Lin Lizhen has good reason to celebrate a decision she made two years ago.

The 34-year-old Taiwanese woman, who wants to extend her family business to the Chinese mainland but is fearful of difficulty of accession, chose to open a small retail shop at the Taiwan Small Goods Trade Market on the Dadeng Island of Xiamen, east China's Fujian Province.

"That was our first business in the Chinese mainland, and it is proving successful," she said.

In her 20-square-meter shop, more than 100 kinds of Taiwan-made goods including bottles of fiery sorghum liquor, Taiwanese processed foods and cosmetics are for sale.

Lin's shop is one of the more than 300-plus that are gathered at the market, the sole one opened in the Chinese mainland that enables direct trade between people across the Taiwan Straits.

Just an hour's drive from Xiamen, through underdeveloped villages and sprawling banyan trees, shops at the Dadeng Island Taiwan Trade Market now offer an array of tax-free goods shipped from Jinmen: bottles of sorghum liquor, Taiwanese packaged foods, hair care products and Jinmen-made kitchen knives, among many others. Taiwanese businessmen stock up here on garlic, mushrooms, toys and watches.

The market, opened in 1999, was designed to legalize the bustling but illicit trade that has been going on for years between Matsu, Jinmen and Xiamen.

Taiwanese authorities allowed outlying islands including Matsu and Jinmen to trade directly with the mainland in 2001.

Before that, goods from Taiwan had to be imported via a third place, such as Hong Kong, Macao or South Korea, before entering the Chinese mainland.

Import tariffs are eliminated at the market if one buys goods worth less than 1,000 yuan (US$121) in a day.

Until now, a total of 30,000 Taiwanese people have visited the market, bringing a total of US$20 million worth of goods.

"The fair essentially offers a tax-free venue for people across the Straits to trade directly," said Hong Qi, an official with the market.

"Since it was opened, illegal smuggling and trading in Xiamen waters have diminished," he said.

More significantly, the market has opened a window for Taiwan and mainland business people to get to know each other more directly and in an everyday way.

"We have learned to do business in the mainland in the past two years by running the shop," Lin told China Daily, saying she and her husband have become acquainted with the mainland market and plan to invest in a health enhancement center on Dadeng Island.

"We are going to invest in more sectors and places in the mainland," Lin said. "We found the market here is massive and lucrative."

Rosier future expected

Topping Hong's agenda is further activating the market by attracting more shoppers and goods.

A set of incentives will be put in place to stimulate the market.

First, the completion of major transportation projects will bring more mainlanders to visit the market.

A cross-sea bridge and an undersea tunnel will shorten the time needed to bring a traveler from downtown Xiamen to Dadeng Island.

"Seventeen minutes will be enough," Hong said. "That compares with an hour needed currently."

And more goods from Taiwan are expected to enter the market, Hong said.

At present, only six categories of goods are allowed to be sold there, including food, apparel, artistic products, light industrial products and medicines.

And buyers may flock to the island after the tax-free limit is lifted to 3,000 yuan (US$363).

"When the limit loosens up, shoppers will be able to buy DVD players and small home electric appliances with zero tariffs," he said. "They will find the inexpensive and high-quality goods at the market."

The 0.8-square-kilometer market will have an intake of imports of US$5 million from Taiwan this year, Hong predicted.

Hong said he expects the market to empower the development of the underdeveloped Dadeng Island, whose dusty roads and shabby buildings offer a stark contrast to high-pitched and modern downtown Xiamen.

"We hope the market can be a platform to lure Taiwan investors to the island," said Hong.

"Dadeng has abundant tourism resources but lacks funds," he said.

(China Daily August 24, 2004)