The Economic Development Committee (EDC) of the Executive Yuan yesterday approved a trillion-dollar national development plan, hoping to guide funds -- in particular, insurance funds invested overseas -- to invest in social housing, water recycling plants, and other strategic projects.
Mr Paul Liu Jin-ching, chairman of the National Development Council, said that the overseas funds of the insurance industry totalled approximately NT$22tn ($674bn). Due to risks and regulatory restrictions, the portion that can be invested back in Taiwan is NT$3.27tn and could create benefits of NT$10tn.
The National Development Council proposed the investment plan to broaden funding sources for public construction projects, including encouraging the insurance industry to invest in public infrastructure investment funds and real estate investment trusts (REITs). In doing this, one goal is to avoid disrupting market order.
Legislation
Mr Liu said that there are abundant funds in the insurance industry. In addition, in recent years, the insurance industry has faced situations such as excessive interest rate spreads, excessive exchange differences, and unstable overseas investments. Therefore, the industry also hopes to have domestic investment objects.
He also said that the investment plan is not limited to attracting funds from insurance companies. It will also attempt to attract foreign capital and investments from other interested parties.
He added that the national development plan will provide for the establishment of an inter-ministerial investment and construction promotion platform, where the government and the sector will jointly discuss public projects. For example, there is already a huge interest in building water recycling plants and social housing.
As for whether legislation or regulations need to be revised for investments by the insurance industry, Mr Liu said that the legal limit of funds that the insurance industry could utilise is 10%, with the current ceiling standing at NT$3.27tn. However, investment in real estate securitisation products (REITs) will require legislative amendments.
In addition, there is a six-year plan to build Taiwan into an Asian asset management centre. This includes plans to expand private banking (wealth management) business; expand the domestic asset management industry (investment industry); attract investments from foreign asset management companies; expand the stock market (by promoting transnational listings); attract insurance funds to invest in domestic public construction, and integrate inclusive finance and green finance, etc.