China premier says confident of peaceful growth in Taiwan ties

BEIJING (Reuters) - Chinese Premier Li Keqiang said on Thursday that he was confident of the peaceful growth in relations with self-ruled Taiwan, an island China claims as its own, saying it was a historic trend that could not be reversed. Business ties across the narrow Taiwan Strait have surged to their most extensive in six decades, supported by the policies of Taiwan's China-friendly President Ma Ying-jeou. But Taiwan's ruling Nationalist party took a major drubbing in recent local elections largely seen as a referendum on ties with China. That followed a weeks-long occupation of Taiwan's legislature last spring by students and activists in protest against a trade deal with China. Speaking at the opening of the annual full session of the National People's Congress, China's parliament, Li made no direct mention of the protests or the Taiwan elections, but said he wished to make progress on relations. "We will strive to make progress in discussion and dialogue between the two sides of the strait, advance cross-strait economic integration for mutual benefit and promote local and youth exchanges," he said. "We are firmly confident that the peaceful growth of cross-strait relations is a historical trend that can be neither resisted nor reversed," Li added in his speech, a major policy address for the year ahead. Taiwan holds presidential elections early next year. The Nationalists fled to Taiwan after losing a civil war to the Chinese Communists in 1949. China considers Taiwan a renegade province, and has never renounced the use of force to bring it under Beijing's control. Proudly democratic Taiwan has shown little interest in wanting to have political talks with China, still ruled with an iron fist by the Communist Party, and there are also deep military suspicions on either side. China's President Xi Jinping said in 2013 that a political solution for the Taiwan issue could not wait forever. Underscoring that mistrust, Taiwan's Defence Ministry expressed concern about the 10.1 percent rise in China's military budget announced at the same time Li was speaking. "The Communist army's continued modernization severely challenges our defense operations," it said in a statement, adding China's actual defense spending was likely at least double the published figure. Li said though that both sides should work together to "achieve China's peaceful unification". "We hope that our compatriots on both sides of the strait will continue to strengthen mutual understanding and trust, deepen their bonds of kinship, bring hearts and minds together," he said. (Reporting by Ben Blanchard; Additional reporting by J.R. Wu in TAIPEI; Editing by Alex Richardson)