TAIPEI (Bloomberg) - Ask Taiwanese Premier Lin Chuan about the economy he's been charged with managing and he'll talk about the need for innovation, investment and higher paying jobs.
He'll also tell you one way to achieve those goals is by welcoming more immigrants.
In an interview Friday (May 5) in Taipei, Lin laid out the vision for invigorating the economy he and President Tsai Ing-wen have sought to implement since Tsai won power in a landslide victory in early 2016.
While economists expect growth to accelerate to 2 per cent this year from 1.5 per cent in 2016, expansion has slowed significantly from 6.52 per cent in 2007.
The reforms Lin and Tsai promote touch on areas from trade to taxes to infrastructure. Immigration stands out for being where Lin believes action can be taken soonest and for being what he says is the most immediate countermeasure for one of Taiwan's most-pressing ailments: talent leaving for Shanghai, Hong Kong, Singapore and beyond.
That exodus, which the labour ministry in 2015 put at 20,000 to 30,000 professionals annually over the past decade, has been primarily because of Taiwan's lower wages, according to Lin, who holds a doctorate in economics from the University of Illinois at Urbana-Champaign.
And in the short term, Lin says there isn't much the government can do to change that.
"It's difficult to stop mainland China and Singapore recruiting Taiwanese talent because our wages are lower," he said. "So what can we do? We can open up in the hope that other people come in."
By his diagnosis, the main culprit for low wages has been the government's long focus on controlling consumer price increases, which Lin says has kept the cost of goods and services low but also stunted pay increases.
The movement of factories and companies to China, along with a lack of innovative new products and services has also contributed, he said.
While Lin doesn't expect management of consumer prices to change, he sees foreign workers as a catalyst for innovation and creating more competitive companies. That's a notable contrast with US President Donald Trump's anti-immigrant rhetoric, the UK's decision to leave the European Union and Japan's long-standing aversion to foreign workers.
But Lin isn't proposing broad relaxations of immigration limits. He wants to lure foreign professionals who have skills Taiwan needs, such as connecting local manufacturers with foreign customers and to integrating them into global supply chains.
Lin cited Taiwan Semiconductor Manufacturing Co. founder and chairman Morris Chang as an example of how immigration can spur innovation. Chang, a US citizen, set up TSMC in Taiwan in 1987. It is now the world's biggest contract chip manufacturer and the most valuable company on the Taiwan Stock Exchange.
Chang's "most important contribution was pushing TSMC to become a global company. There are lots of companies in Taiwan with this potential but they lack the talent," Lin said. "When TSMC does well, it helps Taiwan's economy. We need more TSMCs." In luring that global talent, Taiwan will have plenty of competition, perhaps none larger than China.
Governed separately since 1949 as the result of a civil war, Taiwan's relationship with China has oscillated between hostility and cooperation. Ties reached a high point in 2015 when Tsai's predecessor, Ma Ying-jeou, meet with Chinese President Xi Jinping in Singapore.
Relations have chilled since Tsai, whose Democratic Progressive Party has been skeptical of closer ties with China, took power in May 2016. Those tensions were punctuated by a 10-minute phone call she had with Trump after his election victory but before he took office.
While Lin's portfolio includes the economy, relations with China, the island's largest trading partner, are overseen by Tsai. In speaking about trade, Lin said he's not opposed to stronger ties with China and that he recognised trade with the mainland benefited Taiwan.
He added that Taiwan also wants to foster trade links with other nations, which would benefit its relationship with the mainland. Conversely, Chinese opposition to such links would hurt ties, he said.
When it comes to talent, many in China share Lin's view. Robin Li, the billionaire chief executive of China's most-used search engine Baidu Inc., proposed to the government in March that it create a better pathway for foreign nationals to obtain work and residence permits in China. Lin is moving on a similar idea.
Taiwan's Cabinet, which the 65-year old leads, passed a Bill last month that aims to ease visa and residency requirements for foreign professionals, along with improving insurance, pension and other benefits. The Bill must still be passed by parliament before it takes effect.
Tsai named Lin, a former finance minister, as premier last year soon after the economic platform he drafted helped lead her party to victory over the then ruling Kuomintang party.
As an independent who never joined a political party, it's not been an easy first year. Lin has already faced calls earlier this year to step down from lawmakers unhappy with his performance, according to the Taipei Times.
Since Taiwan's first democratic presidential election in 1996, the average tenure for a premier has been 17 months. Asked if he was concerned about being unable to see through his reform agenda, which includes a US$28.9 billion stimulus plan, Lin said he was not.
"The length of a politician's term can't be decided by one person alone," Lin said. "I don't want to waste time. I just want to get things done. If one day someone replaces me, I hope that person does this job better than me."