TAIPEI - TAIWAN on Tuesday partially lifted its decades-old ban on investment in the island by Chinese companies or individuals in a further sign of closer economic ties between the former bitter rivals.

The move was immediately welcomed by ruling-party legislators and advocates of warmer relations with China at a time when Taiwan's economy has been struggling badly amid the global financial crisis.

Under the new investment measures effective immediately, Chinese investors will be permitted to buy into 100 categories in the island's manufacturing, service and infrastructure sectors.

But Chinese military or their affiliated enterprises will be barred from investing here.

'Previously, the government only allowed local businesses to invest in mainland China,' vice-economic minister John Deng told reporters, hailing the move. 'We have hoped to do something to change this' unilateral investment, Mr Deng said.

China still regards Taiwan as part of its territory awaiting to be reunified - by force if necessary - although the island has governed itself since 1949 at the end of a civil war.

However, cross-Strait ties have improved dramatically since the Beijing-friendly President Ma Ying-jeou came to power last year pledging to boost trade and tourism with China.

The move came more than two months after Taipei and Beijing agreed in a third round of talks to expand air links and other measures to help both sides fight the global economic meltdown and ease ties. -- AFP