TAIPEI -- Taiwan plans to invest around 880 billion New Taiwanese dollars ($28.8 billion) in infrastructure over the next eight years, seeking to spur economic recovery by upgrading its rail transport, waterways, and digital industry facilities.
The move will further spur "Taiwan's competitiveness and modernization," Premier Lin Chuan told reporters Thursday, the day President Tsai Ing-wen's cabinet endorsed a proposed special budget including the plan. The measure could pass the legislature as early as May.
Around NT$424 billion -- or just under half of the total -- will go to rail projects, centered on a new light rail route connecting Taipei and the northern port city of Keelung, plus extended subway lines in Kaohsiung to the south. The plan lists 38 projects in all.
Some NT$250 billion will pour into anti-flood equipment for rivers and dams, as well as projects tied to stemming water shortages. A further NT$137 billion will go to improving urban infrastructure and roads. Heavier fortifications against earthquakes and other disasters will improve the investment environment for residences and businesses.
Taiwan's real gross domestic product grew 2.88% on the year for the October-December quarter, recovering from three quarters of contraction through January-March 2016. Yet information technology exports to China remain a major economic driver. Taipei intends the infrastructure package to not only spur growth, but help shift away from overreliance on China.
The plan also earmarks NT$46 billion for digital industry infrastructure, such as new data centers. Taiwan "can't fall behind" the likes of Japan, South Korea or Singapore in that area, said Lin. Such upgrades would benefit companies working in cloud services and artificial intelligence technology. Some NT$24.3 billion will also go to cultivating new energy industries such as solar and wind.
The Tsai administration's economic policies have so far centered on longer-term plans including strengthening ties with Southeast Asia. This package, however, "is pertinent to everyday life, with tangible benefits," says Fan Shih-ping, a professor at National Taiwan Normal University. Some also see the move as aimed at shoring up the government's image in advance of Tsai's first anniversary as president in May.