CONTINUED dialogue and cooperation across the Taiwan Strait is beneficial to both sides, especially during the current economic crisis, Minister Mentor Lee Kuan Yew has said.

He made the comment on Thursday when the visiting vice chairman of Taiwan's ruling Kuomintang party, Mr Chiang Pin-kung, called on him.

At their meeting, MM Lee said that more economic links between Taiwan and China will revive Taiwan's economy and benefit the cities on the Mainland, where more than a million Taiwanese are residing and conducting successful businesses.

Mr Chiang, who was here for a party-to-party exchange with the People's Action Party, also met Senior Minister Goh Chok Tong on Thursday.

A spokesman for the Senior Minister described the meeting as one between two old friends.

Mr Chiang updated SM Goh on developments in Taiwan and the economic challenges that they faced.

SM Goh welcomed the recent developments in cross-strait relations and congratulated Mr Chiang on the successful conclusion of talks between the Straits Exchange Foundation and the Association for Relations Across the Taiwan Strait that were held in Taiwan last month.

He said such continual cross-strait exchanges built confidence and strengthened mutual trust between the two sides.

Mr Chiang is chairman of the Straits Exchange Foundation.

The Foundation and China's Association for Relations Across the Taiwan Strait were set up in the early 1990s as a semi-official conduit for Beijing and Taiwan to talk in the absence of official contacts.

At the November talks in Taipei, Taiwan and China inked four pacts, including an agreement to launch daily passenger flights and shorten flight routes.

Both sides also gave the green light for direct postal, as well as air and sea cargo services.