After breaking ice, China, Taiwan talk business

BOAO, China (Reuters) - Taiwan's vice president-elect and China's commerce minister held talks on economic cooperation on Sunday, underlining the potential benefits of closer ties after a landmark meeting a day earlier.

Chinese President Hu Jintao and Taiwan Vice President-elect Vincent Siew shook hands and talked one-on-one for about 20 minutes on Saturday, in what many analysts saw as a breakthrough that could thaw their icy relations and pave the way for closer trade and transit links.

Siew, who attended the meeting in a private capacity, met Chinese Commerce Minister Chen Deming on Sunday. Each led a delegation of industrialists, academics and officials to discuss details of how to step up cooperation.

They first met behind closed doors and then held an hour-long seminar, with executives from technology, shipping and other companies from both sides swapping views on the specific market opening and cooperation they hoped to see in their fields.

The meetings were held on the sidelines of the April 11-13 Boao Forum for Asia held on the southern Chinese island province of Hainan.

China's Chen called normalizing trade and economic ties between the two sides an urgent matter.

"This urgency results especially from the current global uncertainties that we both face," Chen said, pointing to the economic slowdown in the United States and other Western countries as well as soaring prices for natural resources.

"In such times, when we see such a good chance to bring our two sides' economic and trade ties forward towards normalization, ... by working together, we can reduce the negative impact on us from the slowing of growth in Western countries," he said.

"SOONER THE BETTER" ON FLIGHTS

Siew noted the benefit to China's growth that increased cooperation with Taiwan could bring, as its firms bring greater innovation to Chinese manufacturing and other sectors.

"We hope the new Taiwan government's economic policy will bring both sides new business opportunities," Siew said.

The meetings came after Siew and Taiwan's President-elect, Ma Ying-Jeou of the Nationalist party, won elections last month, promising to work for closer relations with China, including more direct flights, more Chinese tourists, normalized trade ties and the resumption of negotiation mechanisms.

China, which has about 170 allies including the world's most powerful nations, has claimed self-ruled Taiwan as its territory since the end of the Chinese civil war in 1949 and pledged to bring the island under its rule, by force if necessary.

Political differences have effectively barred high-level contact between the two sides for the past six decades, but Taiwan's economy depends increasingly on China.

While no specific deals were signed on Sunday, both sides indicated that they were moving forward on those links. A statement by the Chinese side said it was open to setting up a negotiating mechanism, under the "one-China" principle.

Asked about when direct flights might happen, Chen told reporters "the sooner the better", adding that they were currently not able to start for technical business reasons.

Direct flights are banned, except during holiday seasons, for security reasons, usually forcing layovers in Hong Kong or Macau. Chinese tourists seldom enter Taiwan due to the island's fear of security breaches and overstays.

Siew and President-elect Ma will take office on May 20.

(Reporting by Jason Subler; Additional reporting by Ralph Jennings in Taipei; Editing by Bill Tarrant)