The agreement is a good news for Taiwan investors, who are thirsty for capital to fund business expansion on the mainland, said Jay Shane, managing director of the Hangzhou-based Huatong Industries Inc.

"We hope to enjoy better services from mainland banks," he said.

A healthy development of firms invested by Taiwan compatriots on the mainland benefits China's reunification effort, he added.

Chen Yunlin, minister of the Taiwan Affairs Office, said cross-Straits economic co-operation has developed rapidly in recent years thanks to the joint efforts of both sides of the Straits.

By the end of June, the mainland had approved 66,028 Taiwan-invested firms, involving contracted investment of US$84.1 billion and actual investment of US$40.7 billion.

By that time, cross-Straits trade volume had reached US$445.6 billion, with Taiwan's exports to the mainland hitting US$372.7 billion.

The mainland has become Taiwan's biggest export market and largest source of trade surplus, Chen said. It has also become the largest recipient of direct investment from the island.

The vast number of Taiwan firms investing on the mainland need financial support, Chen said.

However, the Taiwan authorities have imposed many restrictions on companies and financial institutions with investment on the mainland, he said. Taiwan-invested firms are facing a lot of financing difficulties.

"The mainland has always paid special attention to the issue," Chen said.

As early as the beginning of the 1990's, the mainland arranged more than 3 billion yuan (US$369.9 million) in special loans to fund fixed asset investment by Taiwan firms. Some mainland banks have also provided financial support to these firms. In 2001, the mainland opened its A-share market to Taiwan-invested companies.

President Hu Jintao said in March that "anything beneficial to Taiwan compatriots and conducive to the promotion of cross-Straits exchanges... we will do it with our utmost efforts and will do it well. This is our solemn commitment."

Chen Yuan, president of China Development Bank, said his bank has kept a close watch on cross-Straits economic and trade exchanges, as well as Taiwan-invested companies' development on the mainland.

"We will take advantage of our role as a policy institution to actively support Taiwan-invested companies financially," he said.

The support will not only help solve their financial difficulties, but also promote cross-Straits economic and trade exchanges, he said.

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