According to official statistics, 289 projects backed with US$650 million in investment funds from Taiwan got approval from the provincial government last year, up 18 per cent and 67 per cent respectively from figures for 2000.

The total number of Taiwan-invested projects in Fujian reached 6,585 and the projects involved a total of US$12.35 billion by the end of last year. About US$8.81 billion has already been pumped into the projects.

Zhang Guangmin, deputy director of the Taiwan Affairs Office of Fujian Province, attributed the growth to efforts of governments at various levels to improve the investment environment.

The year 2000 was a disastrous year for Taiwan investment in the province, dropping 47 per cent from that of the previous year.

In the 1980s, Taiwan investment in Fujian made up about 70 per cent of total Taiwan investment in the Chinese mainland, but it dropped to 18 per cent in 2000.

"The decline was due to the investment environment which failed to meet the demands of Taiwan investors," Zhang said.

Taiwan business people complained about complicated procedures for investors to establish projects in the province. Problems raised with the local governments by Taiwan business people were not handled quickly enough.

The costs for Taiwan-invested projects are higher in Fujian, than they are in other provinces and regions, Zhang said.

Fujian's overall economy is smaller than that of these places. The government cannot afford to grant preferential policies to overseas-invested projects. Some Taiwan business people have turned to other provinces to seek such benefits.

Fujian spends large sums of money every year organizing business activities overseas. However, the result is not satisfactory because of the weak preparation work. Projects prepared to seek overseas investment are not supported by effective feasibility studies and detailed introductions.

To reverse the situation, the provincial government listed improving the investment environment high on its agenda in 2000, and the task continues to be the focus this year, Zhang said.

Reform of the land-use system is the first step being taken by the government. Land approved for project use has been re-examined. Idle land has been returned to the government. Some land users have been ordered to pay fees for idle land.

Work sites owned by bankrupt or closed enterprises have been recommended to overseas businesses for their use. A land banking system will be established to increase the government's power for the control over land resources.

In some key areas designated for Taiwan investment, the land-use fee has been significantly reduced to attract investors.

(China Daily February 11, 2002)