China says it is willing to provide economic assistance to Taiwan if the island needs it to get through the global financial downturn. Representatives from the Chinese Communist Party and the Taiwanese Nationalist Party are in Shanghai for a two-day forum aimed at further improving cross-straight economic ties. 
China's official Xinhua news agency quoted Jia Qinglin, a senior Communist party leader, as saying Saturday that if Taiwan asks for help, Beijing will do its utmost to offer assistance.

Xinhua said Jia made the comment at the opening of a two-day meeting between the two sides in Shanghai.  Jia did not specify what kind of assistance or how much would be offered.

The statement was the latest indication of warming relations between the two rivals.

The chairman of KMT, Taiwan's ruling Nationalist Party, Wu Poh-hsiung attended along with a delegation of 400 businessmen, experts and officials from both sides according to China's official Xinhua news agency.

Wu says the two sides should treasure the current relationship of great peace, great development and great communication said Taiwan's Wu.  He said they should patch up the opportunities lost in the past and at the same time create more benefits for people and enterprises on both sides of Strait.

Tensions between China and Taiwan have eased significantly since the inauguration of Taiwanese President Ma Ying-jeou in May. In contrast to his pro-independence predecessor, Ma wants to normalize economic relations with China by skirting thorny political issues and concentrating on economic pacts.

On Monday, China and Taiwan launched the first direct air, sea and postal links since the two sides split amid civil war in 1949. The links are the result of an agreement reached in Taipei in November amidst widespread street protests.   Prior to the agreement, cargo, passenger flights and postage have had to pass through a third point such as Hong Kong or Macau.

Many Taiwanese fear that these cross-strait agreements are coming too quickly, and potentially risk Taiwan's security and cultural identity.  China officially views democratically-ruled Taiwan as a runaway province and has threatened to take the island by force should its leaders move to formalize de facto independence.  At the meeting Saturday, Jia Qinglin tried to reassure the Taiwanese people.

"Some of our Taiwan compatriots still worry about the relationship between both sides of the Strait," Jai said. "  We would like to convey that we understand their feelings and are willing to treat each other honestly."

The  KMT, officially supports eventual unification with China, a stance that pleases Beijing's leaders.  For now, however, even the KMT has ruled out political unification, citing the huge gulf between China's one-party system and Taiwan's maturing democracy.