A senior Taiwan affairs official on Friday formally proposed a pact similar to a free trade agreement to boost economic ties between the mainland and Taiwan.

Wang Zaixi, deputy director of the Taiwan Affairs Office of the State Council, said such a mechanism would ensure the healthy and orderly development of cross-Straits economic ties.

"Both sides of the Taiwan Straits could initially carry out joint research into the tourism and civil aviation industries which have been hit hard by the outbreak of SARS," Wang said at the closing ceremony of a two-day seminar on cross-Straits relations.

This is the first time Beijing has officially proposed strengthening cross-Straits economic exchanges in such a way.

The proposal comes in the wake of a landmark free trade deal between the mainland and Hong Kong.

In January 2002, former Vice Premier Qian Qichen invited Taipei to talks on establishing a mechanism for cross-Straits cooperation on economic issues.

But Qi an's proposal met no positive response from the pro-independence Democratic Progressive Party (DPP) administration on the island.

But since the mainland and Hong Kong signed a Closer Economic Partnership Arrangement (CEPA), a growing number of businessmen and economic researchers have called for a similar deal, modelled on the free trade agreement.

Under the CEPA, products from Hong Kong will be exempt from tariffs on the mainland and 17 of the island's service sectors will gain wider access to the mainland.

Wang said both Beijing and Taipei should give top priority to bilateral economic and trade relations.

"To that end, any hurdles to cross-Straits economic cooperation should be removed," the official told more than 130 scholars and experts attending the event.

"And any political dispute that interferes with and affects bilateral economic and trade exchanges should be left aside and gradually resolved."

Analysts said Beijing's focus on economic issues si gnals it wants to maintain stability in across-Straits relations ahead of the island's "presidential" elections in March next year.

Despite the DPP's attempt to undermine ties by pushing for a new referenda law, the mainland is more concerned with the interests of the Taiwanese people, Wang said.

Economic relations between the mainland and Taiwan have grown much stronger over the past two decades, in spite of a long-standing political stalemate.

According to Ministry of Commerce statistics, more than 56,000 projects on the mainland with a total contractual investment of over US$60 billion are funded by Taiwanese businesses.

(China Daily July 20, 2003)