Taiwanese investments in China have soared to a record high of $108 bn despite the absence of formal political or trade links across the Taiwan Strait, a Chinese official says.
The thriving indirect trade between the two rival nations saw an 18 per cent jump in 2006, with Taiwanese companies investing a total of $2.1 bn in China.
Imports from Taiwan rose 17 per cent to $87 bn last year while exports were up 25 per cent to total $21 bn.
But China has warned of "severe challenges" arising from Taiwan's push for independence and is prepared to staunchly oppose any move from across the strait, including going to war.
Yang Yi, a spokesman for China's Taiwan Affairs Office, also advised the island's government against seeking independence by pretending to pursue constitutional reforms.
"The year 2007 is a crucial period for opposing 'Taiwan Independence' and safeguarding peace across the Taiwan Strait," he said on Wednesday.
He warned of strained relations this year "as Taiwan authorities' efforts to seek de jure independence through the so-called constitutional reform may enter into a substantive stage".
"We will make utmost efforts to seek the prospect of peaceful reunification with our maximum sincerity. We cannot tolerate 'Taiwan independence' and cannot allow any people to secede Taiwan from China by any means," Yang said.
Increased travel
No figures were provided on the total Taiwanese investment in China to date, but the island's government said its companies have invested more than $100 bn since the early 1990s.
Not only are the commercial ties between China and Taiwan booming but travel has also increased even though most tourists and business people are required to go via Hong Kong or a foreign country.
On Monday, Taiwan announced that six airlines each from Taiwan and China will run 96 round-trip charter flights during the forthcoming Chinese New Year holiday period.