The first undersea fibre-optic cable between China and Taiwan is set to begin operating this week, official media reported Wednesday, the latest sign of closer links between the Cold War rivals.

Yang Yi, spokesman for Beijing's State Council Taiwan Affairs Office, said the cable would enhance communications and was "good news" for the two sides, the Xinhua news agency reported.

Yang hailed the cable, set to open Friday, as another milestone in the relationship between the two following the establishment of postal and trade links as well as direct shipping and air routes.

Ties have dramatically improved since Taiwan's Ma Ying-jeou of the China-friendly Kuomintang political party came to power in 2008. He was re-elected in January 2012 for a second and final four-year term.

China still insists Taiwan is one of its provinces, even though the island has ruled itself for more than 60 years since they split in 1949 at the end of a civil war, becoming a vibrant democracy with a dynamic economy.

The cable stretches 270 kilometres (167 miles) from the Chinese city of Fuzhou to Tamsui on Taiwan, the report said.

Yang also said China was willing to supply water to the Taiwan-controlled islands of Kinmen close to Fujian province on the mainland.

Officials from Kinmen have discussed a proposal to use ships to transport water from Xiamen in Fujian.

The fortified Kinmen island group was a flashpoint during the Cold War, when it was heavily shelled from the mainland.