Nov. 4 (Bloomberg) -- China and Taiwan will establish direct flights across the Taiwan Strait and agreed on shipping and postal links, following the highest-level talks between the two sides on the island in almost 60 years.

Envoys from the mainland and Taiwan agreed on 108 weekly flights that no longer have to go through Hong Kong airspace. The two sides also agreed to direct shipping links between 63 Chinese ports and 11 Taiwanese ports. The transport links will take effect within 40 days, according to the Web site of Taiwan's Straits Exchange Foundation.

By boosting ties with China, the island's biggest trading partner, Taiwan President Ma Ying-jeou hopes to revive the economy. Supporters of the pro-independence Democratic Progressive Party staged a rally in Taipei yesterday evening, protesting against what they call Ma's sellout of the island's sovereignty in exchange for economic benefits.

``As China is comparatively less affected by the global financial crisis, what option does Taiwan have but to seek closer cooperation with the mainland?'' said Yang Tai-shuenn, a political science professor at Chinese Culture University in Taipei. ``In the long-term, the two sides inevitably will touch the political issue, but not now.''

China's top Taiwan envoy, Chen Yunlin, and his Taiwanese counterpart Chiang Pin-kung signed the agreements in Taipei today. Chen Yunlin is the highest-ranking Chinese official to visit Taiwan since Chiang Kai-shek's Kuomintang government was defeated by Mao Zedong's communist forces in 1949 and moved to the island.

Forced Detours

Direct cargo and passenger flights over the Taiwan Strait have been banned since the rift, forcing goods and people to travel via a third port, usually Hong Kong, extending travel time and increasing cost.

A total of 21 mainland Chinese airports will be open to the passenger flights to and from Taiwan, from five, according to the agreements. Taiwan and China will allow 60 cargo flights a month and the two sides also agreed on postal links, to start within 40 days.

Flights between the mainland and Taiwan will no longer have to go via Hong Kong, said Zheng Lizhong, the deputy to China's top Taiwan envoy, at a separate briefing. Only companies from Taiwan and China can manage the transportation services, according to the agreements.

Direct shipping links can save more than $100 million in costs a year, Zheng said.

Food Safety

China and Taiwan agreed to cooperate on food inspection in an agreement that will take effect in seven days, Taiwan's Chiang said at a separate briefing. They agreed on immediate notification in case of incidents affecting food safety, as well as the exchange of information and the recall of products.

In April, Chinese President Hu Jintao met then-Taiwan Vice President-elect Vincent Siew in southern China's Hainan, in the highest-level contact between China and Taiwan since the split.

This week's meeting follows a June agreement signed in Beijing that allows for weekend charter flights between China, which considers Taiwan part of its territory, and the island. Direct transportation links between China and Taiwan have been restricted since 1949.

China and Taiwan will discuss financial ties in coming months, including allowing Taiwan banks to directly buy stakes in or units of banks and securities brokerages in China, Straits Exchange Foundation's Vice Chairman Kao Koong-lian said today.

``Chances are high'' that the two sides will sign a memorandum of understanding agreeing on ``financial ties in the next round of talks in the first half of next year,'' he said. Chen has invited his counterpart Chiang to visit China in the first half of 2009 for the next round of talks, Kao said.

More Protests

The opposition DPP vowed to continue its rally during Chen's five-day stay in Taipei.

``Even if these economic benefits existed, it is controlled in the hands of China, and the government seems to be prepared to trade off our sovereignty in order to gain these economic benefits,'' said DPP Chairwoman Tsai Ing-wen, in a statement issued yesterday.

Ma may meet Chen this week, Chiang said Nov. 1, without elaborating. The DPP wants Chen to refer to Ma as president, the statement said.

``Taiwan and China simply are trying to recover the basic communication channels they lost previously, so there is no need to overexpose the sovereignty issue,'' Chinese Culture University's Yang said. ``The DPP simply is seeing it as a zero- sum game to meet its own political needs.''

To contact the reporter on this story: James Peng in Taipei at jpeng7@bloomberg.net; Yu-huay Sun in Taipei o ysun7@bloomberg.net

Last Updated: November 4, 2008 04:09 EST