China Says Will Aid Taiwan In Economic Slump

Ties between China and Taiwan, separated since the end of the Chinese civil war in 1949, have warmed.

China, expanding its pledges to help neighbouring economies ride out the global financial crisis, said on Saturday it was willing to meet requests for assistance from political rival Taiwan.

Ties between China and Taiwan, separated since the end of the Chinese civil war in 1949, have warmed since Taiwanese president Ma Ying-jeou took office in May. On Monday the two sides opened direct daily passenger flights, new shipping routes and postal links for the first time in six decades.

"We deeply sympathise with the economic difficulties faced by Taiwan and sincerely hope to cooperate on steps to cope with the international financial crisis," said Jia Qinglin, the fourth most senior leader of China's ruling Communist Party.

"I solemnly declare that if the global economic situation continues to deteriorate and Taiwan asks for measures to ease its economic difficulties, the mainland is willing to do its utmost to provide aid."

Jia said China was willing to make it easier for Taiwanese companies to trade and invest on the mainland, help them obtain financing, and cooperate to develop technologies in areas such as electronics, environmental protection and new forms of energy.

China hopes Taiwan will remove restrictions on imports of Chinese goods and let Chinese companies take part in big infrastructure projects on the island, he said.

Jia, opening a two-day meeting in Shanghai of over 400 delegates from the two sides, including businessmen, academics and officials of the Communist Party and Taiwan's ruling Nationalist Party, did not give concrete details of China's plans for economic assistance.

But his remarks were part of a flurry of economic diplomacy by China, which has so far suffered less from the global crisis than its neighbours and is presenting itself as a stabilising force in the region.

ECONOMIC DIPLOMACY

Earlier this month Chinese leaders announced a nearly $30 billion currency swap facility to help stabilise the South Korean won, and took part in a trilateral summit to discuss the crisis with South Korea and Japan.

On Friday, Hong Kong said Beijing had agreed to a package of 14 measures to aid the Chinese territory, including a currency swap facility, an easing of travel restrictions and the opening of more of China's services sector to Hong Kong.

In recent years China has used economic assistance to Hong Kong to boost support for pro-Beijing politicians in the territory. Aid to Taiwan could help sway public opinion there towards Beijing's goal of eventual reunification with the island.

Taiwan's Nationalist Party chairman Wu Poh-hsiung told the meeting on Saturday that he hoped Beijing would facilitate the operations of Taiwanese companies that have invested tens of billions of dollars on the mainland.

He also urged Beijing to boost the flow of Chinese tourists to Taiwan. An agreement in June allowed visits to begin, but Taiwan has been disappointed that daily visits have fallen short of a 3,000-person target, at least partly because of China's rigorous screening process for travellers to the island.

"Together we should cooperate to cope with the financial tidal wave sweeping the world," Wu said.

Chang Jung-kung, the Nationalists' China affairs director, said he expected the two sides to reach a consensus on cooperation on Sunday.

"Mainland China will announce some new policies," Chang told Reuters. "I have no way of saying what they are now, but they will be related to the economy."

Taiwan's economic reliance on China may increase further in coming months as the U.S. economy, traditionally a key market, slumps. The island's economy contracted in the third quarter while November exports plunged 23 percent from a year earlier.