Fujian province has become a test bed for mainland China’s push for economic, social and political integration with Taiwan. In this story – the first in a four-part on-the-ground series – Amber Wang details the 15-year integration drive in Fujian’s Pingtan county, which appears to be losing steam as the mainland economy falters, military tensions grow and Beijing struggles to turn cross-strait business ties into political loyalty.
For Allen Xue, a Taiwanese woman, the allure of moving just across the Taiwan Strait to the coastal county of Pingtan on the mainland was hard to resist.
Earlier this year, she settled into a compound specifically tailored for Taiwanese and bought it at a price far below market value.
Many decades ago, Pingtan, located just 110km (68 miles) from Taiwan in Fujian province, was a collection of underdeveloped fishing towns that served as a base for mainland Chinese attempting to illegally enter Taiwan.
Much has changed since then. Around 15 years ago, the county became a test site for economic, social and political integration with Taiwan. Business and infrastructure boomed as Beijing invested billions into building links across the strait.
However, the integration drive seems to be losing steam after its initial progress as the mainland’s economy stumbles and cross-strait tensions grow, according to Taiwanese residents of Fujian and Beijing policy advisers interviewed by the South China Morning Post.
While some Taiwanese businesses have taken advantage of the scheme, the plan has not succeeded in fostering deep cross-strait economic ties or political loyalty towards Beijing.
Pingtan, once a symbol of opportunity, is now dotted with abandoned factories and industrial estates and empty storefronts. The Taiwanese who remain there are left with mixed feelings – hope, scepticism, and even fear.
A mainland scholar, who advises on Taiwan affairs for multiple government bodies, said the effectiveness of the integration plan remained “limited”.
“The success of integrated development requires moving beyond exchanges based on economic interests to find ideological and political common ground,” said the scholar, who requested anonymity.
A once-a-millennium opportunity
In the late 1970s, as Beijing sought to integrate into the US-led global economic order following the death of leader Mao Zedong, it tuned down its rhetoric about “liberating Taiwan”, or taking over the island by force.
Beijing started advocating for “peaceful reunification” and exploring ways to promote cross-strait exchanges and cooperation, though it has not ruled out the use of force to take the island back, if necessary.
Hundreds of thousands of Taiwanese business leaders have come to mainland China to set up factories since the 1980s, attracted by its economic reforms and market potential. Taiwanese people have made 100 million visits to the mainland since the exchanges began in 1987.
In 2009, Pingtan was designated as a site to explore “common governance” centred around Beijing’s “one country, two systems” reunification formula.
In 2014, President Xi Jinping visited the area to unveil his vision of “integrated development”, an ambitious plan to win the hearts and minds of Taiwanese by strengthening economic, social, and cultural ties – ultimately laying the groundwork for peaceful reunification and governance.
Pingtan was chosen as a place to try out the strategy, whose principles include shared development opportunities, equal treatment, and cross-strait connectivity in trade, infrastructure, and public services.
While in Pingtan, Xi reminded local officials that the county faced a “once-in-a-thousand-year opportunity”.
Beijing invested more than 150 billion yuan (US$20.6 billion) in infrastructure in the county from 2012 to 2022.
During this period, the number of Taiwanese residents in Pingtan grew from just a few dozen to over 3,000, and more than 1,000 Taiwanese enterprises were established in the county.
Industrial estates and residential communities aimed at serving Taiwanese businesses and residents proliferated, and certain government posts were reserved for Taiwanese people.
Beijing even planned a direct rail link connecting Pingtan to Taiwan in just half an hour to be completed by 2035 – a key reason Xue chose to settle in the county – though Taipei has shown no signs of interest in giving it the green light.
In September of last year, Beijing sought to replicate some of the Pingtan experience elsewhere in Fujian, declaring the province a “model zone for integrated development” and aiming for “substantial progress” by 2025.
In a 21-point plan issued at the time, Beijing sought to create shared industrial standards, foster social integration and encourage more Taiwanese to visit.
A year later, mainland China’s Taiwan Affairs Office (TAO) recounted some successes of the plan. It said that in the first half of 2023, a total of 434,000 Taiwanese entered mainland China via Fujian’s ports, a 65 per cent increase from the previous year.
During the same period, over 1,500 Taiwanese people in 50 professions obtained certificates to practise in Fujian as part of the mainland’s policy to recognise Taiwanese standards, the TAO said.
The integration push has been backed by generous state financing. For example, the coastal city of Xiamen offers a subsidy of up to 1.5 million yuan per year for Taiwanese professionals who work in the city, while Taiwanese entrepreneurs who start businesses in Xiamen’s Huli district may receive start-up funds of up to 150,000 yuan.
The city also has policies to recruit Taiwanese talent in the integrated circuit industry, offering tens of thousands of yuan for those who join a mainland company in the sector.
Losing economic steam
However, Taiwanese companies operating in Fujian face challenges, including a lack of industrial clusters and skilled talent, a slowing mainland economy and tougher competition from mainland rivals, according to business owners and observers.
Following remarkable annual GDP growth averaging 9.3 per cent from 2012 to 2022, Pingtan’s economic growth slowed to just 3 per cent in 2023, compared with 4.5 per cent for Fujian province.
Pingtan’s 2023 growth rate was the second slowest of any city in the province, while just five years earlier it had the second-fastest-growing economy in Fujian.
A once-bustling duty-free market in Pingtan – previously home to over 300 Taiwanese vendors selling products from the island – is now nearly deserted and quiet.
“We just don’t make money here – there are hardly any customers except during the summer tourist season, and our Taiwanese products have gradually lost competitiveness on the mainland,” said a vendor surnamed Ye, who was considering leaving.
“Especially since the pandemic, the number of Taiwanese here has gradually declined,” she added.
Despite tax breaks and incentives, many frustrated Taiwanese businesses have departed Pingtan, leaving behind empty industrial estates and abandoned factories.
A new generation of Taiwanese young people is exploring government-backed initiatives and start-ups, but their numbers remain low.
Last month, Taiwan’s Mainland Affairs Council released numbers from the January to September period showing rapidly declining investment on the mainland, falling from US$8.49 billion in 2018 to US$3.04 billion in 2023.
It added that investment in Fujian accounted for only 0.03 per cent of total Taiwanese investment outside the island.
Mainland authorities responded, saying the mainland was the “top choice” for the island’s investors, but did not provide numbers on total Taiwanese investment on the mainland.
Instead they pointed to growth in the number of investment contracts and cross-strait trade volume. They also noted 1,121 new Taiwan-funded enterprises were established in Fujian in the first half of 2024, up 27.4 per cent compared to the same period last year.
According to Beijing, the number of Taiwan Compatriot Residence Permits in Fujian in the first half of this year was 2.6 times that of the same period last year.
Mainland China’s economic downturn is a key reason it has become less attractive for Taiwanese businesses, said Tang Yonghang, a Taiwan affairs specialist at Xiamen University.
“In recent years, as our economic growth has slowed, that means fewer opportunities here,” Tang said.
The tense atmosphere across the strait, as well as the trade and tech rivalry between Beijing and Washington, have made many people proceed with “extra caution”, Tang said.
The rise of the Democratic Progressive Party (DPP) in Taiwan has not helped.
Official interactions between the island and mainland were frozen and people-to-people exchanges were limited after the independence-leaning party came to power in 2016. Since then, integration has been a “one-way effort”, according to several mainland observers.
In recent years, the Taiwanese government has introduced policies and incentives aimed at steering Taiwanese investments towards Southeast Asia or back home.
Yu Xintian, a researcher with the Shanghai Institutes for International Studies, blamed the DPP for pushing the island and its people away from the mainland and said the two sides were almost at a state of “economic decoupling”.
“The situation is largely due to the impact of the pandemic and the cooling of cross-strait relations. Since [former Taiwanese leader] Tsai Ing-wen took office [in 2016], the DPP administration has placed significant restrictions on cross-strait exchanges,” she said.
Taiwanese businesspeople in Fujian also pointed to the suspension of a passenger ferry as another DPP effort to stall economic integration.
The Haixia ferry, which over a decade carried more than 1 million people between Pingtan and three cities in Taiwan, has been suspended since the coronavirus pandemic erupted in 2020.
Taipei has rejected the ferry company’s application to resume operations 20 times.
Can money buy loyalty?
Beijing wants the integration efforts to lead to deeper political recognition of the mainland among Taiwanese, but they have so far not delivered on that goal.
A February survey by the Election Study Centre of Taiwan’s National Chengchi University showed that only 2.4 per cent of Taiwanese identify as Chinese, the lowest since 1992.
Roughly a month before the election in January, Song Tao, director of the mainland’s Taiwan affairs office, hosted 152 Taiwanese business moguls and told them they should “aim to steer cross-strait relations back onto the right track”.
But so far interactions have remained at a superficial level of cooperation, analysts said.
Yang Kaihuang, a professor with Taiwan’s Mingchuan University, said that while Beijing had introduced favourable measures for Taiwan and promoted broad exchanges in recent decades, they had inadvertently fostered anti-Beijing sentiment on the island.
“This would mean a significant risk for the governance of Taiwan after unification,” he said. “The costs are too high if we aim at political outcomes with economically preferential policies, and the pushes now are too rushed.”
While most Taiwanese businesses on the mainland are Beijing-friendly, Tang from Xiamen University said there was a certain degree of “separation of politics and economics” among Taiwanese businesspeople on the mainland.
He noted that some who were making money on the mainland still supported the DPP, with some cases of those being punished by the mainland in recent years.
Tang suggested Beijing take a “differentiated” approach – offering benefits to those who recognise both sides as one country, but withholding them from those who do not.
“If you consider me a friend, I’ll treat you as one; if you’re my enemy, I’ll treat you as such,” Tang said.
However, the integration push did succeed in reinforcing friendly sentiment towards Beijing among business owners who feel attached to the mainland.
Taiwanese businessman Chen Mengbang said that “the financial support is very generous and beneficial to Taiwanese people”.
He received a 15 per cent corporate income tax reduction and over 1 million yuan in funding for his tech company established in Pingtan.
Wang Shenhao is a young Taiwanese man who operates a government-funded cultural and tourism exhibition hall for a community in the Fujian city of Xiamen.
He said his time on the mainland had shown him it is not a place “without human rights”, despite the popular image portrayed by Taiwanese media.
Xue, the Taiwanese woman in Pingtan, said she believed moving to the mainland was consistent with a simple principle: she will go wherever there are policies that “care for the Chinese people”.
She is still counting on the resumption of the Haixia Ferry and the opening of the high-speed railway, despite the lack of progress on it.
She added that she hoped her son could come to the mainland to avoid the looming threat of war.
Military pressure and war worries
Xue’s worry about a potential war is on the minds of many Taiwanese who live in Fujian.
Wang Shenhao, the Taiwanese youth working in Xiamen, said he was worried about his own safety in the event of a war across the strait.
“If there were to be a war between the two sides, all of us Taiwanese people here on the mainland would definitely be rounded up and controlled, right?” he said, adding that he did not think Beijing would let Taiwanese “roam around and spread information” on the mainland about what was happening across the strait.
John Dotson, deputy director of the Global Taiwan Institute, said Beijing’s dual approach of heightened military pressure on the island alongside these softer integration policies were in conflict with each other.
“Beijing’s campaign of military coercive pressure raises concerns of instability or war – things businesspeople never like – and further alienates Taiwan’s population, at a time when a separate sense of Taiwanese identity is steadily rising,” he said.
A test of joint governance
Beijing has long held the view that Taiwan should follow “one country, two systems” after its reunification with the mainland, meaning it may practise a political system somewhat different from the mainland.
Xi proposed in 2019 that “all sectors of Taiwanese society can work together” to explore how Taiwan’s version of “one country, two systems” could work out.
So far there are no official details, but observers believe Fujian’s experiments with hiring Taiwanese for grass-roots and community government positions are aimed at post-reunification governance.
In 2012, Pingtan said it planned to hire 20 Taiwanese people for government leadership roles in the next five years.
Eight Taiwanese people now serve as deputy heads of villages in Pingtan, and an unknown number have filled various government roles elsewhere in Fujian.
A Taiwanese person working a contract-based government job in Pingtan, who asked not to be named, said some participants truly believed they would become “influential figures” after reunification.
A mainland scholar said the bid to lure Taiwanese talent to the mainland was aimed at fostering professionals familiar with the systems of both sides.
The ruling DPP has pushed back aggressively against the plan for years, calling it a “trap”.
At least 30 Taiwanese people working in community governance roles in Fujian in recent years have been fined by Taiwanese authorities for having jobs that fall into the category of working for the Communist Party, the mainland government or the People’s Liberation Army, which is illegal in Taiwan and considered a threat to “national security”.
Last year, Taipei also investigated over 40 village chiefs who had travelled to the mainland. They were accused of accepting discounted prices for their trips to the mainland, also a violation of Taiwanese law.
Chang Ya-chung, a professor at National Taiwan University, argued that integration efforts were unlikely to succeed unless Beijing and Taipei addressed the most fundamental issues surrounding reunification.
“The concept of integration should ultimately serve the goal of unification. However, if the overarching political issues remain unresolved, grass-roots integration will never overcome this fundamental barrier,” Chang said.
He added that Beijing’s “one country, two systems” model remained unacceptable to most Taiwanese.
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