BEIJING - CHINA said on Sunday it would allocate 130 billion yuan (S$27.7 billion) in financing for Taiwanese companies on the mainland over the next two or three years - part of efforts to combat the global economic crisis and to overcome longstanding tensions between Beijing and Taipei.

The plans were unveiled in Shanghai at the end of a two-day forum between China's Communist Party and Taiwan's ruling Nationalists centered around how to strengthen ties across the Taiwan Strait.

Mr Wang Yi, director of the Communist Party's Taiwan Work Office, announced 10 policies and measures toward that goal, according to the central government's Web site.

The policies include the US$19 billion in financing, which will be provided by three of China's top banks: Industrial and Commercial Bank of China, Bank of China and China Development Bank.

The government will also promote two-way investment, help develop Taiwanese-funded companies on the mainland, expand the help given by Chinese experts to Taiwan businesses looking to upgrade their businesses, and increase industrial cooperation.

Additionally, it calls for the wider sale in China of agriculture products from Taiwanese farms.

While few details were released, the plans underscore a new warmth between the longtime rivals. Earlier in the week, the two sides initiated daily air and direct maritime links after a break of nearly 60 years.

The lifting of the ban Dec. 15 on direct links across the 160-kilometre-wide Taiwan Strait is expected to generate new business for the two sides, which have annual bilateral trade at about US$100 billion.

Taiwan and China split amid civil war in 1949. The mainland continues to claim the self-governing island as part of its territory and has threatened to attack if it moves to formalize its de facto independence.

Tensions have abated significantly since the inauguration of Taiwanese President Ma Ying-jeou in May. In contrast to his pro-independence predecessor, Ma wants to tighten economic relations with China as a way of boosting Taiwan's economy.

Similar forums were held in 2006 and 2007 but this year's appeared to be the most cordial. Previous meetings had taken place amid strains over the 2008 Olympic torch route and Taipei's desire for diplomatic recognition.

The forum was attended by the chairman of Taiwan's Nationalist Party, Wu Poh-hsiung, and honorary chairman Lien Chan, as well as 400 delegates including businessmen, experts and officials from the two sides, the official Xinhua News Agency said.

Mr Jia Qinglin, the fourth-most-powerful person in the Communist Party, said it 'demonstrated the great significance the two sides attached to the event,' according to Xinhua.

'The suggestions made at the forum reflected the common aspirations of the compatriots on both sides,' Xinhua quoted him as saying. -- AP