Taiwan and China agreed Thursday to set up permanent offices in each other's territory for the first time in nearly six decades of hostility, one of the biggest trust-building steps they've taken in their political rivalry. There were few details and no time frame was given for establishing the offices, which could perform consular functions such as issuing travel documents. Yet coming on the first day of formal talks between the sides in a decade, the agreement lends strong momentum toward efforts to build confidence and spur cooperation between the two sides, which divided amid civil war in 1949 and whose relationship has veered between strained to outright hostile.

Foundation Deputy Secretary-General Pong Jian-kuo said a consensus on exchanging offices was reached during morning talks, saying they would "facilitate people's exchanges and traveling across the Strait."

The unexpected announcement injected a touch of drama into an otherwise modest agenda that sought mainly to finalize agreements on charter flights and tourism.

"It's a very positive and healthy development in relations across the Taiwan Strait," said political scientist George Tsai of Taiwan's Chinese Culture University.

Tsai cautioned ,however, that the offices would be limited to dealing with administrative matters and would offer little direct help in dealing with core political differences such as China's threatening missile arsenal and Taiwan's desire for diplomatic recognition overseas.

Taiwan's 19-member negotiating team is being led by Chiang Pin-kung, chairman of the quasi-governmental Straits Exchange Foundation, and includes two vice Cabinet ministers - the highest-ranking Taiwanese officials ever to participate in bilateral talks.

Chiang told reporters in Beijing that the Chinese side had proposed the idea first during talks Thursday morning.

"Chairman Chen (Yunlin) proposed to have (a Chinese agency) to issue travel documents in Taiwan, and I agreed," he said. "I also hope there will be a similar Taiwanese agency serving Chinese people who plan to visit Taiwan."

Ahead of the talks, Chiang had said the negotiations would lay the foundation for "a long-term peaceful relationship between the two sides."

His counterpart, Chen Yunlin, head of Beijing's semiofficial Association for Relations Across the Taiwan Strait, said the public on both sides were counting on the talks to produce results and alter the often combative tone between the two governments.

"Whether cross-strait relations can improve, depends on whether our negotiations can proceed smoothly," Chen said.

Beijing's communist administration, which seized power on the mainland in 1949, considers Taiwan part of its territory and refuses to recognize the government in Taipei, which means that negotiations must be carried out by semiofficial bodies.

Taiwan's delegation also planned to discuss what additional help the island could provide for China's earthquake relief efforts. The talks are scheduled to run through Friday at a state guesthouse in western Beijing.

Both sides have periodically looked for ways to build trust between the governments amid soaring trade and investment, and they set up the dialogue mechanism in the early 1990s after briefly setting aside political differences. China withdrew from the exchanges in 1999 in anger over steps by Taiwan to shore up its independent identity. Beijing insists the island is Chinese territory to be reunified with the mainland, by force if necessary.

While most Taiwanese oppose political union, many favor closer economic cooperation with the mainland, which has already absorbed more than $100 billion in Taiwanese investment in the past 15 years.

Chiang's visit is seen as the first step toward fulfilling a pledge by newly elected Taiwanese President Ma Ying-jeou to reinvigorate Taiwan's economy, in part by hitching the island's wagon to China's economic juggernaut.

Foundation Secretary General Kao Koong-Lian said that the two sides also reached an agreement on expanded charter flights and tourism.

"On July 4, we will have the first large group of mainland tourists visiting Taiwan to coincide with the kickoff of weekend charter flights," he said.

The accord opens the way for 36 charter flights to cross the 100-mile-wide Taiwan Strait every weekend. Taiwan has banned direct scheduled flights since the 1949 division.

The expanded flights will be enough to shuttle several hundred thousand Chinese tourists to Taiwan every year - below Ma's target of 1 million, but far above the current level of about 80,000.

Charter flights are now limited to four annual Chinese holidays and are usually packed with Taiwanese residents on the mainland returning home to visit family. Ma wants to gradually expand the charter schedule and supplement it with regularly scheduled flights by summer 2009.

An agreement is expected to be signed Friday, after which Chiang was scheduled to meet with Chinese president and Communist Party leader Hu Jintao.

Also Thursday, Xinhua reported Chen had accepted Chiang's an invitation to visit Taiwan later this year. No specific date was mentioned.

Written By DEBBY WU

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