With a population of close to a million, the city is situated on an island linked to the mainland suburbs of Jimei and Xinglin by two causeways and, since the end of 1990, by a bridge.
Xiamen is one of China's Special Economic Zones (SEZs) which initially covered an area of only 2.5 square km when it was first established in 1980, but since then it has expanded to cover the whole of the island (131 square km). Light industries now account for 70 per cent of total industrial output value.
The rapid development of the SEZ has proved too much for the city's port and to tackle the problem, World flank financing of US$36m (half the requirement) is being sought for the construction of four new berths in the Dongdu harbour development project. One berth will be for container ships of up to 35,000 tonnes, one for coal handling for vessels up to 25,000 tonnes and two general berths for vessels up to 25,000 tonnes.
Fujian's position so close to Taiwan to the east has ensured that it has been the traditional recipient of Taiwanese investment in China. With two way trade between China and Taiwan totalling more than US$100m a year, Xiamen is keen to ensure it keeps a more than healthy share and to this end has recently adopted measures to attract more of this interest from across the Straits. Though the city's development got off to a slow start, it received a healthy boost with the success of this bid to boost Taiwanese trade and investment. In 1989 alone, for example, this grew by an astonishing 490 per cent to
US$484m. Of the 464 wholly-foreign owned ventures and the 375 joint ventures, 417 were from Taiwan. Taiwanese capital now accounts for almost half of the cumulative foreign investment in Xiamen of US$2.1 bn.
On the down side however, the high dependence on Taiwanese investment meant that when Taiwan's stock and property markets crashed in 1990, Xiamen was more affected than other SEZs and investments dropped in 1991. Other investors are from Hong Kong (probably fronting Taiwanese money), Singapore, USA, Japan, Germany, Thailand and Denmark. Foreign investment accounts for 55 per cent of output value and 44 per cent of industrial products go for export. Exports in 1990 were US$ 781 m.
The Xiamen Foreign Exchange Swap Centre officially began operation in early July 1989. The centre operates a membership scheme and currently has 70 members including 12 brokers. Non-members are not allowed to enter the centre but may engage in transactions through a broker. Currently there is a great deal of emphasis on improving infrastructure which has begun to lag behind industrial development. The climate, unspoiled beaches and the impressive natural beauty of its surroundings give Xiamen potential for development as a popular tourist resort.
These include: A 1.2m KW coal-fired power station at Songyu Xiamen to ease electricity supply problems, at a cost. of about US$320m. A bridge or tunnel to connect Xiamen to Haicang on the mainland is under consideration. A 265km motorway linking Fuzhou, Xiamen, and Zhongzhou is to be built. Construction will begin in 1992 and the motorway is expected to be completed in 2003.
The Fujian authorities and Ikawa Trust Group of Japan have agreed on the construction of China's first bullet train which will run between Fuzhou and Xiamen. It will cost US$2bn and take five to six years to build. See page 14 for a full report on this and other railway projects in China.
China's first joint venture bank, Xiamen International Bank has been set up with three foreign investors: the Asian Development Bank (with a 10 per cent holding), the Long-term Credit Bank of Japan (10 per cent) and the First Interstate Bank of Hawaii (5 per cent). Fujian is able to authorise projects up to 200m RMB without reference to the State Planning Commission.
The city has recently made efforts to use overseas funds to step up construction of commercial facilities. Last year, the commercial departments of the city signed 30 contracts on joint venture and cooperative projects, with a total investment of US$490m, with some US$448m coming from overseas. The overseas funds came from Canada, Singapore, Malaysia, the Philippines, Hong Kong and Taiwan.
* China Southern Airlines flies in and out of Xiamen, with international destinations including Hong Kong, Manila, and Singapore.
* Dragonair, Cathay Pacific's subsidiary, runs a daily service to Hong Kong. * SilkAir, Singapore Airlines' regional subsidiary, is to launch its new service from Singapore on 2nd June 1993, leaving for Xiamen every Wednesday and Saturday. The airline says that it will cater to the healthy volume of business traffic that travels to the SEZ, as well as travellers visiting friends and relatives in the city. *
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