Privileges to Taiwan investors not to change

By CHEN ZHIMING

Express staff

Taiwan business people were assured yesterday that the privileges they enjoyed on the mainland will not be changed.

That was the message delivered by officials attending yesterday's Taiwan Merchant Investment Forum at the ongoing Sixth China International Fair for Trade and Investment (CIFIT) in Xiamen.

"We will protect the legal rights of investors and make our overseas investment policies coherent and stable,'' said Wang Liaoping, director of the Department of Taiwan, Hong Kong and Macao Affairs with the Ministry of Foreign Trade and Economic Co-operation (MOFTEC).

He also called for more Taiwan investors to take advantages of the mainland's optimized business environment and raise their cash input.

According to the MOFTEC, a total of 2,700 Taiwan-funded companies were set up on the mainland in the first seven months of this year, up 18 per cent on a year earlier.

Actual utilized investment from Taiwan was US$2.1 billion, registering a year-on-year growth of 28 per cent.

MOFTEC said that by the end of July this year, a total of 53,500 Taiwan-funded projects had been approved by the central government, with contractual investment totalling US$60 billion.

Michael Cheng, a Taiwan businessman in charge of a website company in Xiamen, was delighted with his decision to invest on the mainland in March.

"I am becoming more ambitious owing to the enormous market on the mainland,'' said the 30-year-old businessman whose company mainly provides services to the manufacturing industry and imports and exports companies.

Hundreds of thousands of Taiwan business people like Cheng are eying the mainland market because of its great potential.

"The mainland is the best place for us to expand our businesses,'' Cheng said.

The company has been operating in Taipei for eight years and is now seeking more business opportunities through co-operation with mainland players.

The thriving mainland market is so important to Taiwan's economy that it has overtaken the United States as the largest export market for the island.

Taiwan has become the mainland's fourth largest trading partner.

Trade across the Straits last year stood at US$32.3 billion.

In the first seven months of this year, the figure topped US$23.5 billion, up 33 per cent compared with the same period last year.

"It is expected to reach US$40 billion by the end of this year,'' Wang said.

Li Fei, professor of the Taiwan Affairs Institute at Xiamen University, said: "It shows that Taiwan's economy has closely integrated with the mainland market.

"Hence, the 'three direct links' are the imperative issue for cross-Straits economic co-operation, which is vital for the island's current and future economy.

"Political disagreements should not become barriers in the way of the trade between the two sides.''

Political relations between the mainland and Taiwan, a barometer for trade relations between the two sides, have long been sensitive.

Chen Shui-bian's remark of "one country on each side'' on August 3 stirred up trouble in cross-Straits relations.

"Chen's remark was not supported by the majority of Taiwan people,'' said Chen Chien-Nan, president of the Taiwan Merchant Investment Association in Fuzhou.

He said it was very important to maintain a stable economic partnership between the mainland and Taiwan.

"I don't think Chen's advocates will have any influence on Taiwan investors who are eying the mainland market,'' said Chen.

"It is mutually beneficial for the two sides to co-operate with each other and it is good to see that economic co-operation between the two sides is moving forward step by step.''

"I think worsening political relations across the Straits will affect economic ties, though it may have just a little effect,'' claimed Jason Huang, deputy secretary-general of Taiwan Merchant Association in Shenzhen.

"However, the mainland will remain one of the top destinations for investors because of its huge market and optimized market environment.

"The majority of Taiwan people hope the cross-Straits relationship can develop in a positive way, and they are eagerly looking forward to realizing the 'three direct links,' as these are imperative to cross-Straits economic co-operation.''

He added: "We need patience.''

With regard to Chen Shui-bian's encouragement to business to invest more in South Asian countries such as Malaysia and Singapore, Huang said: "Investors go to the places where they can gain profit and long-term development.''

Huang is also the general manager of the Shenzhen branch of Taiwan-based China-Taiwan.com. His first investment in the mainland was in 1992 in Nanjing, Jiangsu Province.

Statistics from Taiwan's economic authorities revealed the number of Taiwan-invested projects in the mainland reached 753 in the first seven months of the year, up 10 per cent on a year earlier. The total volume concerned was US$1.94 billion, representing a growth of 20 per cent on an annual basis.

Most of the projects were in the areas of electronics and machinery. Taiwan's overseas investment (excluding the mainland) dropped 34.6 per cent year on year to US$1.83 billion.

"In another development, the restrictions placed on mainland products by the Taiwan authorities have caused a great trade deficit for the mainland,'' Wang said.

He said the trade deficit to Taiwan was US$22 billion last year. The figure for the past two decades has accumulated to US$1.17 trillion.

"The entry of both the mainland and Taiwan to the WTO has laid the sound foundation for further co-operation,'' Wang said.

"Non-discriminative and free trade policies should be implemented fully.''

He said approximately 70 per cent of mainland-made products can now be exported to the island. "Regional co-operation is an inevitable trend for us to follow and a freer and fairer trade will benefit the people on each side,'' said Hu Jingyan, director of the Foreign Investment Department at MOFTEC.

"We are encouraging more overseas investors to invest in China complying with the Foreign Investment Directory issued in April this year.''

The opening of service sectors -- the logistics and service trade sectors in particular -- has been promoted to attract more overseas investment.

Co-operation in high-tech industries will also be a key factor in years to come, Hu said.

Zhejiang achieves rapid development

By WANG YONGMING

Vice-governor of Zhejiang Province

Widening globalization and China's entry to the World Trade Organization has enabled Zhejiang Province in East China to experience unprecedented fast growth.

The province attracted an increasing amount of foreign investment in the first seven months of this year, reaching US$8.6 billion.

More than 1,710 overseas-funded enterprises were established in the province this year.

The province's foreign trade volume has continued to surge in the first seven months this year, reaching US$21.6 billion -- up 18.7 per cent on the same period last year.

Situated on the eastern coast of China and south of the Yangtze River Delta, Zhejiang is becoming one of China's economic powerhouses.

The province's gross domestic product (GDP) reached 670 billion yuan (US$80.7 billion) last year, up 10.5 per cent on the previous year. Per capita GDP last year reached 14,700 yuan (US$1,771), ranking fourth in the country.

The per capita income of urban residents in the province hit 10,465 yuan (US$1,260) while those of farmers reached 4,582 yuan (US$552) last year.

Its well-established infrastructure -- a comprehensive highway, railway, air and waterway network -- has attracted more overseas investors.

A total of 54 of the Fortune 500 companies have established branch offices or subsidiaries in Zhejiang.

The province has established friendly relations with more than 75 countries and regions, as well as provinces and cities in more than 20 countries including the United States, Japan, Germany, France and Republic of Korea.

A pattern of opening up has been formed throughout the province with major cities such as Hangzhou, Ningbo and Wenzhou as the forerunners.

Zhejiang warmly welcomes overseas investors to tap its development potential, especially in infrastructure construction such as transportation, energy, water supply and sewage disposal.
The province's agriculture sector has opened wider to foreigners and it is keen to co-operate with foreign investors in green food and organic food production and introducing new and high technology to improve agricultural production.