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Growing number of businesses look at Taiwan, report Hu Meidong in Fuzhou and Sun Li in Xiamen, Fujian.
It seems that even the recent freezing weather has been unable to give investors from the Chinese mainland cold feet about pouring their money into Taiwan.
Fosun Group, a private Shanghai conglomerate, paid 77 million yuan ($12.3 million) in November for a 20 percent stake in the Taiwan-based pastry maker Vigor Kobo.
An Xtep International Holdings Ltd store in Shanghai. In July 2010, the company, based in Jinjiang, Fujian province, became the first sports brand to enter the Taiwan market. Provided to China Daily
The deal, made through Fosun's subsidiary, Laxton Investment Ltd, marks the first time that a mainland company has invested in the island's food industry.
Taiwan opened up to investment from the mainland three years ago and by the end of October the value of investments made by mainland companies hit $722 million. Most of the capital has gone to labor-intensive sectors such as manufacturing and services.
Compared with other investors from the Asia-Pacific region, Chinese mainlanders have a number of advantages, including a shared cultural background and language, but they also face restrictions. There are strict regulations on the industries in which they can invest and limits on the size of their shareholdings in joint ventures.
November was a good month for deals: Huatian Gangaotai Commodity Shopping Co from Xiamen in Fujian province, announced a plan to add $65 million to its five-star hotel and leisure complex project in Taiwan's Kinmen county.
Huatian's capital injection, which has received the green light from Taiwan's economic authorities, will bring the company's total investment in the project to $390 million, making it the biggest individual investment in Taiwan by a mainland company, said a report from the Fujian provincial department of foreign trade and economic cooperation on Nov 21.
Rise in tourism
Fosun's vice-chairman and CEO Liang Xinjun said increased cross-Straits tourism is the main driver behind the company's foray into the island's food sector.
Tourists from the mainland made more than 1.8 million visits to Taiwan between January and November, a rise of 60.6 percent from the first 11 months of 2011, and accounted for 35 percent of inbound trips during the period, according to the National Tourism Administration on Dec 11.
The surge highlighted the great potential in sectors such as the tourism-food industry, said Liang. He added that Fosun plans to help Vigor Kobo expand its flagship pineapple cake business to famous cultural and scenic spots in Shanghai and launch specialties featuring Shanghainese-style snacks.
While Liang is a relative newcomer to investing in Taiwan, Wu Youhua, Huatian's president, is something of a veteran. Wu set up a joint venture, Yanming Development and Construction Ltd, in Kinmen in late 2010, which is mainly involved in the resort hotel business.
Wu also established a cattle farm in Kinmen, using free vinasse, a byproduct of the distillation process, from a local liquor factory as fodder, and then started a company that rents out vehicles powered by marsh gas made from cattle waste. The 61-year-old entrepreneur shared Liang's confidence that the boom in cross-Straits tourism will benefit mainland enterprises investing in the island.
Taiwan opened its doors to individual tourists from Beijing, Shanghai and Xiamen in June 2011, previously only tour groups were allowed to visit, and mainlanders have rushed in like the tide, said Wu.
The Chinese mainland is currently Taiwan's largest source of tourists, accounting for roughly 30 percent of visitors, according to the Association for Tourism Exchange across the Taiwan Straits in Beijing.
Meanwhile, the July launch of a night ferry between Xiamen and Kinmen has also contributed to the surge in cross-Straits travel and Wu is convinced that Kinmen, an island lying off Taiwan's coast, a short distance from Xiamen, is an ideal place to launch tourism-related businesses.