President Lai's Proposal for a Sovereign Fund in Taiwan: Challenges and Opportunities

During his first anniversary speech, President Lai Ching-te proposed the 'Taiwan Sovereign Fund' policy, sparking widespread discussion. A national sovereign fund can be likened to a dream machine: if managed well, it can create significant benefits and strengthen the nation’s strategic position, but poor design might turn it into a tool for political party interests.
President Lai emphasized that the establishment of the sovereign fund must adhere to four principles: 'trust from all citizens, financial transparency, a professional team, and the creation of long-term growth.' Although the phrase 'bring Buffett to manage it' is merely a metaphor, it carries significant implications.
After decades of discussion, the concept of a Taiwanese sovereign fund suddenly became a focal point in Lai’s anniversary speech. Previous major political decisions typically followed discussions through think tanks, but President Lai directly announced the initiative, showcasing his strong leadership style.
A successful sovereign fund requires stable financial resources. While former central bank governor Peng Huai-nan insisted that foreign exchange reserves cannot be used without compensation, the reality is that Taiwan's banking sector is well-capitalized. The government needs to demonstrate that the benefits of using these funds outweigh the risks.
Ultimately, building an international professional team is crucial. The social acceptance of high-salaried professional managers in Taiwan is vital. Countries that operate successful sovereign funds generally adopt international standards for salary structures; thus, it is essential to establish clear boundaries between political interference and professional investment decisions.