Taiwan's Southeast Asia focus augments — not replaces — investment in China: premier

Speaking at a breakfast with business leaders in Taipei, Lin said the "New Southbound Policy" ran in parallel with investment in China and was aimed at creating more robust economic linkages globally.

Citing existing engagement by Japan and South Korea in Southeast Asian, Lin said that Taiwan's efforts would require "people-based exchanges" that would create reliable networks and industrial product chains.

Pushing the southbound policy would therefore give businesses even more competitiveness globally, Lin said.

"Taiwan is facing the challenge of a slowing and declining global economy, which has created difficulties for exports. Companies have been trying to reduce costs either by shifting production elsewhere or keeping wages low, which has reduced employment prospects," he said.

The government would focus on several areas to help Taiwan meet the challenges of globalization, Lin said, citing increasing investment opportunities, bolstering global competitiveness, expanding domestic infrastructure investment and strengthening industrial cooperation to keep talent at home.

He said that since assuming power, the current administration had already put in place measures to increase the presence of innovative sectors while enlarging budget allocations to promote research cooperation between academia and industry.

Taiwan Semiconductor Manufacturing Co. Chairman Morris Chang, who attended Monday's breakfast, told reporters afterward that government efforts to invest in innovative sectors was important, but that the high demand for innovation and its limited supply were creating critical problems in the distribution of innovative talent.

He warned the government not to forsake older sectors such as semiconductors, and said that problems regarding land use and power supply needed to be handled proactively.