Factbox: Relations between China and Taiwan

TAIPEI (Reuters) - Taiwan's parliament has passed a trade pact with China that could boost about $100 billion in annual two-way trade and is the most significant agreement between the two after 60 years of hostilities.

Following are key facts on relations between the two.

TRADE AND INVESTMENT

* China, including Hong Kong, is Taiwan's top trading partner. About 40 percent of Taiwan's exports, such as tech components and chemicals, go to China.

* China, with its 1.3 billion people, is also Taiwan's favorite place to set up shop, with Taiwanese companies investing more than $100 billion there, private estimates show.

* Since 2008, Taiwan and China have signed deals allowing daily direct flights and new cargo routes. Taiwan since then has also begun allowing in Chinese tourists.

* The economic cooperation framework agreement, passed by Taiwan's parliament on Aug 17, slashes tariffs on more than 800 items.

POLITICS

* China has claimed sovereignty over Taiwan since the end of the Chinese civil war in 1949, when defeated Nationalist (KMT) forces fled to the island. It has vowed to bring the island under mainland rule, by force if necessary. Democratic Taiwan remains staunchly anti-Communist.

* Ties were badly strained when Chen Shui-bian from the now opposition Democratic Progressive Party was Taiwan president from 2000-2008 because of his rhetoric advocating the island's formal independence from China.

* Relations warmed after Ma Ying-jeou from the Nationalist Party took office in May 2008 and opened negotiations that culminated in the trade pact. The two sides have put off discussing political issues.

MILITARY

* The military balance is firmly in China's favor. China's army is 2.3 million strong while Taiwan's is about 280,000.

* China has an estimated 1,400 missiles aimed at the island, according to the Taiwan government.

* The United States is obliged to help Taiwan defend itself in the event of an attack under the U.S. Congress 1979 Taiwan Relations Act.

* U.S. officials are seen deferring any major new arms sales to Taiwan until at least 2011 as Beijing steps up pressure on Washington, where mending Sino-U.S. ties is a priority.

Sources: Reuters, Taiwan government, GlobalSecurity.org

(Compiled by the Taipei bureau)