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Taiwan’s Lai marks milestone with economic focus, China gap

Reporter Dimitri Bruyas
Release time:2025/05/20 19:08
Last update time:2025/05/21 09:39
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Taiwan plans sovereign wealth fund (TVBS News) Taiwan’s Lai marks milestone with economic focus, China gap
Taiwan plans sovereign wealth fund (TVBS News)

TAIPEI (TVBS News) — In a carefully calibrated address marking his first anniversary in office, President Lai Ching-te (賴清德) unveiled Tuesday (May 20) an ambitious economic strategy centered around a proposed sovereign wealth fund, while noticeably sidestepping the thorniest issue facing the self-governing island: its increasingly tense relationship with China. The speech reflected the president's delicate balancing act between economic resilience and geopolitical pragmatism.

Standing before the stairway of the Presidential Office in Taipei, Lai presented a vision of economic transformation and national resilience. His speech navigated complex terrain: an increasingly assertive China across the Taiwan Strait, thorny tariff negotiations with Washington, and eroding domestic approval ratings that have plagued his administration since taking office exactly one year ago.

 

"We're working to strengthen Taiwan's overall resilience — reviewing national-level preparedness, conducting field drills, and coordinating across ministries," Lai said, his voice steady as he addressed national security concerns. "We've also introduced 17 strategic measures to counter united front threats and keep our society united against division," he added, referring to Beijing's political influence operations that Taiwan has long accused China of using to undermine its democratic institutions.

Pivoting to economic challenges, Lai reiterated his administration's NT$41 billion (US$1.36 billion) support package, drawn from surplus tax revenues, designed to cushion Taiwanese industries caught in the crossfire of Washington's aggressive new tariff policies. The substantial financial commitment underscores the economic vulnerability of Taiwan's export-dependent economy amid shifting global trade patterns and protectionist policies from its most crucial security partner.

"In response to the new U.S. tariff policy, I proposed a five-point strategy, and the Executive Yuan acted quickly to consolidate public and industry feedback," the president said, referring to Taiwan's cabinet, which has been scrambling to address economic headwinds. "We'll also expand the role of Taiwan's National Development Fund to drive industrial transformation," he continued, highlighting the government's plan to leverage its sovereign investment vehicle to guide Taiwan's economy through troubled waters.
 

Lai marks first year with economic plan, China silence (TVBS News)

The centerpiece of Lai's economic vision came in his proposal for a new sovereign wealth fund — distinct from the existing National Development Fund — that would function as Taiwan's premier investment vehicle on the global stage. The initiative represents Taiwan's most significant economic policy shift in years, potentially deploying billions in national assets to secure strategic investments abroad while countering China's growing economic influence across the Indo-Pacific region.

"Looking outward, the fund will target global markets — focusing on strategic foresight, necessity, and helping Taiwanese industries expand their global footprint," Lai explained, outlining an approach that economic analysts view as Taiwan's attempt to diversify away from its heavy economic dependence on the Chinese market. The sovereign fund initiative comes as Taiwan faces increasing economic coercion from Beijing, which considers the democratically governed island part of its territory despite Taiwan's separate government for more than seven decades.

Adopting a notably diplomatic tone, Lai addressed the sensitive negotiations with the United States over tariffs threatening Taiwan's crucial semiconductor and technology exports. His carefully calibrated language reflected the delicate position of an island that relies on American security guarantees while simultaneously navigating Washington's increasingly protectionist trade policies that have sent ripples of concern through Taiwan's business community.

"Taiwan-U.S. tariff talks remain ongoing following the most recent round of in-person consultations," he said, acknowledging the bilateral tensions that have emerged under the new U.S. administration. "Even close friends can have friction — but over time, they find common ground. As the Bible says, iron sharpens iron — and so do friends shape each other," Lai added, employing biblical imagery that resonates with Taiwan's significant Christian minority while signaling his hope for resolution with Washington.

The most striking aspect of Lai's anniversary address was what remained unsaid. Throughout his 30-minute speech, the president— who Beijing has labeled a "dangerous separatist" — made no direct mention of China or cross-strait relations, despite military tensions reaching their highest point in decades. Political observers in Taipei view this conspicuous omission as a tactical retreat from the more assertive stance that characterized his inaugural address one year ago.

Lai marks first year with economic plan, China silence (TVBS News)

Lai's strategic silence on China came just days after former U.S. President Donald Trump publicly celebrated a preliminary tariff agreement with Beijing, using language about "unification" that sent tremors through Taiwan's political establishment. The timing suggests Lai's administration may be recalibrating its approach amid shifting geopolitical winds and uncertainty about Washington's long-term commitment to Taiwan's de facto independence from mainland control.
 

Rather than addressing the elephant in the room — Taiwan's relationship with China — Lai pivoted to domestic themes of democratic resilience and national unity. In a notable departure from his previous confrontational stance toward opposition parties, he extended an olive branch across Taiwan's polarized political landscape, positioning himself as a unifying figure at a moment when the island faces unprecedented external pressures and internal divisions over how to manage relations with Beijing.

"I will instruct the national security team to begin planning briefings on major security developments for opposition party leaders," he said, signaling a potential thaw in Taiwan's frigid partisan climate. "Taiwan is a peace-loving country. Our society is built on compassion, and I remain firmly committed to pursuing peace," Lai continued, employing language that analysts noted could apply equally to cross-strait relations and domestic political reconciliation.

The response from Taiwan's main opposition party was swift and conditional. Opposition Kuomintang (KMT) Chairman Johnny Chiang countered with five specific demands, including that Lai personally lead the proposed security briefings rather than delegating them to subordinates. The KMT also called for establishing a permanent cross-party national security mechanism, reflecting deep skepticism about the sincerity of Lai's overture.

Meanwhile, Taiwan People's Party Chairman Huang Kuo-chang — representing the island's emerging third political force that positions itself as a moderate alternative to both the ruling Democratic Progressive Party and the KMT — offered a more measured response. While cautiously welcoming Lai's dialogue initiative, Huang stipulated that any meaningful cross-party consultation must occur without "predetermined positions or frameworks," reflecting widespread concerns that the president's outreach might be more symbolic than substantive. ◼ 
 

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#Taiwan sovereign fund#Lai Ching-te#U.S. tariffs#Taiwan economy#cross-strait relations#Taiwan resilience#NT$41 billion package#Taiwan-U.S. relations#Taiwan opposition dialogue#Taiwan China silence

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