New measures draw Taiwan people to mainland
A growing number of the island’s residents are relocating, lured by new policies, financial incentives and a wider range of opportunities, as reports.
‘Since I opened my first store in Sichuan province in December, the mainland’s business potential has exceeded my expectations. I now have four stores,” said Ken Huang, an entrepreneur from Taiwan.
The 37-year-old owner of a handbag brand was among 8,000 people from the island who participated in a weeklong trade exhibition at the Ninth Straits Forum in Xiamen, Fujian province, last month. Most of the attendees were seeking opportunities to expand their businesses in the mainland and exploring the possibility of trading internationally.
Last month, communications and exchanges between people on both sides of the Taiwan Straits continued to rise, despite recent setbacks in political ties.
Although tourism and business activity are developing rapidly, high-level communications between the mainland and Taiwan have been at a low point for more than a year. The relationship between the two sides had been developing constructively based on the 1992 Consensus, a formula for relations between Taipei and Beijing rooted in the understanding that there is only one China, and opposed to “Taiwan independence”.
Things changed in May last year, when the Democratic Progressive Party in Taiwan denied the existence of the 1992 Consensus, consigning dialogue to the deep freeze. That means the Straits Forum — composed of 21 major trade fairs, symposiums and exhibitions — is now the biggest platform for people from both sides of the Straits to seek career opportunities and better lifestyles.
During a speech at the forum, Yu Zhengsheng, China’s top political adviser, announced a series of new policies to be rolled out in the coming months to benefit Taiwan residents in the mainland, and help them enjoy the same status as mainlanders in terms of financial and public services.
A growing presence
The new policies have been formulated as a response to the growing number of people from Taiwan settling in the mainland. According to a report conducted in April by 1111 Job Bank Co in Taiwan, about 700,000 Taiwan residents live and work outside the island, with about 350,000 of them working in the Chinese mainland. Meanwhile, research conducted in March by the Global Views Survey Research Center in Taiwan suggested that nearly 60 percent of Taiwan residents ages 20 to 29 would be willing to work, study or invest in the mainland.
Last year, the number of new businesses in the mainland owned by Taiwan residents rose 32 percent, and by February, nearly 4,000 sole proprietors from the island were operating in the mainland.
More than 20 new policies will be released in the coming months to help Taiwan residents find their feet in mainland cities.
Speaking at the forum, Cheng Tien-li, a freelance writer from Taiwan, explained the potential benefits. “At present, it would take me two weeks to open an account with a State-run bank because my documents would need to be reviewed and the procedure is complicated,” she said.
“However, the staff at the bank said I will soon be able to apply for a credit card, just like a mainland resident. There will be no extra requirements or time taken when we (non-mainland residents) apply.”
Huang, the handbag producer, said previously released policies — designed to support startups and entrepreneurs age 45 and younger — prompted him to expand outside Taiwan: “There was every reason to shift my business to the mainland, mainly the preferential policies for young people that have been released in recent years.”
His workshop is located in the Taiwan pavilion of the Xiamen section of the Fujian Free Trade Zone, where the policies allow qualified businesspeople from Taiwan to claim a 100 percent refund of the rent they pay for business premises in the first year of operations, and they also receive a housing subsidy of up to 2,000 yuan ($295) per month.
In addition, measures released in January last year mean high-end professionals from Taiwan who earn more than 300,000 yuan a year can claim a refund of 25 percent of the income tax they pay to the Xiamen government, while “extraordinary talents” — highly respected individuals — can receive startup funding of as much as 1.5 million yuan over several years.
“Who wouldn’t be tempted by these incentives?” said Bill Chow, senior manager at Dayongqi Trade Co, which has made seafood-based sauces in Taiwan for several decades.
“My company began developing its business in the mainland a year ago. We decided to establish branches in Xiamen and Shandong province because the mainland’s large population provides a huge market — Taiwan can’t compete.”
After conducting market research in Shandong, Chow discovered that a number of food producers in the province met the standards of food safety required by his company, which has now subcontracted production to a local producer.
“It’s more efficient to produce our sauces in the province. The factory’s standard of hygiene is very satisfactory — the opposite of the food safety concerns we heard about in recent media reports.”
One major attraction is that in the coming years the mainland’s export tax is expected to be lower than its counterpart in Taiwan, according to Chow.
“With China’s growing national strength and success in developing economic and trade ties with other countries, it’s predicted that exporters in the mainland will enjoy low taxes and convenient customs services, plus more trade agreements with other countries, especially those participating in the Belt and Road Initiative,” he said.
Hsu Jung-hsiao, a 76-year-old retiree from Taiwan who attended the forum, said: “I’m not surprised that a growing number of people are willing to live and work in the mainland. For one thing, transportation and public services in major cities are much better than in Taiwan.
“I have lived in Taiwan since my parents took me to the island in 1949, but I have visited my hometown, Yancheng, Jiangsu province, every year for the past decade. The rapid development of airports and highways mean it’s now convenient for me to visit my sister in Yancheng every year,” he said.
Hsu’s sons work in Shanghai and Guangzhou, Guangdong province, because they believe the economic development of large mainland cities offers great potential.
Visitor numbers rise
Last year, 5.7 million people from Taiwan traveled to the mainland, underscoring the steady growth since the two sides resumed communications 30 years ago.
In Nov 1987, after long-standing restrictions on trade and direct communications were abandoned, the Taiwan authorities allowed residents to visit relatives in the mainland. The move ended 38 years without formal communications between the two sides, even though trade via third countries thrived in the 1970s.
In 2011, in a bid to boost Taiwan’s tourism sector, residents of three mainland cities were allowed to visit Taiwan as individuals — before, visitors were only allowed as members of tour groups. The number of eligible cities has been expanded to 47.
Hsu said he has full confidence in cross-Straits businesses and people-to-people exchanges, despite temporary setbacks, because people on both sides share the same roots, traditions, cultural values, culinary habits and language. Moreover, the mainland offers a wider range of employment and business opportunities, and the lifestyle is virtually undistinguishable from that in Taiwan.
That point was echoed by Chow: “I like living in Xiamen. One important factor is that there is no difference when I go to restaurants or supermarkets in the city. I can get everything I want, just like at home.”
Despite the political setbacks, Yin Cunyi, a professor at Tsinghua University’s Institute of Taiwan Studies, believes the mainland’s determination to improve the lives of people on both sides of the Straits remains unchanged. “The political relations between the two sides are virtually ‘frozen’, but communications between people on both sides of the Straits are really ‘hot’, because they still need to trade,” he said.
The mainland’s growing popularity with businesspeople from the island is demonstrated by the number of startups in the Taiwan pavilion in the Xiamen section of the Fujian Free Trade Zone. To date, 81 companies have chosen to base themselves in the pavilion, which opened a year ago.
“It is an irreversible trend; businesses and organizations on both sides will engage in a wider range of exchanges and interactions in the coming years,” Yin said.
Contact the writer at email@example.com Major events in the history of relations
The Kuomintang was defeated by the Communist Party of China after a civil war, and retreated to Taiwan. The CPC established the People’s Republic of China in October 1949.
When the United States established diplomatic relations with the PRC, the Kuomintang authorities in Taiwan adopted the “Three-Nos” policy — no contact, no negotiations and no compromise — with the Chinese mainland.
Taiwan lifted its ban on individual residents traveling to the mainland. Some people were permitted to travel to the mainland to visit relatives and friends they had not seen for more than 35 years. In 1988, Taiwan residents paid around 450,000 visits to the mainland.
The Association for Relations Across the Taiwan Straits was founded in the mainland. The association is a quasi-governmental organization through which the mainland has formally engaged in crossStraits contact with the Straits Exchange Foundation, its counterpart in Taiwan.
Consensus was reached after meetings between two semi-official representatives on both sides of the Straits. Under the consensus, both sides commit to the “one China” principle.
Three cross-Straits links — direct trade, transport and postal services — were resumed after almost 50 years. Since 2008, the relationship between the Chinese mainland and Taiwan had achieved peaceful and sound development, based on the 1992 Consensus. However, the relationship changed in May last year, when the Democratic Progressive Party in Taiwan denied the existence of the 1992 Consensus. High-level communications between the two sides have stagnated since then.