(Writes through, adds byline, previous BEIJING)
By Royston Chan
SHANGHAI, Dec 21 (Reuters) - China reached out a hand to diplomatic rival Taiwan on Sunday, offering Taiwanese investors on the mainland $19 billion in financing over the next three years, the latest in a flurry of economic diplomacy by Beijing.
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. [ID:nTP350629]
Taiwanese investors have poured billions into China since a detente began some three decades ago, lured by a common culture and language and cheap Chinese labour.
But many Taiwanese companies in China have been feeling the pinch from the global economic slowdown, dependent as they are on customers in Europe and the United States and their orders for everything from fake Christmas trees to computers.
Wang Yi, head of China's Taiwan Affairs Office, told a meeting with Taiwanese politicians in Shanghai that three banks would provide 130 billion yuan ($18.99 billion) in financing.
"Compatriots on both sides are part of the same family. We feel the same pain at this current time of economic difficulties in Taiwan," Wang said.
Industrial and Commercial Bank of China and Bank of China would provide 50 billion yuan each, he said.
Policy bank China Development Bank would provide 30 billion yuan, in addition to another 30 billion yuan pledged previously, Wang added. He provided no other details of the financing.
OTHER MEASURES
China would also buy $2 billion in flat screen monitors from Taiwanese companies, Wang said.
China would back its firms to invest in Taiwan.
"The mainland will continue looking at ways to increase cooperation across the strait and take measures hand in hand to cope with the global economic crisis," Wang said.
Tseng Yung-chuan, deputy chairman of Taiwan's ruling Kuomintang, or Nationalist Party, told reporters in Shanghai he welcomed China's moves.
"At the time of this global financial tsunami and when both economies are facing a downturn, I feel that these are very strong measures, and this is especially so for the financing available for Taiwanese business in China," Tseng said.
China has so far suffered less from the global economic crisis than its neighbours and is presenting itself as a stabilising force in the region.
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. [ID:nT216782]
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. [ID:nHKG230384]
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. ($1=6.844 Yuan) (Writing by Ben Blanchard; Editing by David Fox)