This article was first published in The Straits Times on April 28, 1993

China and Taiwan have agreed to formalise official contacts between two semi-government bodies handling bilateral ties following the opening of their talks here yesterday.

An agreement will be signed at the end of the two-day meeting today between Mr Wang Daohan, chairman of China's Association for Relations Across the Taiwan Straits (Arats), and Mr Koo Chen-fu, head of Taiwan's Straits Exchange Foundation (SEF).

Under the pact, which will be one of three to be signed by the two delegation leaders this afternoon, officials at director or deputy secretary-general levels would meet once every three months in either China or Taiwan on a rotation basis.

Higher level meetings at the vice-chairman and secretary-general levels will take place once every six months, either in China or Taiwan, or in a neutral country.

No time frame or frequency is set for talks between the two delegation leaders, Mr Wang and Mr Koo.

Officials from the two sides said the agreement, to be signed today along with one on the authentication of documents and another on verification of lost mail, represented a breakthrough at the talks, the highest level meeting between the two sides since 1949.

With frequent contacts established, bilateral relations would improve as the two sides could discuss issues such as economic, cultural and scientific exchanges, actions against smuggling and illegal immigration by their people, said SEF secretary-general Cheyne Chiu, at a press briefing after yesterday's talks.

In a separate briefing, Arats' vice-chairman Tang Shubei also said the agreement would pave the way for more contacts between China and Taiwan.

Both Mr Chiu and Mr Tang, who were involved in the talks, said economic co-operation between China and Taiwan was the key issue discussed at their meeting.

Mr Wang and Mr Koo, who met in the morning for the first round of their talks yesterday, went straight into the issue of economic relations after exchanging pleasantries and posing for pictures for more than 200 journalists, mainly from China, Taiwan, Hongkong and other Asian countries, who came to cover the event.

The atmosphere at the talks at the NOL Building just before the meeting began at 10am was tense when a delegation of 12 legislators from Taiwan's opposition party arrived to make statements to the media. They challenged the SEF's right to represent at the talks the 20 million Taiwanese.

Their leader from the Democratic Progressive Party, Mr Shih Ming-teh, told reporters that they did not plan to attend the talks and only wanted to make their presence felt, especially by the SEF officials, to ensure that no political matters were raised.

Indeed, political issues were avoided by the Taiwanese side at the meeting, which was meant to discuss "civilian, administrative, economic and functional" matters between China and Taiwan.

SEF's Mr Chiu told reporters that although Mr Wang raised briefly the issue of reunification, Mr Koo said their talks should be confined to non-political matters.

Mr Koo told Mr Wang that their talks should be part of a process to improve bilateral relations.

Arats' Mr Tang described the economic ties between China and Taiwan as matters of great "urgency and necessity".

Mr Wang, he said, also spoke of the need for more investments by Taiwanese businessmen in China, adding that the Chinese economy had been growing rapidly and that Taiwan should seize the opportunity to invest more in the country.

Among the proposals raised by the Chinese team to promote greater economic co-operation was the need to ease restrictions on Taiwan's investments in China and Chinese imports to Taiwan.

But Mr Koo said, without elaborating, that "under the present situation", the time was not right for direct investments by the Taiwanese in China.

He felt that promoting greater business contacts between them and other economic issues deserved greater attention.

These included Taiwan's call for clearer guidelines on China's laws on taxation, business disputes and the remittance of profits.

China invited the Taiwanese to develop new industrial areas such as those in Pudong and the Three Gorges region along the Yangtze River and wanted to see more co-operation in the development of energy and natural resources.

Other matters discussed included exchange programmes for the media and youth from the two countries.

A joint statement is expected at the end of talks today.