"The mainland's wider opening-up following its entry into the World Trade Organization is set to appeal to more investors from the island in the new year," said Zhang Guangmin, deputy director of the Fujian Provincial Taiwan Affairs Office.

He predicted that Taiwanese investment in the coastal province would increase this year.

Under commitments it made when it joined the WTO, China is expected to further lower its tariffs, scrap more non-tariff barriers and improve its investment environment.

In an exclusive interview, Zhang said contracted Taiwanese investment in Fujian saw a year-on-year rise of 119.1 percent to reach US$2.15 billion in the first 11 months of last year.

In the same period, 411 Taiwanese-funded projects were approved, bringing the total number of projects to 7,014 with contracted investment of US$14.63 billion, according to the official.

Zhang also predicted that the island's accession to the WTO will also help speed up the transfer of Taiwanese high-tech firms to the mainland.

Meanwhile, deepening industrial restructuring and strong overseas competition will also force Taiwanese investors to increase their investment in the transportation and logistics sectors on the mainland.

"We also plan to build the service sector areas - such as the telecommunications, banking, insurance, tourism, accounting and foreign-trade industries - into new growth points to attract more Taiwanese investment," Zhang said.

The official pointed to the brighter prospects for closer agricultural cooperation between Fujian and Taiwan this year, partly due to the expected impact of the island's farming sector from its WTO membership.

Zhang said Fujian Province may become the best investment destination for Taiwan's agricultural capital, given that Fujian is the closest neighbor and has similar climate, soil and crops.

"Fujian-Taiwan agricultural cooperation will not only benefit the further development of the Taiwanese farming sector but also boost our own agricultural industrialization to help increase farmers' incomes," the deputy director said.

The official said the current shipping links between Fujian coastal cities and outlying Taiwanese islands under Taipei's so-called ''three mini links,'' introduced on January 1, 2001, will also greatly help improve bilateral economic and trade ties this year.

The ''three direct links'' refer to direct trade, transport and postal links across the Straits. The ''three mini links'' indicate those between the outlying Taiwanese islands of Jinmen and Matsu and the port cities in Fujian Province.

But only Taiwanese vessels are allowed to ferry passengers and goods between the islands and Fujian cities. Mainland ships remain barred from docking at Jinmen and Matsu.

The "mini links" have helped expand the volume of trade between Taiwan and Fujian. This rose by 20.78 percent year-on-year to US$2.76 billion in the first 10 months of last year.

However, Zhang also warned against several disadvantageous factors that may hinder the development of bilateral economic cooperation.

Among them are the Taiwan authorities' maintenance of rigid restrictions on cross-Straits economic exchanges and Taipei's attempt to internationalize the Taiwan question under the WTO framework.

(China Daily January 20, 2003)