Taiwan Service Sector Faces Transformation Challenges Amid Global Economic Shifts

Taipei: Taiwan's service sector needs to transform itself to prepare for global economic changes expected after U.S. President-elect Donald Trump takes office, according to the Commerce Development Research Institute (CDRI), a local think tank. CDRI Chairman Hsu Tain-tsair highlighted the potential challenges and opportunities that may arise during the Trump era at a recent press conference. According to Focus Taiwan, Hsu emphasized that expected fluctuations in exchange rates could impact Taiwan's import costs and export competitiveness. However, Trump's focus on reducing China's influence in supply chains could present an opportunity for Taiwan to enhance the competitiveness of its service businesses. One area of potential cooperation with the U.S. that Hsu pointed out is artificial intelligence (AI). Hsu predicted that the uneven recovery of the economy would persist as global transformations in trade and supply chains continue, with U.S.-China relations acting as an accelerator. He warned that if Taiwan 's service sector does not engage in digital and services transformations, it might face a structural decline. Hsu also addressed Taiwan's chronic labor shortages, cautioning that they are unlikely to be resolved in the short term and could become a long-term trend. He warned that inaction in addressing this issue might lead to a wave of business closures. He argued that permitting more migrant workers to enter Taiwan would be too passive and called for a structural transformation in how Taiwan attracts workers. Hsu cited Japan's approach as more "proactive," noting that Japan recruits workers from abroad and sends back those who do not pass training programs. He suggested that Taiwan should discuss such issues among relevant groups at the Legislative Yuan. The CDRI, established in 2007, aims to set a foundation for the service sector by fostering high-quality, high added-value innovation, integrating resources, accelerating knowledge accumulation, and enhancing international competitiveness, as stated on the CDRI website.