Fujian to Foster Cross-straits Auto Cooperation

The Xiamen Government is reportedly planning to

Located directly across the Taiwan Straits from Taiwan, Fujian Province is at the forefront in boosting auto-industry interaction between China and Taiwan. According to Hong Kong's Wenwei newspaper, Fujian is ready to welcome automobiles shipped from Taiwan under rules approved by the Beijing authorities in January.

It has also been reported that Fujian is initiating talks with Taiwan on the mutual recognition of auto license plates and driver's licenses.

The Fujian government has mapped out a special zone in Pingtan, Fujian's largest island, exclusively for the promotion of economic interaction with Taiwan. This “Western Coast Economic Zone” will allow Taiwan-made trucks, sedans, and electric bikes to be registered and issued temporary plates, and Taiwanese citizens will also be able to apply there for temporary driver's licenses. The plates and driver's licenses will be valid for three months at most.

The special economic zone will also offer favorable conditions and incentives to attract Taiwanese investment and boost cross-straits industrial cooperation. To facilitate the zone's operations, Fujian is planning to add regular cross-straits shipping services between Xamen and Fuzhou in Fujian Province and Keeling and Taichung in Taiwan.

Fujian's Communications Department has designated 2010 as the year for fostering the construction of cross-straits transportation facilities with the aim of developing a cross-straits transportation center in the province. Construction of docks to handle containers moving across the Taiwan Straits has already begun; according to the Fujian government, Taiwanese construction firms are welcome to participate in the construction projects.

In addition, following a cross-strait telematics conference in Taipei last April, the Xiamen government has arranged several follow-up visits to Taiwan for the discussion of details about further cooperation. One cooperative project is the proposed BRT network to be powered by a Taiwan-made telematics operating system.

Located between the Pearl River in the south and the Yangtze River in the north (the most commercially active areas in China), Xiamen is aware that it has to take advantage of its geographical location as the closest Chinese province to Taiwan. Besides, southern Fujian residents share the same culture and language as the Taiwanese, because most of the Taiwanese people's ancestors came from Fujian centuries ago.

Auto Shipment to Taiwan

Taiwan has opened its door to autos shipped from China. In December 2008, Taiwan's Sanyang Motor first put “Sanyang Golden Dragon” buses on the streets of Taipei. These buses are produced by the Xiamen King Long United Automotive Industry Co., in which Sanyang holds a 25% stake.

Xiamen King Long United Automotive Industry is currently the largest bus maker in China and is among the top five in the world. Its Model 6858 bus has won several international awards in the United States, Europe, and Australia in recognition of its quality and design. Partnership with Xiamen King Long gives Sanyang, which is well known as a motorcycle maker, a short-cut access to the bus and commercial van niche, with its great market potential in both Taiwan and the mainland.

“Taiwan's bus and commercial van market is traditionally dominated by Japanese brands, and the globally-known Golden Dragon may offer an alternative choice in Taiwan's market,” commented an executive at Sanyang Motor.

Earlier last September, King Long signed a contract with Sanyang Motor for the establishment of a joint venture in Taiwan. The details, however, have yet to be finalized.

Industrial Cooperation

The beginning of Taiwan- Fujian auto industry cooperation came back in 1995 with the establishment of a joint venture between Fuzhou Motor of China and Taiwan's China Motor (a member of the Yulon Group). The resulting Dongfeng Automobile Co. remains the largest auto joint venture in the greater China area, supported by over 30 Taiwanese-run auto parts makers as satellite plants.

Dongfeng is also among the largest automakers in China, with 62 first-tier retailers in 32 major cities around the country. It is targeting sales of 600,000-700,000 units this year, and will contribute an annual profit of over NT$3 billion to the Yulon Motor Group.

All of the automakers in Fujian were established with Taiwanese partners. Fujian Daimler Automotive Co. is a joint venture of the Fujian Motor Industry Group, German automaker Daimler AG, and Taiwan-based China Motor, set up with an initial paid-in capital of US$300 million. The company was registered in June 2007 and started formal operation in October that year. Located in Qingkou Township, Minhou County in Fujian's capital city of Fuzhou, the company hopes to produce 40,000 Mercedes-Benz multi-purpose vehicles (MPVs) annually in addition to other high-end commercial vehicles including the Viano, Vito, and Sprinter models, with technology transferred from German partner.

"This joint venture,” said Fujian Diamler chairman Ling Yu-zhang, “will enhance the technology and quality of the Fujian auto industry and also mark the start of cooperation between the Fujian auto industry and overseas companies," said FJMG Chairman Ling Yu-zhang.