A street in Jinmen.HUANGSHAOYI

         Most people living in the Chinese mainland only know about such beautiful scenic spots in Taiwan as SunMoonLake, AlishanMountain and Wulai Waterfall from books and videos.
         However, the chance to personally experience the island's wonderful landscapes is no longer the impossible dream it has been for the past five decades. In May, the Central Government opened tourist routes to mainland residents wanting to visit Taiwan.
         Fujian Province, Taiwan's nearest mainland neighbour across the Straits, has exclusive advantages in developing the new routes and deepening tourism co-operation between the two regions, a senior official of the province's Tourism Bureau said recently.
         Delegates from both provinces' tourism agencies held a meeting on June 6 in the coastal city of Xiamen to exchange ideas for building two-way tourist routes between Fujian and Taiwan.
         They also proposed extending the current direct sea voyage links of Xiamen-Jinmen and Mawei-Matsu. The two water routes were launched in January 2001.
         According to a co-operative agreement signed at the meeting, both sides have decided to make full use of their mutual advantages to jointly design several tourist routes toTaiwan, with an emphasis on discounts in travel costs.
         Raising public awareness of cross-Straits tourism has become a common goal for the industry players of both provinces.
         The agreement also urged the two sides to strengthen the exchange of such information as developments in their respective industries, exploitation to scenic areas,admissionticket prices and travel ticketquotations made by tourism agencies in both regions.
         Furthermore, the agreement states that both sides should actively attend each other's tourism festivals, in a bid to promote tourist routes and learn more about their mutual tourist resources on either side of the Straits.

         Since last December when Fujian made tour packages to the Taiwan city of Jinmen available to its residents, a total of 1,025 tourists travelling in 55 groups have visited the island, according to Huang Xiaoyan, director of the Fujian Tourism Bureau.
         However, due to complicated application procedures and the unsteadiness of the travel journey, the route has not been as popular as expected, experts noted at the meeting.
         In the route's favour, they lauded its special selling point of saving tourists 2,000 yuan (US$242) in travel costs compared with the more expensive option of travelling to Taiwan via Hong Kong or Macao.
         Only through the collaboration of mainland and Taiwan tourism agencies can the cross-Straits travel industry enjoy a prosperous future, they stressed.
         In addition, Fujian residents will soon be allowed to travel to Matsu according to the relevant agreements signed by the two sides' delegates in attendance at the meeting, said Huang.
          The Fujian Tourism Bureau announced that it intends to increase the number of the province's travel agencies handling routes to the Jinmen, Matsu and Penghu routes of Taiwan from five to 21.
           Meanwhile, the first Cross-Straits Tourism Expo, proposed by Vice-Premier Wu Yi, will be held in conjunction with the ninth China International Fair for Investment and Trade from September 8 to 11 inXiamen.
           With its special historical and kindred ties to Taiwan, as well as its advantageous geographical location, Fujian's Taiwan compatriots have been its steadiest and most important tourism resource since the island's authorities began allowing its residents to visit their mainland families in 1987.
           By the end of 2004, Fujian had received more than 6.76 million Taiwan people, accounting for about one-third of all of its tourist traffic.


      "Lifting the central region" tops China's agenda of regional economic concerns this year. Experts have pointed out that the central region should serve asthe backbone of the country's growing economy.
       The central region, a sort of blind spot under past regional development strategies, is lagging behind. Its gross domestic product (GDP) growth rate has fallen 0.51 per cent below that of the far less developed western region.

GRAPE 1:Regional GDP and its Growth Rate in China 2004

Soure:Report on Regional Finance Operations in China 2004

        After a government report released in 2004 urged "promoting development of the central region," the issue was made one of the six economic priorities to be tackled in 2005.
        If the northeastern provinces are taken as an individual region, the central region consists of six provinces: Shanxi, Henan, Anhui, Hubei, Hunan and Jiangxi, accounting for 10.7 per cent of the nation's land area and 28.1 per cent of its population.
        The central region cannot help but be an ideal geographic location, lying as it does directly at the heart of China. Major railways, waterways and national highways cut across the region, joining even the furthest sections of the north, south, east and west together.
 Considered its most precious land in ancient times, China's central region possesses a great cultural heritage and has long been an important base for agriculture, industry and energy resources.
       Helping the central region reach its full potential should become China's most important strategy, following on from the success of the eastern region, development of the western region and revitalization of the old industrial base in the northeast.
       AnhuiProvince, which borders the Yangtze River Delta, will benefit from the Delta's

industrial upgrades and transfer initiatives. Current major transport network projects will make Anhui a pivotal point between the eastern and western regions.
        "Anhui will step up publicity of its strengths this year. We aim to boost investment in terms of scale and strategy," said Xiang Li, Director of Foreign Investment for the CommerceDepartment of Anhui Province.
         Shanxi promotes investment in projects with higher technological content and greater focus along with those of a scale large enough to drive the economy of the province.
         According to officials with the CommerceDepartment, the provincial offices concerned have delegated approval authority to lower level departments in order to simplify procedures.
         Shanxi has an ambitious plan to build itself into an industry base as well as a centre for new energy resources.
       "Credibility" is JiangxiProvince's theme for 2005.
        "We will follow up on every key project, not only to attract investment, but also to nurture the projects into local industrial leaders that will lift our economy," Shen Jingyi, director of the Investment Promotion Centre for the province's International Trade Department.
         The country's long-time heavy industry base of HubeiProvince has committed itself to industrial restructuring and a new growth model.
          Yin Hanning, director-general of the CommerceDepartment of the province said investment should be closely related to the actual circumstances of a local economy.
          HubeiProvince will devote investment to major projects, the manufacturing industry and other pillar industries, said Yin.
         HenanProvince was the nation's economic, cultural and political centre for more than 1,000 years. Today, the ancient cities of Henan has been trying to become a burgeoning urban cluster including the province¡¯s nine cities such as Zhengzhou, Luoyang and Kaifeng.
          Henan is also a major transportation, communications and power supply network hub,

making it China's logistics centre.
         HunanProvince, the well-known farming region of China, set a record high net income growth rate among farmers in 2004, exceeding that of urban workers.
         "We hope foreign investment will accelerate the industrialization process in agriculture in HunanProvince," said Zhou Yue, an official with the CommerceDepartment of Hunan Province.

GRAPE 2:Regional FDI and its Growth Rate in China 2004

Soure:Report on Regional Finance Operations in China 2004

         "Investment should help build a chain of industry," Zhou added. HunanProvince plans to firmly implement its investment contacts this year.
          Some scholars have pointed out that central region is key to improving regional economy and building a prosperous society throughout China. To develop the central region, the support of the eastern region, the initiative of the central region, and, above all, the impetus of the central government are equally necessary.
          However, Li Jiange, vice-director of the Development Research Centre of the State Council, has poured cold water on the idea of more policy support.
          Li said it is unlikely that the Central Government will put forward a favourable policy for regional development.
          On the other hand, he advised, the central region should not follow the growth models of the Yangtze River Delta, the Pearl River Delta or the western and northeastern regions. The central region, Li warned, has to develop its own sustainable strategies in accordance with its own strengths.
          On March 5, Premier Wen Jiabao emphasized that each region should complement and stimulate the others to achieve co-ordinated development. Common consensus agrees that a drive to lift the central region will benefit regional development markedly.

      Security. Conservation. Co-ordination.
         These are the three key challenges facing the newly formed energy office.
         Amid chronic power shortages and increasing reliance on foreign oil, the government hopes the powerful administration regime can help secure enough fuel to sustain the country's economic boom.
         The Energy Leadership Panel, headed by Premier Wen Jiabao and consisting of two vice-premiers and 13 ministers - including the foreign and defence ministers - was approved by the State Council in mid-May.
         Also, a 24-member Energy Office will help the work of the panel, which is expected to meet for the first time this week.
         The panel and the office will work to secure overseas oil and gas reserves, ease the chronic electricity crunch, stabilize the supply of coal, enforce industrial energy efficiency, and promote nuclear power and other renewable-energy resources.
        "Energy security is the key task of the panel," says one senior official with the Research Office of the State Council. "And foreign co-operation to tap overseas oil and gas reserves would be the pivot of the security issue."
With local supplies unable to meet demand, China - like the US - is growing more dependent on foreign oil. The country's oil imports rose 35 per cent last year to 120 million tons, and overseas crude now accounts for more than 40 per cent of supply. Imports may account for 60 per cent of domestic consumption by 2020, according to estimates.
          Analysts say the government is pooling all its political, economic and diplomatic strength to safeguard its energy security, especially when it comes to international co-operation in the energy sector.
          The country has been in quest of overseas oil and gas - from Sudan, Iran and Indonesia to Kazakhstan - in recent years to fuel its economic boom. A powerful co-ordination panel will enable it to make swift decisions to trump its competitors. 
         "The security of oil supply has increasingly become an uncertainty for the national economy," says Yan Xuchao, director of the department of development and research of China National Petroleum Corporation (CNPC), China's biggest oil producer. "When a country's oil imports exceed half its consumption, its economic, diplomatic and military strength is needed to secure supplies."
          Energy conservation is another vital issue on the agenda.
          China still has much potential for conservation. To generate the same amount of gross domestic product (GDP), the energy China uses is 2.4 times higher than the world average, 4.9 times higher than Europen Union countries, and 8.7 times higher than Japan, according to the National Development Reform Commission (NDRC).
          Energy consumption in major industries such as steel, cement and ethylene is 20-45 per cent higher than developed countries like the US or Germany. Cars in China burn 25 per cent more petrol than cars on European roads.
          China has already set an ambitious goal of improving energy consumption efficiency by 42.5 per cent between 2003-2020.
          Another challenge is how to address overlapping authority in the industry, and even with the existing Energy Bureau under the NDRC.
          The pricing department of the NDRC, for example, is in charge of setting energy prices. The Ministry of Commerce oversees oil and coal imports and exports, and the domestic oil market, while the Ministry of Land and Resources stakes out resource exploration.
          The result is that the energy policy is not always consistent, and, sometimes, even contradictory.
          "They have to be very careful to have a clear administrative structure," says one senior expert with the China Electricity Council.
          And where to find enough talents is another question.
          "Those who have expertise in both economic matters and the energy business are few," says a vice-president with a foreign oil company's Beijing office. "In most cases, people who are well-versed in economics have little knowledge of energy, and vice versa."
          Immediate changes are not expected in the energy industry with the setting up of the office, but many believe the office will be a prelude to the consolidation of the fragmented energy industry. Eventually, the transitional institution will lead to a more powerful US-style Department of Energy, giving the country greater leeway in deciding its energy policy that may, in the long-run, change the global economic and geopolitical landscape.
          "There should be a comprehensive institution like a ministry of energy," says Wu Zhonghu, a senior energy expert with the Energy Research Institute under the NDRC. "The setting-up of the office is one step forward."
          China did set up the Ministry of Energy in 1988 but it was disbanded five years later as its administrative functions overlapped with other departments such as the then State Development Planning Commission, now the NDRC.
          Since late 2002, wide-spread energy shortages have swept the country with more than two-thirds of the country's territory suffering frequent blackouts. Coal mines cannot keep up with the surging demand, while oil imports are rocketing as the nation becomes the second-largest oil consumer in the world.
          To cope with the problem, the government set up the Energy Bureau under the NDRC during the reform of the administration in March 2003.
          Critics, however, say the Energy Bureau, which has fewer than 30 on its payroll, is not powerful enough to oversee an industry that has total assets of more than 10 trillion yuan (US$1.2 trillion) or co-ordinate different energy sectors as much of the authority is spread over different administration organs.
          Late last year, the NDRC submitted a proposal to the State Council to reactivate the Ministry of Energy, but the plan was rejected as the top decision-makers believe the reform would involve the overhaul of the whole administrative structure. The State Council made it clear that it would not consider the option during the tenure of the current government, which ends in 2008.
          Instead, the energy panel and the office will set long-term energy policy while the Energy Bureau will continue with administrative work and vet special projects.
          To better co-ordinate resources in the industry, the government appointed NDRC's minister, Ma Kai, as the head of the energy office.
          Ma Fucai, the former general manager of CNPC, is the one of the two deputy-directors of the office. With over 30 years experience in the oil business, Ma has won wide acclaim for turning the government's once-lumbering oil company into China's most profitable State-owned enterprise.
          Ma resigned from CNPC last year after a gas field accident in 2003 killed 243 people in Chongqing,but stayed on as a government consultant.

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