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Magical Times Digital Technology Co. Ltd. is a top animation and cartoon company located in Fuzhou, capital of southeast China’s Fujian Province, facing Taiwan across the Taiwan Straits. In an effort to bring new ideas to the table from across the Straits, the company hired a five-man team from Taiwan to help with its creativity and international businesses.
“The technology for the animation and cartoon industry on the mainland is pretty advanced, but the sector still lacks creativity and innovation. That’s what we are here for,” said Nieh Yu-ping, new Operation Director of Magical Times and a Taiwanese resident who used to work for Eastern Television.
The cooperation between the Chinese mainland and Taiwan is prevalent in many sectors, and Fujian has been a frontier province due to its proximity to Taiwan.
“The economies of Fujian and Taiwan are complementary, and gains from increasing trade across the Taiwan Straits can benefit both sides,” said Robert Mundell, a Nobel Prize-winning economist, at a forum in Fuzhou.
The forum, a sideline event of the 14th Cross-Straits Fair for Economy and Trade held in Fuzhou on May 18, focused on the development of the west side of the Taiwan Straits into an open and vigorous economy. The annual fair seeks to expand trade cooperation, strength two-way investment and promote people-to-people exchanges across the Taiwan Straits.
Taiwan’s technology and investment are a great plus for the development of Fujian, and Fujian’s larger supply of cheap labor has attracted investment from the island, said Mundell.
The fair is a popular event in Fujian for cross-Straits pilot programs and cooperation. The Mawei-Mazu Agreement, a historical paper for cross-Straits communication, was signed at the 2001 session. In 2005, tariffs for Taiwan fruits imported to the Chinese mainland were lowered to zero. In 2011, an Early Harvest Program exhibition under the CrossStraits Economic Cooperation Framework Agreement (ECFA) was held at the fair, demonstrating the latest accomplishments of the agreement.
At the 2012 session, with the growing influence and wider coverage of preferential tax policies under the ECFA, a new step forward to boost trade with Taiwan was taken. An agreement for the establishment of an administration office, which issues certificates of origin to mainland goods and commodities for tax breaks when exported to Taiwan, was inked. The office is the first of its kind on the mainland established by the General Administration of Customs to make crossStraits trade more convenient.
“Tax was a key barrier before. But now taxes for textile products have been lowered under the ECFA,” said Huang Guo-zhou, President of Taiwan-funded Fujian Taixing Textile Co.
Oolong Tea is a commodity that Taiwan specializes in. Under the Early Harvest Program, the tariff on oolong tea leaves was lowered to 5 percent in January 2011 and zero in January 2012. Previously, the tariff was 15 percent. This new move has allowed mainland citizens to enjoy the tea at a lower price and increased the sales volume of Taiwanese companies.
Market appeal
When Taiwanese companies look to the mainland, they generally see two prospects: a broad market and robust source of cheap labor. Fujian is a foothold for their forays into the mainland.
Many Taiwanese companies came to Fujian to launch their mainland business ventures. By the end of March 2012, Fujian had more than 3,863 Taiwan-funded enterprises, with a total investment of $9.7 billion.
“We come to the fair every year. This year, we held a festival for the 60th anniversary of Kinmen Kaoliang Liquor. We entered the Chinese mainland market in 2004,” said Yang Wun-zhi, Chairman of the Xiamen company affiliated to the Kinmen Kaoliang Liquor, which holds a 90-percent market share of the liquor market in Taiwan. “The sales revenue in 2011 totaled 2.89 billion yuan ($457.5 million), a record high, among which 190 million yuan ($30.12 million) came from the mainland, a 72-percent yearon-year increase,” said Yang.
“Although the sales value on the main- land is a small share for the time being, we are quite confident in the market, the largest aromatic liquor market in the world. We expect sales on the mainland to reach 260 million yuan ($41.13 million) in 2012,” Yang told Beijing Review.
Yuan Dean Scientific Co. Ltd. is a Taiwan-based electronics company that sells power converters, LAN filters, transformers, delay line and LED components. Yuan Dean has chosen Xiamen of Fujian as the location of its factory because of the cheap labor and easy access to the mainland market.
“The sales revenue in China accounted for 33 percent of the total in 2011 and the proportion is bound to increase,” said Alen Chen, general manager of the company. “Since China is a major manufacturing base for the world, our electronics components have a bright prospective on the mainland.”
Learning from Taiwan
Starting this year, the Fujian Provincial Government will allocate 10 million yuan($1.58 million) annually to promote the development of Taiwan-funded enterprises in the province.
The fund will be used to support the construction of facilities and infrastructure in both state-level and provincial-level Taiwan investment zones in the province, and to subsidize the work of attracting investment from Taiwan. It will also be used to reward local Taiwan-funded enterprises that have produced innovative goods and services and to attract talent from the island.
The animation and cartoon industry in Fujian, for example, had a production value of 5.6 billion yuan ($886.5 million) in 2011, with more than 200 companies and 20,000 employees. Now, the province is determined to develop it into a pillar industry.
Taiwan is famous for its characterized cultural industry, such as the developed entertainment industry, advertising industry, and animation industry. Talents from those sectors will provide more advanced concepts and practices on the mainland.
In 2011, Magical Times created 6,600 minutes of animation and cartoons, two thirds the total output in Fuzhou, which included the new Cool Dog series, Dou Dou Tiger series, and a movie called Wishes of Little Stars with the cooperation of a Taiwan-based digital company. It also hired four Taiwanese senior consultants for creation, brand design and international operations.
In an effort to form an industry chain for animation and cartoons, Magical Times hired a team from Taiwan responsible for the creativity and marketing aspects of the company’s key project, the Dou Dou Tiger series.
“They do have a better idea and concept when it comes to image design. Our previous image of Dou Dou Tiger was rather bland. But after the Taiwan team made changes, the image was appealing for our target audience,”said Fang Yanhong, PR Manager of Magical Times.
Additionally, due to their experience interacting with other international businesses, they have a head start in terms of international operations, and their business management level and ideas are more advanced than ours, said Fang.
“We want to bring new concepts and innovation to the mainland animation and cartoon industry,” said Nieh, head of the Taiwan team. Animation and cartoon companies are small and micro-companies in Taiwan. Their works are broadcast on public television as part of public education, he added. “Taiwanese animation and cartoon companies rely heavily on the international market by selling their overseas copyrights at international exhibitions. But the mainland animation and cartoon sector is much bigger, with a huge potential in the foreseeable future,” he said.
The task now is to integrate Taiwan’s creativity with the maturing technology of the mainland, so as to add to competitiveness in the international market, said Nieh.
Cross-Straits Economic Cooperation Framework Agreement
The Economic Cooperation Framework Agreement (ECFA) is a preferential trade agreement between the Chinese mainland and Taiwan that aims to reduce tariffs and commercial barriers between the two sides. The pact, signed on June 29, 2010 in Chongqing and effective on September 12, 2010, has greatly bolstered trade between both sides.
The ECFA decides to take out the first group of commodities for tariff cuts or zero tariff, which is called the Early Harvest Program of ECFA. Under the program, tariff between Taiwan and the mainland will be reduced gradually. Taking the tariff of 2009 as a basis, if at under 5 percent, it was lowered to zero on January 1, 2011; if it’s 5-15 percent, it was lowered to 5 percent in 2011 and zero in 2012; if it’s above 15 percent, it was lowered to 10 percent in 2011 and 5 percent in 2012, and will be lowered to zero in 2013. Most products included in the program can have zero tariffs as of January 1, 2012.
From 2011 to March 2012, the tariff under the program saved Taiwanese companies about $225 million. In the first quarter of 2012, about $102 million worth of duty cuts were recorded, as more Taiwan goods were entitled to zero tariff from this year under the program. Now, more than 500 Taiwanese goods sold to the mainland are enjoying zero tariffs.
Lower or even zero tariffs tremendously increased the sales volume of some industrial and agricultural products sold to the mainland in the first quarter of 2012.
In the first quarter of 2012, more than 3,300 companies obtained ECFA-related business qualifications. More than half of them had no business affiliation with the mainland.
ECFA has expanded the market share of Taiwanese goods on the Chinese mainland. At the end of March 2012, 257 Taiwanese goods under the program had a market share of over 10 percent on the mainland, among them, 199 had a market share of over 15 percent.
The ECFA has had a profound effect on the labor market in Taiwan, as the growth rate of jobs in sectors related to the Early Harvest Program is stronger than Taiwan’s average job growth rate in manufacturing.
“The technology for the animation and cartoon industry on the mainland is pretty advanced, but the sector still lacks creativity and innovation. That’s what we are here for,” said Nieh Yu-ping, new Operation Director of Magical Times and a Taiwanese resident who used to work for Eastern Television.
The cooperation between the Chinese mainland and Taiwan is prevalent in many sectors, and Fujian has been a frontier province due to its proximity to Taiwan.
“The economies of Fujian and Taiwan are complementary, and gains from increasing trade across the Taiwan Straits can benefit both sides,” said Robert Mundell, a Nobel Prize-winning economist, at a forum in Fuzhou.
The forum, a sideline event of the 14th Cross-Straits Fair for Economy and Trade held in Fuzhou on May 18, focused on the development of the west side of the Taiwan Straits into an open and vigorous economy. The annual fair seeks to expand trade cooperation, strength two-way investment and promote people-to-people exchanges across the Taiwan Straits.
Taiwan’s technology and investment are a great plus for the development of Fujian, and Fujian’s larger supply of cheap labor has attracted investment from the island, said Mundell.
The fair is a popular event in Fujian for cross-Straits pilot programs and cooperation. The Mawei-Mazu Agreement, a historical paper for cross-Straits communication, was signed at the 2001 session. In 2005, tariffs for Taiwan fruits imported to the Chinese mainland were lowered to zero. In 2011, an Early Harvest Program exhibition under the CrossStraits Economic Cooperation Framework Agreement (ECFA) was held at the fair, demonstrating the latest accomplishments of the agreement.
At the 2012 session, with the growing influence and wider coverage of preferential tax policies under the ECFA, a new step forward to boost trade with Taiwan was taken. An agreement for the establishment of an administration office, which issues certificates of origin to mainland goods and commodities for tax breaks when exported to Taiwan, was inked. The office is the first of its kind on the mainland established by the General Administration of Customs to make crossStraits trade more convenient.
“Tax was a key barrier before. But now taxes for textile products have been lowered under the ECFA,” said Huang Guo-zhou, President of Taiwan-funded Fujian Taixing Textile Co.
Oolong Tea is a commodity that Taiwan specializes in. Under the Early Harvest Program, the tariff on oolong tea leaves was lowered to 5 percent in January 2011 and zero in January 2012. Previously, the tariff was 15 percent. This new move has allowed mainland citizens to enjoy the tea at a lower price and increased the sales volume of Taiwanese companies.
Market appeal
When Taiwanese companies look to the mainland, they generally see two prospects: a broad market and robust source of cheap labor. Fujian is a foothold for their forays into the mainland.
Many Taiwanese companies came to Fujian to launch their mainland business ventures. By the end of March 2012, Fujian had more than 3,863 Taiwan-funded enterprises, with a total investment of $9.7 billion.
“We come to the fair every year. This year, we held a festival for the 60th anniversary of Kinmen Kaoliang Liquor. We entered the Chinese mainland market in 2004,” said Yang Wun-zhi, Chairman of the Xiamen company affiliated to the Kinmen Kaoliang Liquor, which holds a 90-percent market share of the liquor market in Taiwan. “The sales revenue in 2011 totaled 2.89 billion yuan ($457.5 million), a record high, among which 190 million yuan ($30.12 million) came from the mainland, a 72-percent yearon-year increase,” said Yang.
“Although the sales value on the main- land is a small share for the time being, we are quite confident in the market, the largest aromatic liquor market in the world. We expect sales on the mainland to reach 260 million yuan ($41.13 million) in 2012,” Yang told Beijing Review.
Yuan Dean Scientific Co. Ltd. is a Taiwan-based electronics company that sells power converters, LAN filters, transformers, delay line and LED components. Yuan Dean has chosen Xiamen of Fujian as the location of its factory because of the cheap labor and easy access to the mainland market.
“The sales revenue in China accounted for 33 percent of the total in 2011 and the proportion is bound to increase,” said Alen Chen, general manager of the company. “Since China is a major manufacturing base for the world, our electronics components have a bright prospective on the mainland.”
Learning from Taiwan
Starting this year, the Fujian Provincial Government will allocate 10 million yuan($1.58 million) annually to promote the development of Taiwan-funded enterprises in the province.
The fund will be used to support the construction of facilities and infrastructure in both state-level and provincial-level Taiwan investment zones in the province, and to subsidize the work of attracting investment from Taiwan. It will also be used to reward local Taiwan-funded enterprises that have produced innovative goods and services and to attract talent from the island.
The animation and cartoon industry in Fujian, for example, had a production value of 5.6 billion yuan ($886.5 million) in 2011, with more than 200 companies and 20,000 employees. Now, the province is determined to develop it into a pillar industry.
Taiwan is famous for its characterized cultural industry, such as the developed entertainment industry, advertising industry, and animation industry. Talents from those sectors will provide more advanced concepts and practices on the mainland.
In 2011, Magical Times created 6,600 minutes of animation and cartoons, two thirds the total output in Fuzhou, which included the new Cool Dog series, Dou Dou Tiger series, and a movie called Wishes of Little Stars with the cooperation of a Taiwan-based digital company. It also hired four Taiwanese senior consultants for creation, brand design and international operations.
In an effort to form an industry chain for animation and cartoons, Magical Times hired a team from Taiwan responsible for the creativity and marketing aspects of the company’s key project, the Dou Dou Tiger series.
“They do have a better idea and concept when it comes to image design. Our previous image of Dou Dou Tiger was rather bland. But after the Taiwan team made changes, the image was appealing for our target audience,”said Fang Yanhong, PR Manager of Magical Times.
Additionally, due to their experience interacting with other international businesses, they have a head start in terms of international operations, and their business management level and ideas are more advanced than ours, said Fang.
“We want to bring new concepts and innovation to the mainland animation and cartoon industry,” said Nieh, head of the Taiwan team. Animation and cartoon companies are small and micro-companies in Taiwan. Their works are broadcast on public television as part of public education, he added. “Taiwanese animation and cartoon companies rely heavily on the international market by selling their overseas copyrights at international exhibitions. But the mainland animation and cartoon sector is much bigger, with a huge potential in the foreseeable future,” he said.
The task now is to integrate Taiwan’s creativity with the maturing technology of the mainland, so as to add to competitiveness in the international market, said Nieh.
Cross-Straits Economic Cooperation Framework Agreement
The Economic Cooperation Framework Agreement (ECFA) is a preferential trade agreement between the Chinese mainland and Taiwan that aims to reduce tariffs and commercial barriers between the two sides. The pact, signed on June 29, 2010 in Chongqing and effective on September 12, 2010, has greatly bolstered trade between both sides.
The ECFA decides to take out the first group of commodities for tariff cuts or zero tariff, which is called the Early Harvest Program of ECFA. Under the program, tariff between Taiwan and the mainland will be reduced gradually. Taking the tariff of 2009 as a basis, if at under 5 percent, it was lowered to zero on January 1, 2011; if it’s 5-15 percent, it was lowered to 5 percent in 2011 and zero in 2012; if it’s above 15 percent, it was lowered to 10 percent in 2011 and 5 percent in 2012, and will be lowered to zero in 2013. Most products included in the program can have zero tariffs as of January 1, 2012.
From 2011 to March 2012, the tariff under the program saved Taiwanese companies about $225 million. In the first quarter of 2012, about $102 million worth of duty cuts were recorded, as more Taiwan goods were entitled to zero tariff from this year under the program. Now, more than 500 Taiwanese goods sold to the mainland are enjoying zero tariffs.
Lower or even zero tariffs tremendously increased the sales volume of some industrial and agricultural products sold to the mainland in the first quarter of 2012.
In the first quarter of 2012, more than 3,300 companies obtained ECFA-related business qualifications. More than half of them had no business affiliation with the mainland.
ECFA has expanded the market share of Taiwanese goods on the Chinese mainland. At the end of March 2012, 257 Taiwanese goods under the program had a market share of over 10 percent on the mainland, among them, 199 had a market share of over 15 percent.
The ECFA has had a profound effect on the labor market in Taiwan, as the growth rate of jobs in sectors related to the Early Harvest Program is stronger than Taiwan’s average job growth rate in manufacturing.