Taiwan President Lai Ching-te announced that next year the central government's total budget will increase by NT$235.7 billion, and each person will receive NT$10,000 in cash (US$314; RMB 2,110).
The case is yet to be voted on by the Legislative Yuan. If the opposition party with the majority in Congress votes in favor, it is expected to be passed as soon as the end of this year. Money will be distributed around the Lunar New Year next year, making it the third time since 2023 that the Taiwanese government has directly distributed money to all people.
Lai Qingde used the slogan "AI dividends, shared by all" this time. Bloomberg reported that its "confidence" is that Taiwan has benefited from the global AI boom, semiconductors and supply chain advantages. This year's economic growth rate is expected to be 11.05%, which is expected to hit a 39-year high.
But at the same time, universal cash is more political. The opposition party criticized the ruling Democratic Progressive Party for its "double standards" - last year the Blue and White camp proposed that PFA was described as a "money pit" by the Green camp, but now it is packaging the money as "dividends".
As Taiwan’s local elections approach in November, is this money a real sharing of results, or is it a political attack or defense?
"AI Dividend" and "K-shaped Economy"
Taiwan's stock market recently broke a record, hitting 40,000 points, and its economic growth reached 14.15% in the first half of the year, the strongest in the same period in half a century.
Lai Ching-te said on Monday (August 17) that this time the universal cash is not a special budget or borrowing, but to make money in Taiwan AI Semiconductor, and the government will "distribute the fruits of economic growth directly to the people" under the premise of "balancing annual income and annual expenditure, and essentially zero borrowing".
He admitted that Taiwan's overall economy is booming, but there is a problem of income disparity. The government cannot just look at the average number, but also needs to take care of "people below the average number." He believes that universal cash will help the latter. He also emphasized that this case will not crowd out other policies.
Nick Marro, chief economist for Asia at the British Economist Intelligence Unit (EIU), analyzed to BBC Chinese that Taiwan's technology industry exports are strong, but other data do not simultaneously reflect this momentum, and the growth of non-technology exports is relatively flat. "And quarterly inflation-adjusted wage growth - especially in services - has actually softened since 2025."
"The Taiwanese market is gradually realizing that the K-shaped economy is becoming increasingly severe, which echoes the policy developments we have seen in other markets."
K-shaped Economy refers to the situation where the development trajectories of different industries, enterprises or social classes become "differentiated" when the overall economy is growing or recovering. Like the two branches of the letter "K", one end continues to climb up, and the other end continues to go down.
Ma Zhiang believes that the direction itself is positive for the Lai Ching-te government to face up to the imbalance caused by the AI boom, even if this specific policy prescription is not enough to solve the core problem. He said that to truly address structural or generational inequality, we should focus on improving relatively weak wage growth.
"Universal cash payments are only marginal policy tools. They can bring about a short-term increase in purchasing power, but they cannot fundamentally solve the deep-seated problems faced by Taiwanese families or consumers."
Wu Daren, a professor at the Department of Economics at National Central University in Taiwan, also pointed out to Taiwanese media that for low-income families with a monthly salary of about NT$30,000, NT$10,000 is equivalent to one-third more monthly salary, which has a certain income transfer effect and will be particularly felt by disadvantaged groups in the K-shaped economy.
However, Wu Daren reminded that people may use it to pay for existing expenses or savings, rather than new consumption. If the general payment amount is too high, it may crowd out public construction.
He suggested that if universal cash becomes normalized in the future, it should be equipped with rich exclusion clauses or should be targeted at weak points to make resource utilization more precise.
political wrestling
Returning to the political level, this "universal distribution of 10,000" has triggered heated debates in public opinion in Taiwan.
Zhang Junhao, a professor at the Department of Political Science at Tunghai University in Taiwan, analyzed to BBC Chinese that the relevant proposals are "strongly political", but there are still many questions about whether cash can be exchanged for votes.
He believes that what is more important is whether Lai can control public opinion and "let everyone see who created Taiwan's economic achievements in recent years? Who can lead the distribution? It depends on whether the DPP has the ability to dominate the discussion."
Japanese scholar Ogasawara Yoshiyuki, who has long studied Taiwanese politics, also published a professional post on his personal Facebook to analyze that the iron law of traditional political science that "a good economy is good for the ruling party" cannot be applied in Taiwan, because Taiwanese people's feelings about the economy are severely divided by party leanings. This is a unique political problem faced by Taiwan's rulers.
On the opposition side, Chen Yixin, chairman of the Kuomintang Cultural Communication Committee, criticized, "The Kuomintang's proposal (universal cash) is called fiscal discipline, while Lai Qingde's proposal is called AI dividend."
Taipei Mayor Chiang Wanan cited Lai Ching-te's past statement that "you'll lose all the money you need to buy groceries" and called for an increase in the "universal payment of 20,000 yuan." He also questioned the DPP's inconsistent attitude. Green Camp responded that Taipei City has a cumulative surplus of more than 57.7 billion yuan. If you really think it is not enough, you can increase the amount on your own instead of "speaking out."
Wang Wanyu, chairman of Times Power, issued a statement expressing her opposition. She criticized this as the third universal cash payment in the past four years. "Whenever the government tax exceeds the tax limit, the first thing that all political parties think of is universal cash." However, in fact, this fund should be used to build social housing.
"(Universal cash distribution) This is the cheapest and least effective policy option. A universal cash payment will cost more than 230 billion yuan, but after the money is distributed, what will be left in Taiwanese society?"
In this regard, economist Ma Zhiang pointed out to BBC Chinese that the idea of universal cash use of excess fiscal revenue was proposed by the opposition party last year when preventing the "general recall". The ruling party opposed it at the time, but proposed it independently this year. Although there is no need to use a special budget, it still attracted criticism from the opposition party.
Ma Zhiang believes that the political nature of the ruling party's move before local elections is self-evident: "This is a typical example of populist policies often containing political performance elements."
"Of course I will accept it. When will I not accept it?"
The competition between political parties in Taiwan is fierce, but the people contacted by BBC Chinese, regardless of color, and voters from the north and south, all said they would receive the money - few people said no when faced with 10,000 yuan in real money.
In Taipei City, Ms. Yang, who works in the high-end jewelry industry, excitedly told reporters that she would even like to receive the 20,000-yuan gift from Mayor Chiang.
"No one will refuse to take it, right?" she said.
Mr. Jiang, a Kaohsiung citizen in his 40s who is engaged in education, said that if this proposal can be put to the General Budget Review of the Legislative Yuan to avoid the budget continuing to be stuck in the Legislative Yuan by the opposition parties, he will support PFE.
He told BBC Chinese: "Of course I will receive it. When will I not receive it? But receiving the money does not mean that I think it is the right policy. Just like rental subsidies, I don't think it can really improve the issue of housing justice. But if I want to work and rent an apartment outside the city, I will also apply for rental subsidies."
Mr. Jiang believes that universal distribution of 10,000 yuan is not a good policy, but it is a good political attack and defense. "If the DPP doesn't propose a universal payment of 10,000 yuan, Blue and White will propose it and use it as an election operation."
Another 30-year-old young medical worker in Changhua City, Mr. Zhuang, admitted to reporters that universal cash "seems to be the policy that most people feel the most about, but it is also the most likely to cause discussion."
Universal cash is not unique to Taiwan; similar policies exist across Asia.
Singapore launches "Growth Dividends" from time to time to return fiscal surpluses to citizens in cash. The amount is graded based on income and house value. Low-income earners receive more, which is a "limited inclusive + progressive" design. After Iran eliminated energy and bread subsidies in 2010, it instead distributed cash subsidies (about US$40-45 per month initially) to almost everyone. The scale was so large that it was regarded as one of the largest nationwide cash transfers in the world at the time.
In the past, South Korea also launched a consumer voucher policy due to semiconductor dividends or revitalizing domestic demand. This year, the idea of using excess tax revenue to issue a "citizen dividend" has also emerged, but it has not yet been implemented. President Lee Jae-myung said basic income could be one of several practical policy options.
