TAIPEI (REUTERS) - Taiwan and China will sign an agreement to open their services markets to each other around June, a Taiwan government official said on Wednesday, in the latest sign of warming trade ties between the former political foes.

Under the agreement, China will let Taiwan companies set up fully-owned cargo transportation companies on the mainland, said the official, who declined to be identified as the matter is confidential.

China will also allow Taiwan firms to own as many as a 55 per cent stake in e-commerce websites in Fujian province, added the official. That is more favourable than the 50 per cent stake given to Hong Kong companies, said the official.

Taiwan will allow Chinese companies to invest up to 12 per cent stake in its construction firms, added the official.