China To Offer $19 Billion In Loans To Taiwan Firms To Bolster Economic Ties

Beijing, China (AHN) - China has decided to provide as much as 130 billion yuan ($19 billion) of loans for Taiwan businesses based on the mainland, boosting its cross-Straits mutual investment and to increase economic solidarity in the region.

The statement released after the talks between China's Communist Party and Taiwan's ruling Nationalists in Shanghai said that China will provide funds over the three years.

"Cooperation at this time is especially meaningful as the global financial crisis will soon spread to the manufacturing industry," Schive Chi, chairman of the Taiwan Stock Exchange was quoted as saying by Bloomberg.

"As both China and Taiwan have few foreign debts and both have high savings ratio, we should really actively use up the huge savings to help boost our economies."

Beijing is also planning to buy $2 billion worth of flat-panel displays from the island's companies, which will boost Taiwan companies' revenue amid weakening global demand of export products.

"If the worsening world economic situation continues and the Taiwan side asks for help to solve economic difficulties, the mainland is willing to offer assistance with utmost efforts," said Jia Qinglin, the one of the leading person in the Communist Party of China, according to the official Xinhua News Agency.

The Industrial and Commercial Bank of China and the Bank of China are planning to invest 50 billion yuan each. The China Development Bank will provide 30 billion yuan in addition to a previous provision of 30 billion yuan.