Taiwan's new premier pledges economic upgrade

Feb 6, 2012, 10:50 GMT

Taipei - Premier Sean Chen pledged Monday to turn Taiwan into a 'rich world' economy by pushing for more locally designed and manufactured products and reducing the gap between the rich and poor.

Appointed by President Ma Ying-jeou after he was re-elected to a second term last month, Chen will be responsible for new domestic initiatives.

'I am focusing on creating sustainable growth,' Chen said. 'What Taiwan needs is a new round of economic restructuring away from lowering costs of production to emphasizing innovation, cultural creativity, and research and development.

'We hope future products will not only be 'Made in Taiwan,' but also 'Made by Taiwan' and 'Designed by Taiwan.''

Most analysts believe Ma promoted Chen to premier to utilize his financial expertise.

As vice premier during Ma's first term, he was widely credited for helping to steer Taiwan out of the 2008 global financial crisis.

He also managed the injection of government funds to stabilize the stock market in December after it had declined to two-year lows.

But the key to the premier's success will be on how he handles the relationship with mainland China, according to Raymond Wu, president of e-telligence Research and Consulting Group.

'The protections and programs that his government is trying to sign with Beijing would make Taiwan an attractive investment destination, where foreign investors enter joint ventures with Taiwanese companies to penetrate the massive Chinese domestic market,' Wu said.

Taiwan's economy is in technical recession after two straight quarterly declines in gross domestic product. Last week, the government dropped its growth forecast for 2012 from 4.2 per cent to 3.9 per cent.