China unveils policies to support cross-Strait economic integration

China has unveiled a package of policy steps to support building its coastal Fujian province, located opposite Taiwan, into a pilot zone for advancing cross-Strait economic integration — a move which experts said will tap into cooperation potential in new areas and deliver concrete benefits for businesses on both sides.

The guideline highlighted five major areas of focus — supporting Fujian in expanding opening-up toward Taiwan, promoting cross-Strait trade, deepening integration of strategic industries, facilitating integration of Taiwan businesses operating in Fujian into domestic circulation and accelerating the integrated development of key regions.

The guideline was jointly issued by the Ministry of Commerce, the Taiwan Affairs Office of the State Council, the National Development and Reform Commission and the Ministry of Industry and Information Technology on Monday.

According to the guideline, Fujian will be supported to take strides toward aligning its pilot free trade zone with international economic and trade rules and promoting institutional opening-up, so as to explore a regulatory framework conducive to cross-Strait economic integration.

Fujian is encouraged to leverage its geographical proximity and advance such key reform initiatives as cross-Strait trade in goods and mutual recognition of professional qualifications on a priority basis.

Moreover, Fujian will be guided to capitalize on the opportunities presented by the Regional Comprehensive Economic Partnership agreement, in an effort to attract projects from Taiwan in industries such as petrochemicals, textiles, machinery and cosmetics to establish a strong presence in the province, it said.

The year 2022 witnessed significant growth in cross-Strait trade, with the total volume between Fujian and Taiwan registering 103.67 billion yuan ($14.47 billion).Exports to Taiwan experienced a surge of 22.9 percent, data from the provincial commerce bureau in Fujian showed.

In addition, as of June last year, there were more than 12,000 Taiwan enterprises doing business in Fujian, and the actual utilization of capital from Taiwan has exceeded $32 billion, according to official data.

The success of cross-Strait economic cooperation can be attributed to the complementary advantages and shared resources between Fujian and Taiwan, said Yin Cunyi, a professor at Tsinghua University's School of Public Policy and Management.

Both regions possess unique strengths in various industries, including manufacturing, technology and services. Through collaboration and the exchange of expertise, these strengths have been effectively leveraged, contributing to growth and development of both sides, Yin said.

Going forward, the strengths of Fujian in digital economy, integrated circuits, new energy, lithium batteries, petrochemicals and textiles will be fully harnessed to build demonstration bases for new-type industrialization in regions where conditions are ripe, the guideline said, adding that it aims to create industry clusters that pool advantages from both sides and bolster global competitiveness.

In particular, greater support will be channeled to Fujian to promote construction of the experimental zone for cross-Strait cooperation in integrated circuits. Meanwhile, the province will place great emphasis on the development of key functional zones to facilitate the concentrated development of Taiwan's leading sectors, it said.

Proactive steps will be adopted by Fujian authorities to explore new forms of cross-Strait services trade cooperation in areas such as culture, tourism, digital economy, logistics, exhibitions and traditional Chinese medicine, it added.

During the 14th Five-Year Plan period (2021-25), the mainland has planned over 1,300 "new infrastructure" projects, with total investment exceeding 10 trillion yuan. This development has brought new opportunities for cross-Strait economic cooperation, particularly in areas such as industrial internet, artificial intelligence and 5G, said Wu Jiaying, executive vice-president of the Beijing-based Association of Taiwan Investment Enterprises on the Mainland.

Taiwan enterprises have demonstrated their excellence in software design and electronic product manufacturing. Their proficiency in these fields positions them to play a significant role in the development of "new infrastructure" projects on the mainland, Wu said.

Additionally, sectors such as semiconductors, circuit boards and machine tools are considered strong areas in Taiwan. This expertise puts them in a better position for integration into the mainland's "new infrastructure "as well as industrial and supply chains, he added.