The People's Liberation Army (PLA) has set up a new ballistic missile base on China's south-eastern coast opposite Taiwan and replaced missiles already deployed with improved versions, the China Times said.

Taiwan's Defence Ministry declined to comment on the report.

While avoiding reference to this latest twist in cross-strait relations, Taiwan's President Ma Ying-jeou told the military yesterday that Taiwan would not shrink from a military showdown.

'Maybe some of you may feel confused whether China is a friend or foe,' he said while addressing hundreds of military cadets during a commencement ceremony in southern Kaoh-siung county.

'Don't get confused. All you have to do is to step up your combat-readiness as it is the only way to deter war. While Taiwan will never seek a military showdown, we will by no means avoid a war or be afraid of taking it on' if necessary, he said.

The defence authorities had previously said that China had 1,300 cruise missiles and short-range ballistic missiles pointing in the direction of Taiwan.

China sees Taiwan as part of its territory, despite their split in 1949 at the end of a civil war, and has threatened to use force if the island ever moves towards declaring formal independence.

The China Times said the PLA had previously 'pulled out' its Russian-made S-300 air-defence missiles from several bases along China's south-east coast.

However, it said the PLA lately has rearmed the bases with improved versions of its missiles, which are capable of placing Taiwanese fighter jets within striking range.

The missiles hit a raw nerve in Taiwan.

During Taiwan's first presidential polls in 1996, China staged missile 'tests' off the island's coast. When the China-friendly Ma won the presidency in May, he made it clear he would consider signing a peace deal with Beijing only if it stopped aiming its missiles at Taiwan.

The alleged deployment of new missiles came just a month after Taiwan's ruling Kuomintang (KMT) claimed that China had agreed to reduce the number of missiles aimed at the island.

The claim was made after KMT chairman Wu Poh-hsiung had a landmark meeting in late May with Chinese President Hu Jintao in Beijing - the first such contact between the heads of China and Taiwan's ruling parties since 1949.

Meanwhile, non-stop weekend charter flights will be launched tomorrow after a nearly six-decade ban on direct transport links. Up to 3,000 Chinese tourists a day will be allowed into Taiwan to help stimulate its economy.

AGENCE FRANCE-PRESSE