INTERVIEW - China signals OK for Taiwan FTAs -Taipei

A man fixes a bicycle, part of the items included in the economic cooperation framework agreement (ECFA), at a shop in Taipei, June 29, 2010.

TAIPEI (Reuters) - China has signalled it is finally willing to let Taiwan negotiate trade pacts with the outside world, a senior Taipei official said, a move that could give a major lift to the island's economy.

China, which claims the self-ruled island as its own and seeks to stop it from doing any official business with foreign governments, had long used its diplomatic clout to block free trade agreements.

But senior policymaker Kao Charng told Reuters that Chinese officials indicated a change of stance when the two sides signed their own historic trade deal.

The vice-chairman of Taiwan's Mainland Affairs Council said Chinese officials had suggested that as a member of the World Trade Organisation (WTO), Taiwan could pursue pacts with other member economies, sidestepping the issue of sovereignty.

"As long as a deal doesn't apply to political sovereignty, mainland China shouldn't oppose it," Kao said in an interview.

"I believe they won't oppose it. They will look at it according to the situation and what's fair."

Some of Taiwan's Asian trading partners have expressed strong interest in pursuing trade pacts in light of the economic cooperation framework agreement (ECFA) signed last week between China and Taiwan, local officials say.

Taiwan has already begun courting them via the WTO, Kao said.

"The real concern for China is under what title, what form," said George Tsai, a political scientist at Chinese Cultural University in Taiwan. "The WTO would be OK, as long as Taiwan does not highlight any political implication."

Taiwan wants the FTAs as part of a longer-term effort to stay competitive with regional rivals and help prevent the economy becoming too reliant on China.

Taiwan's parliament, which will start it review of the pact on Thursday, is expected to give its support for the biggest ever tie-up between the rival governments.

(Additional reporting by Argin Chang; Editing by Jonathan Thatcher)