The Xiamen-Kinmen ferry provides an important link between the mainland and Taiwan. Zhu Qingfu / for China Daily

 

Port city pioneers cross-Straits business, cultural connections and tourism ties

For several decades the port city of Xiamen in Fujian province was best known as a fortress island facing Taiwan.

Since the 1950s, it was of strategic importance in defense of the mainland if an attack was mounted by the Kuomintang that had taken refuge in Taiwan.

Xiamen's Dadeng Island, just a few kilometers from Taiwan's Kinmen Island, was battered to ruins during massive bombardment in 1958.

But today the atmosphere of Dadeng is totally different. It is a peaceful place that has close trade ties with Kinmen.

Dadeng is now gearing up for renewed cross-Straits trade and becoming a scenic spot in Xiamen.

With tourists to the island buying duty and tax-free imported goods from Taiwan, the history of Dadeng illustrates how Xiamen changed from a military frontier to a pioneer city in cross-Straits exchanges. Beginning in the early 1980s, the central government endowed the city with the mission to develop ties between the mainland and Taiwan.

Investment and trade

Modern business relations between Xiamen and Taiwan began with the establishment of the Xiamen Special Economic Zone. Preferential policies in the city generated interest and investment from Taiwan's businesses.

Their investment then spread further into the mainland through Fujian and especially Xiamen.

In 1989, China's first business zone for Taiwan investment was established in Xiamen's Haicang area.

The 100-sq-km Haicang Taiwanese Investment Zone, which is close to Xiamen Port, is also the largest Taiwanese investment zone on the mainland.

Later, two similar zones were developed in Jimei and Xinling districts, enabling the city to build industry clusters backed by Taiwan's investors.

Xiamen is now home to three of the four Taiwanese investment zones in Fujian.

By the end of 2010, Xiamen had attracted almost $5 billion in total direct investment from Taiwan. Some 3,112 Taiwan-invested projects in the city are involved in industrial production and now serve as pillars of Xiamen's economic development.

In 2010, total trade volume with Taiwan reached $6.38 billion as Taiwan replaced Japan as Xiamen's second-largest trade partner following only the United States.

Xiamen has established the country's largest distribution center for fruit from Taiwan. It received 5,963 tons of the fruit last year, the most of any mainland city.

"Over the past three decades, Xiamen has became the favorite city for Taiwan people to invest and do business on the mainland," said Yu Guowei, Xiamen's Party chief.

Further links

Increasing numbers of Taiwanese investors on the mainland and mainland tourists to Taiwan have boosted development of transport facilities and services across the Straits.

Xiamen Port was among the first authorized by the central government to begin cargo services to Taiwan. In 1997, a direct route for container liners between Xiamen and Kaohsiung ports started trial operations.

In 2001, authorities on the mainland and Taiwan agreed to begin the "three initial links" - to restore tourist exchanges, the flow of commodities and mail service between the mainland and Taiwan's offshore islands.

The Xiamen-Kinmen ferry service became the most important channel for connections with more than 5.8 million people visiting Xiamen and Kinmen.

Chartered flights between Xiamen and Taiwan were put into operation, and in 2006 Xiamen became the fourth mainland city to have direct flights to Taipei and Kaohsiung.

Before the direct link, travelers departing from Xiamen would first take a ferry to Kinmen and then fly to Taiwan.

In July 2008, Taiwan's authorities lifted the ban on mainland tourists.

Financial cooperation

In 2010, the State Council announced that Xiamen would be a regional financial hub for cross-Straits cooperation. The city is moving toward a new goal as home to more mainland headquarters of Taiwan businesses.

The mainland and Taiwan also signed the Economic Cooperation Framework Agreement last year that will facilitate mainland operations by Taiwan's insurance, securities and futures companies.

Xiamen was once again the pioneer in development. King Dragon Life Insurance Co Ltd established in Dec 2008 and headquartered in Xiamen was the first mainland-Taiwan joint venture insurance company to begin operations on the mainland.

In September 2010, Taiwan's Fubon Financial Holdings set up a property insurance unit, Fubon Property and Casualty Insurance Co Ltd in Xiamen to become the mainland's first insurer with exclusive investment from Taiwan.

According to plans by the Xiamen city government, the guiding principle of building the financial service hub is to explore possibilities for launching further financial reforms such as renminbi settlement for cross-Straits trade and promoting local financial businesses in Taiwan.

Today Xiamen remains a hot destination for Taiwan investors. Ever-increasing economic and cultural exchanges ensure that Xiamen plays a more important role in cross-Straits ties.