Businesses in southeast China and Taiwan say they're benefiting from a Free Trade Zone in Fujian Province, which was officially launched in April. China's State Council approved the initiative last December and that same month, CCTV reporter Liu Yang travelled to one company in Fujian Province, to find out what they were expecting from the scheme.
Dicing saws like this are widely used in semi-conductor assembly, optical communication, and LED wafers. The cutting-edge technology created by a company in Taiwan changed the fate of this small and outdated company.
"We're a small business. We make machinery components, automation equipment, and packaging-products. We're looking for better source-products that can help us transform our business," said Liu Honglin, manager of Dong Feng Machinery company.
It was a win-win situation for both companies. This machinery was mostly produced in the 90s, inefficient and unsafe to use. The manager says both companies were looking for partners back in 2011. The Taiwan company eventually decided to provide the dicing saw machine to Dong Feng, and Dong Feng in turn promoted the dicing saw to its customers. They are just the tip of the iceberg in cross-Strait business relationships between Fujian and Taiwan.
New opportunities mean new challenges. The State Council's approval of a Free Trade Zone in Fujian will be good for reform and innovation in various sectors. The manager of the company says its business will benefit from policies issued in the free trade zone.
"Dicing saws are high tech machines. If they're imported from abroad, they have a zero tariff. However, we build the entire machines here in China. We need to pay a high price because all the components have to be imported. So we have to pay tariffs. We hope these tariffs can be lifted for these machine parts from abroad," said Li Jianwen, manager of Fuzhou Shengyi Electronic Technology Co. LTD.
Fujian is the closest place on the mainland to Taiwan. And the mainland is Taiwan's largest trading partner.
"Taiwan is just a small island. Our resources here on the mainland are a thousand times more than what we have in Taiwan. Our products need to develop in the mainland," Li said.
Bigger markets mean more opportunities. The establishment of the Free Trade Zone in Fujian which spans parts of Pingtan, Fuzhou and Xiamen, promises an explosion of business opportunities.
"Our Free Trade Area has carried out many new policies to boost investment. We will open some of our service industry to boost financial innovation," said Liang Yong, deputy director-general of Fuzhou Commercial Bureau.
Experts say the Fujian Pilot Free Trade Zone will benefit significantly from cross-Strait relations. They cite the Shanghai Pilot FTZ. In its first year of operation from Sept 2013 to Sept 2014, the Shanghai zone attracted 157 Taiwan-funded companies with a total registered capital of 270 million US dollars. Shanghai saw its trade volume with Taiwan soar over 5.7 billion US dollars in 2013. As Fujian is the closest FTZ to Taiwan, both sides can expect a big boost in economic development.
