Private Investments Become Major Growth Driver

Thanks to improved investment climate, Taiwan`s private investments surged to NT$75.5 billion in July, double June`s level, with the total amount in the first seven months having reached 62% of the government target for the entire year, according to the Ministry of Economic Affairs (MOEA).

Christina Liu, minister of the Cabinet-level Council for Economic Planning and Development (CEPD), noted yesterday (Aug. 18) that private investments have joined export to become a major growth driver of the economy. She pointed out that of the 7.66% growth rate for the second quarter forecast by the Directorate General of Budget, Accounting, and Statistics in May, domestic demand accounts for 6.07 percentage points, leaving only 1.59 percentage points to external demand, a major departure from the situation in the past.

A major source of private investments in July was IC firms and other hi-tech firms, such as Taiwan Semiconductor Manufacturing Co. (TSMC) and United Microelectronics Corp. (UMC), the world`s two leading contract IC makers, which expanded their capital outlays on rosy market outlook.

The vigorous private investments are attributed to the signing of the cross-Taiwan Strait Economic Cooperation Framework Agreement (ECFA) and the improved domestic investment climate, notably the slashing of business income tax to 17%.

Liu remarked that private investments will continue to figure prominently in local economic growth, due to the government`s global investment-solicitation initiative and growing Chinese investments, the latter of which will be facilitated by the further liberalization of the government`s policy.

Statistics of the Investment Commission, MOEA, show that Chinese investments in July topped US$28.5 million, 10 times of June`s level of US$2.77 million.

(by Philip Liu)



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