Chang, one of the most revered industry leaders in Taiwan, made the remarks in a lecture titled "Emerging Challenges to Economic Growth" to trainees at the Ketagalan Institute established to groom leaders from the ruling Democratic Progressive Party.

President Chen Shui-bian, founder of the organization, was among the audience.

Chang pointed out that Taiwan's economic development is faced with nine new daunting challenges in the new century and the government is bound to play a pivotal role in coping with the challenges.

According to Chang, the challenges to sustained economic growth on the domestic front include an accelerated graying population, people's rising expectations induced by the explosive expansion of higher learning institutions, increasing added value in a society with greater mobility, pluralization in occupations, and the weak rule of law and slow pace of updating business rules.

On the international front, Taiwan must tackle the limitations on energy and other natural resources like water, environmental devastation, the deteriorating atmosphere, and the tremendous impact from intensified global economic competition brought by major players like China and India.

Chang noted that market economy was victorious in the 20th century, as western Europe, Japan, Asia's Four Little Dragons, China, Russia, and eastern Europe all experienced substantial economic growth by following in the footsteps of the U.S. in moving toward the free market economic system.

He explained that the disastrous failure of the communist economy implemented by China from 1950 to 1980 has prompted Beijing leaders to revert to a socialist market economy in 1980.

For the 21st century, Chang said, the government needs to adopt and implement new strategies to raise the bar for maximum economic growth.

This is attainable, Chang optimistically stressed.

But the efforts to raise the level of Taiwan's development potential have not be adequate since 2002, although some progress has been made.

There is also a need to take a hard look at the education sector which now boasts more than 150 colleges and universities while many graduates cannot find jobs or are forced to settle with less fulfilling positions.

He advised the government to push educational and legislative reforms, bolster infrastructure development, and promote cultural, artistic and moral values.