The nine former generals and admirals met on the south Chinese island of Hainan, exchanging 'frank views' on how to strengthen military ties, the People's Daily reported on its website on Sunday.

'The two sides agreed the retired generals of both armed forces should enhance contacts and exchanges to jointly promote the development of bilateral military ties,' the report said after the historic talks on Saturday.

The US delegation was headed by former deputy chairman of the Joint Chiefs of Staff William Owens, while Xiong Guangkai, former Deputy Chief of the General Staff of the People's Liberation Army, led the Chinese side, it said.

The participants offered 'constructive' advice on how to enhance ties between the two armed forces, it said, citing the Foreign Affairs Office of the Chinese Defence Ministry.

No further details on the informal meeting were immediately available. A US embassy spokesman said on Sunday that she had no information on the talks, since the US participants were all retired.

The talks took place amid concern about lingering tension between the two sides, reflected in Chinese criticism of a US decision to shoot down a satellite last week, seen by Beijing as a step towards militarisation of space.

They also come just days ahead of the official announcement of China's 2008 defence budget, likely to mean another double-digit increase in spending on the armed forces.

Last year, the Chinese defence budget increased by 17.8 per cent, triggering US calls for greater transparency to clarify what the extra money was used for. -- AFP