TAIPEI (TVBS News) — As President Donald Trump directed the creation of an American sovereign wealth fund on Wednesday (May 7), Taiwan's financial authorities have accelerated their own deliberations on establishing a similar investment vehicle. The Central Bank of the Republic of China (CBC, 央行), Taiwan's monetary authority, outlined several approaches for a potential Taiwanese sovereign fund in a comprehensive report delivered to the Legislative Yuan, Taiwan's parliament, coinciding with Trump's announcement that day.
The central bank's detailed proposal outlines three potential funding mechanisms for Taiwan's sovereign wealth initiative: government bond issuance, direct budget allocations, or strategic investments managed through the Ministry of Finance. Initial capital could be sourced from various public sector commissions, according to the report. Banking officials strongly emphasized that specialized legislation would be necessary to create an autonomous management entity for the sovereign fund while explicitly warning against tapping into Taiwan's substantial foreign exchange reserves. Such a move, they cautioned, could disrupt the central bank's carefully maintained balance sheet and potentially compromise its ability to implement independent monetary policy.
The central bank envisions the proposed sovereign fund pursuing wealth generation through a diversified investment portfolio spanning multiple asset classes, including government and corporate debt instruments, equity markets, private investment opportunities, and real estate holdings. While acknowledging the inherent volatility and unpredictability of investment returns, the CBC's report specifically recommends that Taiwan study successful models implemented by regional neighbors. The bank points to Singapore's Government Investment Corporation and South Korea's Investment Corporation as instructive examples of how independent management structures can effectively govern sovereign wealth operations.
The report emphasizes that operational flexibility would be crucial for the fund's success, particularly regarding organizational structure, staffing decisions, budget allocation, and competitive compensation packages — all requiring dedicated legislation from Taiwan's government. Central bank officials recommend full government capitalization of the sovereign wealth initiative while establishing a professional management entity with autonomous legal standing and comprehensive governance protocols. The Finance Committee of Taiwan's parliament has scheduled a special session for May 8, during which representatives from multiple government ministries will present detailed proposals regarding the potential sovereign fund's establishment and operational framework. ★