Taipei [Taiwan], May 20 (ANI): President Lai Ching-te on Tuesday announced a plan during his first anniversary speech for Taiwan to set up a sovereign wealth fund (SWF) to be responsible for foreign investment 'to connect with the world,' as reported by Focus Taiwan.

'The government will set up a sovereign wealth fund to build a national-level investment platform,' he said in his address made at the Presidential Office one year after he took office.

The fund will '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 era,' Lai said, without elaboration.

During a question and answer session following his speech, Lai was asked about why his government thinks it is the right time to set up a sovereign wealth fund for Taiwan and if it will focus on investing in the United States.

In response, the president said the latest proposal was raised as part of its international economic strategy to deal with the latest challenges in the global economy, the Focus Taiwan reported.

Lai said the government will propose legislation to create the fund, which will be used mainly for foreign investment while at the same time helping local businesses to expand their international presence.

According to the International Monetary Fund (IMF), sovereign wealth funds are 'government-owned investment funds, set up for a variety of macroeconomic purposes. They are commonly funded by the transfer of foreign exchange assets that are invested long term, overseas.'

The issue has been debated locally in recent months, with the Ministry of Finance saying last month that more discussion was needed before a consensus on the idea was reached.

In his speech Tuesday, Lai also mentioned the ongoing trade dialogue between Taiwan and the United States over the threat of U.S. President Donald Trump's tariffs on goods imported into the U.S. from Taiwan.

Unlike other governments in the region, Taiwan has remained extremely vague about what has been going on in its interaction with the Trump administration, and Lai's speech was no different.

He said it was not uncommon for friends like Taiwan and the U.S. to have some friction but that ultimately the two sides would find common ground.

Aside from continuing to expand economic and trade cooperation with the U.S., Taiwan has also been expanding such relations with United Kingdom by signing the Enhanced Trade Partnership, Lai said.

It is actively in talks with other countries to sign more bilateral trade deals and double-taxation avoidance agreements, and also hopes to gain access to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), he said.

According to Taiwan's Office of Trade Negotiations, Taipei and Washington concluded a first in-person meeting on tariffs on May 3. The meeting followed an initial round of talks held via videoconference on April 11.

U.S. President Donald Trump first announced sweeping 'reciprocal' tariffs on April 2, including a 32 percent import duty on goods from Taiwan, that targeted countries with large trade surpluses with Washington.

A week later, he announced a 90-day pause to allow for negotiations to reduce the impact of the high tariffs. (ANI)