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Pilot project in Fujian aims to deepen cross-Strait trade

Updated: 03 25 , 2015 11:15
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One of the new free trade zones is in the southeast province of Fujian. CCTV's reporter Liu Yang tells us from the city of Xiamen, how businesses in the province, and across the strait in Taiwan, are preparing to reap the benefits.

If you've ever used a treadmill or an elliptical machine to work out, chances are it came from this factory in Xiamen.

Approximately 85 percent of the training equipment produced here is exported to the EU and the US.

The company's president, Li Jianyu, says his family started the business 30 years ago, and are excited for a future under the new Fujian Free Trade Zone.

Though details on the FTZ have yet to be released, Li hopes it will bring policies to make international trade more efficient and convenient, such as exchange rate measures to allow transactions in a single currency.

"Many enterprises in Fujian are export-oriented, so if the exchange rate policy can be opened up, it will be good for our business. We know the Fujian FTZ is to be established to benefit both Taiwan and Fujian. Many of the Taiwan companies' customers are in the US and the EU, it will be a good help if monetary policies can be changed," Li said.

Li also hopes the FTZ will attract more highly skilled talents from Taiwan to the Chinese mainland to support current industrial innovation and transformation there. As China's economy slows, preferential policies are increasingly in demand to boost the local economy.

Professor Li Fei from Xiamen University says the Fujian FTZ helps by improving cooperation between the Chinese mainland and Taiwan.

"The main purpose is to strengthen the cross-Strait relationship, set up more closed relations between the two sides, and eventually to build a community of common interests," Prof. Li said.

Li says FTZs aren't only meant to stimulate the local economy. They also allow officials to experiment with different policies, which if successful, other regions can imitate, and adapt for their own use later on.

"Free trade zones add new impetus to our economic transformation and upgrading. At present, the Chinese economy has reached a bottleneck. But by opening up and promoting the reform process, making enterprises allocate their resources according to the rules of the market economy, and limiting government intervention, enterprises can develop their innovative ability," Li said.

Fujian is one of three sites approved for a new FTZ. But each one will look to create policies specific to its geographic location.

The one in Guangdong has been working towards further integration with nearby Hong Kong, and develop industries such as electronics.

And in Tianjin, the major port city between the capital, Beijing, and the Pacific Ocean, the focus will be on regional economic development and reform.

Experts say both Pingtan and Xiamen are economically and geographically linked to Taiwan. Combining Xiamen and Pingtan into one FTZ will provide a large enough space to accommodate a number of enterprises from Taiwan, and enhance trade with the region. They also say that the future FTZ is likely to be integrated into the 21st Century maritime Silk Road, which is a bid to enhance economic and trade cooperation between China, ASEAN, South Asia and the Middle East.

And as the closest province to Taiwan, Fujian is expected to see the biggest boost, and benefits, from trade and people-to-people exchanges.