By the end of year 2001 since 1979, the accumulative total number of the Taiwan investment items in the mainland has reached 50,820, the contracted capital has amounted to US,73 billion, among which some US,32 billion has already been putsintosuse. Whereas in the same period, the number of Hong Kong-funded projects in the mainland had exceeded 172,000 enterprises, with actual investment amount reaching US.2 billion, accounting for 57.4 percent of total foreign investment. Compared with Hong Kong, Taiwan has its unique style in terms of economic strength, industrial structure and mutual complementariness with the Chinese mainland economy. Taiwan businessmen still have tremendous potential to invest in the mainland.

　　Along with the enhancement of the open policy and the economic development of the mainland, the cross-Strait economic and trade cooperation has witnessed a process of being stronger day by day. According to the statistics of Chinese mainland, by the end of year 2001 since 1979, the accumulative total number of the Taiwan investment items in the mainland has reached 50,820, the contracted capital has amounted to US,73 billion, among which some US,32 billion has already been putsintosuse.

　　With co-endearment of the Chinese across the straits after 20 years' development, the economy and trade communication across the straits was initiated from zero and boomed to a situation of cross-straits economical remedial and mutual benefit.

　　The first batch of companies came to the mainland were characterized by their sunset labor-densed processing characteristics. Most of them were in the seaside areas. Since 1994, the distribution of Taiwan’s investment in the mainland became more reasonable; the inland also attracted large items. Many hi-tech companies brisked up their investment in the mainland these years insgroupsto seek more profits. Besides, Taiwan businesses also set feet in banking, insurance, retailing and logistics.

　　More Taiwan businesses have invested in the Chinese mainland and the ratio of Taiwan firms which manage to earn profits from mainland operations has increased. It is an irreversible trend for more Taiwan businesses to invest in China's mainland. Although Taiwan has made great achievements in hi-tech industry, it is necessary and reasonable to transfer part of the industry's production to China's mainland due to the low labor cost as of only one-tenth than that in Taiwan, a factor of great importance for enterprises. So it's quite natural for more Taiwan businessmen being attracted to invest in China's mainland.

　　According to an official from the Ministry of Foreign Trade and Economic Cooperation, the mainland boasts of abundant resources, huge market, and cheap labor, while Taiwan has advantages in high-technology, capital, and global trading network.

　　"Economically complementary, both sides could benefit from the cooperation," he said.

　　The ever-closer cross-Strait economic and relations in recent years have played an active and important role in stabilizing and developing Taiwan's economy. South China's Zhujiang Delta and the Yangtze River Delta in east China not only are the favorite of Taiwan investors but have been transformed as the production bases and spring-boards for Taiwan companies to enhance presence on world market, Taiwan businessmen held.

　　Famous Taiwan economists recently made an in-depth analysis of the contribution made by the cross-Strait economic exchanges to Taiwan's economy, pointing out that Taiwan business people's investment in the mainland has opened up the second spring for the undertakings of Taiwan business people, expanded Taiwan's exports and export surplus, increased its foreign exchange balance and job opportunities and accelerated Taiwan's economic growth. Related data show that in the first half of 2001, cross-Strait economic and trade volume hit US.4 billion, of which some US billion was Taiwan's favorable balance of trade, making cross-Strait trade the only bright point in Taiwan's external trade.

　　Taiwan business people have performed meritorious deeds in promoting Taiwan's economic development over the past 10 years. Taiwan has become the fifth trade partner of the mainland and the second import market and the mainland has served Taiwan as the second export destination and the largest favorable balance source.

　　
　　Taiwan's economy is predicted to grow 2.29 percent this year, reports from Taipei said Saturday. A previous economic forecast made in November last year by local authorities estimated that the gross domestic product growth rate would reach 2.23 percent in 2002 after suffering its first-ever decline in 2001.

　　Viewed from the situation in the Chinese mainland, the economic strength has shot up at an average annual GDP growth rate of nearly 10 percent since the open policy was carried out. This means that the huge potential of the Chinese mainland market embracing a population of over 1 billion has begun to emerge and bring a great many opportunities for the economies of Asia-Pacific and East Asian regions in their economic restructuring and reorganization.

　　The World Bank estimated that by 2020, China would possibly double its share in world trade and become the second largest trader in the world just behind the United States; China's GDP in the next decade is expected to hit US,000 billion, making it an economic power in the world.

　　Although there were more than 50,000 Taiwan-invested projects in the mainland and its actual amount of investment exceeded US billion, whereas in the same period, the number of Hong Kong-funded projects in the mainland had exceeded 172,000 enterprises, with actual investment amount reaching US.2 billion, accounting for 57.4 percent of total foreign investment. Compared with Hong Kong, Taiwan has its unique style in terms of economic strength, industrial structure and mutual complementariness with the Chinese mainland economy. Taiwan businessmen still have tremendous potential to invest in the mainland.

　　　New opportunities

　　　The exploration of the west area and China's entrysintosthe WTO provide more opportunities for Taiwan businesses. It can be envisaged that in the early 21st century, particularly after China's entrysintosthe WTO, China will still be one of the regions with the fastest and most dynamic economic development in the world economy. Further cross-Strait cooperation will hasten the realization of this possibility and will provide Taiwan with a favorable opportunity. Whether or not Taiwan can further deepen its economic ties with the Chinese mainland will yield important influence on Taiwan's economy. A strengthened cross-Strait economic tie not only helps maintain the sustained cross-Strait economic development and improve cross-Strait relations, but will also help lift East Asian economies out of the slump.

　　Investment legislation accelerates

　　The mainland is also improving its legal system and accelerating legislation so as to better its investment environment.

　　The Detailed Rules on the Implementation of the Law on Protection of Investment by Taiwan Compatriots have been drawn up in February after four years of investigationssintoshow best to implement the law.

　　The law was adopted in 1994 and serves as the first legislation to protect and encourage investment by Taiwan compatriots in the mainland.

　　The detailed rules enlarge the scope of investment forms. Besides equity joint ventures, contractual joint ventures and solely owned enterprises, Taiwan business people may engage in joint exploration and development of natural resources, compensatory and processing trading and purchasing of shares and bonds of enterprises and housing. It also gives them the right to obtain the use of land and buy small-scale enterprises, collective enterprises or private businesses.

　　In respect of matters concerning investment returns, investors may remit in accordance with law their legal returns from investment, other lawful earnings and funds after settlement of accounts back to Taiwan or other places outside the mainland.

　　Regarding disputes arising during the investment, the matter may be submitted to an arbitration organization on the mainland and Taiwan compatriots may be employed as the arbitrator. The rules have strengthened regulations on the freedom and security of Taiwan business people.

　　With the deepening of the mainland's reform drive and the continued improvement of the legal system, it is expected that the economies across the straits will complement each other and move towards common prosperity with enhanced economic communications.

　　Deciding factor:

　　The influences of economic factors inside and outside the Island are important reasons for the emergence of problems in the Taiwan economy, but the root cause lies in the political factor. Over the past year or more since the new leader of the Taiwan authorities took office, he has thus far refused to accept the "92 Consensus" and pushed through a separatist line of "covert independence" as the core, thus causing high tension in cross-Strait relations and social turbulence on the Island, and making it impossible to create a favorable social environment for economic operation.

　　Since Taiwan's economic problems arose from the political level, solutions should be sought from the political angle. How to face up to the one-China principle and the "92 Consensus" is the key to stabilizing Taiwan's political situation, stabilizing cross-Strait relations, bringing about closer cross-Strait economic and trade ties and proceeding to push Taiwan's economy out of difficulties, and guaranteeing the long-term development of the Taiwanese economy.

　　Adhering to the one-China principle, strengthening cross-Strait economic ties and bringing about close economic mutual complementariness are a "win-win" smooth way.