Peking's wooing of Taiwan includes an offer of trade across the strait

Peking is holding out the possibility of direct trade between China's coastal province of Fujian and Taiwan. The impending decision, disclosed recently in Hong Kong, represents the latest step in Peking's continuing campaign to convince the Nationalists that they should reunite with the mainland.

Besides having an exclusive right to trade with Taiwan, Fujian Province would also be allocated additional foreign currency, according to reports circulating in Hong Kong. A shortage of foreign exchange in recent months has slowed the pace of trade between China's coastal cities and foreign countries.

Last fall, the official New China News Agency sponsored visits by three groups of foreign diplomats, businessmen, and journalists to this port city of 270,000 people and other urban areas in Fujian, situated directly across the strait from Taiwan.

These trips were designed to show foreigners the rapid development of the Xiamen Special Economic Zone as well as the modernization of the province in general. Created in 1981 after the funding of three other zones in Guangdong Province -- Shenzhen, Shantou, and Zhuhai -- the Xiamen Special Economic Zone was first concentrated in a 1.5-square-mile area at the tip of Xiamen Island. In 1983, Peking extended the zone to cover the entire island.

The 1,100-year-old port city of Xiamen (Amoy) boasts South China's deepest natural harbor. The city has 588 factories and 750 enterprises, including joint ventures with Eastman Kodak, a Hong Kong boatworks called Celestial Yachts, and Conic of Hong Kong, a financially ailing electronics firm recently bailed out by Peking. The companies in the zone employ 80,000 workers, who earn an average of 150 yuan ($50 US) a month.

Since 1983, the Xiamen Special Economic Zone has attracted 128 new industrial projects and a total investment of $1.1 billion. Of that total, $600 million represents direct foreign investment, 60 percent of it coming from Hong Kong and Macao, 20 percent from overseas Chinese in Southeast Asia, 15 percent from Japan and the United States, and 5 percent from Europe.

Those are impressive statistics, but in reality, Xiamen's new Huli industrial district, within the special economic zone, looks like a ghost town of the future.

Eighteen new industrial buildings, 12 stories high on average, stand empty at the base of a hill topped by the new Xiamen Mandarin Hotel. The buildings cost about $2.5 million each for the provincial government to build and will rent for some $30 a square foot annually once they are occupied. But because of red tape and a general sense of caution, few of the tenants will be moving into their new buildings for another year or more.

Despite these complications Fujian, the traditional home of many overseas Chinese, is a logical place for Peking to begin building ties with Taiwan. Some 80 percent of Taiwan's Chinese population can trace their roots to the province. Many of the 300 overseas Chinese students who study at Fujian's Huaqiao (``overseas Chinese'') University are from Taiwan. And the main dialect of Chinese in Fujian is virtually identical to Taiwanese.

Peking has begun to make an effort to lure back wealthy expatriates to Xiamen. On Gulangyu Island, opposite the port city, some turn-of-the-century mansions built by wealthy overseas Chinese are being returned to their families by the Chinese government.

In most cases, however, the descendants cannot afford the upkeep and have allowed the state to continue to use the homes for government offices and official functions.

China's leaders have long wanted to show the world that they understood Hong Kong and could create a little Hong Kong, says a Hong Kong businessman with close ties to officials in Fujian's provincial government. Now they're trying to woo Taiwan by establishing stronger trade links with Xiamen.

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