Will Fujian ever surpass Taiwan in GDP and income? [Eye on Fujian series]

Fujian’s economic trajectory is, in many ways, a classic case of constraint-driven transformation. Geographically, it is a province dominated by mountains, with limited arable land and relatively fragmented internal connectivity. Historically, such conditions constrained agricultural productivity and hindered the formation of large-scale inland markets.

In addition, Fujian faces Taiwan across the strait, a geopolitical factor that for decades added uncertainty and limited domestic strategic investment (on civil manufacturing) before 1980. In this sense, Fujian’s starting point was not unlike that of Zhejiang — resource-poor, land-constrained and peripheral to China’s traditional economic core.

Yet paradoxically, these very disadvantages laid the groundwork for Fujian’s later success in the reform and opening era.

When China initiated its open-door policy in the late 1970s and 1980s, Fujian’s coastal orientation — once a marginal feature — became a strategic asset. Unlike inland provinces, Fujian’s proximity to maritime routes allowed it to bypass domestic logistical constraints and directly integrate into global trade networks. More importantly, its cultural, linguistic and familial ties with Taiwan positioned it uniquely to absorb early waves of external capital and entrepreneurial practices.

This transformation is clearly reflected in the province’s long-term economic data. According to the Fujian Statistical Yearbooks, its provincial GDP expanded from less than US$7 billion in 1980 to approximately US$47 billion in 2000 and further to more than US$810 billion in 2024, while the per capita GDP rose from around below US$200 to nearly US$1,200 in 2000 and over US$19,000 in 2024. Such growth represents not merely quantitative expansion, but a profound structural shift.

Central to this transformation was the rise of private small and medium-sized enterprises (SMEs). Unlike state-led industrialisation models in northern China, Fujian’s development was driven by decentralised, family-based entrepreneurship. These SMEs, often rooted in local networks and diaspora connections, were highly adaptive and outward-looking. They leveraged Fujian’s coastal location to engage in export-oriented manufacturing and trade, particularly in sectors such as textiles, footwear, electronics and light industry. For example, ANTA, founded in 1991 in Jinjiang (a county of Fujian), has grown into one of China’s largest sportswear companies and leveraged original equipment manufacturer (OEM)-to-brand upgrading strategies to enter global markets. It even goes further beyond after successfully acquiring international brands such as FILA and Amer Sports.

Taiwanese investment played a catalytic role in this process. Fujian became one of the primary destinations for Taiwanese capital on the mainland, particularly in electronics, petrochemicals and machinery. According to the Department of Commerce of Fujian, Fujian had attracted more than 25,000 Taiwan-funded projects, with cumulative actual investment exceeding US$33 billion by 2023. This influx not only provided capital but also facilitated technology transfer, management upgrading, and integration into regional supply chains.

Thus, what began as a disadvantaged province evolved into a dynamic node of cross-strait economic interaction and global trade.

Over time, Fujian’s economic structure has undergone significant upgrading. In the early 2000s, growth was heavily driven by industrialisation, with the secondary sector accounting for over 50% of GDP at its peak. However, data reported by the Statistical Bureau of Fujian indicated that in 2024 the structure had shifted to 5.7% (primary), 42.8% (secondary) and 51.5% (tertiary), indicating the emergence of a service-led economy built upon a strong manufacturing base.

This transition reflects a broader evolution from “quantity-driven” to “quality-driven” growth. Advanced manufacturing, digital economy, and modern services have become increasingly prominent. According to the Statistical Bureau of Fujian, in 2025 Fujian’s GDP surpassed US$845 billion, with strategic emerging industries accounting for nearly 30% of industrial output. The province has also entered the first tier nationally in digital economy development. However, this maturation also marks the end of easy growth.

Fujian’s traditional growth model — export-oriented manufacturing supported by foreign direct investment (FDI) — is now under strain.

First, global trade conditions have become more volatile. While Fujian’s exports have historically shown resilience, recent years have seen fluctuations due to weakening external demand, trade protectionism, and geopolitical tensions. For instance, according to the data reported by Custom General of China, Fujian’s exports to the US fell sharply by 15.5% in the first eight months in 2025 and in particular footwear exports (as one of Fujian signature exports) from Fujian to the US fell by 23.8% in 2025, highlighting the vulnerability of a highly export-dependent economy.

Second, the nature of FDI is changing. Although the number of foreign-invested enterprises continues to grow, the scale of actual utilised foreign capital has declined in recent years. According to the Statistical Bureau of Fujian, in 2024 Fujian established 4,083 new foreign-invested enterprises, up 9.7% year-on-year. On the other hand, also in 2024, Fujian’s actual utilised FDI amounted to 22.14 billion RMB, a sharp decrease of 26.9% year-on-year. This suggests a shift from large-scale, labour-intensive investment toward smaller, more technology-oriented projects. Rising labour costs in Fujian — once a key advantage — have reduced its attractiveness relative to Southeast Asia and other emerging markets.

Third, cross-strait economic relations, while still significant, are becoming more complex. Taiwan remains an important trade partner, accounting for a stable share of Fujian’s external trade. Notably, Fujian’s trade balance with Taiwan shifted from deficit to surplus after 2022, reflecting changes in industrial positioning and supply chain dynamics. However, broader geopolitical tensions limit the extent to which Fujian can rely on Taiwan-driven growth.

These challenges underscore a critical point: Fujian must transition from an externally driven growth model to one that is more innovation-based and globally diversified.

The Fujian Pilot Free Trade Zone (FTZ) has emerged as a key policy experiment lab for economic transformation. Established in 2015, the FTZ covers Fuzhou, Xiamen and Pingtan, and serves as a platform for institutional experimentation rather than merely a spatial development zone.

Its most significant contribution lies in “institutional spillover”. According to a China Daily report, the FTZ had introduced 632 innovation measures by 2025, many of which have been replicated nationally. These reforms include streamlined business registration, enhanced customs facilitation, cross-border financial innovation and improved legal services for international trade.

The FTZ has also played a crucial role in promoting cross-strait integration. It has pioneered policies such as mutual recognition of professional qualifications, preferential treatment for Taiwanese enterprises, and the development of joint industrial platforms. As a result, it has become a primary gateway for Taiwan-related economic activity on the mainland.

More importantly, the FTZ is increasingly oriented toward global openness rather than Taiwan-specific integration. Initiatives such as the Silk Road Maritime network, digital trade hubs and international arbitration services position Fujian as a broader node in global economic networks. This shift reflects a strategic recalibration: from “Taiwan-centred openness” to “global-oriented openness”.

For many years, Fujian’s development narrative included an ambitious goal: to surpass Taiwan, in terms of GDP first and per capita income later. This goal was both symbolic and strategic, reflecting the province’s role as a bridge — and potential competitor — in cross-strait economic dynamics.

However, recent developments have made this target increasingly difficult to achieve. Taiwan’s economy, particularly its semiconductor industry, has experienced a resurgence. With global leadership in advanced chip manufacturing, Taiwan has secured a critical position in high-value global supply chains. In 2023, Taiwan’s GDP reached approximately US$755 billion, with a per capita GDP exceeding US$32,000. 

By contrast, while Fujian’s total GDP has grown rapidly, its technological base remains less advanced, and its growth rate is slowing as it enters a more mature stage of development. The gap in high-end industrial capabilities — particularly in semiconductors and advanced manufacturing — suggests that the goal of surpassing Taiwan in near future is increasingly challenging. Yet this does not diminish Fujian’s significance. Rather, it highlights the need for a different development paradigm.

Fujian’s future lies not in replicating Taiwan’s trajectory, but in leveraging its own unique strengths.

First, the province can further deepen its role as a hub of global connectivity. With established trade networks, strong logistics infrastructure, and institutional innovations from the FTZ, Fujian is well-positioned to serve as a gateway between China and emerging markets, particularly in Southeast Asia and the Global South.

Second, it must accelerate industrial upgrading. While maintaining its manufacturing base, Fujian should prioritise sectors such as the digital economy, new energy, advanced materials and artificial intelligence. The development of integrated industrial clusters — combining manufacturing and services — will be crucial.

Third, institutional innovation remains key. The FTZ’s experience demonstrates that policy reform can be as important as capital and technology. By expanding such reforms province-wide, Fujian can create a more flexible, business-friendly environment that supports long-term growth.

In essence, Fujian’s story is one of transformation through adaptation. From a resource-poor, peripheral province, it has become a dynamic participant in global trade and regional integration. The next phase of its development will depend not on external conditions alone, but on its ability to innovate — economically, institutionally and strategically.

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