allow dissimilarity and multiculturalism – it doesn’t have the room to survive, even as a younger generation has more opportunity to see the outside world,” Lin says.
In response to its demographic changes, Taiwan has begun looking at how other countries are managing the transition – particularly Japan, which has the world’s second-oldest median age of 48.4, after Monaco’s 54.5.
Academia Sinica research fellow Cheng Yen-hsin has advised both the Japanese and Taiwanese governments on the benefits of migration. He argues that the only solution to a shrinking population is to increase immigration, ease visa rules, and give prolonged or permanent residence permits to foreign nationals, including contract workers.
Both Japan and Taiwan have somewhat modified their migration policies in recent years. Notably, the DPP in 2020 explicitly stated that Taiwan should commit to economic globalization through increased immigration. In 2022, National Development Council Minister Kung Ming-hsin said Taiwan would work to attract 400,000 foreign workers over the next 10 years to make up for the shrinking population. As such, a welcome mat is now being rolled out to foreigners, be they migrant workers, household workers, teachers, nurses, doctors, wives and husbands, businesspeople, investors, or high-skilled workers.
Taiwan adopted the Recruitment and Employment of Foreign Professionals Act in 2017 in an adjustment of its immigration policy to encourage foreigners to study and work in Taiwan by easing and streamlining regulations. In 2018, it launched the Gold Card Program, aimed at highly skilled and salaried foreign professionals.
Since the program’s launch, Taiwan has issued over 6,500 Employment Gold Cards to qualified foreign nationals as part of its global talent acquisition drive. The card is a three-year resident visa and open work permit that allows cardholders to live in Taiwan without being tied to a specific employer.
While the program has seen some success, it has also been met with criticism. Beyond concerns about the program’s stringent requirements, a significant portion of the critique pertains to challenges related to banking, housing, immigration, and Taiwan’s working culture. To address these recurrent issues, the Taiwan Employment Gold Card Office was established in October 2020 with the purpose of tackling these concerns and building a “Gold Card community.”
“The issues we’re encountering now are structural and cultural issues that require a longer time frame,” Tom Fifield, a Gold Card Office project manager, told Taipei Times in May. “The great thing is the Gold Card program has been successful, so effectively we’re a wedge that can be used to break open some of these long-standing issues.”
However, the initiatives for community building, tax breaks, and other benefits for Gold Card holders cover only a small portion of foreign nationals, most of whom only stay for a period of one to three years. Meanwhile, foreigners who have lived and worked in Taiwan for decades, including successful entrepreneurs and well-salaried employees, are ineligible for such benefits. Prioritizing the reduction of practical obstacles for the entire migrant population’s life and work in Taiwan is equally important.
“Pursuing multiculturalism is one of the most important considerations of a migration policy with people from different multicultural situations,” says Academia Sinica’s Lin. “If you don’t make use of immigration, the plane will crash. Now that we have opened migration, we are hoping for a soft landing.”
Recent amendments to the “Act for the Recruitment and Employment of Foreign Professionals,” which came into effect in January, provide “high-level professionals” with more time to apply for both temporary and permanent residency, in addition to lowering the qualification period to five rather than seven years. The amendments also encompass enhanced rights for foreign nationals who are parents. Moreover, entry barriers for “overseas Chinese” – individuals with Taiwanese parentage – have been eased, eliminating the necessity for household registration to obtain an entry permit.
As of February, there were 807,667 foreign residents in Taiwan, with approximately 40,000 characterized as highly skilled professionals, according to figures from the National Immigration Agency. Of these, about 20,000 come from Japan, 11,000 from the United States, and 10,000 from Europe and elsewhere.
However, the vast majority of foreign residents in Taiwan come from Southeast Asian countries, including Vietnam, Indonesia, the Philippines, and Malaysia. To attract more Southeast Asian workers to Taiwan, the Ministry of Labor (MOL) in April last year launched a visa scheme called the “Long-term Retention of Skilled Foreign Workers Program.”
Thirteen thousand visas have so far been issued under the scheme, which reclassifies certain migrant workers as “intermediately skilled,” allowing them to be retained or hired by companies if they meet salary thresholds, have worked in Taiwan for over six years, or hold an associate degree from a Taiwanese university. The MOL expects the program to have attracted 15,000 new residents by the end of the year.
In May this year, the MOL further eased regulations to let in an additional 28,000 migrant workers in manufacturing, construction, agriculture, and caregiving to meet the growing need for workers.
But if Taiwan is to truly strengthen its economy and care for the growing number of elderly people in the short term, these figures will need to increase substantially. So far, programs such as the Gold Card and the Long-term Retention of Skilled Foreign Workers Program represent merely a drop in the ocean of new residents required to make up for the dwindling population.