Taiwan, China to hold free-trade talks

Negotiator P.K. Chiang of export-reliant Taiwan and Chen Yunlin of economic powerhouse China will meet in central Taiwan's Taichung on Tuesday for a fourth round of talks on the proposed Economic Cooperation Framework Agreement (ECFA), since ties began warming last year.

The pact aimed at slashing import tariffs while allowing more market access in the banking sector, should be signed early next year, Taiwan's top China policymaker Lai Shin-yuan told Reuters in a recent interview.

It's important how we frame (the deal) in the initial phase, said Alexander Huang, strategic studies professor at Tamkang University in Taipei. This will be the first framework agreement between China and Taiwan.

Tuesday's talks will also build trust that could lead eventually to dialogue on sensitive political issues, set aside for now as China and Taiwan focus on more practical matters.

China has claimed sovereignty over self-ruled Taiwan since 1949, when Mao Zedong's forces won the Chinese civil war and Chiang Kai-shek's Nationalists fled to the island. Beijing has vowed to bring Taiwan under its rule, by force if necessary.

Ties have warmed since China-friendly President Ma Ying-jeou took office last year. Ma has already lifted the decades-old ban on regular direct flights and opened the doors to Chinese tourists.

The agenda on Tuesday covers avoidance of double taxation, agricultural quarantine cooperation and joint standards for import-export inspections.

Taiwan's anti-China opposition Democratic Progressive Party said tens of thousands of supporters will launch protests from Sunday, adding the trade deal was premature.

China-Taiwan talks in Taipei last year sparked rioting that left police and demonstrators injured.

Fan Liqing, spokeswoman for China's Taiwan Affairs Office, said this week Beijing was confident the island could maintain security around the venue, adding that the talks were in everyone's interests.

We hope to be able to push joint economic development on both sides of the strait and improve the well-being of compatriots on either side, she told a regular news conference in Beijing.

The Chinese negotiator is scheduled to reach Taiwan on Monday and sign deals a day later, followed by an investment seminar on Wednesday and a day of sightseeing before his December 25 departure.

(Additional reporting by Ben Blanchard in Beijing; Editing by Sanjeev Miglani)