TAIPEI: Taiwan yesterday responded positively to Chinese President Hu Jintao's call for a truce with the island, saying it reflects China's 'new thinking' and 'pragmatic approach' on cross-strait ties.

Observers say Mr Hu's speech - which some have described as his most significant comments since he took control - sets the tone for China's Taiwan policy for the coming years.

It could also signal that Beijing is ready to elevate cross-strait dialogue to the next level which could touch on military and political issues, say experts.

In a statement responding to Mr Hu's 'six point' proposal on Wednesday, Taiwan's presidential spokesman Wang Yu-chi said: 'We're pleased to see cross-strait ties developing on the axis of 'peaceful development', under which the two sides can negotiate, launch exchanges and benefit each other.'

By calling a truce, the two sides 'can terminate hostilities, further understanding of each other and bolster cooperation', said Mr Wang.

The statement came a day after Mr Hu called for cross-strait military exchanges in an address to mark the 30th anniversary of an announcement by China to stop the shelling of Taiwan's Kinmen Island.

On Jan 1, 1979, the Chinese abandoned its pledge of 'armed liberation' of Taiwan and replaced it with a policy of 'peaceful reunification'.

In his speech which was dubbed 'Hu's six point proposal' by the Chinese media, he also raised the possibility of concluding an economic cooperation agreement with Taiwan and allowing the island greater representation in global organisations. The latter has been a long-time demand of Taiwan.

The 'six points' are: firm adherence to the 'one China' principle; strengthening commercial ties, including negotiating an economic cooperation agreement; promoting personnel exchanges; stressing common cultural links between the two sides; allowing Taiwan's 'reasonable' participation in global organisations and negotiating a peace agreement.

But while welcoming Mr Hu's comments, Taiwan's government yesterday urged Beijing to take note of the differing views of the Taiwanese people when it comes to the sensitive issue of ties with the mainland.

Closer engagement with China 'is the mainstream opinion here and has won comprehensive support from international community', said Mr Wang.

But 'Taiwan is a democratic society whose people harbour different views towards the future of Taiwan...which we should respect,' he pointed out.

China considers Taiwan part of its territory which must be reunified, by force if necessary. But relations have improved dramatically since Mr Ma Ying-jeou of the China-friendly Kuomintang took office in Taiwan in May.

Mr Ma did not respond directly to Mr Hu's proposal when he delivered his first New Year address as Taiwan's leader.

But he expressed hope that improving cross-strait relations would bring positive changes to the communist giant while not undermining Taiwan's own sovereignty.

'As we deepen our ties with the mainland, we will aggressively seek to maintain our sovereignty and dignity,' he said.

His government has been pushing for improved ties with China. But the opposition Democratic Progressive Party and some Taiwanese have expressed fear that such a policy could compromise the island's sovereignty.

To allay such fears, Mr Ma has promised not to discuss political ties with China during his term. Two rounds of formal cross-strait talks have focused on economic issues.

Mr Hu's speech signalled that Beijing is 'ready to take the next step' by elevating cross-strait talks beyond economics, Mr Alan Romberg of the Washington-based think-tank Stimson Centre told Taiwanese media.

Mr Sun Shengliang, a researcher with the Chinese Academy of Social Sciences, said Mr Hu's remarks set the tone for the mainland's Taiwan affairs.

'His proposals are based on the new cross-straits situation, and they take into account the concerns of Taiwan compatriots,' he was quoted as saying by the China Daily.

AGENCE FRANCE-PRESSE, ASSOCIATED PRESS

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By calling a truce, the two sides 'can terminate hostilities, further understanding of each other and bolster cooperation', said Taiwan's presidential spokesman Wang Yu-chi.