TAIPEI (AFP) - - Taiwan and China signed a range of deals on Tuesday that are aimed at bringing the two sides closer economically, after almost 60 years of hostilities that often took them to the brink of war.

Officials signed four agreements that are potentially worth billions of dollars, after talks that marked a significant warming of ties between the former bitter enemies.

The two sides agreed to introduce direct cargo shipping and postal services, to add passenger flights and shorten existing routes, and to discuss food security in the wake of scandals involving poisonous Chinese food imports.

They discussed cooperation on issues related to the current global financial turmoil, and agreed to meet again in Beijing early next year.

The two men shook hands as they held copies of the signed agreements bound in red silk brocade and exchanged gifts.

The two sides have agreed to triple direct passenger flights to 108 per week and expand services to a total of 21 Chinese cities, up from the current five.

The deals will introduce cargo flights, with up to 60 round trips per month crossing the 180-kilometre (112-mile) Taiwan Strait separating the island from China.

Chen said it had not been easy reaching agreement on direct air, sea and postal links, despite long-term pressure from Taiwanese businesses, in an apparent reference to the many years of mutual animosity.

Analysts described the talks as successful despite widespread protests that the pro-independence Democratic Progressive Party (DPP) hopes will culminate in a mass rally on Wednesday.

"Chen's visit will have a positive impact on cross-strait ties as the two sides aim to promote economic and trade exchanges on an equal-footing," said Chang Ya-chung, a political science professor at National Taiwan University.

With Taiwanese investment in China estimated at 150 billion US dollars since the early 1990s, businesses on the island have been impatient for direct links that will significantly cut their costs.

Currently flights between the two territories must pass through foreign airspace and ships must traverse another country's waters.

Taiwan's Chiang told reporters direct air links would cut fuel costs for airlines by 40-50 percent, while direct cargo links would cut shipping costs by 15-30 percent.

Sea journeys would be shortened by up to 27 hours, he said, depending on the ports involved.

The agreements would "greatly boost Taiwan's competitiveness," he said, and give the island, which is heavily dependent on exports of consumer goods, a greater slice of the Chinese market.

They also agreed on unspecified cooperation on financial issues to cope with the current global economic downturn, and to set up a "mechanism" for dealing with food safety concerns.

The agreements go some way to closing the economic gap between the two sides.

Beijing still formally claims sovereignty over the island, which split from China when the nationalist Kuomintang lost the civil war and fled to Taiwan. The Chinese government has vowed to retake the island, by force if necessary.

The KMT government of President Ma Ying-jeou won office earlier this year on a platform of closer ties with China to improve the island's sluggish economy.

The policy has drawn widespread criticism in Taiwan , where many people fear their democratic island is being slowly drawn into a tight economic relationship with China, which will lead to an erosion of their freedoms and lifestyle.

Outside parliament, thousands of DPP supporters wearing yellow ribbons printed with the slogan "Taiwan is my country" continued a sit-in to protest Chen's visit.

Television showed comedians mimicking Chen's stiff public style, and dubbed him "aeroplane head" for his deep black, upswept hairstyle.

Chen's deputy Zheng Lizhong downplayed the irreverence and the anti-China sentiment.

"The agreements concern the welfare of tens of thousands of people, including Taiwanese compatriots. We welcome these people to visit China to clarify their misunderstanding," he said.

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