Reinforced the relationship between the United States of america and the republic of china but also people of two countries to understand, better relationships than ever, so a very short speech, i thank you for coming and your support, enjoy this afternoon, thank you. I would like to introduce another cohost, america studies. Now we are going to start the panel 2 and talking about an economy issue, it is fundamental, everything is fundamental. Aside from that, Heritage Foundation and from csis and the final essence from that. Good afternoon. As representative for the Heritage Foundation i thought i would talk about our index of Economic Freedom where taiwan ranks among 180 economies, those who are not familiar with it, the index of Economic Freedom published by the Heritage Foundation every year for the past two or three years, scored on a 100 point scale, completely repressed economy, this ranges from north korea with core of 5 to hong kong with a score of 90. The score reflects each countrys Economic Freedom, the score is based on 12 integrators mentioning rule of law, government size, regulatory efficiency and market openness, the most recent 2017 index taiwan scored a 76. 5 points placing it in the category of mostly free and ranks 11th among all other economies. For some perspective the us ranks only 17 for the score of 75. Taiwans overall score for Economic Freedom and global ranking in Economic Freedom have been increasing over the past several years. The us is stagnant and decreasing. Among other Asian Countries taiwan ranks fifth behind hong kong, singapore, new zealand and australia, maintaining property rights, limited governments, and trade freedom and also maintaining labor freedom, and financial freedom. What does this mean . The short answer is taiwan have done a good job with Economic Freedom but improvements can be made and should be made. On average the more economically free a country is the more prosperous people will be, for example whether you measure prosperity by the income per person or measure of social progress or something else, historically taiwans economy has thrived off of relatively open market policies. If you look at the wealth in taiwan, not just Gross National product the total wealth between 16, taiwan totaled us 3. 2 trillion, 50 increase from what it was in 2006 making on par countries like switzerland and india purchasing power of taiwanese about 10,000, more per capita than it was 10 years ago. There are growing concerns about growth for the us taiwan economic relationship becoming ever more important. I might not going to how taiwan ranks as one of the uss largest trading partners or the size of two individual economies, the us and taiwan have maintained some economic relations for decades now and make sense for this trend to continue for the sake of us economic interests in the region whatever those might be or the future of taiwans growth in china. One of the easiest ways to solidify the relationship would be through a freetrade agreement. Current Us Administration has highlighted preference for bilateral economic negotiations over multilateral dialogues and the administration is as focused on transactional outcome from negotiations with trading partners this pound for pound mentality, perhaps taiwan has already proven itself to merit the launch of World Trade Agreement negotiations. We at the Heritage Foundation have been arguing for us taiwan freetrade agreement for 30 years now. Back in the 80s it was seen as a way to balance large trade surplus taiwan had with the us which means leverage opening of japanese markets as market barriers limit for investment taiwanese officials attempt to appease concerns over the growing trade deficit encouraging self initiated, this includes taiwan adopting favorable measures for us physicists and removal of tariff and nontariff barriers and outright purchase of us agricultural and industrial products. In the past 40 years a strong economic relationship is not enough for current officials in taiwan and the last 13 years, dialogues established through the us taiwan Trading Investment framework agreement, if that is not in of the administration is looking more nearterm, taiwans ability to open its market to us beef and pork imports may be one aspect of leverage in the opening round. Us taiwan freetrade agreement would be more than a focus on tariffs of course, taiwans total average tariff rate is relatively low at 6 . Nonagricultural tariffs at 4 , agricultural tariffs average 16. Taiwan scores relatively high on trade freedom at 86 out of 100 but there are other issues including continued establishment of norms regarding investments, regulatory and Market Access transparency. Taiwan has made efforts to adhere to national norms, taiwans labor investment freedoms are still lacking as labor freedom scores 55 and investment freedom at 65 out of 500. There are often concerns by us Companies Regarding the inconsistency of regulations not to mention limitations on investment sectors and increased 60 day commenting period on new proposed regulations was a step in the right direction. Important to remember that Free Trade Agreement are not just means for Economic Cooperation and establishing stable economic norms but the removal of government intervention, interfering with market forces. It take strong leadership on both sides to push past private and public interests that might not want a freetrade agreement. In the 80s, the Prime Minister took the initiative to push the privatization past the bureaucrats, labor unions and other members, to quote a former representative, benjamin lou, speaking at a heritage conference while he was director of the economic division, back in 1987 and advocated the launch of trade talks with the us, said we are anxious to look at ways of protecting us taiwan trade relationship from wide swings in Political Activities generated in both countries on an increasingly regular basis. Donald trump has what it takes to push past the swings that exist today and expand us taiwan economic relationships and commit to Economic Partnership by signing freetrade agreement. In the meantime im enthusiastic about the initiative to invest in Southeast Asia as well as the initiative to make taiwan into the Asian Silicon Valley but it will be difficult. Us Tech Startups have nothing of their own in silicon valley, competition can be fierce and uncertainty exists for all startups. It will be important to create an environment where investors not only invest their money but environment that allows innovation to take place even if those results are reconstructed. To conclude i am optimistic about the future of us taiwan economic relations and i hope the Taiwan Administration can continue to prosper. Thank you. [applause] now serving as director on the chinese economy. I think the Heritage Foundation and other sponsors for putting on this event and inviting me. I wanted to use my time to talk about the ways the us and taiwan can expand Economic Cooperation. I dont hold a lot of optimism for the likelihood of a bilateral Free Trade Agreements or bilateral Investment Agreement but there are a lot of practical ways to expand Economic Cooperation and so i want this is a glass 3 quarters full story with that one element missing but i dont think that is the entire story. That is what i want to leave you with today. Let me elaborate for points, there are already extensive economic ties between taiwan and the United States, trade, investment, integration into supply chains, partners around the globe and these ties are mutually beneficial with very few losers on either side. The reason highlighting of taiwans trade surplus with the United States is not reflected my judgment or the judgment of most economists of who is winning or losing and what is the score in the relationship, the trade surplus is a product not of protectionism but the arrangement of the Global Supply chain and the oddities of how one keeps track of trade, geographically as opposed to by ownership. This has been a strong relationship for for some time and strong because there is high mutual complementary between the two economies. Both are wto members, both are signatories to the Information Technology agreement. And so we already have a very strong relationship. The announcement to fox con investment in wisconsin is a natural outgrowth of this and we will see more. Both second point. The us and taiwan have benefited on Global Supply chain and supply chains that include china. Taiwan has benefited from the inclusion in Global Supply chains. Taiwan has offered technology, management skill, investment in china. The common language, that helped a great deal. There are around 1 million taiwanese which helped further those ties and benefits to taiwans economy. In addition, both are wto members, the economic relationship is not entirely consistent with wto keeps towards each other, and as a result of that, massive barriers to import from the mainland, a quarter of all tariff minds are banned for being imported from china. Lots of investment from china is blocked though not entirely. This type of ability to maintain those types of protections for taiwans economy is something no one else has had and the downside, the economic relationship with china and the supply chain, the best statistic that shows that is the proportion of labor and manufacturing, almost every industrialized country has fallen dramatically over the last 20 some years. There is a single exception and that is taiwan. In 1993, taiwan had its workers in manufacturing, 20 in manufacturing, essentially no change. The way it has engaged china as part of the Global Supply chains is instinctive and relatively strong position. This is a backward looking statement. Doesnt necessarily guarantees of future. Lots of challenges everyone faces as a result of Chinese Industrial policy which is much more aggressive over the last several years and more challenging for everybody that is part of the Global Supply chains. If you are doing a historical analysis it is a big boon for taiwan compared to everybody else. In terms of thinking how the us and taiwan can expand cooperation, the fta or bilateral Investment Agreement would be nice but relatively limited benefit. It would be politically very risky for taiwan to take on a limited benefit because most of the benefits between the two economies in Global Supply chain, the Global Supply chains that are big benefits so unless you improve Global Supply chains or regional supply chains, simply reducing barriers bilaterally giving you a big bang for the buck. As riley already said taiwan scored 76. 5 and the us, 75. I am sure if you look at bilateral arrangements, there are low barriers. Most of the easy stuff has been picked off. There are other things we could do in the short terms that would yield positives for both economies particularly taiwan. First thing at the top of my list, my fourth point, the first thing at the top of my list is both the United States, taiwan and everybody else pushed back hard on chinese protection, the number one challenge, everyone in the Global Economy faces, chinas efforts to expand and dominate Global Supply chains where everybody else is, bilaterally, regionally, tpp is an important initiative, tpp 11, taiwan, and job number one with consequences of chinas movement to the supply chain to subsidizing and forcing technology transfer, number one for everybody. Riley touched on this, and the government is the new Southbound Policy and i was in taiwan in june, in the fall, the new Southbound Policy, and economic ties with countries in east asia, south asia, in new zealand, some are more promising than others, there is more meat on the bones, helping to modify taiwans economic structure, particularly in areas of education, the us isnt one of the members of the Southbound Policy countries, the us can do a lot to encourage all of those countries to participate but facilitates interactions. These taiwanese businesses moving more towards that region are part of the supply chain affecting interest in American Companies as well. There is a lot the us can do to facilitate implementation of the Southbound Policy. Big Regional Initiative beyond Southbound Policy and tpp is the initiative. Taiwan, you wouldnt think of the dominant country in investing in infrastructure, taiwan to participate and develop those. And our investment initiative, opportunities that are not part of it, the us is not part of it, the price tag is so large, getting a tiny sliver of investment would be helpful of taiwans economy. Fourth, the United States, bilateral Investment Agreement, unlikely soon and covering the last 13. 5 points, and tied with hong kong. That gap is often framed, consistently framed as bilateral negotiation. 13. 5 points and taiwans selfinterest with liberalization, would help the economy. Regardless whether the us provides reciprocating concessions on the other side. And the Service Market liberalizing those markets, the second would be immigration, and into taiwans economy, in june, still going through legislative un, there is discussion over whether there should be modification of taiwanese to increase immigrants by 700. These are small numbers, taiwan needs tens of thousands of immigrants to contribute to it economy, should not be talking hundreds or thousands but tens of thousands. There needs to be a significant liberalization of thai wheeze taiwanese in taiwans interest in shabbat confessed to anybody else. Lastly, the United States at 75, the us isnt going in the right direction and a lot of taiwan and everyone else can do to encourage the us to maintain or stand its market and commit itself to the multilateral trading system to the wto, the g 20. Maintaining the open multilateral system is critical to the health of the american economy, the taiwanese economy, bilateral relationships. I try to come up with 5 practical things, i cant say they will all be adopted. I would put my money on those things and my energy on those things and have less eggs in the basket of bilateral investments. Vincent wang is with the inside edition. Thank you for Heritage Foundation. Organizing this Important Forum for for elevating the awareness of important us taiwan relationships. Why good economic proposals make good politics. Trying to argue, many ways of looking at us taiwan Economic Partnerships. And you say a strong relationship, mutually beneficial, the us, taiwans second trading partner, 23 million, the ninth largest trading partner of the United States, a two way trade between the two economic partners, goods and services, 85 billion last year, 65 billion in the good trade, the us has a deficit with taiwan of 13 billion but if you look at the services which is another 2 billion, the us has a trade surplus of 4 billion so if you look at the total picture it is mutually beneficial and i agree with the Service Utilization of one area further advancing Mutual Benefit and according to the Us Department of commerce, us export of goods and services to taiwan supported an estimated 208,000 jobs in 2015, the latest data available, 130,000 supported by the good export and 79,000 supported by Service Exports so us taiwan trade supports a lot of us jobs. I think we will support a few more. In goods alone, right now, 10. 3 of taiwans exports go to the United States, 9. 5 of taiwan and imports come from the us. We know as recently as 1985 about 40 of taiwans exports came to the United States. The diffusion of technology, the transfer of highly skilled talents and so on. For taiwan the reversal of the roles between the us in china in the last 30 years has of the most important economic partner looks at chinas globally and all americas relatively declining to chinas. Former president obama reasserted important pivot to asia and unfortunately well, i t