Taiwan residents will from next year be allowed to run small private catering and retail businesses on the mainland. The new policy, announced Wednesday, has been hailed as a boost for cross-Straits peace and development.

"In order to encourage more Taiwan residents to invest and run businesses on the mainland and deepen cross-Straits economic and trade cooperation, starting January 1, 2012, the mainland will open regions for them to apply for self-employed business," announced Yang Yi, spokesman with Taiwan Affairs Office of the State Council.

The first regions to be opened up to catering and retail investment are Beijing, Shanghai, Chongqing, Guangdong, Fujian, Jiangsu, Zhejiang, Hubei and Sichuan.

"This is a good new year gift for small- and medium-sized enterprises, especially for businessmen in Taiwan," said Xu Shiquan, vice chairman of the National Society of Taiwan Studies in Beijing.

"It's also good news for mainlanders, who will soon enjoy Taiwan's delicacies on their doorstep," Xu said, adding that the move would boost competitiveness on the mainland.

Taipei cafe owner Lin Jian-Jhong said he was pleased.

"I have long wanted to run a coffee bar on the mainland. But the dream could not be realized as only large-scale investment was allowed before," he said, adding that he hoped more regions would be opened up as the initial markets under the new rules are already mature.

Xu said the policy will further strengthen ties, following the "three direct links" of cross-Straits mail, trade, air and shipping services in late 2008.