China promises Taiwan investors bank loans

AP News
Posted: Jun 17, 2012 11:00 PM
China promises Taiwan investors bank loans

China has promised Taiwanese investors up to $95 billion in loans from state banks as it tries to build closer ties with the self-ruled island that Beijing claims as its own territory.

The director of the Cabinet's Taiwan Affairs Office made the announcement at a weekend forum on mainland-Taiwan relations, according to the official Xinhua News Agency.

The two sides separated in 1949 amid civil war and have no official ties but are rapidly building commercial relations. The communist mainland has announced a series of concessions in recent years to Taiwanese companies and farmers in an effort to build public support on the island for eventual unification.

Four state banks will offer credit totaling 600 billion yuan ($95 billion) to Taiwanese-invested mainland businesses, the official, Wang Yi, was cited as saying at the forum in the southeastern port of Xiamen, which faces Taiwan.

The pledge comes amid a mini-stimulus launched by Beijing to reverse an economic slump with more spending on building airports and other public works and promises of more bank loans to private companies to generate jobs.

The mainland is Taiwan's biggest trading partner. The island exported goods worth a total of $124 billion to China last year. Taiwanese companies have invested $130 billion in China over the past two decades and much of the island's labor-intensive manufacturing has shifted to the mainland, where wages are lower.

China is increasingly important to Taiwan as a market as global demand for the island's exports weakens. Mainland Chinese investment in Taiwan totaled only $132 million as of last year, due partly to restrictions imposed by the island's government to avoid being dominated by its giant neighbor.

Taiwanese President Ma Ying-jeou, who was re-elected in January, has pursued amicable relations with Beijing. The mainland's President Hu Jintao has tried to woo Taiwanese by showing the economic benefits of closer ties.

Still, polls in Taiwan indicate no more than 10 percent of its people want political integration with the mainland, while 60 to 70 percent favor the status quo. The rest support formal independence, a step that China says would lead to war.

Wang, the Cabinet official, also said Beijing will ease controls on mainland access for Taiwanese and expand rice imports from Taiwan and outbound mainland tourism to the island, according to Xinhua.

The validity of mainland entry permits for Taiwanese will be extended to two years from one, Xinhua said. It said the number of cities where Taiwanese arriving by air can apply for the permit will be expanded to 31 from 28.

A program that allows residents of nine cities in China's southeast to visit Taiwan's outlying islands of Kinmen, Matsu and Penghu will be expanded to 11 additional cities, Wang was cited as saying.

Mainland tourism authorities have set a target of 1.8 million Taiwan-bound tourists this year, according to Xinhua.

Also, the mainland's National Natural Science Foundation of China will launch a fund with an annual budget of 30 million yuan ($4.7 million) to pay for research by scientists across the strait, the report said.