TAIPEI - MA Ying-jeou, on his first working day on Wednesday as Taiwan's president, pledged not to enter an arms race with rival China but planned to build a strong military defence for the island.

'We will not engage in an arms race with China because it is not in our interests and we would not be able to afford that,' Mr Ma told a press conference.

'We will continue arms procurement on defensive weapons. We will not build or acquire nuclear weapons or weapons of mass destruction,' he added.

Taiwan and the mainland have been governed separately since 1949 at the end of a civil war. But Beijing still sees the island as part of its territory awaiting reunification and has repeatedly threatened to invade should the island declare formal independence.

Although he has pledged to bolster regional stability, he said on Wednesday that Taiwan would continue to build a small but strong force to deter any possible military moves by Beijing against the island.

Mr Ma took the oath of office Tuesday after winning elections two months ago and immediately called for a resumption of high-level dialogue with China.

The Harvard-educated former mayor of Taipei succeeds Chen Shui-bian, whose pro-independence rhetoric during eight years in power irked not only Beijing but also the United States for the way it spiked regional tensions.

Taiwan is planning to boost its military spending in 2008 to 3.0 per cent of gross domesic product, up from 2.69 per cent in 2007.

Defence authorities here have warned that China's rapid military expansion had tipped the military balance in the strait and that Beijing is targeting the island with more than 1,000 missies.

The People's Liberation Army's budget increased 17.8 per cent to US$44.94 billion (S$61.3 billion) in 2007, official figures show, making China the third largest military spender in the world after the United States and Russia.

But reports in Taiwan have said the true figure was two or three times that.