Taiwan goes on spending spree to woo China tourists

By Ralph Jennings

TAIPEI, April 23 (Reuters) - Taiwan will spend T$30 billion ($991 million) on infrastructure as it prepares to open its doors to millions of tourists from political rival China under a plan to boost the economy, the president-elect said on Wednesday.

To prepare for some 50 million Chinese citizens who have expressed interest in visiting Taiwan, where they are normally banned for security reasons and concern that they might overstay their visas, president-elect Ma Ying-jeou said he would approve the budget for "hardware and software."

"The idea is to let them come at 3,000 per day," Ma said at a conference in Taipei. "They would not only bring in cash, but also job opportunities."

China has claimed sovereignty over self-ruled Taiwan since the Chinese civil war ended in 1949, and Beijing has threatened to use force if the island formally declares statehood.

Ma, the Nationalist Party (KMT) candidate who was elected on March 22 on pledges to shore up Taiwan's flagging economy, has said he could sign a long-stalled agreement with China to start direct weekend flights by July, ending required stopovers in Hong Kong or Macau. He takes office on May 20.

Analysts say such a boost in tourism could add 0.2 percentage points to Taiwan's gross domestic product growth (GDP), which was 5.7 percent in 2007.

A timeline for the tourism preparation budget has not been set yet, but the money is expected to go to local governments for infrastructure and hospitality improvements.

Taiwan's construction and tourism indexes have both risen sharply this year on expectations of the visitor influx and accompanying spending to prepare for it. (Reporting by Ralph Jennings; Editing by Doug Young and David Fox)