Al Jazeera's Wayne Hay, reporting from Taipei, said: "Protesters oppose Ma Ying-jeou's closer relations with China and the fact that he is opening up Taiwan to investment by some Chinese firms.
"But he really isn't being clear on exactly which companies or which areas Chinese companies will be able to invest in and that is what people gathered here today are unhappy about," he said.
Ma has promised to abandon his predecessor's anti-Beijing policies, a position which the opposition says weakens Taiwan's sovereignty.
Following Sunday's march, participants are expected to hold a sit-in protest for another 24 hours.
|The policies of Ma, pictured, have met
with popular resistance [EPA]
China claims sovereignty over Taiwan, which split from the mainland at the end of the Chinese civil war in 1949, when defeated Nationalist forces fled to the island.
Beijing has repeatedly said it will bring the island under mainland rule, by force if necessary.
The Chinese congress, controlled by the Communist party, is about to approve military spending for 2009 of $70.2bn, up 14.9 per cent from 2008, with a lot of that spending to be focused on Taiwan.
According to Taiwanese officials, China has increased the number of short-range missiles aimed at the island to about 1,500.
Relations have improved since Ma, who advocates better economic ties with China, took office a year ago and signed deals with China to enhance tourism and business flows.