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4/13/2008 BEIJING (LA Times) -- China's president met with the incoming vice president of Taiwan on Saturday, signaling a possible thaw in a frosty relationship between the rival governments that has lasted nearly six decades.

Beijing played down the brief exchange between President Hu Jintao and Vice President-elect Vincent Siew on the sidelines of an economics forum in southern China's Hainan province, but observers suggested it broke new ground.

"Certainly this is a very significant step forward in terms of thawing the ice from the two sides," said Andrew Yang, secretary-general of the Chinese Council of Advanced Policy Studies, an independent research tank in Taipei, the Taiwanese capital.

Siew's Nationalists just won a landslide election based in part on promises to improve relations with the mainland, which have suffered an eight-year slump under the independence-leaning President Chen Shui-bian.

China considers the island part of its territory and has threatened to reclaim it by force if it ever declares independence.

On Saturday, the Chinese Foreign Ministry was careful to refer to Siew not in his political capacity but as the chairman of the Cross-Strait Common Market Foundation, a private group that seeks to build economic cooperation between China and Taiwan.

For the most part, the two leaders tried to frame Saturday's conversation in terms of economics. "On this occasion, I am happy to exchange opinions on the cross-strait economy with Siew," Hu said. Siew said, "Reality proves that cross-strait economic development is the common wish of people on both sides."

The Nationalists fled to Taiwan after a protracted civil war ended in 1949 and have had little contact with their Communist counterparts despite booming economic ties between their people. The success of the high-level political contact could boost the party's position as it seeks more peace and prosperity for the people of Taiwan.

Engagement with Taipei also has potential benefits for Beijing. The Communist Party faces mounting international criticism over its crackdown on Tibetan protesters. Tibetan rights activists have ignited a trail of demonstrations following the international Olympic torch relay and threatened to dog the Chinese hosts all the way to the Beijing Games this summer.

"China is under tremendous pressure with regard to Tibet and hosting a smooth Olympics," Yang said. "It is necessary for China to ease the tensions in the Taiwan Strait. They certainly don't want extra problems in the South China Sea."

In his first public comments on the protests that erupted in the Tibetan capital, Lhasa, and spread to neighboring provinces last month, Hu told the international community to respect China's internal affairs and pointed the finger once again at the Tibetan spiritual leader, the Dalai Lama, for instigating the unrest.

"Our conflict with the Dalai clique is not an ethnic problem, not a religious problem, nor a human rights problem," Hu was quoted as saying by the official New China News Agency, referring to supporters of the Buddhist leader. "It is a problem either to safeguard national unification or to split the motherland."

(Contributed by LA Times)