The development of an economic zone on the western side of the Taiwan Straits got the backing of the State Council Monday.

"The economic zone will not only boost economic development across the Straits, but also enhance communication between the two sides and contribute to the peaceful reunification of China," said Wu Nengyuan, director of the Fujian-based Institute of Taiwan Studies.

The province of Fujian will act as the hub of the economic zone, which will face Taiwan across the Straits and connect with the Pearl River Delta and the Yangtze River Delta, two economic powerhouses on the mainland.

Wu said the plan means "Fujian finally gets policy support from the central government".

Tan Song, an analyst with Dongxing Securities, said the establishment of such a zone will help boost the country's coastal economy as a whole and channel overseas capital to vast West and Central China.

Fujian's provincial government raised the plan to build an economic zone on the western side of the Straits as early as 2004. The proposal is designed to attract businesses from Taiwan and promote cross-Straits exchanges.

Fujian boasts geographic proximity to the island, and shares ancestral origins, languages, folk customs and cultural traditions with Taiwan, Wu said.

Mainland tourists look over commemorative stamps in Nantou, Taiwan, on March 18. [Wang Yan/China Daily]

In December 2006, Fujian became the first mainland province to import zero-tariff fruit from Taiwan.

Fujian has been one of the largest markets for investment from Taiwan since the 1980s, when people from Taiwan started to run businesses on the mainland.

Since then, Fujian has attracted more than $20 billion in investment from the island, according to statistics from Fujian's Taiwan affairs office.

Taiwan has become the second largest offshore investor for Fujian this year, following Hong Kong.