Department of Economic Development 2018 Policy Achievements
1. Summary of Policy Achievements
Industry and Business Division
In an effort to boost industrial and commercial development, spur small- to medium-sized enterprise growth, and increase market competitiveness, the Department of Economic Development actively monitors Taipei City’s economy. The department publishes up-to-date information to businesses on the TaipeiEcon.taipei website and provides guidance for industries in the city.
Major policy achievements in 2018 include：
The 2018 Taipei International Design Award, which received 4,896 submissions from 71 countries, showcasing Taipei’s soft power on the international stage.
Taipei is ahead of the country in piloting the “Subsidies & Incentives for Industry Development” project, receiving 682 applications in total. The Department hosted 11 application review meetings and granted NTD$ 324,227,700 in subsidies to 227 businesses. The project has instilled renewed confidence in the capital investment market, contributed towards economic growth, encouraged innovative startups, and created numerous jobs in local communities.
The Department continues to encourage businesses and trade associations to participate in international trade exhibitions. In 2018, the Department approved subsidies amounting to NTD$ 15M for 36 trade associations and 295 businesses. These organizations presented their business ideas in major cities across Europe, the Americas, and Asia, looking to bring in approximately USD$ 212M in revenue and investment for the city.
The “Taipei to the World” program helps businesses in Taipei extend their market reach by building their online presence. The Department offers guidance to local businesses in connecting to the global market, developing a competitive edge, and reaching a wider audience.
The “Taipei City Industry Convergence and Business Matchmaking” project focuses on establishing an interdisciplinary cooperative platform for the sports industry in order to promote communication, resource integration, and value creation across business sectors.
The “StartUP@Taipei” office is in charge of the “Taipei City Innovation, Creation, and Startup Platform,” which is an initiative to provide assistance for small- to medium-sized enterprises, business entities, and nonprofits in cross-industry and cross-sector cooperation; including service innovation, startups, and vertical/horizontal integration. In 2018, four companies were granted a combined subsidy of NTD$ 2M. The platform not only improved the visibility of our industry innovation policies but also created a multitude of possibilities for cross-sector startups, offering a variety of job opportunities for interdisciplinary talent.
As part of the “Taipei City Subsidy for Participation in International Startup Competitions” program, the Department provided funding totaling NTD$ 3,999,834 to 21 startups enabling them to participate in international startup conventions (such as Web Summit, Echelon, Slush, and Tech in Asia) and well-known startup accelerators (including Plug and Play, Techstars Rakuten, Founders Space, and Alchemist). The ultimate goal is to position these startups in the global market and help them secure a loyal overseas client base, establish international business connections, and achieve stable growth.
Lastly, the “Business Incubator Project for Capital Investment and Idea Marketing” provided 2,794 instances of general consultation, 170 instances of individual counseling, and 11 instances of assisting innovative businesses and startups in completing their GISA registrations.
Public Utilities Division
In order to effectively manage and oversee the operation of natural gas, petroleum, and hot spring businesses and to promote carbon reduction and green energy across all business sectors, the Department of Economic Development has implemented the following measures: (a) Annual gas equipment inspection and maintenance: we inspected gas pipes alongside gas companies and replaced damaged pipes with new ones to ensure the safety of our citizens; (b) facility inspections at gas and petroleum stations to ensure a high quality service; (c) carbon emission reduction: promoting energy efficiency to lessen the impact of climate change; and (d) sustainable development: utilizing natural resources (such as hot springs and groundwater) in an sustainable manner to achieve maximum efficiency.
Major policy achievements of the Public Utilities Division in 2018 included: (a) In order to ensure the safety of transporting and storing natural gas and to prevent disasters, we formed a joint safety inspection task force, conducting 20 inspections on storing tank equipment of four natural gas companies in Taipei; (b) enforced inspections on barreled liquefied petroleum gas (LPG) to ensure that their weight is within the correct limits; (c) enforced inspections on the operation of gas and petroleum stations; (d) oversaw the energy conservation program (evaluation and inspections of compliance and awarding companies which excel in saving energy), saving 291,800,000 kWh of energy compared to the previous year; (e) Fuxing Hot Spring Foot Spa was utilized by thousands of people every day, and Sulfur Springs Valley Foot Spa and Quanyuan Hot Spring Foot Spa were utilized by 400 people on an average day – the three foot spas are important landmarks in Beitou District and part of its thriving hot spring industry, particularly Fuxing Foot Spa, which consistently attracts large groups of foreign tourists and wide media coverage; (f) monitored hot spring resources and imposed utilization limits so that hot springs won’t be exhausted due to overdevelopment; (g) contracted out the overall planning for Xingyi Road Hot Spring District, which will begin operation in the near future, with a view to developing the area in accordance with its geological features and building a sustainable hot spring recreational district.
Agricultural Development Division
To promote healthy and sustainable lifestyles (otherwise known as LOHAS), the Department has transformed traditional farming in the city into “high quality agriculture” through promoting organic farming, developing recreational agribusinesses, and marketing local produce. Major policy achievements in 2018 included: (a) developing quality agriculture by marketing local industries: we organized the “Calla Lily Festival,” that had an economic value exceeding NTD$ 105M (including $15M in sales of Calla Lilies & related products and $90M in recreational agribusiness revenue in the surrounding area); (b) promoting organic agriculture to protect consumers’ health: 44 farmers received organic certification, and we are expanding the “Food and Farming Education” program to more schools so as to promote environmental sustainability; (c) developing recreational agribusinesses to improve quality of life: we held 49 nationwide produce sales events, making a profit of NTD$ 160,520,000 for farmers in the city; (d) building a green city with “foodscaping”: edible landscaping was constructed at 18 locations, covering 10,760 m2, including 11 public vegetable gardens with a combined area of 5,349 m2.
Hi-Tech Promotion Center
The Hi-Tech Promotion Center is in charge of enhancing the city’s competitive advantage, driving the development of the biotech industry, encouraging innovative research, guiding small- to medium-sized enterprises in their transformation, building the “Great Taipei Hi-Tech Corridor” to achieve economies of scale and industrial symbiosis, attracting domestic and foreign investors, cultivating potential business opportunities, and spurring the overall economic development in the city.
Major policy achievements in 2018 included: (a) As of 2018, the Center has created business opportunities valued at USD$ 281M in total (USD$ 57.02M in 2018 alone); (b) as of year-end 2017, Neihu Technology Park and Nankang Software Park house 4,601 and 346 companies respectively, and the Center is currently planning a third science park located in the Beitou and Shilin Districts; (c) at the 2018 Taipei Biotech Awards 13 outstanding biotech companies and research institutions were awarded a combined prize of NTD$ 6M for setting an excellent example in the biotech industry; (d) the Center approved 3,296 applications for “small- to medium-sized enterprise loans” and “young entrepreneur loans” in 2018, amounting to NTD$ 2,759.72M.
2. Governance Overview by Division
Industry and Business Division
Overview of Taipei City’s economic and industrial development
The first half of the 2018 saw the global economy rise out of its stagnation and begin to expand. The U.S. demonstrated exceptional growth, particularly in the job market. Europe and major countries such as Japan and China also experienced stable, albeit slow, economic growth. However, the US–China trade war erupted in the latter half the year, significantly hammering the global supply chain and risk financing. Economists are concerned with China’s economic performance and some worry that it might cause a ripple effect on Europe and emerging economies. In response, IHS Markit and IMF estimated the annual global economic growth in 2018 at 3.2% and 3.7% respectively while both revised down their forecasts for 2019.
Amidst market pessimism for 2019 due to the Fed’s rate hikes and the US-China trade war, the global market is expected to see even greater turmoil than last year. Currency depreciation and rising prices are threatening the manufacturing and agriculture industries in emerging economies. Various market risk factors point to a potential recession in 2020 or the latter half of 2019, and the global economy might not recover in the foreseeable future. In terms of annual economic growth in 2019, IHS Markit and IMF forecast a 3.0% and 3.7% respectively.
Source: IHS Markit World Overview (Dec. 18th, 2018); IMF (Oct. 8th, 2018)
The trend in the global economy also has an impact on the domestic economy. Retail, food services, and the labor market remained stable in the second half of 2018 while average income saw a slight increase. However, market expansion has shown signs of slowing down and investment prospects have dwindled. According to the Directorate General of Budget, Accounting and Statistics (DGBAS) of the Executive Yuan, the annual domestic economic growth in 2018 was 2.66%. Looking into 2019, international relations continue to play an important role in Taiwan’s economy. Taking into account factors such as tax reduction in the US, diminishing demand in the Chinese market, and the adverse effects of the ongoing trade war, economic growth remains slow. IHS Markit, IMF, and the DGBAS forecast Taiwan’s economic growth in 2019 to be 2.2%, 2.4%, and 2.41% respectively, all down slightly from 2018.
Taipei City is the political, commercial, financial, and cultural center of Taiwan, assuming an important role in the country’s economic development. The city’s industry consists chiefly of the tertiary sector (the service industry), followed by the secondary sector (manufacturing), with the primary sector (agriculture, forestry, fishing, and hunting) accounting for only a small portion overall. As of year-end 2018, the number of companies registered in the city was 237,523, up 1,776 (0.8%) from 2017 (235,747 entities), including 179,050 (75.4%) in the tertiary sector, 55,748 (23.4%) in the secondary sector, and 2,995 (1.3%) in the primary sector. The top 3 industries in the city are wholesale/retail at 65,161 (27.43%), followed by manufacturing at 30,393 (12.80%) and science or professional/technical services at 28,490 (11.99%).
In terms of sales volume, businesses in the city reaped NTD$10.4878 trillion in sales during the first 10 months of 2018, up an impressive 7.04% from the same period in 2017 ($9.7982 trillion), with the tertiary sector leading at $8.5293 trillion (81.33%), the secondary sector at $1.9468 trillion, and the primary sector at $11.696 billion. The top 3 industries by sales volume are wholesale/retail at $4.6972 trillion, financial and insurance services at $1.4438 trillion, and manufacturing at $1.3152 trillion.
In response to the rapidly changing global economy and structure of domestic industry, the Department of Economic Development’s governance centers on the following four policies: supporting innovation, strengthening capital investment, revitalizing commercial districts, and guiding industry transformation. In supporting innovation, the Department is responsible for bolstering a innovation-friendly economy, providing capital funds to entrepreneurs, supporting startup incubators, consolidating resources in the private sector, encouraging business innovation, and encouraging startups to invigorate the economy. In strengthening capital investment, the Department runs the Invest Taipei Office (ITO), offering a streamlined investment process; other projects include Neihu Technology Park 2.0, Nankang Biotech Industry Cluster, and Beitou–Shilin Science Park, all of which are expected to attract massive capital investment from all over the world. In revitalizing commercial districts, the Department is focused on promoting smart payment services and e-commerce, differentiating existing commercial districts, strengthening the brand image of local businesses, and brining shoppers to the stores. In guiding industry transformation, the Department helps traditional industries build international e-commerce platforms to reach overseas markets and organizes theme-based trade exhibitions (gaming competitions, startup conventions, handicraft expos) to drive growth in periphery industries. The department hopes that through these core policies will aid the city’s economy and produce continuing growth and prosperity.
Public Utilities Division
The public utilities sector refers to companies that provide basic amenities and services that are necessary in people’s everyday lives, such as electricity, gas, and water. The Department of Economic Development oversees the operation of electricity, natural gas, petroleum, and hot spring businesses. Its responsibilities include natural gas business management, plumbing and electrical contractor registration and licensing, petroleum business registration and oversight, groundwater rights registration, hot spring resource management, promoting the reduction of carbon emissions, and the development of renewable energy. Among the wide range of responsibilities, oversight of electricity and natural gas companies is the closest to citizens’ daily living. In accordance with the central government’s energy policies, the primary providers of electricity and petroleum are both state-owned corporations – Taiwan Power Company (TaiPower) and Chinese Petroleum Corporation (CPC) respectively. Natural gas services, on the other hand, are run by four private operators: Great Taipei Gas, Shin Shin Natural Gas, Shin-Hu Natural Gas, and Yangmingshan Gas. In order to maintain our citizens’ quality of life, the Department conducts regular inspections of gas/petroleum storage and transportation equipment to ensure the safety of gas and petroleum stations. We also have a centralized monitoring system in place to coordinate the operation of the four natural gas companies, ensure uninterrupted gas supply, enforce periodic disaster response drills, inspect gas storage and transportation equipment, conduct frequent gas pipe inspection, and replace old and damaged pipes, ensuring that every household has access to a safe and convenient gas service.
Taipei City signed the Urban Environmental Accords in Los Angeles on June 5th, 2005 along with 50 other cities. In order to fulfil our responsibilities, as stipulated in the agreement, and achieve Mayor Ko’s vision of a “sustainable green city,” the Department has drafted a variety of energy conservation regulations and plans. With the help of businesses in the city, the Department is running a carbon reduction campaign to promote renewable energy, increase energy efficiency, and ultimately minimize the impact of climate change on the environment and the ecosystem. With regards to hot spring and groundwater sustainability, the Department carried out a citywide hot spring resource survey and conducted detailed inspections at four major hot spring districts in the city. Items on the inspection list include pipeline equipment, water supply and usage, land use, industrial ecology, and resource consolidation. According to the “Guidelines Governing the Management of Hot Spring Districts in Taipei City,” the results of the analysis will inform the direction of any future development of the hot spring recreational districts in the city. This in turn will promote environmental protection and sustainability, aid in the diversification of hot spring-related tourism products, help improve the landscape of hot spring districts, cultivate industry specialities, and revitalize the economy in hot spring districts. In addition, the Department also serves as the governing hot spring enterprise at the Chungshan Hall Hot Spring District, providing guidance to hot spring businesses in the area while making every effort to protect the environment in pursuit of sustainability. The specific policy achievements of the Public Utilities Division are itemized below:
Governance of natural gas business and plumbing/electrical contractor registration
1. Assist gas companies in safety management and overall operations
(1) Natural gas for every household
(i) The city’s natural gas is sourced from the state-owned CPC Corporation and supplied to end users through the pipeline system installed by four private natural gas companies (The Great Taipei Gas Corporation, Yangmingshan Gas Co., Ltd., Shin-Hu Natural Gas Co., Ltd., and Shin Shin Natural Gas Co., Ltd.). The area of operation of each gas company is illustrated in the map below:
(ii) Joint natural gas safety inspection task force:
In order to ensure the safety of transporting and storing natural gas, so as to prevent disasters, the Taipei City Government established a joint safety inspection task force on June 6th, 2018. The Department of Economic Development invited experts from various fields to conduct 20 safety inspections on the four gas companies’ natural gas storage and transportation equipment throughout the city between June 6th and August 30th. The task force consists of government officials from the fire department, public works department (new construction office), labor department (labor inspection office), and environmental protection department of Taipei City, along with experts in piping, occupational safety, and workplace EHS. Inspection results have been forwarded to the four natural gas operators, who must improve any inadequacies by the stated deadline. The Department of Economic Development will continue to keep track of the program’s progress.
The unfortunate gas explosion in Kaohsiung City on July 31st, 2014 and its aftermath are still fresh in the memory of the citizens of Taiwan. To prevent similar disasters form occurring in the future the Taipei City Government now requires the four natural gas companies to conduct an annual “joint natural gas disaster response drill.” This year’s drill took place on December 25th, 2018, at No. 9-1, Aly. 456, Sec. 2, Chenggong Rd., Neihu District. Activities practiced during the drill include an emergency shut-off valve demonstration, gas leak response measures, and gas tank explosion prevention and mitigation measures. These drills allow gas companies and the fire department to stay up to date with the current disaster prevention measures and drastically reduce the response time in the event of an actual gas explosion.
(iv) Free end-user pipeline inspection:
To protect citizen’s lives and property, natural gas operators are required to conduct biennial end user pipeline inspections free of charge and assist the government in its effort to promote carbon monoxide awareness. Furthermore, the Department of Economic Development appoints specifically trained agents to conduct joint gas safety inspections alongside natural gas operators at citizens’ houses during the winter – the peak season of natural gas usage. In December 2018 and January 2019 we inspected 1,682 households, and those who failed the inspection were immediately issued an improvement notice. The Department has instructed the four natural gas operators to keep track of these households and make sure that users are aware of the safety issues and take prompt action to address any issues in order to protect their own safety and that of the general public.
2. Inspections on barreled liquefied petroleum gas (LPG)
Safeguarding the interest of consumers is an important responsibility of the Department of Economic Development. As such, we have teamed up with the fire department and the labor inspection office to conduct unannounced surprise inspections on 88 LGP distributors and 3 LPG plants in the city. 1,049 barrels of LPG were inspected, and 9 were found to be in violation of LPG weight restrictions. Fines were issued to violators, all of which passed the follow-up inspection. See the table below for more information.
3. Management of gas/petroleum station registration
(1) Overview of gas/petroleum station in Taipei City
Pursuant to the “Guidelines Governing the Establishment and Management of Gas/Petroleum Stations,” any gas/petroleum stations in the city must be registered with the city government. As of the end of 2018, there are 75 petroleum stations (38 state-owned and 37 privately owned) and 6 gas stations (3 state-owned and 3 privately owned). See the map below for more details:
(2) Gas station safety management
To strengthen the oversight of gas stations in the city, we continue to enforce safety compliance inspections. In accordance with relevant regulations, gas stations must install the following signage: warning messages that read “no smoking” and “refuel with your engine off,” direction signs at entrances and exits, vehicle height limits on the roof, clear markings for the petroleum offloading and storage areas, and obvious signage that states the company name, station name, business hours, types of petroleum sold, and pricing information. In addition, they must also perform regular self-inspections on petroleum equipment and verify that the premise is covered by public accident liability insurance. In 2018, Ninety-four petroleum stations, 15 gas stations and 19 private storage tanks were inspected. The majority of operators were in compliance with these regulations, and those in violation passed the follow-up inspection.
1. Summary of Policy Achievements
Industry and Business Division
In an effort to boost industrial and commercial development, spur small- to medium-sized enterprise growth, and increase market competitiveness, the Department of Economic Development actively monitors Taipei City’s economy. The department publishes up-to-date information to businesses on the TaipeiEcon.taipei website and provides guidance for industries in the city.
Major policy achievements in 2018 include：
The 2018 Taipei International Design Award, which received 4,896 submissions from 71 countries, showcasing Taipei’s soft power on the international stage.
Taipei is ahead of the country in piloting the “Subsidies & Incentives for Industry Development” project, receiving 682 applications in total. The Department hosted 11 application review meetings and granted NTD$ 324,227,700 in subsidies to 227 businesses. The project has instilled renewed confidence in the capital investment market, contributed towards economic growth, encouraged innovative startups, and created numerous jobs in local communities.
The Department continues to encourage businesses and trade associations to participate in international trade exhibitions. In 2018, the Department approved subsidies amounting to NTD$ 15M for 36 trade associations and 295 businesses. These organizations presented their business ideas in major cities across Europe, the Americas, and Asia, looking to bring in approximately USD$ 212M in revenue and investment for the city.
The “Taipei to the World” program helps businesses in Taipei extend their market reach by building their online presence. The Department offers guidance to local businesses in connecting to the global market, developing a competitive edge, and reaching a wider audience.
The “Taipei City Industry Convergence and Business Matchmaking” project focuses on establishing an interdisciplinary cooperative platform for the sports industry in order to promote communication, resource integration, and value creation across business sectors.
The “StartUP@Taipei” office is in charge of the “Taipei City Innovation, Creation, and Startup Platform,” which is an initiative to provide assistance for small- to medium-sized enterprises, business entities, and nonprofits in cross-industry and cross-sector cooperation; including service innovation, startups, and vertical/horizontal integration. In 2018, four companies were granted a combined subsidy of NTD$ 2M. The platform not only improved the visibility of our industry innovation policies but also created a multitude of possibilities for cross-sector startups, offering a variety of job opportunities for interdisciplinary talent.
As part of the “Taipei City Subsidy for Participation in International Startup Competitions” program, the Department provided funding totaling NTD$ 3,999,834 to 21 startups enabling them to participate in international startup conventions (such as Web Summit, Echelon, Slush, and Tech in Asia) and well-known startup accelerators (including Plug and Play, Techstars Rakuten, Founders Space, and Alchemist). The ultimate goal is to position these startups in the global market and help them secure a loyal overseas client base, establish international business connections, and achieve stable growth.
Lastly, the “Business Incubator Project for Capital Investment and Idea Marketing” provided 2,794 instances of general consultation, 170 instances of individual counseling, and 11 instances of assisting innovative businesses and startups in completing their GISA registrations.
Public Utilities Division
In order to effectively manage and oversee the operation of natural gas, petroleum, and hot spring businesses and to promote carbon reduction and green energy across all business sectors, the Department of Economic Development has implemented the following measures: (a) Annual gas equipment inspection and maintenance: we inspected gas pipes alongside gas companies and replaced damaged pipes with new ones to ensure the safety of our citizens; (b) facility inspections at gas and petroleum stations to ensure a high quality service; (c) carbon emission reduction: promoting energy efficiency to lessen the impact of climate change; and (d) sustainable development: utilizing natural resources (such as hot springs and groundwater) in an sustainable manner to achieve maximum efficiency.
Major policy achievements of the Public Utilities Division in 2018 included: (a) In order to ensure the safety of transporting and storing natural gas and to prevent disasters, we formed a joint safety inspection task force, conducting 20 inspections on storing tank equipment of four natural gas companies in Taipei; (b) enforced inspections on barreled liquefied petroleum gas (LPG) to ensure that their weight is within the correct limits; (c) enforced inspections on the operation of gas and petroleum stations; (d) oversaw the energy conservation program (evaluation and inspections of compliance and awarding companies which excel in saving energy), saving 291,800,000 kWh of energy compared to the previous year; (e) Fuxing Hot Spring Foot Spa was utilized by thousands of people every day, and Sulfur Springs Valley Foot Spa and Quanyuan Hot Spring Foot Spa were utilized by 400 people on an average day – the three foot spas are important landmarks in Beitou District and part of its thriving hot spring industry, particularly Fuxing Foot Spa, which consistently attracts large groups of foreign tourists and wide media coverage; (f) monitored hot spring resources and imposed utilization limits so that hot springs won’t be exhausted due to overdevelopment; (g) contracted out the overall planning for Xingyi Road Hot Spring District, which will begin operation in the near future, with a view to developing the area in accordance with its geological features and building a sustainable hot spring recreational district.
Agricultural Development Division
To promote healthy and sustainable lifestyles (otherwise known as LOHAS), the Department has transformed traditional farming in the city into “high quality agriculture” through promoting organic farming, developing recreational agribusinesses, and marketing local produce. Major policy achievements in 2018 included: (a) developing quality agriculture by marketing local industries: we organized the “Calla Lily Festival,” that had an economic value exceeding NTD$ 105M (including $15M in sales of Calla Lilies & related products and $90M in recreational agribusiness revenue in the surrounding area); (b) promoting organic agriculture to protect consumers’ health: 44 farmers received organic certification, and we are expanding the “Food and Farming Education” program to more schools so as to promote environmental sustainability; (c) developing recreational agribusinesses to improve quality of life: we held 49 nationwide produce sales events, making a profit of NTD$ 160,520,000 for farmers in the city; (d) building a green city with “foodscaping”: edible landscaping was constructed at 18 locations, covering 10,760 m2, including 11 public vegetable gardens with a combined area of 5,349 m2.
Hi-Tech Promotion Center
The Hi-Tech Promotion Center is in charge of enhancing the city’s competitive advantage, driving the development of the biotech industry, encouraging innovative research, guiding small- to medium-sized enterprises in their transformation, building the “Great Taipei Hi-Tech Corridor” to achieve economies of scale and industrial symbiosis, attracting domestic and foreign investors, cultivating potential business opportunities, and spurring the overall economic development in the city.
Major policy achievements in 2018 included: (a) As of 2018, the Center has created business opportunities valued at USD$ 281M in total (USD$ 57.02M in 2018 alone); (b) as of year-end 2017, Neihu Technology Park and Nankang Software Park house 4,601 and 346 companies respectively, and the Center is currently planning a third science park located in the Beitou and Shilin Districts; (c) at the 2018 Taipei Biotech Awards 13 outstanding biotech companies and research institutions were awarded a combined prize of NTD$ 6M for setting an excellent example in the biotech industry; (d) the Center approved 3,296 applications for “small- to medium-sized enterprise loans” and “young entrepreneur loans” in 2018, amounting to NTD$ 2,759.72M.
2. Governance Overview by Division
Industry and Business Division
Overview of Taipei City’s economic and industrial development
The first half of the 2018 saw the global economy rise out of its stagnation and begin to expand. The U.S. demonstrated exceptional growth, particularly in the job market. Europe and major countries such as Japan and China also experienced stable, albeit slow, economic growth. However, the US–China trade war erupted in the latter half the year, significantly hammering the global supply chain and risk financing. Economists are concerned with China’s economic performance and some worry that it might cause a ripple effect on Europe and emerging economies. In response, IHS Markit and IMF estimated the annual global economic growth in 2018 at 3.2% and 3.7% respectively while both revised down their forecasts for 2019.
Amidst market pessimism for 2019 due to the Fed’s rate hikes and the US-China trade war, the global market is expected to see even greater turmoil than last year. Currency depreciation and rising prices are threatening the manufacturing and agriculture industries in emerging economies. Various market risk factors point to a potential recession in 2020 or the latter half of 2019, and the global economy might not recover in the foreseeable future. In terms of annual economic growth in 2019, IHS Markit and IMF forecast a 3.0% and 3.7% respectively.
| Region | Published by | 2015 | 2016 | 2017 | 2018 | 2019 |
|---|---|---|---|---|---|---|
| World | IHS Markit | 2.7 | 2.5 | 3.3 | 3.2 | 3.0 |
| IMF | 3.1 | 3.4 | 3.8 | 3.7 | 3.7 |
Source: IHS Markit World Overview (Dec. 18th, 2018); IMF (Oct. 8th, 2018)
The trend in the global economy also has an impact on the domestic economy. Retail, food services, and the labor market remained stable in the second half of 2018 while average income saw a slight increase. However, market expansion has shown signs of slowing down and investment prospects have dwindled. According to the Directorate General of Budget, Accounting and Statistics (DGBAS) of the Executive Yuan, the annual domestic economic growth in 2018 was 2.66%. Looking into 2019, international relations continue to play an important role in Taiwan’s economy. Taking into account factors such as tax reduction in the US, diminishing demand in the Chinese market, and the adverse effects of the ongoing trade war, economic growth remains slow. IHS Markit, IMF, and the DGBAS forecast Taiwan’s economic growth in 2019 to be 2.2%, 2.4%, and 2.41% respectively, all down slightly from 2018.
| Year | 2015 | 2016 | 2017 | 2018 | 2019 |
|---|---|---|---|---|---|
| Economic growth (%) | 0.81 | 1.41 | 3.08 | 2.66 (2.69) | 2.41 (2.55) |
Source: Directorate General of Budget, Accounting and Statistics (November 30th, 2018)
Note: Numbers in parentheses are forecasts from previous years.
Taipei City is the political, commercial, financial, and cultural center of Taiwan, assuming an important role in the country’s economic development. The city’s industry consists chiefly of the tertiary sector (the service industry), followed by the secondary sector (manufacturing), with the primary sector (agriculture, forestry, fishing, and hunting) accounting for only a small portion overall. As of year-end 2018, the number of companies registered in the city was 237,523, up 1,776 (0.8%) from 2017 (235,747 entities), including 179,050 (75.4%) in the tertiary sector, 55,748 (23.4%) in the secondary sector, and 2,995 (1.3%) in the primary sector. The top 3 industries in the city are wholesale/retail at 65,161 (27.43%), followed by manufacturing at 30,393 (12.80%) and science or professional/technical services at 28,490 (11.99%).
| Companies | Proportion | Top 3 Industries | |
|---|---|---|---|
| Primary | 2,995 | 1.3% |
|
| Secondary | 55,478 | 23.4% | |
| Tertiary | 179,050 | 75.4% | |
| Total | 237,523 | 100.00% |
Source: Taipei City Office of Commerce)
In terms of sales volume, businesses in the city reaped NTD$10.4878 trillion in sales during the first 10 months of 2018, up an impressive 7.04% from the same period in 2017 ($9.7982 trillion), with the tertiary sector leading at $8.5293 trillion (81.33%), the secondary sector at $1.9468 trillion, and the primary sector at $11.696 billion. The top 3 industries by sales volume are wholesale/retail at $4.6972 trillion, financial and insurance services at $1.4438 trillion, and manufacturing at $1.3152 trillion.
| Sales (in trillions) | Proportion | Top 3 Industries | |
|---|---|---|---|
| Primary | 0.011696 | 0.11% |
|
| Secondary | 1.9468 | 18.56% | |
| Tertiary | 8.5293 | 81.33% | |
| Total | 10.4878 | 100.00% |
Source: The Department of Statistics, the Ministry of Finance (January–October 2018)
In response to the rapidly changing global economy and structure of domestic industry, the Department of Economic Development’s governance centers on the following four policies: supporting innovation, strengthening capital investment, revitalizing commercial districts, and guiding industry transformation. In supporting innovation, the Department is responsible for bolstering a innovation-friendly economy, providing capital funds to entrepreneurs, supporting startup incubators, consolidating resources in the private sector, encouraging business innovation, and encouraging startups to invigorate the economy. In strengthening capital investment, the Department runs the Invest Taipei Office (ITO), offering a streamlined investment process; other projects include Neihu Technology Park 2.0, Nankang Biotech Industry Cluster, and Beitou–Shilin Science Park, all of which are expected to attract massive capital investment from all over the world. In revitalizing commercial districts, the Department is focused on promoting smart payment services and e-commerce, differentiating existing commercial districts, strengthening the brand image of local businesses, and brining shoppers to the stores. In guiding industry transformation, the Department helps traditional industries build international e-commerce platforms to reach overseas markets and organizes theme-based trade exhibitions (gaming competitions, startup conventions, handicraft expos) to drive growth in periphery industries. The department hopes that through these core policies will aid the city’s economy and produce continuing growth and prosperity.
Public Utilities Division
The public utilities sector refers to companies that provide basic amenities and services that are necessary in people’s everyday lives, such as electricity, gas, and water. The Department of Economic Development oversees the operation of electricity, natural gas, petroleum, and hot spring businesses. Its responsibilities include natural gas business management, plumbing and electrical contractor registration and licensing, petroleum business registration and oversight, groundwater rights registration, hot spring resource management, promoting the reduction of carbon emissions, and the development of renewable energy. Among the wide range of responsibilities, oversight of electricity and natural gas companies is the closest to citizens’ daily living. In accordance with the central government’s energy policies, the primary providers of electricity and petroleum are both state-owned corporations – Taiwan Power Company (TaiPower) and Chinese Petroleum Corporation (CPC) respectively. Natural gas services, on the other hand, are run by four private operators: Great Taipei Gas, Shin Shin Natural Gas, Shin-Hu Natural Gas, and Yangmingshan Gas. In order to maintain our citizens’ quality of life, the Department conducts regular inspections of gas/petroleum storage and transportation equipment to ensure the safety of gas and petroleum stations. We also have a centralized monitoring system in place to coordinate the operation of the four natural gas companies, ensure uninterrupted gas supply, enforce periodic disaster response drills, inspect gas storage and transportation equipment, conduct frequent gas pipe inspection, and replace old and damaged pipes, ensuring that every household has access to a safe and convenient gas service.
Taipei City signed the Urban Environmental Accords in Los Angeles on June 5th, 2005 along with 50 other cities. In order to fulfil our responsibilities, as stipulated in the agreement, and achieve Mayor Ko’s vision of a “sustainable green city,” the Department has drafted a variety of energy conservation regulations and plans. With the help of businesses in the city, the Department is running a carbon reduction campaign to promote renewable energy, increase energy efficiency, and ultimately minimize the impact of climate change on the environment and the ecosystem. With regards to hot spring and groundwater sustainability, the Department carried out a citywide hot spring resource survey and conducted detailed inspections at four major hot spring districts in the city. Items on the inspection list include pipeline equipment, water supply and usage, land use, industrial ecology, and resource consolidation. According to the “Guidelines Governing the Management of Hot Spring Districts in Taipei City,” the results of the analysis will inform the direction of any future development of the hot spring recreational districts in the city. This in turn will promote environmental protection and sustainability, aid in the diversification of hot spring-related tourism products, help improve the landscape of hot spring districts, cultivate industry specialities, and revitalize the economy in hot spring districts. In addition, the Department also serves as the governing hot spring enterprise at the Chungshan Hall Hot Spring District, providing guidance to hot spring businesses in the area while making every effort to protect the environment in pursuit of sustainability. The specific policy achievements of the Public Utilities Division are itemized below:
Governance of natural gas business and plumbing/electrical contractor registration
1. Assist gas companies in safety management and overall operations
(1) Natural gas for every household
(i) The city’s natural gas is sourced from the state-owned CPC Corporation and supplied to end users through the pipeline system installed by four private natural gas companies (The Great Taipei Gas Corporation, Yangmingshan Gas Co., Ltd., Shin-Hu Natural Gas Co., Ltd., and Shin Shin Natural Gas Co., Ltd.). The area of operation of each gas company is illustrated in the map below:
Taipei City’s Natural Gas Adoption Rate by Provider in 2018
| Item Provider | Total Households | Households with Natural Gas | Adoption Rate |
|---|---|---|---|
| Great Taipei | 593,149 | 391,790 | 66.05% |
| Yangmingshan | 200,319 | 119,934 | 59.87% |
| Shin Shin | 106,640 | 68,405 | 64.15% |
| Shin-Hu | 156,125 | 108,313 | 69.38% |
| Total | 1,056,233 | 688,442 | 65.18% |
| Natural Gas Pipeline Inspection Coverage up to 2018 | |
| Year | Coverage |
|---|---|
| (2015) | 117% |
| (2016) | 238% |
| (2017) | 200% |
| (2018) | 209% |
(ii) Joint natural gas safety inspection task force:
In order to ensure the safety of transporting and storing natural gas, so as to prevent disasters, the Taipei City Government established a joint safety inspection task force on June 6th, 2018. The Department of Economic Development invited experts from various fields to conduct 20 safety inspections on the four gas companies’ natural gas storage and transportation equipment throughout the city between June 6th and August 30th. The task force consists of government officials from the fire department, public works department (new construction office), labor department (labor inspection office), and environmental protection department of Taipei City, along with experts in piping, occupational safety, and workplace EHS. Inspection results have been forwarded to the four natural gas operators, who must improve any inadequacies by the stated deadline. The Department of Economic Development will continue to keep track of the program’s progress.
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The joint safety task force inspecting gas equipment
(iii) Joint natural gas disaster response drill:The unfortunate gas explosion in Kaohsiung City on July 31st, 2014 and its aftermath are still fresh in the memory of the citizens of Taiwan. To prevent similar disasters form occurring in the future the Taipei City Government now requires the four natural gas companies to conduct an annual “joint natural gas disaster response drill.” This year’s drill took place on December 25th, 2018, at No. 9-1, Aly. 456, Sec. 2, Chenggong Rd., Neihu District. Activities practiced during the drill include an emergency shut-off valve demonstration, gas leak response measures, and gas tank explosion prevention and mitigation measures. These drills allow gas companies and the fire department to stay up to date with the current disaster prevention measures and drastically reduce the response time in the event of an actual gas explosion.
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Joint natural gas disaster response drill
(iv) Free end-user pipeline inspection:
To protect citizen’s lives and property, natural gas operators are required to conduct biennial end user pipeline inspections free of charge and assist the government in its effort to promote carbon monoxide awareness. Furthermore, the Department of Economic Development appoints specifically trained agents to conduct joint gas safety inspections alongside natural gas operators at citizens’ houses during the winter – the peak season of natural gas usage. In December 2018 and January 2019 we inspected 1,682 households, and those who failed the inspection were immediately issued an improvement notice. The Department has instructed the four natural gas operators to keep track of these households and make sure that users are aware of the safety issues and take prompt action to address any issues in order to protect their own safety and that of the general public.
2. Inspections on barreled liquefied petroleum gas (LPG)
Safeguarding the interest of consumers is an important responsibility of the Department of Economic Development. As such, we have teamed up with the fire department and the labor inspection office to conduct unannounced surprise inspections on 88 LGP distributors and 3 LPG plants in the city. 1,049 barrels of LPG were inspected, and 9 were found to be in violation of LPG weight restrictions. Fines were issued to violators, all of which passed the follow-up inspection. See the table below for more information.
| Inspection on Barreled LPG in 2018 | ||
|---|---|---|
| Sample size | Within weight limits | Violating weight limits |
| 1,049 | 1,040 | 9 |
| 99.14% | 0.86% | |
3. Management of gas/petroleum station registration
(1) Overview of gas/petroleum station in Taipei City
Pursuant to the “Guidelines Governing the Establishment and Management of Gas/Petroleum Stations,” any gas/petroleum stations in the city must be registered with the city government. As of the end of 2018, there are 75 petroleum stations (38 state-owned and 37 privately owned) and 6 gas stations (3 state-owned and 3 privately owned). See the map below for more details:
(2) Gas station safety management
To strengthen the oversight of gas stations in the city, we continue to enforce safety compliance inspections. In accordance with relevant regulations, gas stations must install the following signage: warning messages that read “no smoking” and “refuel with your engine off,” direction signs at entrances and exits, vehicle height limits on the roof, clear markings for the petroleum offloading and storage areas, and obvious signage that states the company name, station name, business hours, types of petroleum sold, and pricing information. In addition, they must also perform regular self-inspections on petroleum equipment and verify that the premise is covered by public accident liability insurance. In 2018, Ninety-four petroleum stations, 15 gas stations and 19 private storage tanks were inspected. The majority of operators were in compliance with these regulations, and those in violation passed the follow-up inspection.
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| Gas stations must install obvious signage that states the company name, station name, business hours, types of petroleum (gas) sold, and their prices. | Gas stations must put up clear warning signs in obvious places. |
(i) Identifying black market petroleum providers
Black market petroleum providers are unregistered petrol stations that usually disguise as carwashes in remote areas. Some criminals even sell petroleum on the go, using minivans as storage tanks. Petroleum sold at these premises is often mixed with white spirits that can cause serious damage to car engines and thus increases the risk of traffic accidents. For years, the Department of Economic Development has been cracking down on the sale of illegal petroleum. In 2018, the Department appointed 312 agents to the task but did not find any unregistered providers, marking the 7th consecutive year in which no illegal petroleum sellers were identified.
(ii) Rewards for reporting black market petroleum providers
The department makes every effort to protect law abiding citizens and punish those who break the law, with the aim of eradicating all unregistered petroleum stations. Citizens are encouraged to report any such stations by calling the (02)2725-6611 hotline. On top of the NTD$ 70,000 reward set forth in the “Guidelines Governing the Rewards for Reporting Illegal Petroleum Stations” promulgated by the Ministry of Economic Affairs, the Taipei City Government has announced the “Directions Governing the Rewards for Reporting Illegal Petroleum Stations in Taipei City,” giving citizens an additional reward of up to NT$ 70,000 for reporting illegal petroleum sales.
4. Plumber, electrical technician, and contractor registration
(i) In accordance with the “Rules Governing Electric Appliance Contractors,” “Rules Governing Water Pipe Contractors,” “Rules Governing Electrical Technicians,” “Rules Governing Electrical Equipment Inspection and Maintenance,” and other applicable regulations, the Department enforces stringent registration and management procedures to ensure the quality of plumbing/electrical services and protect the safety of citizens and their property.
(ii) In 2018, the Department received 1,532 applications for contractor registration, bringing in NTD$ 1,124,600 in processing fee for the government (compared to 2,067 applications and NTD$ 2,306,200 in 2017).
| Number of Contractor Registration Applications | ||||
|---|---|---|---|---|
| Year Type | (2016) | (2017) | (2018) | 2018 vs. 2017 |
| Electrical contractors | 316 | 710 | 339 | -371 |
| Water pipe contractors | 269 | 457 | 247 | -210 |
| Gas pipe contractors | 40 | 36 | 10 | -26 |
| Electricians | 20 | 19 | 7 | -12 |
| Electrical technicians | 913 | 1015 | 926 | -89 |
| Generator technicians | 2 | 0 | 0 | – |
| Groundwater technicians | 2 | 6 | 3 | -3 |
Agricultural Development Division
8,773 households and 30,320 citizens are registered as farmers in Taipei. With a combined 3,220.58 hectare of farmlands, farming businesses are mainly located on hillsides in the northern and southern parts of the city. To the north, in Beitou and Shilin, farmers grow fruits, vegetables, and flowers; to the south, in Nankang and Wenshan, bamboo and tea plantations can be found. The city’s main crops are vegetables, rice, tea, and fruits (in order of volume).
The Department continues to search for innovative ways to increase the competitiveness of Taipei’s agriculture industry in the wake of globalization and trade liberalization. With LOHAS (lifestyles of health and sustainability) as the city’s guiding policy, we are encouraging organic farming, developing recreational agribusinesses, marketing local produce to a wider customer base, and transforming traditional farming into “high quality agriculture” with the launch of the “Action Plan to Revitalize the Agriculture Business.” We work closely with 10 regional farmers’ association in the city to protect farmers’ livelihood and increase crop yields. Moreover, we provide guidance for Chi-Sing and Liugong Irrigation Associations to improve the irrigation system, strengthen agricultural productivity, increase the quality of produce, and implement farmland management. Finally, we are encouraging the development of recreational agriculture that features ‘small-town charm’, with a focus on calla lilies, teas, Chinese yams, bamboos, and other cash crops.
In summary, the Department aims to achieve the vision of “sustainable farming, LOHAS Taipei” by revitalizing the agriculture industry, transforming traditional farming into high quality agriculture, developing recreational agribusinesses, safeguarding consumers’ rights, utilizing natural resources in a sustainable fashion, boosting the city’s competitive advantages, and creating additional value for its economy.
Hi-Tech Promotion Center
Situated right at the heart of the Asia-Pacific region, Taipei – the political and economic center of Taiwan – is a city of diverse industries and cultures. After decades of hard work by the people, the city’s competitive strengths rank amongst the top in the Mandarin-speaking world. In the era of globalization, Taipei must take the lead and provide businesses in Taiwan with a quality environment for investment, responding to the urgent demand for regional economic integration.
The Hi-Tech Promotion Center is in charge of enhancing Taipei’s competitive advantages, driving the development of the biotech industry, encouraging innovative research, guiding small- to medium-sized enterprises in their transformation, and spurring the overall economic prosperity in the city. We plan to build the “Great Taipei Hi-Tech Corridor” with Neihu Technology Park, Nankang Software Park, and Beitou–Shilin Science Park, all of which contribute significantly to Taipei’s thriving economy.
To keep up with the industry trends of R&D-oriented, highly innovative, and knowledge-intensive services, the Hi-Tech Promotion Center is seeking investment from overseas corporate headquarters, global innovation leaders, tech startups, and knowledge-based service industries from across the globe. We hope that through “laying down a solid foundation for economic growth,” “cultivating the attractiveness of industries,” and “strengthening strategies to promote investment,” the city can create an investor-friendly environment, attract overseas capital, and become the central hub of the Asia-Pacific region.
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