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Shanghai and Taiwan are expected to forge closer economic and trade ties this year on the heels of successful exchanges in 2001, said the Shanghai Municipal Taiwan Affairs Office.

During the first 11 months of last year, 430,000 Taiwan people have come to the city for visits and business opportunities, a 53 per cent increase over the corresponding period in 1999.

Qiu Changgeng, division chief of the Municipal Taiwan Affairs Office, said: "Shanghai has attracted a resident population of more than 15,000 Taiwan people, most of whom are business people and their families."

Qiu added that the number comes to 300,000 if surrounding areas such as Kunshan and Wuxi and the transient population are considered.

Investment has also shot up. During the first 11 months of 2001, Shanghai saw a total of 352 collaboration projects with Taiwan investors with a contractual value of US$636 million.

This was 27 per cent higher than the same period the previous year and the projects accounted for 15 per cent of overseas investment attracted.

The office also said that the 4,185 Taiwan-funded projects in the city represent of investment of US$6.6 billion. More than one-third of the projects are in the real-estate business.

Qiu said: "This suggests those Taiwan people have long-term development plans rather than short-term profit-seeking."

He predicted that, now that the Chinese mainland and Taiwan are in the World Trade Organization, Taiwan businesses will place more emphasis on high-tech projects with high added value instead of labour-intensive projects with low added value, which were popular in the early 1990s.

He said that the finance, information-technology and biochemistry businesses will draw more investment from Taiwan in the coming years.(China Daily)