TAIPEI - TAIWAN President Ma Ying Jeou told senior leaders and the public on Friday he was confident the island would weather the global financial crisis, a day after local stocks fell to a more than five-year low.

Workforce talent and entrepreneurial spirit would help turn Taiwan around, Mr Ma said in a televised speech on National Day. Acturnaround would eventually bring foreign money and personnel to the island, he later told an outdoor crowd.

'We have confidence that we can revitalise the economy and bring back prosperity. The new government is proactively handling the crisis and doesn't dare to relax,' Mr Ma told 2,008 spectators outside the presidential office.

'After revitalisation, our software and hardware will be fully renewed and can attract funds and personnel to Taiwan.'

Taiwan stocks fell 1.45 per cent on Thursday despite a central bank interest rate cut, as concerns over a weak global economy dragged financial shares lower.

The government has been implementing market-boosting moves since the demise of Lehman Brothers, including cutting reserve requirement ratios and extending repurchase agreements with financial institutions to ensure ample liquidity.

The island's export-dependent economy was hampered by inflation and wage stagnation before the global financial crisis.

Also in his speech, Mr Ma said relations with rival China had improved since he took office in May and that his efforts had received international support.

But Mr Ma said he would insist on sovereignty for Taiwan.

China has seen self-ruled Taiwan as part of its territory since the island broke away from Mr Mao Zedong's Communists amid civil war in 1949. Beijing has threatened to take Taiwan by force, if necessary.

'On the issue of sovereignty, the two sides disagree,' he said.

'We hope both sides can use wisdom to set aside conflicts.'

There was a smaller military presence at Friday's holiday ceremony, a symbol of resistance against China, compared to years past under a president who took a harder line against Beijing.

And the number of foreign dignitaries, another indicator of Taiwan's clout, was down by more than half to 171.

Taiwan is recognised by just 23 countries in the world compared to about 170 that recognise Beijing's 'one China' policy.