Su jianrong, head of Taiwan’s finance ministry, said in an interview with bloomberg that an informal alliance led by the us would provide an alternative to China’s One Belt And One Road initiative. He said the SIGNING of a memorandum of Understanding (MOU) ahead of the PRESIDENTIAL election to “establish a partnership structure between the United States and Taiwan on infrastructure financing and markets” would help Taiwanese companies go global, giving Both Washington and Taipei an opportunity to tackle China’s global infrastructure boom.
The bloomberg interview noted that China’s One Belt And One Road initiative relies heavily on loans from Beijing to the government, often involving state-owned enterprises. The MEMORANDUM of Understanding between the United States and Taiwan strongly emphasizes the involvement of private enterprises and the need to raise funds through the market. It also emphasizes that funds should be raised through the market, making funds highly transparent. The memorandum, signed in September, aims to raise funds through bonds issued to Taiwan’s Banks, insurers and other private capital. The U.S. and Taiwan have an opportunity to respond to concerns about Beijing’s commitment to international programs and deteriorating financial conditions in developing countries.
“One Belt And One Road is China’s lending to other governments, but the us framework is financed by private companies involved in the issuance, which is more transparent,” su said. As well as infrastructure co-operation, the US and Taiwan last week signed a memorandum of understanding to institutionalise annual economic dialogue for the next five years, subject to us party turnover.
David Malpass, President of the World Bank, urged the G20 in May to ensure greater transparency in government bond contracts, saying this was “the only way to balance the interests of people with those who sign debt and investment contracts”. Signing a memorandum of understanding with the U.S. would allow Taiwanese companies to go global, and institutions such as life insurance, which have ample capital, would have more access to capital, Su was quoted by Yahoo News as saying. Under this framework, Taiwan engineering companies will issue bonds locally to raise funds and reinvest in areas such as Southeast Asia and Latin America that need infrastructure and energy construction.
He adds: “The ability of Taiwanese life insurers and banking companies to buy bonds is also a way of solving the problem of abundant private capital. They may choose to develop projects of a profit-making nature, so that they can pay the principal and interest of the bonds. I believe that if Joe Biden, the democratic presidential candidate, becomes the new President of the United States, he will continue the INDO-Pacific strategy and maintain the basic structure of cooperation with Taiwan, but the timing may be different from that of the current President Donald Trump.”
In addition to signing the MOU with Taiwan, the United States has signed similar structures with 17 other countries, including Japan, South Korea, Argentina and Brazil, under which local private companies will partner with the FEDERAL Government’s U.S. International Development Finance Corporation (DFC) to provide infrastructure in some countries. The US company has also recently invested billions of dollars to assist small businesses and energy development in African and Latin American countries affected by coVID-19.
Mr Su said the US would work in a similar way with Taiwan and hoped to have its first case in one to two years. Taiwan is already on a broker’s honeymoon amid a bitter trade war between the US and China for global dominance. Taiwan’s exports to the two largest economies have continued to surge over the past year. ‘Taiwan’s exports to the U.S. are likely to continue to grow strongly in the future, and the trade war with China will not end there,’ he added. ‘Taiwan’s economy is expected to continue to benefit from Taiwanese companies’ investment back from China.’
The Taiwan Apple Daily quoted the general Accounting Office as forecasting in August that Taiwan’s economy would grow 1.56 percent this year and 3.92 percent in 2021. Mr Su concluded that Taiwan’s economic growth this year had exceeded expectations. The meeting also mentioned the hope to push forward the signing of double taxation with the United States. In the future, for example, TSMC will set up factories in the United States, or technology giants such as Google and Microsoft will invest in Taiwan, and the tax part can be dealt with to promote the cooperation between the United States and Taiwan. Taiwan’s stock market has also been hitting record highs recently, and he said he expects to collect more than T $30bn this year due to high turnover, which will make up for some of the income tax deferred due to the outbreak. He added that other income such as 5G permits would make up for other tax cuts, leaving Taiwan with a surplus.
Taiwan leader Tsai ing-wen, 25, attend the democratic progressive party (DPP) meeting in November, listed Taiwan currently has three big good foundations, first of all, is the overall stability of the economy and the growth rate in Taiwan is growth, moreover is Taiwan to democratic institutions and epidemic prevention successful international trust, finally has reaffirmed its support has become a mainstream public opinion in the United States, Taiwan and even has become an international trend.