Taiwan's President Lai Announces Sovereign Wealth Fund to Bolster Global Presence

Focus on AI and International Investment to Drive Economic Growth

President William Lai (賴清德) unveiled plans to establish a sovereign wealth fund dedicated to foreign investment, aiming to "connect with the world" and enhance Taiwan's global economic footprint.

Speaking at the Presidential Office in Taipei on his one-year anniversary, President Lai emphasized the fund's role in creating a national-level investment platform. The fund intends to "take advantage of the strengths of Taiwanese businesses and be led by the government, while harnessing the power of the private sector to build a global presence and connect with major target markets in the AI [artificial intelligence] era."

During a question-and-answer session, President Lai cited the government's strategic approach to addressing global economic challenges as the impetus for the fund. He noted that the government will propose legislation to establish the fund, primarily for foreign investment, while simultaneously aiding local businesses in expanding their international reach.

The IMF defines sovereign wealth funds as "government-owned investment funds, set up for a variety of macroeconomic purposes." These funds typically manage long-term, overseas investments funded by the transfer of foreign exchange assets.

The proposal follows discussions within the Ministry of Finance, which indicated a need for further deliberation before reaching a consensus.

President Lai also touched upon ongoing trade negotiations with Washington, addressing potential impacts of former US President Donald Trump's threats to impose duties on Taiwanese goods. He noted that despite potential friction, Taiwan and the US, as allies, would ultimately find common ground.

Beyond expanding economic and trade cooperation with the US, Taiwan is also advancing relations with the UK, having signed the Enhanced Trade Partnership. Furthermore, Taiwan is engaged in discussions with other countries to establish more bilateral trade agreements and double-taxation avoidance agreements, with the goal of gaining access to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

According to the Office of Trade Negotiations, Taipei and Washington concluded their first in-person meeting regarding tariffs on May 3, subsequent to initial talks via videoconference on April 11. Former US President Donald Trump had initially announced sweeping "reciprocal" tariffs, including a 32 percent import duty on goods from Taiwan, but later announced a 90-day pause to allow for negotiations.

President Lai also addressed domestic concerns regarding energy supply, referencing the closure of the last nuclear reactor on Saturday. He proposed subsidies for Taiwan Power Co (Taipower, 台電), which remain pending in the legislature.

President Lai emphasized that "As energy security is national security, ensuring a stable power supply, while developing more forms of green energy, is, whether now or in the future, one of the government’s most important tasks.”