China and Taiwan yesterday closed their first high-level contact in more than 40 years with small steps of cooperation and pledges to continue their tentative dialogue.

The three-day talks were emotionally symbolic to both sides, although major political issues persist and the process to resolve key economic problems remains uncharted.

In ending the talks that began with a handshake across a conference table, Koo Chen-fu of the Straits Exchange Foundation, Taiwan's semi-official agency set up to deal with issues across the Taiwan Strait, said, "The bridges we have built mark a very important milestone for orderly exchanges and future relations between the two organizations."

Wang Daohan, of the mainland's Association for Relations Across the Taiwan Strait, said "the talks this time pave the way for continued talks and development of relations of the two sides in the future."

The two ostensibly private organizations were set up in 1991 to bypass a ban on direct contacts imposed by Taiwan.

The four technical agreements cover plans for future communications and contacts, verification of official documents, exchange of registered mail, and a joint statement. Five additional meetings are planned this year.

But despite the euphoria, there was no breakthrough on deep political differences and thorny economic issues which overshadow ties between the two Chinese societies.

Indeed, Taiwanese delegates angrily rebuffed China for calling for direct transportation, postal, and trade links. That violated a pledge to avoid politically touchy issues that have caused wide divisions in Taiwan over how to deal with its giant neighbor.

Amid an emerging national identity in Taiwan, native-born Taiwanese bitterly oppose reunification with the mainland in favor of a peaceful separate existence from China. Reunification has been gospel for both the Beijing Communists and the ruling Kuomintang of Taiwan since the Nationalists were routed from the mainland in 1949.

Against that backdrop, the two sides skirted touchy issues such as guarantees for growing Taiwanese investment on the mainland, direct investment and trade, and allowing Chinese businessmen and their goods into Taiwan.

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