According to a recent report by the World Information Technology and Service Alliance (WITSA) and its Digital Planet 2006, Taiwan's investment in information and communications technology (ICT) last year amounted to US$22.9 billion, accounting for 0.7% of the world total. Among the four Asian “Tigers” this percentage was second only to that of South Korea, at 1.9%, and higher than that of Hong Kong at 0.5% and Singapore at 0.4%.

        Taiwan' s ICT infrastructure has improved substantially in recent years, thanks to the implementation of a number of ICT-related government programs including “Digital Taiwan” and “Action Taiwan.” ICT investment has risen as a result, from 5.6% of GDP in 2001 to 6.7% in 2006. Today Taiwan is one of the world’s most important ICT producers, but its ratio of software to hardware investment is just 30.9%--much lower than the advanced-country average of 68.1%. This means that while Taiwan has a strong advantage in the manufacture of ICT products, the development of its software industry needs to be strengthened. According to the Directorate General of Budget, Accounting and Statistics, Taiwan’s economic growth rate averaged 4.6% during the 2002-2006 period, with the contribution of capital accumulation accounting for 33.5%. ICT accounted for 30% of the contribution of overall capital input, indicating that ICT capital is a major force in powering the island’s stable economic growth.

For more information, please consult http://www.cepd.gov.tw/style1/style1_sec2.jsp?linkID=194&parentLinkID=0&businessID=4020&gosec2=y&pageno=&userID=16&nowpage=1.

ICT Spending in 2006

                                                                                                        Unit: US$ Billion

          Under the newly promulgated revision of the Employment Services Act, from July 13 the maximum term of employment in Taiwan for foreign workers is extended to nine years. Employers can apply for the new extension when they apply for a change in recruitment permit. Employers are permitted to apply for an extension, or for re-hiring, of foreigners who are working in Taiwan or who have returned to their home countries after working in Taiwan. Blue-collar foreign workers who have been employed in Taiwan for six years are still required to leave Taiwan for at least one day when their period of employment on the island has been extended to nine years. 

        The Council of Labor Affairs points out that the extension of the maximum term of employment in Taiwan provided by the revision of Article 52 of the Employment Services Act allows employers to make better use of foreign labor and to save money on personnel training, and that it will have a positive effect on the stability of labor-ownership relations, the reducing of labor-ownership disputes, and the disappearance of foreign workers.

For more related information, please go to this website: http://www.cla.gov.tw/cgi-bin/Message/MM_msg_control?mode=viewnews&ts=4694a3e8:68e8&theme=&layout=.

To view the contents of the revision, please consult http://www.lawbank.com.tw/fnews/news.php?keyword=&sdate=&edate=&type_id=19&total=21410&nid=50556.00&seq=32

Investment Tax Offsets Offered Biotech and New Pharmaceutical Companies

        Taiwan’s economic transition, along with its economic and overall national competitiveness, will get a boost from the promulgation of the Biotech and New Pharmaceutical Development Act on July 4. The Act offers a 35% tax offset from the profit-seeking-enterprise income tax for investment in R&D and personnel training by biotech companies, and a 20% offset for investment in shares in such companies so long as the shares are held for at least three years. These tax incentives will be available to the end of 2021.

        The new Act provides a number of tax incentives to stimulate the upgrading of the biotech and new pharmaceutical industries, including the deduction of up to 35% of spending on R&D and personnel training from the profit-seeking-enterprise income tax. This deduction can be spread over five years, beginning with the first year in which a profit is made. The other main tax deduction, of up to 20% of the cost of acquiring shares in a biotech or new pharmaceutical company, begins in the fourth year following acquisition of the shares and can be spread over five years, starting from the first year in which the profit is made.

        Incentives are also offered, in view of the knowledge-intensive nature of biotech and new pharmaceutical industries, to encourage high-level professionals and technology investors to participate in company operations and R&D. Those who procure shares by providing technology can enjoy delayed payment of taxes until the year in which the shares are transferred, given as a gift, or distributed as inheritance, and the tax will be calculated on the actual price of the shares at the time minus the cost of acquisition. To help the relevant industries attract outstanding personnel and acquire technology, the Act also allows biotech and new pharmaceutical companies to issue stock warrants and sell them at under par value to their high-level professionals and technology investors, with taxes being levied according to actual value at the time of transfer.

        The new Act also relaxes restrictions on concurrent jobs for researchers in government agencies, including the Academia Sinica, so that, with the permission of the original employing agency, a researcher may act as founder, director, or technical consultant to a biotech or new pharmaceutical company without being subject to the restrictions imposed by the Public Functionary Service Act. Researchers employed by academic and research organizations also may, with the permission of the original employer, serve as consultant to biotech or new pharmaceutical companies. To view the content of the Biotech and New Pharmaceutical Development Act, please consult this website: http://jirs.judicial.gov.tw/index/htm

Maximum Service Term of Foreign Workers in Taiwan Extended to Nine Years

        Under the newly promulgated revision of the Employment Services Act, from July 13 the maximum term of employment in Taiwan for foreign workers is extended to nine years. Employers can apply for the new extension when they apply for a change in recruitment permit. Employers are permitted to apply for an extension, or for re-hiring, of foreigners who are working in Taiwan or who have returned to their home countries after working in Taiwan. Blue-collar foreign workers who have been employed in Taiwan for six years are still required to leave Taiwan for at least one day when their period of employment on the island has been extended to nine years.

       The Council of Labor Affairs points out that the extension of the maximum term of employment in Taiwan provided by the revision of Article 52 of the Employment Services Act allows employers to make better use of foreign labor and to save money on personnel training, and that it will have a positive effect on the stability of labor-ownership relations, the reducing of labor-ownership disputes, and the disappearance of foreign workers.

 For more related information, please go to this website: http://www.cla.gov.tw/cgi-bin/Message/MM_msg_control?mode=viewnews&ts=4694a3e8:68e8&theme=&layout=

Taiwan’s fresh mango ready to be imported into Australia during this winter

   The Taipei Economic and Cultural Office (TECO) in Australia has the honour to announce that the Australian Quarantine and Inspection Services (AQIS) has already approved the importation of fresh mangoes from Taiwan into Australia as from June 2007.

    As a tropical fruit, mangoes grow in warm climates and are in season during the summer.  While Australian mangoes are out of season in winter, Taiwan will be in full summer and the Taiwanese mangoes will be the tastiest on the market, and at their very best.  This complementarity ensures that the Australian consumers’ desire for mangoes year round is satisfied.  Taiwan also imports various fruits, wine, beef, lamb, food and other agricultural products from Australia.

   Over the last three years, the Bureau of Animal and Plant Health Inspection and Quarantine (BAPHIQ) in Taiwan and TECO have continuously sought approval for the importation of Taiwanese mangoes into Australia, and have recently been in coordination with AQIS in this regard.

   TECO would like to warmly express its deepest gratitude to the Australian government and especially to AQIS for making this latest importation possible.  The final step of a long process to make fresh Taiwanese mangoes available for Australian consumers was for AQIS to conduct an audit of heat treatment facilities and heat treatment processes, as arranged by BAPHIQ.

   The audit was recently completed in late May, conducted jointly by both AQIS and BAPHIQ.  AQIS has reviewed the audit findings and approved all of the facilities in Taiwan that were audited.  As a matter of fact, these treatment facilities and processes were rated satisfactory and of high standard, and Australian consumers will most likely be able to purchase the best of fresh, quality mangoes from Taiwan this winter.

Cabinet Earmarks NT$32 Billion for Strategic Life-related Technology

     A recent meeting of the Executive Yuan´s Sci-Tech Advisory Meeting, headed by Premier Su Tseng-chang, agreed to inject NT$32 billion into the development of six strategic life-related technology industries over the next five years: flexible electronics, radio frequency identification (RFID), nanotechnology, intelligent robots, auto electronics and whole-car manufacturing, and intelligent living space.
 
　　Premier Su points out that Taiwan´s overall strategic planning is focused on the core of creative innovation and humanized development, and that the implementation of the proposed budget must place emphasis on two aspects: efficiency and the improvement of life. The Executive Yuan predicts that by 2013, the annual production values of the targeted industries will reach NT$90 billion for intelligent robots and NT$70 billion for RFID. Flexible electronics will help Taiwan develop electronic products that can be worn on the body at any time; and RFID, being more advanced than bar code technology, will help to create new value in three areas vital to human life: speed, safety, and security.

　　Some preliminary results in promoting the development of the six strategic life-related industries have already been seen. An alliance for the promotion of flexible electronics has been set up, for example, and a common laboratory for life-related nanotechnology, an intelligent robot industry development association, and an alliance for the promotion of the intelligent living space industry are under planning.  For more information please visit:  http://www.stag.gov.tw/content/application/stag/general/guest-cnt-browse.php?ico=7&grpid=5&vroot=&cntgrp_ordinal=00060004&cnt_id=501。

Vice Premier Tsai:Continued Economic Development in Six Dimensions

      In a recent speech on Taiwan´s economic development that she  delivered to foreign institutional investors, Vice Premier Tsai Ing-wen pointed out  that the government would carry out the long-term re-engineering of Taiwan´s economic structure with focus on six dimensions: ensuring growth, creating innovalue, persisting with reform, promoting investment, positioning globally, and embracing humanism. Over the next 10 years (2006-2015), it is predicted that Taiwan´s potential annual average economic growth rate will reach 4.6%, with half of the growth momentum being contributed by technological progress. This will bring the island´s per capita GDP to US$ 27,000 in 2015, and will build Taiwan into an “island of innovation.”

　　In respect to ensuring growth, the vice premier noted that the government will pursue a two-prong approach of economic stimulation and risk management. This will include the promotion of a negotiating mechanism for consumer debt designed to keep the problem of card debt from affecting the growth of consumption.

　　In the creation of innovalue, the goal is to help Taiwan perform even more brilliantly on the stage of international trade by upgrading industrial value-added through a three-prong approach: R&D, branding, and core advantage. The aim is to have two Taiwan brands among the world´s top 100, and five brands with a value of over US$1 billion, by 2012. 

　　In the field of persisting with reform, taxation and financial reforms will be continued with the objective of building up a financial environment that links with the international community.

　　To promote investment, the government will create a good investment environment in the areas of land, capital, human resources, transparency of investment information, and internationalization of the legal foundation.

　　In regard to global positioning, the government will continue to reinforce the operational functions of Taiwan´s five free trade zones, and will aggressively encourage enterprises to set up operations headquarters on the island.

　　To embrace humanism, the government will integrate the different existing pension systems and carry out planning and implementation of an annuity system to take care of the interests of the elderly. In another respect, in response to future changes in the population structure the executive team is engaged in formulating “Population Policy Guidelines” and “Population Policy White Paper” designed to set up “comprehensive population policies aimed at achieving a healthy pluralistic society, to ensure that our economy and society can maintain continuous, sound development.”

Taiwan´s Networked Readiness Jumps to the 2nd in Asia , the 7th in the World

     According to the Global Information Technology Report 2005-2006, issued by the World Economic Forum (WEF) in March, Taiwan´s Networked Readiness Index (NRI) has entered the world´s top-10 for the first time since 2001. From  the 15th place in the previous year´s report, Taiwan´s NRI leaped into the 7th place in the world and the 2nd in Asia, after only Singapore (see accompanying chart).

　　The report points out that Taiwan has played the role of an information and communications technology (ICT) powerhouse during the past three decades, and that it was able to advance eight spaces this year because of its intelligent public policies and public-private synergies. For this reason, the WEF chose Taiwan as a specific case study included in the report this year.

　　The specific case study says that Taiwan’s outstanding technological achievements result largely from government’s implementation of strong and coherent planning mechanisms for the economy, science and government; close collaboration with the private sector; and heavy investment in education, research and infrastructure. In addition, the making of unique institutional arrangements has also played a key role for the progress, such as the quasi-governmental Institute for Information Industry, which serves as a think-tank and research center for both government and business; and government-constructed science parks, which support innovation and the incubation of new ideas.

　　For the Global Technology Information Report 2005-2006, the WEF surveyed 115 economies throughout the world in regard primarily to their information and ICT development. For further information on the report, please consult http://www.weforum.org/site/homepublic.nsf/Content/Global+Competitiveness+ProgrammeGlobal+Information+Technology+Report.

2005-2006 Networked Readiness Index Rankings

Source: World Economic Forum, March 2006.