The Directorate-General of Budget, Accounting, and Statistics (DGBAS) of the Executive Yuan has revised Taiwan’s economic growth forecast for this year upward to 5%, demonstrating robust momentum in the high-tech sector. However, Jiann-Chyuan Wang, Vice President of the Chung-Hua Institution for Economic Research (CIER), highlights that traditional industries are encountering several challenges. They include China’s low-price dumping practices, the appreciation of the New Taiwan dollar, and U.S. tariffs. The pressure for these industries to transform is becoming increasingly hard to ignore.
In the short term, companies can mitigate risks through foreign exchange hedging. Over the long term, they must accelerate R&D efforts, pursue automation and digital transformation, and actively enter high-value-added industries such as artificial intelligence, heavy electrical equipment, and robotics to enhance their competitiveness. Vice President Wang recommends that the government assist companies in diversifying their export markets, establishing overseas trade and logistics hubs, and strengthening supply chain collaboration with like-minded countries to reduce dependence on single markets.
Vice President Wang advocates for the establishment of a sovereign wealth fund that operates under a public-private partnership model. The investment returns generated from this fund could be directed toward supporting the upgrading of traditional industries and facilitating a green transformation. This approach aims to strike a balance between pursuing financial returns and important policy objectives. While traditional industries face significant pressures, they also hold transformational opportunities. By fostering collaboration between industry and government, Taiwan can create a new landscape for its industrial sector to promote innovation and upgrading.
Author: CIER Editorial Team
Date: November 10, 2025