A Taiwanese businessman, who has invested in Zhangzhou, Fujian Province, for the past 18 years, said that he was deeply heartened by the Chinese government's proposal to establish an economic zone on the west coast of the Taiwan Strait.
However, representatives of small and medium enterprises expressed their concerns about such a zone while meeting with former premier Frank Hsieh (
Despite the different reactions to the proposal, they reflected the message that, for the Chinese government, the economic zone would not only be economically significant but would push its political objective of promoting unification with Taiwan, analysts said.
According to the proposal's initiator, Lu Zhangong (盧展工), the secretary of Fujian Provincial Committee of the Chinese Communist Party, "with Fuzhou and Xiamen at the centers, the zone is expected to expand along the coastal areas in the province facing Taiwan."
Despite being one of the first Chinese provinces to open to overseas investment in the 1980s, Fujian Province's growth has been falling behind the other eastern provinces, as its location means it has been given the duty to prepare for a war with Taiwan.
PROVINCIAL GOAL
The Fujian provincial government, however, has pledged to build the west coast economic zone into one of China's major regional economies, alongside with the Yangtze River Delta economic circle to its north and the Pearl River Delta economic circle in the south.
The proposal was approved by China's National People's Congress session last October as a key development scheme in its "11th Five-Year Plan [2006-2010]," which is the guideline for China's overall economic and social development.
Under the proposal, some 230 billion yuan (US$28.5 billion) will be invested in the zone during the five-year plan, mainly to build the infrastructure needed to link the three economic circles.
The president of the Taiwanese Businessmen Association in Zhangzhou, Ho Hsi-hao (何希灝), applauded the proposal, saying that Fujian is exceptionally gifted at playing the role of creating a new platform for further economic co-operation between Taiwan and China.
"Due to the vicinity, blood relationships and similar customs and language in Taiwan and Fujian, most Taiwanese businesspeople have no difficulty to fitting in here, which would urge them to call their related upstream and downstream industries to follow suit," Ho said.
By offering new incentives to Taiwanese businesspeople to invest in Fujian, the ultimate goal of the proposal is to help China's southeastern economic regions, including Taiwan, to fulfill integration and complement each other's advantages, Lu said.
Wang Hsin-hsien (王信賢), an associate professor at National Taipei University, sees the value in the proposal.
"China might want to intensify its internal economic integration, but at the same time it is worsening the hollowing out of Taiwan's industries," he said.
For China, unifying its regional economies would improve its national economic growth, which would in turn become more attractive to Taiwanese businesses, he said.
LOCAL FEARS
But the proposal caused concern among Taiwan-based small and medium-sized businesses, whose representatives appealed to the government on Jan. 19 to come up with a strategy to deal with the proposed zone, fearing that their businesses in Taiwan could become isolated.
Tung Chen-yuan (童振源), an assistant professor of National Chengchi University, thinks the proposal would create a win-win situation for both Taiwan and Fujian Province to establish closer economic exchanges and a cooperative framework.
But Tung anticipates the efforts to establish the economic zone will encounter problems at both the negotiation and realization stage.
As for the trend toward comprehensive economic exchanges and integration between Taiwan and Fujian, they will have to wait for the governments of Taiwan and China to sign an agreement to conform to the rules of WTO, Tung said.
Nevertheless, Chen Teh-sheng (
"It also hinges on whether Taiwan's government will remove its ban on investing in China," Chen said.
The economic zone proposal drew renewed media attention recently, after Chinese President Hu Jintao's (
Hsu Chih-chia (許志嘉), an assistant professor of Ming Chuan University, said that from a political angle, establishing the zone is the Chinese government's main maneuver to "promote unification with economic integration."
"China has gradually shifted its strategy to cope with Taiwan from `against independence' to `promoting unification,'" Hsu said.
"The passage of China's `Anti-Secession' Law last year ended the `against independence' [strategy], after which it transferred its focus to promoting unification," he said.
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