Few provinces have had the kind of luck in attracting big-name foreign investment that Fujian has enjoyed recently. ExxonMobil is making its largest-ever Chinese investment in a cutting-edge oil refinery and petrochemicals complex in Quanzhou. Southwards along the balmy coast, the port arm of Danish shipping specialist Maersk has chosen Xiamen for the largest port investment on the mainland. Iconic European footwear maker Ecco has also chosen the city for its largest ever green-field factory.

Understated and underestimated, Fujian lacks the brash industrialism of neighbouring Guangdong and Zhejiang provinces. Yet Fujian's location right between the Yangtze and Pearl River Deltas, China's most dynamic economic regions, has allowed it to tap into local supply chains.

Natives of this province of 35 million people have won a reputation for adventure and business guile abroad. Fujianese dominate business networks in Chinatowns around the world, from New York to Tel Aviv. More important are the emigrants from Fujian who settled in nearby Taiwan.

"Most Taiwanese people trace their roots to Fujian," says Wang Yi, an investment consultant at the Fujian Department for Trade and Economic Cooperation, a provincial government body. Money has flowed back across the Taiwan Strait ever since the central government's designation of Xiamen as a special zone for attracting investment from across the channel, she explains, and it has been Taiwan investors who have made Fuzhou, the provincial capital, a world centre of manufacturing LCD screens.

The lure of Taiwan

Fujian's status as the location of choice for Taiwan-owned manufacturing industries is largely why ExxonMobil joined Sinopec and Saudi Aramco in a US$5 billion (€3.5 billion) oil refinery and petrochemicals plant in the port city of Quanzhou. The plant, which will process 240,000 barrels of Saudi sour crude per day, represents ExxonMobil's largest investment in the country to date.

Strong demand in the region for polyolefin, a petrochemical used in plastics, and petroleum will absorb the plant's products, says Sarah Du, ExxonMobil's China spokesperson. Indeed, Chinese demand for polyolefin is expected to grow by more than 7 percent a year. Demand for paraxylene, a key ingredient for polyester also produced at the Fujian plant, is similarly expected to rise by more than 8 percent a year (though production of the chemical is somewhat controversial - a proposed Taiwan-funded paraxylene plant in Xiamen was met with protests earlier this year from residents who were concerned with its toxic effects).

Sheer economies of scale also pay off. ExxonMobil had sought for over a decade to build a "fully integrated" operation in China for oil refining and chemicals processing as well as fuel distribution, says Du. In its Fujian joint venture it got all three. A second joint venture will operate 750 Esso/Sinopec brand service stations across the province.

A deepwater port and good railroad and road transportation laid on by local government to the site of the plant were also crucial to ExxonMobil signing up to build the crude processing refinery in Quanzhou. Petrochemicals are one of three "pillar" industries - petrochemicals, electronics and IT, and machinery - promoted by Fujian's government, which is also a signatory to the deal, explains Wang.

The inevitable rise in new businesses and output which will be fed by the province's new petrochemicals capacity is one reason for renewed interest in Fujian's logistics sector. Three 17-metre-deep berths make phase one of the Songyu container port in Xiamen one of the world's most modern for a huge new sixth-generation container ship. The port is jointly run by APM Terminals, a division of Danish shipping and oil group AP Moeller-Maersk and the local government port authority.

Shipping point

Aside from its deep berths a quay length of 1,246m puts the physical size of Songyu on a par with other Maersk-invested ports in China and puts Xiamen among the top eight ports in the country, explains Tom Shi, projects and business development manager at Maersk China Ltd. The company's 50 percent shareholding in Xiamen however represents the largest stake Maersk has taken in a mainland China project.

Much of that growth will come from Xiamen's ties to Taiwan: "it's strategically located as the gateway of trade across the Taiwan Strait," explains Shi. Songyu's 2006 container throughput was 4.0 million twenty-foot equivalent unit (TEU) containers, making it seventh largest in mainland China yet small compared to Shanghai or Shenzhen - which handled 21.7 million and 18.5 million TEUs respectively in 2006. Throughput growth however will be over 12 percent until 2015, predicts Tom Shi.

The new expansion will allow Fujian to comfortably handle its own logistics needs. The new capacity for super sized container ships will feed long haul services to the US West Coast, Europe and Australia, says Shi. That means faster shipping times and less dependency on other South China ports such as Shenzhen and Guangzhou. Phase Two of Songyu port is in the planning stage, says Shi but "no further timeline is available at present."

High-tech Xiamen

A thriving IT and telecommunications industry means Xiamen needs all the port capacity it can get. A cluster of technology-driven firms include Dell and Kodak, both of which based their China headquarters in the city. Locally based Amoi Electronic employs 20,000 staff to turn out electronic goods for local and increasingly international markets. The company's plant turns out 10 million phones a year but has lately been concentrating on notebook computers, for domestic and export markets.

The local government also encourages investment in "traditional" industries such as footwear and textiles, says Wang Yi. The availability of raw materials was one of the reasons Danish shoemaker ECCO chose Xiamen, further down the coast, for a plant. The company has spent US$25 million on a plant in the Tong'an Chengnan Industrial Zone capable of producing five million pairs of shoes a year. The output will be for international markets but also feed Ecco's expanding retail presence in China, explains a company spokesperson. "Good logistics and local buying power are important for Ecco in choosing to locate in Xiamen."

Big names like Ecco choose to locate in Xiamen because of its liveability and port, says Wang Yi. Ecco was also drawn by a proven local capacity for making shoes. "Small private factories do OEM (original equipment manufacturing) for big companies and then establish their own brands," says Wang, who points to Peak and Anta, both Quanzhou shoe brands sold internationally.

Xiamen's grittier northern counterpart and provincial capital, Fuzhou hasn't been left out of the recent FDI splurge across Fujian. German automaker DaimlerChrysler chose the city for a new plant with a capacity for 40,000 Mercedes-Benz Sprinter and Viano commerical vans when production commences in mid-2009 at DaimlerChrysler Vans, a joint venture with both Fujian Motor Industry Group (FJMG) and Taiwan-based China Motor.

DaimlerChrysler will license Southeast Motors, a separate joint venture between CMC and FJMG, to produce Chrysler-brand minivans for the mainland Chinese market. The whole Daimler deal was made easy by Fuzhou's port and a local auto parts and machinery sector, explains DaimlerChrysler press officer Michael Gutzeit. "It also made sense for the local partner, from Taiwan, to locate in Fuzhou as it has much experience there."

Fujian has rarely had it so good, and for that Taiwanese investors are to be thanked - and will be depended upon in the future. "The hinterland of Xiamen is the manufacturing base of Taiwanese enterprises," says Shi. "We will see a very positive hinterland development potential in the future."