COME TO TAIWAN: A booth for promoting Taiwan tourism at the 2012 Cross-Straits Fair for Economy and Trade in Fuzhou, capital of southeast China's Fujian Province (XINHUA)

Magical Times Digital Technology Co. Ltd. is a top animation and cartoon company located in Fuzhou, capital of southeast China's Fujian Province, facing Taiwan across the Taiwan Straits. In an effort to bring new ideas to the table from across the Straits, the company hired a five-man team from Taiwan to help with its creativity and international businesses.

"The technology for the animation and cartoon industry on the mainland is pretty advanced, but the sector still lacks creativity and innovation. That's what we are here for," said Nieh Yu-ping, new Operation Director of Magical Times and a Taiwanese resident who used to work for Eastern Television.

The cooperation between the Chinese mainland and Taiwan is prevalent in many sectors, and Fujian has been a frontier province due to its proximity to Taiwan.

"The economies of Fujian and Taiwan are complementary, and gains from increasing trade across the Taiwan Straits can benefit both sides," said Robert Mundell, a Nobel Prize-winning economist, at a forum in Fuzhou.

The forum, a sideline event of the 14th Cross-Straits Fair for Economy and Trade held in Fuzhou on May 18, focused on the development of the west side of the Taiwan Straits into an open and vigorous economy. The annual fair seeks to expand trade cooperation, strength two-way investment and promote people-to-people exchanges across the Taiwan Straits.

Taiwan's technology and investment are a great plus for the development of Fujian, and Fujian's larger supply of cheap labor has attracted investment from the island, said Mundell.

The fair is a popular event in Fujian for cross-Straits pilot programs and cooperation. The Mawei-Mazu Agreement, a historical paper for cross-Straits communication, was signed at the 2001 session. In 2005, tariffs for Taiwan fruits imported to the Chinese mainland were lowered to zero. In 2011, an Early Harvest Program exhibition under the Cross-Straits Economic Cooperation Framework Agreement (ECFA) was held at the fair, demonstrating the latest accomplishments of the agreement.

At the 2012 session, with the growing influence and wider coverage of preferential tax policies under the ECFA, a new step forward to boost trade with Taiwan was taken. An agreement for the establishment of an administration office, which issues certificates of origin to mainland goods and commodities for tax breaks when exported to Taiwan, was inked. The office is the first of its kind on the mainland established by the General Administration of Customs to make cross-Straits trade more convenient.

"Tax was a key barrier before. But now taxes for textile products have been lowered under the ECFA," said Huang Guo-zhou, President of Taiwan-funded Fujian Taixing Textile Co.

Oolong Tea is a commodity that Taiwan specializes in. Under the Early Harvest Program, the tariff on oolong tea leaves was lowered to 5 percent in January 2011 and zero in January 2012. Previously, the tariff was 15 percent. This new move has allowed mainland citizens to enjoy the tea at a lower price and increased the sales volume of Taiwanese companies.

Market appeal

When Taiwanese companies look to the mainland, they generally see two prospects: a broad market and robust source of cheap labor. Fujian is a foothold for their forays into the mainland.

Many Taiwanese companies came to Fujian to launch their mainland business ventures. By the end of March 2012, Fujian had more than 3,863 Taiwan-funded enterprises, with a total investment of $9.7 billion.

"We come to the fair every year. This year, we held a festival for the 60th anniversary of Kinmen Kaoliang Liquor. We entered the Chinese mainland market in 2004," said Yang Wun-zhi, Chairman of the Xiamen company affiliated to the Kinmen Kaoliang Liquor, which holds a 90-percent market share of the liquor market in Taiwan. "The sales revenue in 2011 totaled 2.89 billion yuan ($457.5 million), a record high, among which 190 million yuan ($30.12 million) came from the mainland, a 72-percent year-on-year increase," said Yang.