Shandong representatives promoting tourism resources for the Taiwanese, in May last year.

Enterprises from Taiwan have increased their investment in Shandong province in recent years and seem keen on using its various resources and sound economy.

The provincial government's Taiwan Affairs Office has reported $580 million worth of Taiwan capital already in place in the first five months of this year, for a year-on-year increase of 20.8 percent.

By May, Shandong had approved 8,116 Taiwan-backed projects which have brought in more than $17.6 billion in utilized investment. That puts the province in fourth place in this category in China, after Jiangsu, Guangdong, and Fujian provinces.

Last year, provincial authorities approved 208 Taiwan-backed projects with $1.17 billion worth of capital used, a year-on-year increase of 1.8 percent. These brought the trade volume between the two last year to $3.28 billion, an increase of 48 percent.

In addition, "the scale of Taiwan-funded projects is getting larger," said Ni Mingyuan, head of the province's Taiwan Affairs Office.

Of those projects approved last year, 62 involve $10 million in backing each, putting the average overall investment of Taiwan-invested projects approved last year at $8.22 million.

One example is Taiwan's Foxconn, which has spent $1.2 billion on business in Yantai, on the north coast of the peninsular province, since 2004.

The company now employs 80,000 people producing a range of products, including computers, game consoles, mobile phones, DVDs, and LCD TVs. Its output last year amounted to 96 billion yuan.

According to the Taiwan Affairs Office, Foxconn will spend 500 million yuan increasing its business this year.

"Taiwanese products are expanding their range to hi-tech, important service industries," Ni emphasized.

Another contributor is the United Microelectronics Corp (UMC), a leading semiconductor manufacturer, which has spent $1.2 billion on 11 energy-related projects in the city of Jining, in southwestern Shandong.

When these projects are completed, they will give UMC annual sales of more than 35 billion yuan.

Then there is Advanced Semiconductor Engineering Inc (ASE), which has spent $290 million since 2008 on its business in Weihai, another city on the north coast, near Yantai.

The company predicts monthly sales of $24 million, up from the current $12 million, when the third phase of its project is finished in 2012.

Meanwhile, Taiwan's Walsin Lihwa Group has put $1.5 billion into an urban complex now under construction around Jinan's West Station, to take full advantage of the opportunities provided by its high-speed railway connections.

In response to this growing interest from Taiwan, Shandong has built 41 Taiwan-related economic parks to better accommodate its businesses. Some of the more prominent ones are the Yantai Foxconn Park, Jiaxiang Taiwan Industrial Park, and Jiyang Taiwan Park.

The province's sound investment environment has lured even more Taiwan companies setting up facilities here.

To provide greater opportunities for exchanges between Shandong and Taiwan companies, the province has held 16 Shandong-Taiwan trade fairs. The one last year in Weifang, brought the city 27 Taiwanese projects, involving contractual investment of more than $1.22 billion.

There is even more possible cooperation as evidenced by the more than 110,000 Taiwanese who came to Shandong on fact-finding missions last year.

In fact, at the 2010 Shandong and Taiwan Products Fair, in Jinan Last October, 498 Taiwanese companies exhibited thousands of products and attracted 323,000 visitors.

It also resulted in 2.74 billion yuan worth of trade and the business is working both ways: 3,279 Shandong delegates went to Taiwan looking for cooperation, last year.

In May last year, one Shandong delegation, led by Cai Limin, the vice-governor, took part in a Shandong-Taiwan Trade Fair, where 62 projects were signed, worth $2.82 billion in investment.

(China Daily 07/12/2011 page24)

By Ju Chuanjiang and Zhao Ruixue (China Daily)

Edited by Chen Zhilin