Defence budget rises despite overtures to Taipei

At the opening session of the National People's Congress, Wen Jiabao, premier, said China was ready for talks on concluding a peace agreement with Taiwan. “Last year . . . positive changes occurred in the situation in Taiwan, and major breakthroughs were made in cross-strait relations,” he said.

He pledged to facilitate the signing of a comprehensive agreement on economic co-operation, and said: “We are also ready to hold talks on cross-strait political and military issues and create conditions for ending the state of hostility.”

Hu Jintao, president, had mentioned China's willingness to take these steps in a speech late last year.

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